Showing posts with label Department of Labor. Show all posts
Showing posts with label Department of Labor. Show all posts

Tuesday, December 20, 2016

EMPLOYMENT LAW AND A NEW ADMINISTRATION

 

One of the biggest employment law developments of 2016 will carry over into 2017 and a new administration.  Employers nationwide spent much of the past year preparing for the December 1, 2016 implementation of the Department of Labor’s (“DOL”) Final Rule, bumping the minimum salary level for white collar exemptions under the Fair Labor Standards Act ("FLSA") from $23,660 annually ($455 per week) to $47,476 annually ($913 per week).  However, just days before this key initiative of the Obama administration was to go into effect, a federal judge in Texas issued a nationwide preliminary injunction, finding the DOL had likely exceeded its authority under the FLSA. While breathing a sigh of relief, employers were left wondering what would happen next.
Current Labor Secretary Thomas Perez has since appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, seeking expedited review.  However, even under the expedited briefing schedule set by the Fifth Circuit, oral argument would not take place until at least February 2017, which would be after Donald Trump takes office.  This would allow the DOL, under Trump’s expected Labor Secretary Andy Puzder, to abandon the appeal.  Puzder, who is the current CEO of the parent company of Hardee’s and Carl’s Jr., has gone on record as to his strong opposition to the DOL’s overtime rule. 
My first prediction of 2017 is the Final Rule and its increased minimum salary requirement never goes into effect. Not surprisingly, Puzder also opposes efforts to increase the minimum hourly wage to $15, claiming such a significant increase would hasten the move to automation in the fast food industry and cost jobs.
In these waning days of 2016, the Equal Employment Opportunity Commission (“EEOC”) offered guidance to employers as to the rights of employees with mental illnesses under the Americans with Disabilities Act, and issued updated enforcement guidelines on national origin discrimination, including question and answer guidance and advice for small businesses.  Generally, national origin discrimination refers to: (a) treating an individual less favorably because he or she is from a certain place or has the physical, cultural, or linguistic characteristics of a particular national origin (ethnic) group; or (b) using an employment policy or practice that disproportionately impacts people on the basis of national origin and is not shown to be job related and consistent with business necessity. 
President Trump also will be putting his stamp on the EEOC.  As previously reported,  over the last eight years, the EEOC has taken a very aggressive posture toward employers, including lawsuits against companies over criminal background checks and separation agreements.  The EEOC’s actions and litigation conduct earned it some harsh words and harsh rulings from a number of federal courts. 
President Trump will select a new EEOC Chairman and a new EEOC General Counsel in 2017, both of whom will set the tone and agenda of the agency going forward.  With the Trump administration’s focus on reducing regulations faced by businesses, one target could be recent major revisions to the Employer Information Report (EEO-1).  With a focus on equal pay issues, the new form will require employers to list employee pay and hours by categories of sex, race and ethnicity.  The regulations are slated to go into effect in March 2018, but under a new administration, could be revised or even abandoned.


Monday, November 28, 2016

SURPRISE RULING ON FLSA OVERTIME RULE


It continues to be a season of surprises in American politics . . . and in employment law.  Who would ever have thought that a federal judge, appointed by President Obama, would throw a money wrench in a key initiative of the Obama Department of Labor?  Not me.  As I incorrectly predicted in my November 18, 2016 article, I fully expected U.S. District Judge Amos L. Mazzant III to shoot down an injunction aimed at blocking the December 1, 2016 implementation of the DOL’s Final Rule, bumping the minimum salary level for white collar exemptions under the Fair Labor Standards Act ("FLSA") from $23,660 annually ($455 per week) to $47,476 annually ($913 per week).

What instead happened was that Judge Mazzant entered a nationwide preliminary injunction on November 22, 2016, blocking for now the U.S. Department of Labor (“DOL”) from implementing significant changes to the overtime rules applicable to white collar employees.  The ruling out of the U.S. District Court for the Eastern District of Texas held that the DOL most likely exceeded its authority by doubling the salary requirement, which would have rendered essentially meaningless the duties test, which is actually written into the FLSA.

The issuance of an injunction means that implementation and enforcement of the Final Rule by the DOL is just on hold until further notice by the Court.  The DOL has not yet announced whether it intends to appeal the ruling, and it remains to be seen if the Trump administration would have any interest in trying to implement a Rule so unpopular within the business community.  Another potential option might be a revised Rule that would include a smaller increase in the minimum salary requirement.

What I think I did get correct was my observation that “[i]f the unlikely actually happens, I expect an enormous sigh of relief from many employers, tinged with annoyance and aggravation over six months spent preparing for a rule that never went into effect.”  Annoyance aside, what should employers do at this point? 

In expectation of the December 1, 2016 deadline, many employers had bumped employee salaries to meet the new requirement, and many more had simply adjusted hour wages and work schedules in an effort to reduce overtime or keep actual wages approximately the same.  As reported in the Wall Street Journal, businesses are now faced with the difficult decision of either walking back pay increases they had already put in place, resulting in angry employees, or eating the expense of changes made in anticipation of a now uncertain requirement.

There is no right or wrong answer, and employers will have to look at a number of factors in making their decision for their particular business.  These factors include, but are not limited to: (1) whether the employer has already begun implementation of salary/exemption changes, (2) whether the employer has already communicated planned salary increases or changes even if it hasn’t actually put them in place, (3) whether the changes impact or potentially impact the company’s benefit plans, (4) the overall economic impact of the change to the client, (5) the workforce morale issues that may be implicated, (6) the temporary nature of the injunction and the fact that it could be appealed and, if so, potentially reversed on appeal.  This is an odd situation where those employers who planned ahead are faced with more issues than those companies that procrastinated and did nothing.


In response to reader requests, if you would like to receive the latest articles from "The Employee With The Dragon Tattoo" by e-mail, please send your name, your company, and your e-mail to me at fijmanm@phelps.com.  

Friday, November 18, 2016

RULING EXPECTED NEXT WEEK IN LEGAL CHALLENGE TO INCREASED SALARY REQUIREMENT FOR FLSA “WHITE COLLAR” EXEMPTIONS



Back in May 2016, the U.S. Department of Labor ("DOL") issued its final rule, bumping the minimum salary level for white collar exemptions under the Fair Labor Standards Act ("FLSA") from $23,660 annually ($455 per week) to $47,476 annually ($913 per week). With the new standard slated to go into effect on December 1, 2016, employers have spent the last six months scrambling on how to comply with the new rule, which makes millions of formerly exempt employees now eligible for overtime under the FLSA.
 

Options available to employers include bumping employee salaries to meet the new minimum (not feasible in many cases), paying employees’ current salaries with overtime after 40 hours (increased expense), reorganizing schedules and workloads to avoid overtime, or adjusting hourly rates of pay to essentially maintain the same pay level by estimating potential overtime hours. For a more detailed explanation of the final rule, click on this link to read an article by my colleague Jessica Coco Huffman in Phelps Dunbar’s Baton Rouge, Louisiana Office. For a discussion and explanation of the FLSA white collar exemptions, click on this link.
 

However, 21 states filed a lawsuit against the DOL, seeking to block the implementation of the new salary requirement prior to it going into effect, because of the heavy burden it would place on state budgets An injunction hearing was held November 16, 2016 in the United States District Court for the Eastern District of Texas. At the hearing, issues addressed included the DOL’s authority to make the change, the appropriateness of a nationwide injunction, and the impact on the incoming Administration. Following the hearing, the federal Judge in the case stated he was taking the matter under advisement, and expects to have a ruling on the requested injunction on Tuesday, November 22, 2016.
 

Reading the tea leaves, I think it is unlikely the Court will issue the injunction this late in the game. The federal Judge hearing the case, Amos L. Mazzant III, is an appointee of President Obama, who initially pushed for the change. However, after our tumultuous roller-coaster ride of a political season, the only sure bet is to see what happens next Tuesday.
 

If the unlikely actually happens, I expect an enormous sigh of relief from many employers, tinged with annoyance and aggravation over six months spent preparing for a rule that never went into effect.
 
 
In response to reader requests, if you would like to receive the latest articles from "The Employee With The Dragon Tattoo" by e-mail, please send your name, your company, and your e-mail to me at fijmanm@phelps.com.  





Sunday, October 12, 2014

Dept. of Labor Delays FLSA Enforcement and Penalties Against Home Healthcare Companies

             Employers in the home healthcare industry will be getting a brief delay in the enforcement of new regulations extending minimum wage and overtime requirements to home healthcare workers under the Fair Labor Standards Act (“FLSA”). 
The U.S. Department of Labor’s (“DOL”) final rule is scheduled to take effect January 1, 2015, but on October 7, 2014, the DOL announced it would delay enforcement and the imposition of penalties for a period of six months, or until June 30, 2015.  For the following six months, or until December 31, 2015, the DOL will exercise its discretion in determining whether to bring enforcement actions, based on the extent to which employers have made “good faith efforts to bring their home care programs into FLSA compliance.”

 It is important for employers to remember that despite the DOL's enforcement delay, they are still required to begin complying with the new rule as of January 1, 2015.
            Up until the new rule, the FLSA contained an exemption that employees providing “companionship services” to elderly persons or individuals with illnesses, injuries, or disabilities were not required to be paid the minimum wage or overtime pay if they met certain regulatory requirements.
            This change will result in nearly two million direct care workers, such as home health aides, personal care aides and certified nursing assistants falling under the requirements of the FLSA.  Business groups and Congressional Republicans had strongly pushed for a complete suspension of the new rule, expressing fears that it would make home healthcare unaffordable and result in disruption to patient care.  In explaining its reason for the additional delay in active implementation, the DOL noted:
When we announced the final rule, we provided a 15-month implementation period before its effective date. We did so out of recognition that home care services financing is complex, and that making adjustments to operations, programs and budgets in order to comply with the rule would take time. Some states, tell us that they’re ready to implement the rule. Others, because of budget and legislative processes, have requested an extension.  After careful consideration, the department decided to adopt a time-limited non-enforcement policy. This approach will best serve the goals of rewarding hard work with a fair wage while not disrupting innovative direct care services.
            For employers seeking more detailed information on the changes to the FLSA under the final rule, the DOL is providing an on-line fact sheet.
Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com


Wednesday, September 25, 2013

DEPARTMENT OF LABOR EXTENDS FLSA REQUIREMENTS TO IN-HOME HEALTH CARE WORKERS





 
On September 17, 2013, the Wage and Hour Division of the U.S. Department of Labor issued a Final Rule which limits the "companionship exemption" of the Fair Labor Standards Act ("FLSA") and extends additional minimum wage and overtime protections to an estimated two million direct care workers, including personal caregivers, home health aides and certified nursing assistants.

Hardest hit by the Final Rule will be home health care staffing agencies and similar health care business. This is because the Final Rule, which becomes effective on January 1, 2015, does not allow third-party employers to claim the FLSA’s companionship services or live-in domestic service employee exemptions.

Generally, the FLSA requires that all hourly non-exempt employees be paid at least the minimum wage and overtime for hours worked beyond the forty hour work week. However, the law provided an exemption for domestic service workers hired for "companionship services" and such workers were not required to be paid the minimum wage or overtime. Likewise, the exemption did not require live-in domestic service workers to be paid overtime.

The Final Rule clarifies that direct care workers who perform medically-related services for which training is typically a prerequisite are not companionship workers and therefore are entitled to the minimum wage and overtime. And, in accordance with Congress' initial intent, individual workers who are employed only by the person receiving services or that person's family or household and engaged primarily in fellowship and protection (providing company, visiting or engaging in hobbies) and care incidental to such activities, will still be considered exempt from the FLSA's minimum wage and overtime protections.

Because home healthcare agencies will no longer be able to claim the exemption, such business will have to review and revise their payroll and time-keeping practices and procedures to be in compliance with the FLSA.

For Further information, the Department of Labor has proved answers to frequently asked questions on the Final Rule.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com.