Category Archives: Employment Practices

New Overtime Regulations More Than Double Minimum Salary Threshold Effective December 1st

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.

 

New Overtime Regulations Closer to Reality

The long-awaited new overtime regulations took a big step forward this week when the Department of 600px-US-DeptOfLabor-Seal_svgLabor submitted the proposed final regulations to the White House Office of Management and Budget for final review and approval.  This last step in the review process is anticipated to take up to 90 days, with the final regulations anticipated sometime during Q2.

As we noted in our post on June 30, 2015, the proposed regulations more than double the minimum salary requirement for the “white collar” overtime exemptions (administrative, professional and executive) from $455/week ($23,660/year) to approximately $970/week ($50,440/year), with annual increases thereafter based on a to-be-determined index.  The proposed regulations also increase the minimum salary for the Highly Compensated Employee exemption from $100,000/year to more than $122,000/year (though it is important to note that this exemption does not apply under some states’ overtime laws).  Finally, while the proposed regulations did not change the job duties tests, they did suggest that the final rules may impact the job duties tests in addition to the minimum salary requirement.

There are various strategies available to businesses to minimize the financial, operational and employee-relations impact of the new regulations, but it is important to act quickly to consider available options for impacted employees.  Companies should also consider whether other changes to exempt status classifications make sense, as the regulatory change is a good opportunity to improve compliance across the board.

Facebook Comments and “Likes“ Protected Activity?

Social Media keyboard

Is commenting on a Facebook post protected, concerted activity under the National Labor Relations Act?  What about hitting the “Like” button on a post?  The Second Circuit recently agreed with the National Labor Relations Board that they are.

In a decision last year, the Board ruled that a sports bar had unlawfully terminated two employees for their activity on Facebook.  The first employee had commented on a status update of a co-worker stating that the bar’s owners “couldn’t even do the tax paperwork correctly” and that someone should do the owners “a favor” and purchase the business from them.  The employee’s comment stated that she “owed too,” and referred to one of the owners as an “asshole.”  The second employee “liked” the first employee’s status update.  The Board held that both employees’ had engaged in protected, concerted activity under the Act, and that the bar had violated the Act when it terminated their employment.

Last month, the Second Circuit (Connecticut, New York, and Vermont) affirmed the Board’s decision.  The court held that the employees’ actions amounted to a group of employees discussing labor issues and were protected by the Act.  The bar argued that the Facebook comment and “like” were meant to defame the bar – with the use of profanity – and thus brought it outside the protections of the Act.  However, the court reasoned that the Facebook activity at issue was different from obscenities voiced by employees in earshot of customers in a crowded shop (even though customers could view the comments on Facebook).  The court also noted that the bar’s internet and blogging policy could be read as prohibiting employees from protected activity under the Act.

The take-away here?  It’s a good time for employers to review their social media policies.  As we have warned in the past, these policies as written and as enforced must not “chill” employees from engaging in protected, concerted activity.  There is often a fine-line between lawfully prohibiting certain types of activities on the internet and unlawfully interfering with employees’ protected activity.  It’s a good idea to check with counsel on how to best craft the wording of these policies to protect the employer’s interests while not interfering with employees’ rights.

Webinar – Back to School: Employment Law Update

school-suppliesAs fall approaches and students head back to school, The Employment Lawyers are taking a look back and a look ahead at issues in labor and employment law. Join us for an informational webinar to review developments over the past year and discuss tips to keep your workplace practices current in the coming year.

Thursday, September 17, 2015
12:00 pm – 1:30 pm (CDT)
CLICK HERE TO REGISTER

TOPICS

  • Proposed changes to overtime regulations that will make more employees overtime-eligible
  • New standards in accommodating religious practices and pregnancy
  • The NLRB’s “quickie” election rules and what they mean for union organizing efforts
  • Raising the standard to establish that a worker is properly classified as an independent contractor
  • The EEOC’s new position on wellness programs and disability discrimination
  • Expanding employee retaliation and whistleblower claims
  • New state and local laws that impact minimum wage, paid sick leave and accommodation requirements

And more…

CLE Credit Available | This program has been submitted to the HR Certification Institute for review.

QUESTIONS

Contact Annie Darmofal at 312.476.7626 or adarmofal@lplegal.com

What Does The Supreme Court’s Same-Sex Marriage Ruling Mean For You?

On June 26th, in a ground-breGay_flag_svgaking decision, the Supreme Court ruled that same-sex couples have a constitutional right to marry. Full text of the Court’s decision in Obergefell, et al. v. Hodges, et al. can be found here.

But beyond the general public response, employers need to consider how the ruling will impact employment policies and practices — especially in states that previously have not recognized same-sex marriages.  Following are some of the areas where employers might see Obergefell’s impact:

Employee Benefit Plans

If you offer any employee benefit plans through a separate insurance company, all “spousal” benefits must now be extended equally to same-sex spouses as they are to opposite-sex spouses. You may not be under the same restraints if you are self-insured, but if you deny benefits to same-sex spouses in this instance, you run a high risk of discrimination lawsuits.

It’s a good time to review your employee benefit plans and the costs associated with these plans. You should anticipate that the Court’s ruling may add some new couples — and associated costs — to your plans, especially if you did not previously offer benefits to domestic partners or same-sex spouses.

Equal Employment Opportunity

Marital status is a protected class under many state and local laws. These laws now protect all married people, including those in same-sex marriages.

Family and Medical Leave Act

As we discussed in a previous post, the FMLA has recently been amended to include same-sex spouses in the definition of “spouse.” Given the heightened publicity of the Court’s ruling, be sure to review your FMLA policies and practices to ensure that same-sex spouses are included.

Additional Policies and Practices

We recommend reviewing your employee handbook and any other employment policies to make sure that the policies as written – and in practice – apply equally to employees in same-sex marriages or rely on a qualification other than marriage.