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Federal Court Puts DOL Salary Changes on Ice
11/23/2016
By: Forrest Rhodes

Late yesterday afternoon, a federal judge in Texas issued an order preliminarily enjoining the DOL's proposed amendments to the white-collar exemptions under the FLSA.  The most notable aspect of these proposed changes was the substantial increase in the minimum salary necessary for exempt status, from the current $23,660 to $47,476 per year. 

This decision arose from two recently filed cases brought against the Department of Labor by a group of state Attorneys General and a coalition of business advocacy groups.  Although the court did not issue a final decision on the merits of the issues, it determined that it was substantially likely that the plaintiffs would prevail on their argument that the DOL lacked the authority to impose a salary requirement that could be determinative of exempt status, regardless of an employee's job duties or responsibilities.

The injunction does not end the litigation in those cases, but it effectively places the regulatory amendments on indefinite hold until those cases conclude through final decisions.  While it's possible that the court could ultimately decide to lift the injunction, or the district court's decision could be reversed on appeal, neither of those decision points is likely to occur in the near term, or before the Trump Administration takes over the DOL.  How and to what extent the Trump DOL decides to continue to fight for these amendments remains to be seen. 

For now, employers should continue to follow the current requirements for exempt status, which are paying a salary of at least $455 per week per the current salary      Continue Reading...

 
DOL Finally Issues New FLSA Regulations
05/20/2016
By: Forrest Rhodes

On May 18, the Department of Labor issued the long-awaited regulatory amendments to the white collar exemptions under the Fair Labor Standards Act.  Proposed changes were published last summer, and after a period of public comment (and more DOL thought and analysis) the regulations in their final form (known as the Final Rule) are now on the street.  

In general, the regulatory changes are as expected and will go into effect on December 1, 2016.  The focal point of the changes was to increase the minimum salary for exempt status.  Although the proposed changes suggested the new salary could be at or above $50,000 per year, the Final Rule adopts a more conservative figure (in DOL’s eyes) of $913 per week ($47,476 annually).  While certainly less than what it could have been, this still represents a more than 100% increase over the current minimum salary of $455 per week ($23,660 annually). 
 
Similarly, for employers who utilize the exemption for highly compensated employees, the minimum compensation figure will increase from its current annual amount of $100,000 to $134,004. 
 
Also as expected, the new regulations will incorporate an automatic salary update, but instead of the annual updates that the proposed regulations suggested, the Final Rule adopts an update schedule of every three years.  Thus, after the new salary amounts go into effect on December 1st, they’ll remain in place until January 1, 2020, and will update every three years after that.
 
A small silver lining to the new rules is that employers will now be able      Continue Reading...
 
OSHA Addresses Unique Recordkeeping Scenarios
04/16/2016
By: Forrest Rhodes

For those employers who fall under OSHA’s recordkeeping requirements, it’s usually relatively easy to determine whether a workplace injury must be recorded. Sometimes, however, as a couple of recent cases highlight, the facts are a bit more tricky. 

Take the employee at a West Virginia window manufacturer. He sustained a small cut (more like a scratch) to his index finger while working. When the cut began to bleed, the employee asked a co-worker to help him put a Band-Aid on the cut. This sounds like a clear case of basic first aid, which is not recordable. But as the late Paul Harvey would say, there’s more to the story. As the co-worker was applying the Band-Aid, the employee saw some of his blood and fainted. He briefly lost consciousness, but did not suffer any additional injury from the fainting. 
 
Does this change the recordability of the events? OSHA’s Technical Support Division said “yes.” While the scratch was not recordable because it only required basic first aid for treatment, the employee’s fainting was a separate event that met one of OSHA’s express general recording criteria (i.e., loss of consciousness). The fact that the fainting was caused by an otherwise non-recordable event did not impact the decision. 
 
Another recent case that presented unique facts occurred when the employee of a commercial construction contractor hurt himself on the job, but subsequently tested positive pursuant to the employer’s post-accident drug and alcohol test. Turns out the employee was drunk and the alcohol likely contributed, if not outright      Continue Reading...
 
DOL Proposes Significant Increase in Required Salary for FLSA Exemptions
07/01/2015
By: Forrest Rhodes

After over a year of waiting and wondering, the Department of Labor finally issued its proposed amendments to the white-collar exemptions under the Fair Labor Standards Act.  These are often referred to as the salaried exemptions because of the threshold requirement that the employee be paid on a salary basis at a minimum salary level.  As you may recall, the impetus for these changes was direction from President Obama that the exemptions were too many employees were being treated as exempt.  In other words, the stated goal of the proposed changes was to make sure that more employees will become non-exempt and thus entitled to overtime. 

DOL’s tool for effectuating that direction is to raise the required minimum salary for exempt status from its current level of $455 per week ($23,660 per year) to $921 per week ($ 47,892 per year).  The proposed changes also affect the qualifying salary for “highly compensated employees,” who are exempt under less rigorous duties requirements.  A highly-compensated employee will now have to be paid total annual wages (salary, bonuses, commissions, etc.) of at least $122,148 (an increase from the current $100,000).  In addition, the amended regulations will provide for annual updates to the requisite salary levels.  Of note, while the currently proposed changes target only the required salary levels, DOL said that it continues to look at whether changes to the job duties tests applicable      Continue Reading...

 
Wage and Hour Self-Audits
05/20/2015
By: Forrest Rhodes

In all too many cases the first time an employer takes a critical look at its own wage and hour practices is in the context of an FLSA audit conducted by the Department of Labor. This is less than ideal because the employer has no opportunity to fix or correct issues on its own terms. If the DOL determines a violation has occurred, it will require the payment of back wages (typically going back two years) and depending on the facts and circumstances it can also require liquidated damages (effectively doubling the back wages). In extreme cases or those involving repeat offenses, DOL can impose additional monetary fines known as civil money penalties. 

The good news is that employers don’t have to wait for the DOL to knock on their door to internally assess their wage and hour compliance. Self-audits are an effective tool for this purpose. They can be tailored to the particular employer’s needs in order to stay cost-effective, but provide the most benefit when the scope is similar to what the DOL would do. 
 
Not only does the audit help with overall compliance, but it also demonstrates the employer’s good faith intent to comply with the FLSA.. This can be critical in litigation because it helps to refute the showing of willfulness that the plaintiff will be trying to make in order to extend the period of potential recovery (i.e. statute of limitations) from two years to three years. 
 
There are additional benefits to having legal counsel involved in the audit; namely, potential protection of the      Continue Reading...
 
DOL Delays Proposed Amendments for White Collar Exemptions
11/26/2014
By: Forrest Rhodes

The Department of Labor recently announced that the roll-out of its proposed amendments to the white collar exemption regulations under the Fair Labor Standards Act (which were previously scheduled for a November release) have been pushed back to sometime in 2015.  Various reports have targeted a release date between February and May.   

From comments by the Secretary of Labor earlier this year, these amendments are expected to significantly restrict the scope of the white collar exemptions with the goal of making more employees eligible for overtime.  It’s likely that DOL will seek to achieve this goal through a combination of a higher minimum salary (currently $23,660 per year) along with stricter job duty requirements. 
 
While these changes may be significant, they are not imminent.  The proposed amendments will be open for a period of public comment that is at least 30 days, and usually from 90 to 120 days.  After that period is closed, DOL will digest the comments and determine if any of the amended regulations should be revised before they are published for final implementation.  It’s unlikely that any of the proposed changes will be in place before the end of 2015 at the earliest.   
 


Authors
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Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers Image
Boyd Byers, the General Employment Law Guy
Jason Lacey Image
Jason Lacey, the Employee Benefits Guy
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