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.
I wrote last summer about issues involving volunteer interns; it’s that time of year again to consider your practices involving interns. With more and more students and job seekers who need resume-building opportunities, there are many requests to job shadow or obtain unpaid work experience. Employers must use care to avoid running afoul of wage and hour laws.
The DOL has listed several factors in reviewing whether the FLSA is implicated, including if the internship is similar to educational training, is really for the benefit of the intern, does not displace regular employees, and offers no immediate advantage to the employer. Based on the factors, most interns should be paid for work they perform.
The complete DOL fact sheet is available here: Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.
Wilson Worley employment attorney Sam Booher covers several topics in the April 2013 newsletter: (1) The proposed Fair Minimum Wage Act of 2013; (2) Request for Supreme Court review of the ruling that invalidated recess appointments to the NLRB; and (3) Yahoo’s decision to discontinue allowing employees to work from home. Click here to read the full newsletter.
Almost fifteen hundred home care workers will will recover $1.1 million in settlement of a class-action case against their employer. The recovery is against non-profit McMillan’s Home Care Agency. The case was originally filed in 2010, alleging blatant violation of wage-and-hour laws for New York City workers with individuals working up to 60 hours a week without additional compensation. Approximately one in seven low wage earners in New York are in the home care industry.
“Summer’s here and the time is right for dancing in the street. . . .”
The time is also right for having summer interns in your place of business. With a difficult job market, many students are seeking any type of position to build a resume while others are involved in education programs for credit that require practical on-the-job work.
If you plan on allowing volunteer interns to work over the summer at a for-profit business, you must meet certain criteria outlined by the Department of Labor to avoid a wage and hour violation under the FLSA. Those factors are:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Click here to review the complete DOL fact sheet: Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.
The Tennessee Attorney General issued an Opinion in October 2011 confirming that Tenn. Code Ann. § 22-4-106(b) requires an employer to pay an employee for travel time to and from jury duty if the employee does not receive compensation for travel as part of the employee’s usual duties. According to the Opinion, an employer must compensate for that travel time, as well as for the service on the jury, subject to limitations in the statute. This does not apply to employers who have fewer than five regular employees or to temporary employees who have worked less than six months. The Opinion may be viewed here.
The statute provides:
Notwithstanding the excused absence as herein provided in subsection (a), the employee shall be entitled to the employee’s usual compensation received from such employment; however, the employer has the discretion to deduct the amount of the fee or compensation the employee receives for serving as a juror. Moreover, no employer shall be required to compensate an employee for more time than was actually spent serving and traveling to and from jury duty. If an employer employs less than five (5) people on a regular basis or if the juror has been employed by an employer on a temporary basis for less than six (6) months the employer is not required to compensate the juror during the period of jury service pursuant to this section.
The FLSA does not require employers to compensate for travel to the regular place of work. Therefore, an employee who commutes to work and then works regular shift is only compensated at the regular rate for the shift. As the Opinion clarifies, a Tennessee employer must pay “usual compensation,” for time “actually spent serving and traveling to and from jury duty” according to Tennessee law. “Usual compensation” is the regular rate of pay. Thus, an employee who travels half an hour from home to court and serves eight hours on jury duty should be paid for 9 hours—one hour for travel plus eight hours for jury duty.
The AG does not specifically address salaried employees, but opines that legislative history is consistent with paying a salaried employee on a pro-rated basis if jury duty is less than a regular work day.
How do you treat payment for employees who are “On the Road Again”?
A basic tenant of employment law provides that an employee is responsible for getting to work, and the employer is not obligated to pay for this commute time to work (unless the employee works during the travel). That commute or home-to-work travel is not pay time under the FLSA pursuant to the Portal-to-Portal Act. However, there are times that the employer should pay the employee for travel time. The question is whether the travel is for the organization’s benefit (trips out of town, to clients, etc.) or for the employee’s benefit (getting to the workplace). Even if the employee works at different job sites, travel to the site is not compensable, unless the employee must report to a central location and then is sent to a remote job site.
Travel that is part of the regular daily duties of the employee, such as visits to customers, must be counted as work time. For day trips, any travel to the ultimate location is compensable. However, travel to an airport or other mass transit terminal is treated as home-to-work travel. For an overnight stay, all travel during normal working hours, regardless of the day of the week, is compensable.
“The life I love is makin’ music with my friends, and I can’t wait to get on the road again.” Sorry if you have Willie Nelson in your head now.