Author Archives: Lindsey L. Dunn

U.S. Department of Labor Boosts Penalties for Violating Labor and Employment Laws

On August 1, 2016, the Department of Labor increased civil money penalties for more than 60 kinds of violations of labor and employment laws, ranging across the board from wage-and-hour rules and occupational health standards to benefits requirements and immigration regulations. The Occupational Safety and Health Administration has seen the first increase to its civil penalties in 25 years, with maximum fines rising by nearly 80% to $12,471 for serious violations and $124,709 for willful or repeated violations. Other significant increases involve penalties for violations of the Immigration and Nationality Act’s prohibitions on displacing a U.S. worker with an H1B visa holder (rising from $35,000 to $50,758), as well as for violations of the Fair Labor Standards Act’s prohibitions on child labor (rising to $12,080 per violation, $54,910 if serious injury or death occurs, and $109,820 if child labor violations are willful or repeated resulting in serious injury of death). Penalties for willful violations of the FLSA’s wage and overtime provisions have also increased from $1,100 to $1,894. The increase in fines for willful FLSA violations comes on the heels of the new DOL rule extending overtime protections to nearly 4 million more workers, which could drive more wage-and-hour litigation. The DOL began applying these new, increased rates to penalties assessed after August 1, 2016.

The DOL’s announcement of its new rules to adjust civil penalties may be found here: https://www.dol.gov/newsroom/releases/opa/opa20160630.

Lindsey L. Dunn
ldunn@williamsparker.com
941-552-2556

Department of Labor Announces Updated Sex Discrimination Regulations for Federal Contractors

For the first time in over forty years, the Department of Labor is publishing new sex discrimination regulations for federal contractors to reflect the current state of the law. The final rule updates the sex discrimination regulations of the Office of Federal Contract Compliance Programs (OFCCP) and makes explicit the protections against compensation discrimination; sexually hostile work environments; discrimination based on pregnancy, childbirth or related medical conditions; and discrimination based on unlawful sex stereotypes, gender identity, and transgender status. The regulations also promote fair pay practices. The new rule also implements Executive Order 11246, which prohibits companies with federal contracts and subcontractors from discriminating in employment on the basis of sex. These updated regulations should afford additional clarity and consistency for federal contractors and subcontractors, as they now reflect existing federal laws prohibiting discrimination on the basis of sex.

The DOL’s final rule can be found here:
https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-13806.pdf

Executive Order 11246 is available here:
https://www.dol.gov/ofccp/regs/statutes/eo11246.htm

Lindsey L. Dunn
ldunn@williamsparker.com
941-552-2556

Employer-Sponsored Workplace Wellness Programs May Require Adjustments in Light of New EEOC Rules

The Equal Employment Opportunity Commission (“EEOC”) recently issued two final rules regarding employer-sponsored wellness programs. The rules arose as a result of the interplay between several federal statutes which touch upon wellness programs, including the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA), and the EEOC’s concern that employer-sponsored wellness plans, especially those that solicit information about employees’ family members, could violate the ADA or GINA. In an attempt at clarifying when wellness programs are permissible, the EEOC’s final rules provide that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to thirty percent of the total cost of self-only coverage. The EEOC’s rules also cap the incentive attributable to a spouse’s participation in a wellness program at thirty percent of the total cost of self-only coverage. The final rules will become effective beginning on the first day of the plan year that begins in 2017. Given the numerous statutes applicable to employee wellness programs, and the newly promulgated EEOC rules, employers should review their wellness programs closely to ensure compliance with all applicable laws.

The EEOC’s final rules and related information can be found at:
https://www.eeoc.gov/laws/regulations/qanda-ada-wellness-final-rule.cfm and
https://www.eeoc.gov/laws/regulations/qanda-gina-wellness-final-rule.cfm

Lindsey L. Dunn
ldunn@williamsparker.com
941-552-2556

App-Based Business Models May Generate a New “Hybrid” Employee Classification

Online, app-based companies such as Uber and Lyft recently attempted to settle class action lawsuits brought by drivers who contend they were misclassified as independent contractors rather than employees. Uber recently reached a proposed $100 million dollar settlement with drivers who worked in California and Massachusetts which keeps drivers classified as contractors. A federal judge unsealed the originally proposed settlement deal, which reflects potential damages closer to $852 million. On June 2, 2016, Uber drivers in New York also filed a federal class action lawsuit seeking millions of dollars in minimum wage and overtime pay. Lyft had also recently agreed to settle its class action lawsuit for $12.25 million, but a separate federal judge rejected the deal because it only represented about 9% of the drivers’ claims. Business models utilized by companies such as Uber and Lyft do not lend themselves to the traditional classification of employee versus independent contractor, and these lawsuits do not resolve the issue. There are proponents of a “hybrid” employee classification that would afford workers certain protections provided to employees, however, any third classification would require corresponding modifications to laws like the Fair Labor Standards Act, which can only occur through congressional action. As there is no indication from Congress that this issue will be addressed in the near future, we will likely continue to see the filing of class action lawsuits against Uber, Lyft, and similar companies alleging worker misclassification.

Lindsey L. Dunn
ldunn@williamsparker.com
941-552-2556

DOL Issues Final Rule Revising Overtime Regulations

On May 18, 2016, the Department of Labor raised the minimum salary level that certain employees must be paid to qualify as exempt from the overtime pay requirements of the Fair Labor Standards Act. Under current regulations, executives (supervisors), administrative employees and professionals, must both perform “exempt” duties as defined by the DOL and be paid a guaranteed salary of at least $455 a week ($23,660 annually). This new regulation significantly increases the salary threshold to $933 a week ($47,476 annually), however, it does not alter the primary duty test. The federal government predicts that the new rule will result in companies having to pay an additional 4.2 million employees overtime, boosting wages for workers by $12 billion over the next ten years.

Additionally, as noted in comments included in a recent Law360 article, the DOL’s rule, while potentially extending overtime protections to 4.2 million more employees, may also have adverse effects for certain employees. In an effort to offset costs businesses may incur as a result of the new rule, both in terms of the expense associated with ensuring compliance, as well as having to pay overtime to formerly exempt employees or sufficiently increasing an employee’s salary so as to maintain the exemption, certain employers may reduce rates of pay, cut back scheduled hours to reduce risk of overtime, or offer less generous benefits to non-exempt employees.

A link to the new rule can be found here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-11754.pdf

Related guidance issued by the DOL can be found here: https://www.dol.gov/sites/default/files/overtime-overview.pdf

Lindsey L. Dunn
LDunn@williamsparker.com
(941) 552-2556