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Amanda Lavis
Amanda Lavis

CLIENT ALERT: COURT STOPS IMPLEMENTATION OF NEW FLSA OVERTIME REGULATIONS

For months, employers have been preparing for the U.S. Department of Labor’s (DOL) new Fair Labor Standards Act “white-collar” overtime exemption regulations, which were to take effect on December 1, 2016. Now, in a surprising decision issued on November 22, 2016, a Texas federal court issued a nationwide preliminary injunction blocking the regulations.   The Court’s decision means that employers no longer have to comply with the new regulations by December 1.

What happens next remains to be seen — The injunction, which has not yet been appealed by the DOL, creates uncertainty as to the future of the regulations, particularly in light of the new incoming presidential administration. Should the DOL choose not to appeal the decision, or should the injunction be held up on appeal, the injunction could forecast the demise of the regulations.

What does this mean for employers? The answer depends on how far down the path employers have gone to comply with the proposed December 1 changes.  To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes.  And, depending on the final outcome of this legal battle, it is possible employers may never need to implement them.

Employers who have already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016, are placed in a difficult situation with managing employee expectations and the changed legal landscape. Whether employers can or should reverse salary increases they have already implemented should be discussed carefully with your legal counsel.

For any questions on the status of the enjoined FLSA regulations or for legal guidance as to how to communicate with employees that those announced changes will not go into effect on December 1, 2016, please contact Amanda Lavis at ALavis@Rhoads-Sinon.com

Posted By : Amanda Lavis (View Bio) in FLSA Comments Off on CLIENT ALERT: COURT STOPS IMPLEMENTATION OF NEW FLSA OVERTIME REGULATIONS
Cory A. Iannacone
Cory A. Iannacone

Client Alert: The Time is Now to Update Your Attorney-Client Retainer Agreement to Specifically Include Indirect Persuader Activities

On March 23, 2016, the Department of Labor enacted its new Persuader rule, which went into effect on April 25, 2016.  Pursuant to this new rule, employers are now required to file detailed reports with the Department of Labor (“DOL”). These reports must disclose any type of consulting or legal services the employer is provided in connection with advice on addressing union organizing campaigns.  Specifically, employers must disclose this information to the DOL if its attorney or consultant engages in activity that constitutes direct or indirect “persuasion.”

An employer’s attorney or consultant engages in direct “persuasion” if he or she engages in direct contact or communication with any employee, with the objective of addressing matters regarding the exercise of the right to be represented by a union.  With respect to indirect “persuasion,” an employer’s attorney or consultant engages in this type of conduct if he or she consults with the employer to provide advice on how to address matters regarding its employees wanting to exercise the right to be represented by a union. Some clear examples of indirect persuasion include the following:

1)   planning, directing, or coordinating the employer’s meetings and interactions with employees;

2)   providing materials for circulation to the employees;

3)   conducting union avoidance seminars for supervisors and other employer representatives; or (4) developing or implementing policies, intended to persuade employees regarding their rights to engage or refrain from engaging in union organizing activities. In sum, employers must now disclose all acts of direct and indirect “persuasion” on behalf of its attorney or consultant.

It is important to note that this new rule is only applicable to agreements or arrangements made on or after July 1, 2016, and to payments made pursuant to arrangements or agreements entered into on or after July 1, 2016. In order to take advantage of the DOL’s grandfathered exemption, we are proposing that our clients make a slight amendment to their retainer agreements with our firm, to specifically include any future services which may be deemed to be indirect persuader and collective bargaining activities.

If you have any questions on the Department of Labor’s new Persuader rule, please feel free to contact Cory A. Iannacone, Esq., a member of Rhoads & Sinon LLP’s Labor and Employment Law Department, at (717) 237-6778 or ciannacone@rhoads-sinon.com.

Posted By : Cory A. Iannacone (View Bio) in Collective Bargaining, National Labor Relations Act, Union Issues Comments Off on Client Alert: The Time is Now to Update Your Attorney-Client Retainer Agreement to Specifically Include Indirect Persuader Activities
Amanda Lavis
Amanda Lavis

Updated Postings and Penalties

In light of recent changes by the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor (DOL), employers should conduct a compliance check to ensure they are abiding by federal law posting requirements.

On June 2, the EEOC announced that it is more than doubling the fines for employers that violate notice posting provisions of Title VII and other statutes from $210 to $525 per violation. The EEOC said it was adjusting the penalty for inflation, in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. Employers covered by Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act or the Genetic Information Nondiscrimination Act must post notices describing the key provisions of these acts in “prominent and accessible” spots in the workplace, according to the EEOC. The requirement applies to private employers, state and local governments, and educational institutions employing 15 or more individuals, as well as to federal contractors and subcontractors. The “EEO is the Law” poster, prepared by the EEOC, summarizes these laws and is available for free here in English, Arabic, Chinese and Spanish

In May, the DOL issued a new user-friendly Family and Medical Leave Act (FMLA) poster. Employers who are covered by the FMLA are required to display a DOL-prepared poster advising employees and applicants of the major provisions of the Act.  Employers are still permitted to display the prior version of the poster (dated February 2013) or may elect to use the new poster (dated April 2016).  A copy of the new poster is available for free from the DOL here.

Posted By : Amanda Lavis (View Bio) in Discrimination, Wage and Hour Comments Off on Updated Postings and Penalties
Lindsey Snaveley
Lindsey Snaveley

It’s Here: Department of Labor Issues Final Rule on New Overtime Regulations

The long-awaited and highly-anticipated Final Rule updating the federal wage and overtime standards as they relate to both “white collar” and highly-compensated employees is here. (If you need a refresh on the background of this Final Rule, see our post from July 2015 at http://blog.rhoadssinon.com/department-of-labor-issues-notice-of-proposed-rulemaking-on-overtime-regulations-july-2-2015/).  According to the United States Department of Labor (DOL), the Final Rule will automatically extend overtime pay protections to over 4 million workers within the first year of implementation, alone.

So what do you need to know about the Final Rule? The Fair Labor Standards Act (FLSA) excludes executive, administrative, professional, outside sales, and computer employees (“white collar” exemptions), as well as highly-compensated employees from minimum wage and overtime pay protections provided they meet certain tests related to job duties and are paid on a salary basis at a minimum specified amount.  The Final Rule does the following with regard to each:

  1. Raises the standard salary level for the “white collar” exemption equal to $913 per week ($47,476 annually for a full-year worker).
  2.  Raises the total annual compensation for a highly-compensated employee to $134,004.

In addition, the Final Rule provides for automatic adjusting to these salary and compensation levels every three (3) years to maintain the standard salary level at the 40th percentile of full-time salaried workers in the lowest-wage Census region, and the highly-compensated employee total annual compensation level at the 90th percentile of full-time salaried workers nationally. Lastly, the Final Rule allows employers to use nondiscretionary bonuses, incentive payments, and commissions to satisfy up to 10% of the new standard salary level.  Importantly, there are no changes to the standard duties test.  (Take a look at https://www.dol.gov/WHD/overtime/final2016/faq.htm#8 for a great summary of the Final Rule as compared to the current regulations).

So what do you need to do now? The effective date of the Final Rule is December 1, 2016, so definitely bold, underline, set up a tickler on your calendars –oh, and happy holidays! The initial increases to the standard salary level (from $455 to $913 per week for the “white collar” exemption and from $100,000 to $134,004 per year for the highly-compensated employee) will become effective on that date.  The automatic adjustments will begin on January 1, 2020, and occur every three years thereafter.

With just a little over six months until the effective date of the Final Rule, employers must prepare now. Employers should begin a wage audit of its internal workforce to determine who may be affected and the business strategy they will put in place to address, whether that be raising salaries or reclassifying workers from exempt to non-exempt.  Also, remember that communication and policies will be key here as some employees may be faced with new requirements in the workplace (wait, what do you mean I need to punch a time clock now?!).  Employers must determine how changes will be communicated to employees to provide the least business disruption, and they must review and revise if necessary their policies –including those related to timekeeping, payroll, and overtime– to ensure compliance with the Final Rule.

For more information, please contact Lindsey E. Snavely at lsnavely@rhoads-sinon.com or (717) 231-6629, or your Rhoads & Sinon attorney.

Posted By : Lindsey Snaveley (View Bio) in FLSA, Wage and Hour Comments Off on It’s Here: Department of Labor Issues Final Rule on New Overtime Regulations
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