After months of anticipation by many employers, the DOL has released its Final Rule related to overtime this week. The Final Rule amends compensation levels for the Highly Compensated Employee (HCE) Exemption and the Executive, Administrative, and Professional (EAP) Exemptions. (The duties tests remain the same.) These levels were last updated in 2004.
The compensation for HCE will be set at an annual rate of $134,004, or equivalent to the 90th percentile of full-time salaried workers across the country. The EAP Exemption will be set at $47,476, indexed to the 40th percentile of the lowest-wage Census Region—at this time, the South. Importantly, the Rule also sets a method for updating the compensation levels automatically every three years to maintain the levels at those percentages.
By raising these pay thresholds, the Final Rule greatly increases the number of employees eligible for overtime protection. Many employers may modify the way they operate, taking measures to limit the work hours of employees or altering the structure of positions.
The changes become effective December 1, 2016. For more detail on the changes and how they may impact your operations, consult with employment counsel.
Last week, OSHA issued a final rule regarding the reporting of workplace hazards. Many employers are already required to keep records of injuries and illnesses. At this time though, little of this information about individual employers is made public. Under the new rule, employers in high-hazard industries that are already collecting data will send it to OSHA for posting on OSHA’s website. OSHA states that the availability of this data will enable employees to choose workplaces where injury risk is lowest, and employers that wish to hire the best workers will make prevention a priority.
Under the rule, employers with 250 or more employees in industries covered by the Recording and Reporting Occupational Injuries and Illnesses regulation must electronically submit information. Employers with 20-249 employees in certain industries must electronically submit more-limited information as well.
New requirements take effect August 10, 2016, with submissions to OSHA beginning in 2017. The obligations to complete and retain injury and illness records under the recordkeeping regulation remain unchanged.
According to the Bureau of Labor Statistics, over three million workers suffer a workplace injury or illness annually. Assistant Secretary Michaels states, “Since high injury rates are a sign of poor management, no employer wants to be seen publicly as operating a dangerous workplace. Our new reporting requirements will ‘nudge’ employers to prevent worker injuries and illnesses to demonstrate to investors, job seekers, customers and the public that they operate safe and well-managed facilities.”
You have probably heard discussion of the United States Department of Labor’s Final Rule published March 24, 2016, related to “persuader” activities. This Rule was established under the Labor-Management Reporting and Disclosure Act.
Under this Rule, an employer and its attorney are each obligated to report any arrangement in which a direct or indirect object of the service by the attorney is to persuade employees about the manner in which they exercise rights to organize and bargain collectively. Reports are to be made to the DOL. As slated, the Rule will be applicable to agreements and activities from July 1, 2016 forward.
House Republicans have introduced a joint resolution seeking to block the Final Rule and noting disapproval.
- Establish a consistent process for execution of I-9 forms.
- On the first day of work, ensure that each new hire completes and signs Section 1.
- Review the employee’s documents and confirm that they are on the acceptable document list and look authentic (www.uscis.gov/i-9).
- While it is not required in all locations, making copies of all documentation provided is a good practice.
- Track the expiration of documents that limit the right to work and prepare a tickler system to follow up. Also, do not keep I-9 documentation in the personnel file.
- Retain I-9s and any supporting documents for the later of three years after hire or one year after termination.
The Wage and Hour Division of the Department of Labor provided recent guidance for determining worker classification. The WHD says a business “‘suffers or permits’ an individual to work if, as a matter of economic reality, the individual is dependent on the entity.” The economic reality test factors are:
(a) the extent to which the work performed is integral to the employer’s business;
(b) the worker’s opportunity for profit or loss depending on managerial skill;
(c) the extent of the relative investments of the employer and the worker;
(d) whether the work performed requires special skills and initiative;
(e) the permanency of the relationship; and
Businesses are to analyze these factors in conjunction with each other, and no factor is given more weight than another. In particular, the “control” factor should not be given more weight. If you have questions or want to discuss how the relationships with your workers are structured, give us a call at Wilson Worley, PC.
The Wage and Hour Division of the Department of Labor issued an Administrator’s Interpretation on July 15, 2015. The Interpretation discusses the classification of independent contractors and employees. An Interpretation does not have the force of a regulation that has been subject to the procedures of notice and comment. However, the Interpretation is indicative of the stance that the DOL will likely take regarding employee and independent contractor classification. The Interpretation’s actual authority and ability to impact the classification of employees and independent contractors in litigation will be a source of future debate. It is an indication that misclassification continues to be a hot button topic for businesses paying workers.
This week in 1990, President George H.W. Bush signed the Americans with Disabilities Act into law. The DOL is celebrating 25 years of the ADA this month. The law is designed to eliminate discrimination against persons with disabilities and strive for full participation for all people in economic opportunities and in independent living. The ADA has since been amended in 2009. More information on the anniversary is available on the U.S. Department of Justice’s Civil Rights Division website, by clicking here.