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The Shoe Drops: DOL Releases Its New Overtime Final Rule

Department of Labor crestAfter 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.

OSHA Final Rule on Workplace Injury & Illness Reporting

OSHA 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.”

IRS Notice Offers Windsor Guidance to Benefits Plans

Earlier this month, the IRS issued Notice 2014-19, which discusses recognition of same-sex spouses in qualified retirement plans. The notice comes after the Supreme Court opinion of U.S. v. Windsor (June 26, 2013) and states that plans are not forced to apply the requirements of the opinion retroactively. However, plans with terms inconsistent with Windsor must be amended by December 31, 2014.

This month’s Notice follows Rev. Rul. 2013-17 (Sept. 16, 2013), which provided in the federal tax context, that the terms “spouse,” “husband and wife,” “husband,” and “wife” include an individual married to a same-sex person if the individual is lawfully married. Numerous IRS statutes and treasury regulations include one or more of those terms.

IRS Notice 2014-19 only applies to qualified retirement plans. However, non-qualified plans, severance agreements, incentive plans, and other agreements often include the same terminology. Thus, employers should take care to consider other uses of these terms.

Expanded Scope for New HIPAA Rules

HIPAASeptember 23, 2013.  Today is the day that many of those who use protected health information (PHI) must comply with new Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules, which went into effect 180 days ago.

If you use PHI in your work, hopefully by now you are aware of those changes. For the first time, Privacy and Security rules apply not only to covered entities and business associates, but also to subcontractors who provide services to those business associates. This includes the security breach notification requirements when PHI is compromised.

An HHS press release earlier this year noted, “Some of the largest breaches reported to HHS have involved business associates.”  With the expanded scope of the rules, look for more enforcement actions in the future.

HIPAA Omnibus Final Rule

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The HIPAA-HITECH Omnibus Final Rule has been released and was officially published January 25, 2013.  Businesses need to take steps to be compliant with many requirements by September 23, 2013.  And there will be much work to do.  Among other issues:

  1. There will be a need for changes in Notices of Privacy Practices.
  2. There will be greater enforcement efforts, which is already being seen in many places, and more emphasis on penalties.
  3. There are changes to breach notification requirements with more events being reportable.
  4. There is direct liability for Business Associates and Covered Entities will need to monitor Business Associates more closely.
  5. The Rule contemplates electronic copies of electronically stored information.

OSHA Training Centers

The Occupational Safety and Health Administration of the U.S. Department of Labor operates education centers (OSHA Training Institute Education Centers) throughout the country.  The program has been in place for 20 years and provides outreach, training, and monitoring, working with 40,000 participants last fiscal year.  The program covers construction, general industry, disaster site, and maritime issues, focusing on training courses for safety and health hazards.

The DOL has renewed 24 existing sites and added 4 new sites after a national competition.  The new sites include Volunteer State Community College in Gallatin, Tennessee.   The press release is available by clicking here.

OSHA Fall Prevention for Construction

OSHA is continuing to work with the National Safety Council, a nonprofit public service organization, to promote workplace safety, giving emphasis to fall prevention at construction sites.


According to Assistant Secretary of Labor for Occupational Safety and Health David Michaels, “Falls cause more fatalities than any other hazard in the construction industry.”  So OSHA has entered into a new two-year agreement to identify best practices including developing fact sheets on the benefits of injury and illness prevention programs that identify workplace hazards.