Tag: FLSA

November 21, 2017

What Are Employers Thankful for in 2017?

In advance of Thanksgiving 2017, I thought I would recap some of the most significant labor and employment law developments so far this year. Let’s take a look at what’s making employers thankful this holiday season!

I recognize that some do not personally agree with all of the policy and legal issues discussed here, but they are generally “positives” for employers with respect to the employment relationship.

No Increase (Yet) to Federal Overtime Threshold

This time last year, employers across the country were preparing for a huge increase in the salary level for many common FLSA overtime exemptions. The Department of Labor’s new rules then scheduled to take effect December 1, 2016, would have more than doubled the salary requirement from $455 weekly to $913 per week. In addition, the rules provided for automatic increases to the threshold every 3 years.

Then, on November 22, 2016, a federal judge in Texas enjoined the rule before it took effect. The Department of Labor preserved its rights to keep fighting, but under President Trump it has shifted its priority toward reconsidering the rules. The injunction is still on appeal, but it is clear the Trump DOL will not try to implement the 2016 rules.

It seems likely that the DOL will instead come up with a new set of rules. They will probably increase the salary requirement to a level below $913 per week. But we are probably at least a year away from any changes taking effect.

Republican Control of the National Labor Relations Board

Attorney Peter B. Robb was sworn in as General Counsel of the National Labor Relations Board on November 17, 2017. He replaces Obama-appointee Richard F. Griffin, Jr., who served from November 4, 2013 to October 31, 2017.

Robb has represented employers in labor and employment law for approximately the past 30 years. For more on his background, read this earlier post.

As chief prosecutor for the NLRB, Robb will have significant control over the agency’s agenda during his 4-year term.

Two President Trump nominees had already joined the 5-member Board, giving Republicans a 3-2 majority over the agency’s adjudicatory body. Read more about new Labor Board members Marvin Kaplan and William Emanuel.

Experts anticipate that the Republican majority will reverse many pro-labor decisions from the Obama-era NLRB. Some prime targets for review are decisions related to:

Joint employer doctrine
Mandatory arbitration/class-action waivers
Micro bargaining units
Union election procedures
Social media policies
Graduate student collective bargaining
Employee use of employer-provide email accounts
Confidentiality of internal investigations

Although employers must continue to abide by the National Labor Relations Act, including respecting employees’ Section 7 rights, they should gradually regain more leeway to run their businesses with the new Board.

Congressional Disinterest in Employment Laws

Sure, healthcare and taxes are major topics of interest for all businesses. And they’re very much on the table. But there has been little meaningful discussion of further regulating the employment relationship at the federal level.

If anything, this Congress may eventually try to loosen burdens on employers. This could include legislation to expedite issues that the NLRB and Department of Labor could more slowly address through adjudication and rulemaking. Efforts are already underway to relax existing joint employer tests, for example.

One issue raised by Trump’s campaign, paid family leave, remains just off the back burner. However, the most viable legislation floated so far seems to involve optional leave programs. It seems clear that the Republican Congress isn’t eager to impose more burdens on employers just because the President threw an idea out there.

What Else Would Make Employers Thankful?

Here are just a few thoughts about some other issues that would make employers thankful going forward. Some would be easier to achieve than others

1. More effective means of preventing workplace harassment.

Sexual harassment has become a hot media topic recently. This is unfortunate in that the harassment, including assault, occurred in the first place. But at least the recent accounts are shining a spotlight and motivating people to do something about it.

This does, however, have a significant potential impact on employers. Various employment discrimination laws prohibit harassment based on many protected characteristics not limited to sexual harassment. It’s reasonable to assume that more employees will come forward to report harassment in light of the recent societal openness on the subject. This will require employers to expend resources on investigations and enhanced training. Plus, some will inevitably be held liable, meaning settlements, legal fees, and damages awards.

For some well-run businesses, this will mean increased costs, both direct and to productivity. They should recognize the inevitable and try to come up with innovative ways to prevent harassment. Areas of consideration include hiring, performance reviews, management accountability, and even exit interviews. This may well not be an area where the law will help employers. But, if necessary, the existing laws can help provide the motivation to act.

2. Resolution of the Affordable Care Act debate.

Congress remains within a couple Senate votes from repealing the Affordable Care Act (“Obamacare”). Like it or hate it, employers need to know what’s going to happen with this law that still hasn’t fully taken effect. The only thing that seems clear is that many of the existing (in writing) requirements upon employers will never actually materialize. But it’s still something of a guessing game to determine what will apply and when.

Most likely, we’ll have a new set of rules in this area within a couple of years. But who knows what they’ll look like! With the ever increasing cost of health insurance, uncertainty surrounding employers’ responsibilities is a major headache, at best.

3. Clarity in dealing with employee disabilities.

There are so many laws that apply when addressing an employee medical situation. These include the Americans With Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), the Family and Medical Leave Act (FMLA), worker’s compensation laws, state disability discrimination laws, and more.

It’s hard enough to comply with any one of these sets of rules, let alone all of them together. They leave many traps for the unwary and the well-intentioned employer alike. Even though employers usually want to be fair to employees with medical conditions, they must consider other employees and effective operation of the business as well.

For now, employers just have to accept that managing these situations is complicated. Perhaps one day some wise lawmakers can come up with a good a solution that make many employers thankful.

You may also be interested in reading 5 Big Legal Questions for New York Employers.

October 4, 2017

U.S. Employment Law by the Numbers

There are probably many lawyers who went to law school because they don’t like dealing with numbers. I’m not one of them. So, I thought I would address some of the most significant numbers in employment law.

Many of these numbers establish thresholds, especially for coverage issues. But others are caps, dates, or other parameters.

(If you prefer words, click here for my free Employment Law Dictionary.)

1 – Employee threshold for many employment laws

One is the number of employees an employer must have before being covered by the federal minimum wage and overtime laws. It also establishes coverage for many other federal laws, including immigration, health and safety, and labor law requirements. So, if you have just one employee, you’re already responsible for employment law compliance.

$7.25 – Minimum wage

This is the current nationwide minimum wage for most employees under the Fair Labor Standards Act (FLSA). Many states and some cities have higher minimum wage requirements for their employers.

11 – OSHA recordkeeping threshold

Non-governmental employers with at least 11 employees must maintain records of serious work-related injuries and illnesses.

12 – Annual FMLA leave allowance, in weeks

The employer can determine what 12-month period counts as a year for its employees. The best option is usually a rolling year measured back from the date on which a particular employee will use the leave. Other options include the calendar year, the employer’s fiscal year, or a forward rolling year from the date the employee first takes FMLA leave.

15 – Several federal discrimination laws kick in

Employers with 15+ employees are subject to Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA). Title VII prohibits discrimination because of race, color, sex, religion, and national origin. The ADA prohibits discrimination against qualified individuals with disabilities and requires employers to make reasonable accommodations. GINA prohibits discrimination based on genetic information, which is broadly defined.

20 – ADEA and COBRA coverage

The Age Discrimination in Employment Act (ADEA) prohibits discrimination because of age for employee 40 years of age or older.

Employees with at least 20 employees also become subject to COBRA insurance continuation requirements. COBRA entitles employees and/or their families to continue their group health insurance coverage for up to 18-36 months (depending on circumstances) after employment ends. The employees usually pay the coverage.

40 – FLSA overtime/ADEA age thresholds

Under the FLSA, employers must pay non-exempt employees overtime once they work more than 40 hours in a work week. The overtime rate must be at least time-and-a-half the employee’s regular rate.

As mentioned, employees also become protected by the ADEA when they turn 40.

50 – Affordable Care Act, FMLA, and WARN coverages

Employers with 50+ “full-time equivalents” qualify as large employers under the Affordable Care Act. This triggers various requirements, including the obligation to provide affordable health insurance to employees (or pay a penalty).

The Family and Medical Leave Act (FMLA) applies to employers with at least 50 employees.

The Workforce Adjustment Retraining Notification Act (WARN) requires employers to give written notice before mass layoffs and plant closings that will cause employment loss for at least 50 employees, sometimes more.

60 – Days in advance WARN notices must be issued

The employer must notify not only the affected employees (or their unions), but also certain government officials. There are exceptions to the notice obligation. If circumstances require the employer to act suddenly, the employer usually must give as much notice as possible.

75 – FMLA geographic proximity requirement

To become eligible for FMLA leave, among other conditions, an employee must work within a 75-mile radius of at least 49 other employees.

100 – WARN and EEO-1 thresholds

Non-governmental employers with 100 or more employees are potentially subject to WARN notice obligations and also must file annual EEO-1 reports. (Many federal contractors must file EEO-1 reports even if they have less than 100, but more than 50 employees.)

The EEO-1 form reports on company employment data by race/ethnicity, gender and job category. Read more about the status of EEO-1 reporting here.

$455 – Required weekly salary for some FLSA exemptions

To qualify for the most common FLSA exemptions, employees must receive a salary of at least $455 per week. The U.S. Department of Labor tried to increase this to $913 per week in 2016. Courts rejected that change, as has the current administration in Washington, which is reviewing an alternative approach.

1250 – Required annual hours worked for FMLA eligibility

If an employee has not worked 1250 hours for the employer in the past 12-months, they are not eligible to take FMLA leave.

$100,000 – “Highly compensated employee” exemption

The FLSA has special exemption rules for employees who receive at least $455/week in salary and $100,000/year in total compensation. These employees may be exempt even if they don’t satisfy the full standard exemption tests.

$300,000 – Highest cap on Title VII damages

Employers with more than 500 employees may be liable for up to $300,000 in compensatory and punitive damages for violations of Title VII’s anti-discrimination provisions. The caps are lower for employers with fewer employees: 15-100 employees = $50,000; 101-200 employees = $100,000; 201-500 = $200,000.

Some state employment discrimination laws have no caps. Thus, employees often sue under both state and federal laws to maximize their potential recovery.

No caps apply to damages for lost wages/benefits or attorneys fees under Title VII.

Employment Law Is Daunting

It’s not just the numbers. Employment law relies on many complicated words and phrases too. I’ve written a concise Employment Law Dictionary to help with that. Get your free copy here.

July 28, 2017

How Much Should Exempt Employees Get Paid?

One of 2016’s hot topics in employment law was how high the salary threshold for FLSA exemption would increase? In other words, how much would employer have to pay exempt employees to keep them exempt? It’s mid-2017, and the question hasn’t gone away!

The U.S. Department of Labor initially answered that question with a $913/week salary requirement. That threshold would then change every three years based on average salary levels.

However, a federal court in Texas stopped the new salary rule before it took effect. That case remains on appeal, but the Department of Labor–now under a Republican administration–has indicated it will not fight to uphold the $913/week standard. Instead, the DOL has announced that it will review the relevant rules and establish a new test.

On July 26, 2017, the DOL issued a Request for Information seeking information related to the FLSA exemption rules. In particular, the DOL refers to the executive, administrative, professional, outside sales, and computer employee exemptions.

What Tests for Exempt Employees?

Based on the Request for Information, it looks like the DOL is open to reviewing all aspects of the exemptions. This includes not only the salary level for exempt employees, but also the duties tests.

Here are some of the specific questions the DOL is asking:

Would updating the 2004 salary level ($455/week) for inflation be an appropriate basis for setting the standard salary level and, if so, what measure of inflation should be used?
Should the regulations contain multiple standard salary levels? If so, how should these levels be set: by size of employer, census region, census division, state, metropolitan statistical area, or some other method?
Does the standard salary level set in the 2016 Final Rule ($913/week) work effectively with the standard duties test or, instead, does it in effect eclipse the role of the duties test in determining exemption status?
To what extent did employers, in anticipation of the 2016 Final Rule’s effective date on December 1, 2016, increase salaries of exempt employees in order to retain their exempt status, decrease newly non-exempt employees’ hours or change their implicit hourly rates so that the total amount paid would remain the same, convert worker pay from salaries to hourly wages, or make changes to workplace policies either to limit employee flexibility to work after normal work hours or track work performed during those times?
Did employers make any additional changes, such as reverting salaries of exempt employees to their prior (pre-rule) levels, after the preliminary injunction was issued?
Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test?
Does the salary level set in the 2016 Final Rule exclude from exemption particular occupations that have traditionally been covered by the exemption and, if so, what are those occupations?
Should there be multiple total annual compensation levels for the highly compensated employee exemption?
Should the standard salary level and the highly compensated employee total annual compensation level be automatically updated on a periodic basis to ensure that they remain effective, in combination with their respective duties tests, at identifying exempt employees?

Help the DOL Get it Right

The DOL will accept public comments on the Request for Information until September 25, 2017. Anyone can submit information related to these issues affecting exempt employees. You can expect prominent employee, labor, and business groups to do so.

I am currently considering submitting comments based on my experience representing employers in employee classification and overtime for more than a decade. If you have any information that you would like to share in connection with my preparation of those comments, please email me.

DISCLAIMER: No attorney-client relationship will be created by you emailing me information! If you need legal representation, whether in connection with employee exemption issues otherwise, please speak with me (or another attorney of your choice) before sending confidential information.