Each year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope you find this 2016 Labor and Employment Law Checklist a helpful guide to best practices for the year ahead.
Look out for the new FLSA overtime regulations and prepare for them. The proposed Fair Labor Standards Act (FLSA) overtime regulations likely will be issued in late 2016. The new regulations will drastically increase minimum salary thresholds with annual increases after implementation. It’s possible that the final regulations also will include changes to the job duties tests. We expect that the new regulations will take effect 30 days after they are published. To prepare, check how many of your exempt-classified employees are paid a salary (or other guaranteed pay) of less than $52,000 per year and consider which of the two options for these employees – increasing salary or paying overtime – is the better solution for your business. Also consider whether you have any larger issues with how employees are classified, as the new regulations will provide a good opening for reclassification.
Carefully reconsider independent contractor relationships. The DOL recently warned employers that most workers qualify as employees under the FLSA – regardless of what the worker and the company may have agreed to. Other agencies, too, are coming after companies for improperly classifying workers as independent contractors when, under applicable legal standards, they should be treated as employees. The consequences of misclassification are steep, including damages and penalties under tax, wage and hour, and other employment laws. In addition, the Affordable Care Act exposes companies that misclassify workers to significant penalties based on failure to offer coverage to the required portion of the workforce and in situations where a misclassified worker obtains coverage on an exchange.
Consider instituting a formal policy on after-hours smartphone use. Does your team communicate with non-exempt employees after hours? If so, do you have a clear, formal policy on how after-hours smartphone use is handled (including any procedures to be followed by employees to report time spent after hours)? This type of policy can significantly improve your chances of employees bringing a wage claim.
Pay attention to staffing/temporary firm relationships. More and more companies are working with staffing firms to provide a flexible workforce. Unfortunately, the agreements between staffing companies and their clients often lack necessary protections, which could expose both parties to significant liability. Make sure your staffing contracts appropriately allocate responsibilities and risk, require compliance with laws, and provide the framework for the true partnership that is the hallmark of a successful staffing relationship.
Review unpaid internship programs. Unpaid internships were in the spotlight in 2015, and we expect that light to continue to shine in 2016. If you have unpaid interns, make sure that they qualify as “non-employees” under the test that applies in your state. If they don’t, they need to be paid at least minimum wage and overtime for hours over 40.
Understand the new NLRB “Quickie Election” rules and prepare for organization efforts. The NLRB’s new rules, which took effect on April 14, 2015, shorten the election process and reduce the types of challenges employers can make, giving the union an advantage in most elections. As soon as a representation petition is filed, there may be as few as 10 days until the election is held. Given this short time frame, it’s important that employers prepare for a union campaign before a petition is filed by keeping communication channels open with employees, making sure all employment policies and practices comply with the NLRA, considering possible unit determination issues, and providing periodic training for managers and supervisors on how to detect union “storm warnings.” Employers may also consider drafting a “war plan”—which may include campaign materials—that is ready to go as soon as a petition is filed.
Consider sexual orientation and gender identity as protected categories. The EEOC has taken the position that Title VII protects against discrimination based on sexual orientation and gender identity. And while that issue is currently before the courts, many states (including Illinois) separately prohibit discrimination on these grounds. To help guard against claims, include these classifications in your EEO and harassment policies and consider them just as you would other protected categories before taking any adverse employment action.
Understand new requirements for federal contractors and subcontractors. The minimum wage for employees of federal contractors and subcontractors increased to $10.15 in 2016. Prohibitions on discriminating against applicants and employees who discuss, disclose, or inquire about compensation (which is defined very broadly to include all types of pay and benefits) or based on sexual orientation or gender identity are now effective as well.
Make sure you are complying with new pay and benefit requirements. Chicago’s minimum wage is now $10/hr, as is the state-wide minimum wage in California, while the minimum wage in New York State increased to $9/hr and the minimum wage in the District of Columbia increased to $10.50/hr (and will increase again on July 1st to $11.50/hr). Equal pay requirements are also getting tighter, as the Illinois Equal Pay Act now applies to all employers, regardless of size (with increased penalties for violations), and New York and California have both implemented new, stricter prohibitions on pay discrimination. In addition, certain employers in New York City, San Francisco, and the District of Columbia are now required to provide transit benefit programs.
Ensure that sick leave laws are being followed. California, Connecticut, Massachusetts, Oregon, and the District of Columbia now require most employers to provide paid sick leave – though the specific requirements vary from state to state. Likewise, federal contractors and subcontractors will have to provide paid sick/family leave for contracts beginning in 2017.
For a PDF of this checklist, please click here.