Tag Archives: employer policies

Once More, With Feeling: Proposed Increase to Minimum Salary for Highly Compensated Employees

As previously reported, the U.S. Department of Labor issued a proposed rule addressing exemptions for bona fide executive, administrative, professional, and outside sales employees (the “white-collar” exemptions”) under the Fair Labor Standards Act. Presuming the rule goes into effect, the new minimum salary threshold for these employees will be $35,308 per year (or $679 per week).

Beyond changing the minimum salary threshold for the “white-collar” exempt employees, the DOL also proposed increasing the exemption threshold for a smaller category of employees: “highly-compensated” employees. Previously, any employee whose primary duty was performing office or non-manual work and who customarily and regularly performed at least one duty or had at least responsibility of a bona fide executive, administrative, or professional employee could be exempt–if the employee made at least $100,000 a year and received at least $455 each week on a salary or fee basis. In essence, the “highly-compensated” employees exemption combines a high compensation requirement with a less-stringent, more-flexible duties test in comparison to those used under the “white-collar” exemptions.

Like the DOL’s proposed changes to the “white-collar” exemption, the DOL’s proposed changes to the “highly-compensated” exemption does not alter the duties requirements. Rather, the DOL proposes an increase to the annual and weekly salary thresholds. But in this instance, the increase is substantial. The proposed new threshold jumps from $100,000 under the current rules up to $147,414, of which $679 must be paid weekly on a salary or fee basis. That is an approximate 50 percent increase, and it is about $13,000 higher than what had been previously proposed when changes were considered in 2016.

Now, despite the change raising eyebrows, one could question whether it would have significant impacts because most workers paid $100,000 or more often already fall into one or more of the other exemptions. The DOL itself acknowledges in the proposed rulemaking that it estimates only about 201,100 workers nationwide would become eligible for overtime due to this salary increase. In comparison, the DOL expects the “white-collar” salary change will impact approximately 1.1 million workers nationwide.

The common view remains that the new minimum salary thresholds will likely go into place later this year (2019) but likely no later than January 1, 2020. Although that later date is almost seven months away, that deadline is rapidly approaching. Hence, it is worth reiterating that employers should begin evaluating their staff to determine who, if anyone, may be affected and determine how to proceed. Similarly, this rule change provides employers an opportunity to audit all of their employees (even those unaffected by the proposed rule changes) to make sure each one is properly classified. And if they are not, employers can time any reclassifications with those made to meet the new rule changes to possibly minimize bringing attention to and potential liability for any past misclassifications.

In the meantime, the DOL will accept comments from interested parties until May 21, 2019 at 11:59 PM ET. The public will be able to provide electronic comments at regulations.gov (after searching for RIN no. 1235-AA20) or via mail to the address below (identifying in the written comment (1) the Wage and Hour Division, United States Department of Labor; and (2) RIN no. 1235-AA20).

Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor, Room S-3502
200 Constitution Avenue, N.W.
Washington, D.C. 20210

John C. Getty
jgetty@williamsparker.com
(941) 329-6622

No Fooling: DOL Proposes New Rule to Determine Joint-Employer Status

As a rule of thumb, skepticism is in order for any news blasted out on April Fool’s Day. For that reason, you could easily believe that the U.S. Department of Labor (DOL) was joining in the tomfoolery this year when it issued a new Notice of Proposed Rulemaking on April 1, 2019 to address joint employment under the Fair Labor Standards Act (FLSA), but, that wasn’t the case.

Through its April 1, 2019 notice, the DOL seeks to revise regulations on joint employment issues. A joint employer is any additional individual or entity who is equally liable with the employer for the employee’s wages, including minimum wages and overtime. Presently, the regulations state that multiple persons or companies can be joint employers if they are “not completely disassociated” with respect to the employment of an employee. The phrase “not completely disassociated” is not clearly explained in the regulations, which has led to thorny issues when dealing with the employees of subcontractors, franchisees, and similar relationships.

To address such issues, the DOL proposes a four-factor analysis that considers whether the employer actually exercises the power to:

  • Hire and fire an employee;
  • supervise and control an employee’s work schedules or conditions of employment;
  • determine the employee’s rate and method of payment; and
  • maintain the employee’s employment records.

The DOL indicates that there are other factors that should and should not be considered. It also clarifies certain business models and practices or contractual language that does not make a joint employer status more or less likely. A Fact Sheet issued with this proposed rule does a fair job of summarizing the other factors. For example, the DOL indicates that just because a company reserves the right in a contract to exercise control over another company’s workers does not—by itself—make a company more or less likely to be considered a joint employer. Rather, a company must actually exercise the contractual control to become a joint employer. Likewise, the DOL notes that just because a company can require another contracting party to institute anti-harassment policies, workplace safety measures, or wage floors does not make it more or less likely the two companies are joint employers.

The April 1, 2019 notice began the notice-and-comment process. The DOL will accept comments from interested parties for 60 days. The public will be able to provide electronic comments at www.regulations.gov (after searching for RIN no. 1235-AA26) or via mail addressed to:

Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor, Room S-3502
200 Constitution Avenue, N.W.
Washington, D.C. 20210

(identifying in the written comment (1) the Wage and Hour Division, United States Department of Labor; and (2) RIN no. 1235-AA26).

John Getty
jgetty@williamsparker.com
(941) 329-6622

Business Resolutions: Ensuring Your Business Starts the New Year Off Right

When was the last time that your business had a wage audit to evaluate whether your employees are properly classified under the Fair Labor Standards Act, or had your employee handbook reviewed and revised to bring it up-to-date with the law and current company practices? If it has been a few years, then this may be the year that your business resolves to invest in a wage audit and/or handbook review.

Wage audits include an evaluation of your job positions, pay and overtime policies, as well as payroll records of each position within an organization or department. Sometimes, audits can also include interviews with employees to ascertain if there are any issues that management should be aware of. Audits can reveal if a business has any issues with, not only misclassification of employees as exempt when they should be non-exempt, but whether managers are following the organization’s policies regarding overtime. As a company grows and changes, often the duties of its employees also change. Sometimes these changes are significant enough that a change in classification is in order and a failure to adjust the classification could result in liability. Further, a wage audit can often help to determine if an organization’s accountant or payroll company is calculating overtime in accordance with the applicable regulations. Many a lawsuit are filed against employers who believe that since they have enlisted the assistance of a third party, employee overtime is being calculated appropriately. That is not always the case.

Employee handbooks should be reviewed every couple of years, not only to ensure that the handbook reflects the current state of the law, but also that it reflects the actual practices of a company. Businesses grow and change, and actual practices can start to diverge from what is reflected in the handbook. It is always better to have a handbook that provides policies and procedures that the company is currently using and enforcing. It is never recommended for a company to have policies that it does not follow.

This post is part of a series of business resolutions to consider for the new year. In case you missed them, our previous posts in the series discussed Florida minimum wage and employee performance management.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Office Holiday Parties: Avoid Adding Your Company to the Naughty List

Harvey Weinstein, Kevin Spacey, Michael Oreskes, Brett Ratner, Louis C.K., Charlie Rose, and Matt Lauer are a few well-known names that have already appeared on the naughty list for 2017. Although the Mad Men days of the sexy secretary sitting on Santa’s lap (the boss’s lap) with his arms wrapped around her while both are drinking a dry martini SHOULD be a vestige of the past, there are those that believe that “keep your hands to yourself” does not apply to them.  And, there are those that understand the “hands-off” rule, yet when under the influence of alcohol, find their inhibitions on the copy room floor.

This year, with stories of sexual harassment and abuse dominating the news, it is more important than ever for employers to consider the potential risks associated with any planned celebration. Employers should keep in mind that office policies that are generally recognized in the workplace sometimes are forgotten when there is a party, especially a party with libations. A holiday office party can embolden inappropriate behavior, from simple innuendos to unwelcome touching that could lead to claims of sexual harassment. The office holiday party can be a quagmire of potential employment issues, even beyond sexual harassment. These issues can include claims due to on-the-job injuries (workers compensation), unpaid wages for attending the party (the Fair Labor Standards Act), or other types of workplace harassment or discrimination (e.g. religion).

As you prepare for your office party, consider whether alcohol should be available, as most issues arise due to someone bending the elbow a bit too much. If you do decide to provide spirits make sure you have someone (a designated responsible adult) that is watching to ensure that your workforce does not get too “relaxed” and cross the line. Possibly limit how much alcohol is served and make sure any employee that drinks a little too much has a ride home. Evaluate in advance whether the party is going to be mandatory or not. If its voluntary and employees do not feel compelled to attend, then employers are not required to compensate employees for their attendance. Review the plans for the party in advance to see if there are any activities that could be considered inappropriate or offensive to members of any protected class.  Finally, make sure that employees understand that the company’s policies and procedures, especially those related to conduct, are still in effect at the party. Most parties are benign and conclude with no real issues to speak of, but you don’t want to be the exception to the rule. You do not want your CEO or VP added to the naughty list.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Arbitration Update: Eleventh Circuit Finds in Favor of Florida Employers

Florida employers are beginning to benefit from recent U.S. Supreme Court and National Labor Relations Board (NLRB or Board) rulings.  On June 26, 2018, the federal Eleventh Circuit Court of Appeals issued two decisions in favor of Florida employers in which it rejected NLRB rulings that the employers had violated the National Labor Relations Act (NLRA). The cases are Everglades College, Inc. v. NLRB and Cowabunga, Inc. v. NLRB.

Applying the Supreme Court’s Epic Systems decision (for further information on Epic, click here), the Eleventh Circuit held in both cases that the inclusion of class and collective action waivers in these employers’ mandatory arbitration agreements did not violate the NLRA. Additionally, relying on the Board’s Boeing decision (for more information, on Boeing click here), the Eleventh Circuit vacated the NLRB’s holdings that the arbitration agreements were unlawful because employees could “reasonably believe that they were prohibited from filing unfair labor practice charges with the NLRB.”

In Boeing, the NLRB retroactively changed the rationale it used to evaluate the lawfulness of facially neutral employee policies, thus eliminating the broadly applied “reasonably believe” standard that prohibited any rule that could be interpreted as covering protected activity. Without that standard, the Board could not defend its prior decisions in the appeals. Therefore, the Eleventh Circuit remanded the remaining issues in the cases to the NLRB so that it can apply its new Boeing rationale, which does not interpret ambiguities against the drafter and does not ban all activity that could conceivably be included in generalized provisions.

Even with the NLRB General Counsel’s recent memo addressing the application of the Boeing standard (for more on the memo, click here), it is unclear how the Boeing rationale will apply to arbitration agreements. Regardless, employers should remain hopeful as the new standard provides for a more balanced review.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

[Editor’s Note: Williams Parker attorney Gail E. Farb represented the employer in the Everglades College, Inc. case cited above.]

An Employer’s Response to #MeToo

If you did not know the name Harvey Weinstein prior to October 2017, you should now, following the well-publicized allegations against him of sexual assault and harassment spanning decades. The focus on the allegations against Weinstein has resulted in women and men sharing their personal accounts of sexual assault and harassment. Often these personal accounts of improper sexual behavior are tied to the workplace and are prompting a national conversation of the abuse of power in the workplace. Many of these accounts are being made with the hashtag #MeToo. Even persons not willing to share the specifics of their experiences have been using #MeToo to confirm that they were indeed victims. The hashtag itself is not a specific call to action but instead aims to raise awareness of the magnitude of the problem of sexual assault and harassment.

Improper conduct by those in positions of power in several large companies is now being highlighted, and high-ranking officials in several of those companies are having to answer for their conduct, even if such conduct is outside of a relevant limitations period for a legal claim. On November 1, 2017, NPR’s senior vice president for news resigned on the heels of allegations of sexual harassment against him by several women, including two that, according to the Washington Post, claim that “he unexpectedly kissed them on the lips and stuck his tongue in their mouths.” Questions are now being asked regarding when NPR, and other companies, first learned of allegations of harassment and why firmer action was not taken by the company.

Due to this intense focus on harassment in the workplace, companies may want to evaluate if the policies and procedures that they have in place are sufficient, if their leadership truly understands what is appropriate behavior, and if employees are familiar with how to make complaints. To do this employers should consider the following:

  • Review written policies to ensure they are easily understood and provide the proper protections for employees
  • Conduct management training regarding harassment and appropriate behavior
  • Conduct employee training to ensure employees are aware of policies in place to protect them and understand the reporting procedures

Employers should anticipate that, with the increased focus on sexual misconduct, an issue may come up within their own companies. Understanding the issue and being prepared to provide a proper response is usually a better option for employers than merely responding to an issue when it arises.

You may also want to read our past posts relating to sexual harassment.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Offensive Facebook Posts May Be Protected Speech

Human resources experts often recommend a detailed analysis before disciplining an employee for offensive statements. On April 21, 2017, the Second Circuit Court of Appeals highlighted this requirement and forced an employer to reinstate an employee who had been fired for posting highly offensive comments about his supervisor. Although this case, National Labor Relations Board v. Pier Sixty LLC, 2017 U.S. App. LEXIS 6974 (2d Cir. April 21, 2017), involved a union organizing campaign, such a dispute can arise outside the union context. It can arise in a breakroom conversation, a media interview, a picket sign, or a social media post. If the content involves protected speech, such as criticism of the terms and conditions of the employee’s employment, and especially if the speech purports to speak on behalf of or for the benefit of others, the speech may be protected, whether or not there is a union involved.

In Pier Sixty, the employee posted on Facebook that his supervisor is a “NASTY MOTHER F—ER” and “F—his mother and his entire f—ing family!!!”  The post criticized his supervisor’s communications style, saying, “…don’t know how to talk to people!!!!”  The post also included a pro-union statement, “Vote YES for the UNION!!!!!!”

The court weighed the protections (here, concerted activity) versus how abusive or “opprobrious” the comments were. The court reviewed the context of the statements, including that the employer was found to have permitted past vulgarity and to have engaged in other efforts to impede unionizing efforts. Commenting that these posts fall on the “outer bounds” of protected activity, the court declared the posts to be within the bounds of protected concerted activity and required the employer to bring the discharged employee back to work.

Employers should ensure that workplace rules are consistently enforced and that the reason for discharge does not involve and does not appear to involve a protected reason. Employers should be prepared to articulate and, if required, prove the lawful reason for discharge rather than relying on at-will status.

Kimberly Page Walker
kwalker@williamsparker.com
(941) 329-6628

Starting in 2017 Federal Contractors Will Be Required to Provide Employees Paid Sick Leave

Last week the Department of Labor issued a final rule requiring federal contractors entering into contracts on or after January 1, 2017, to provide up to 56 hours of paid sick leave to employees.  This rule does not require those employers that already offer equivalent or more generous paid time off plans than that required by the rule to increase the benefits offered to employees. The new rule applies to those contracts that are covered by the Service Contract Act or the Davis-Bacon Act, concessions contract, and service contracts in connection with or federal property or lands. Covered employers will need to post the “Paid Sick Leave for Federal Contractors” poster, which can be downloaded from https://www.dol.gov/whd/regs/compliance/wh1090.pdf.

More information about those contracts that will be impacted, what employees are covered, employee eligibility, carry-over rights, and coordination with existing collective bargaining agreements can be found at https://www.dol.gov/whd/govcontracts/eo13706/.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558