Congress has joined the fight in trying to stop or delay the Department of Labor’s new overtime regulations. This week, the U.S. House of Representatives voted 246 to 177 to delay the effective date of the DOL’s overtime rule by six months until June 1, 2017. This bill faces an uphill battle — first having to pass the Senate and then a very likely Presidential veto.
Given that the bill is unlikely to become law, and given the questionable future of pending court challenges, employers should continue to prepare for the new regulations to be effective on December 1st. We will continue to monitor these challenges and keep you apprised.
The Equal Employment Opportunity Commission (EEOC) has released its final Enforcement Guidance on Retaliation and Related Issues. While the guidance doesn’t create any new law, it serves as a good reminder of the position the EEOC takes on such claims. Here are a few highlights from the Guidance:
- Retaliation can exist even when no official employment action against the employee is taken. For example, it could be retaliation because of the employee’s EEO activity for an employer to:
- reprimand an employee or give a performance evaluation that is lower than it should be;
- transfer the employee to a less desirable position;
- engage in verbal or physical abuse;
- threaten to make, or actually make reports to authorities;
- increase scrutiny;
- spread false rumors, treat a family member negatively; or
- take action that makes the person’s work more difficult.
- The EEOC makes clear that an employer cannot retaliate against an employee for raising Americans with Disabilities Act (ADA) rights, and cannot interfere with ADA rights by doing anything that makes it more difficult for an applicant or employee to assert these rights.
- The Guidance contains an entire section entitled “Examples of Facts That May Defeat a Claim of Retaliation.” This section includes examples such as poor performance, inadequate qualifications, negative job references, misconduct, reductions in force or downsizing, as well as others.
- The Guidance includes a list of suggestions that the EEOC believes may reduce the risk of retaliation violations:
- Implementing a written anti-retaliation policy;
- Training all supervisors on the anti-retaliation policy;
- Providing advice and individualized support for those who could be in a position to retaliate and those who could be in the firing line for retaliatory action;
- Proactively following up after protected activity or opposition has taken place; and
- Reviewing your internal employment actions to ensure full compliance with the EEOC laws on retaliation.
We encourage all employers to review the Guidance carefully to make sure that their current policies and practices are compliant. Employers should pay particular attention to the EEOC’s suggestions on practices that may reduce the chances of retaliation, as implementing and enforcing these may help to protect employers from potential retaliation claims.
This week, 21 states and over 50 business groups filed suit in the Eastern District of Texas challenging the Department of Labor’s new overtime regulations, arguing that the DOL overstepped its authority in establishing the new minimum salary level and the automatic increases to the minimum salary every 3 years.
The new regulations (which,as we have previously discussed
, more than double the minimum salary requirement for employees to be eligible for the administrative, professional and executive overtime exemptions) have been hotly contested — in Congress and now in the courts. But it is far from clear that any of the efforts to delay or stop the new standards will be effective.
We will continue to monitor these challenges and keep you apprised. However, unless and until a challenge is successful, employers should plan to be ready for the new regulations on December 1st.
Illinois employers should be aware of two new leave-related laws.
First, the Child Bereavement Leave Act, which took effect on July 29, mandates that Illinois employers with at least 50 employees provide employees who suffered the loss of a child with up to two weeks (10 work days) of unpaid leave. Leave can be taken to attend the funeral, make arrangements necessitated by the death of the child, or to grieve the death. If an employee has already used all of his or her 12 weeks of available FMLA leave, the employer does not need to provide the additional 10 days for reasons related to the death of a child. Employees may elect to substitute available paid leave, but employers may not require them to do so.
Second, the Employee Sick Leave Act, which takes effect on January 1, 2017, provides greater flexibility to family caregivers. The Act requires Illinois employers who provide employees with paid sick leave to allow their employees to use that time to care for the employee’s immediate family members, parents-in-law, grandchildren, or grandparents. Employers must allow employees to use sick leave for caregiving just as they do for their own illness or injury, though employers may cap the amount of sick leave to be used for caregiving responsibilities at what the employee would have earned during 6 months. The Act does not extend the maximum period of leave under the FMLA, regardless of whether the employee receives sick leave compensation during that leave.
Illinois employers should review bereavement and sick leave policies to make sure that they are compliant with this new legislation.
Under the new Illinois Freedom to Work Act, Illinois employers cannot impose non-compete agreements on “low wage employees.” The Act comes in response to growing concerns and lawsuits over non-compete agreements imposed on employees by certain fast-food companies. Effective January 1, 2017, the Act defines a “low wage employee” as any employee who earns the greater of (1) the hourly minimum wage under federal (currently $7.25 per hour), state (currently $8.25 per hour) or local law (currently $10.50 per hour in Chicago) or (2) $13.00 per hour. The Act defines a non-compete agreement as an agreement between an employer and a “low-wage employee” that restricts such low-wage employee from performing:
- any work for another employer for a specific period of time;
- any work in a specified geographical area; or
- work for another employer that is similar to such low-wage employee’s work for the employer included as a party to the agreement.
The Act does not specifically ban non-solicitation agreements with low-wage employees, in which the employee promises not to solicit employer customers or employees. This will likely be answered in future litigation … stay tuned.
Similarly, the New York Attorney General has been extremely critical of non-competes for low-wage employees, and has publicly announced various monetary settlements with employers who required low-level employees to sign non-competes as a condition of employment. Employers with New York operations should be very wary of requiring low-wage workers to sign such agreements, and are encouraged to consult counsel before doing so.
The National Labor Relations Board just made it much easier for unions to organize employees of staffing firms – sometimes called temp agencies.
It used to be that both the staffing firm and the client had to consent before a union could represent a group of employees that included both staffing firm employees and your regular employees.
However, under the NLRB’s new standard, consent isn’t required. This means that a union can lump together staffing firm employees and regular employees, even though they are employed by different companies and viewed and treated as separate groups.
Under the NLRB’s decision, unions will also have an easier time organizing all of a staffing firm’s employees, regardless of where they work or are assigned.
As a result of the NLRB’s decision, unions will have a far easier time organizing.
So what can you do? Here are 3 steps all Companies that work with staffing firms should take in response to the NLRB’s new standard:
- Ask your staffing firm what steps they’re taking to improve employee satisfaction and avoid unionization, keeping in mind that the lowest cost provider may bring with it lower employee satisfaction and higher risk of unionization.
- Take a close look at your company’s union avoidance efforts. Make sure that you’re paying attention to all employees – both direct and those through staffing companies – and consider stepping up your union avoidance efforts by educating your team about the realities of unionization and how to spot organizing campaigns.
- Finally, make sure your agreement with your staffing firm includes a cooperation clause so that, if there’s an organizing campaign, you’re in the best position to work together quickly to respond.
In avoiding unions, the best defense is a good offense. Take steps now to ensure that you – and your staffing firms – are in the best position possible to avoid union organizing efforts.
Under final overtime regulations set to be published today, the new minimum salary for employees to be exempt from overtime under the “white collar” exemptions will more than double — to $913/week , which is $47,476/year — with further increases every 3 years thereafter, beginning on January 1, 2020. The new regulations will become effective on December 1, 2016.
In a positive development, according to the Department of Labor’s (DOL) overview and summary of the new rule, employers will be permitted to credit bonuses and incentive payments for up to 10% of the new required minimum salary.
According to the DOL’s summary, the new regulations contain the following changes:
- Increase of minimum salary for “white collar” exemptions from $455/week ($23,660/year) to $913/week ($47,476/year) — which is the 40th percentile for full-time salaried workers in the lowest-wage Census region (currently, the South).
- Increase in the salary threshold for the Highly Compensated Employee exemption from $100,000 to $134,000 — which is currently the 90th percentile for full-time salaried workers nationally (note that the Highly Compensated Employee exemption isn’t effective in a number of states, including Illinois).
- Automatic increases in the salary minimums every 3 years, with the first increase effective January 1, 2020. For the regular “white collar” exemptions, the minimum salary will increase the to the 40th percentile for full-time salaried workers in the lowest-wage Census region (estimated to be $51,168 in 2020). For the Highly Compensated Employee exemption, it will increase to the 90th percentile of full-time salaried workers nationally (estimated to be $147,524 in 2020).
- Up to 10% of the minimum salary for the regular “white collar” exemptions can be met with non-discretionary bonuses, incentive pay, or commissions, provided that they are paid at least quarterly.
- The job duties tests remain unchanged.
The Department of Labor estimates that 4.2 million workers will be impacted by the new regulations.
While December seems like a long time away, changes to compensation structures take time. In order to have all options available, companies need to start thinking now (if they haven’t already) about how the new regulations will impact their workforce and how they are going to react. We strongly recommend that you speak with your employment attorney to determine the best course of action for your company.