The Final Overtime Rule Explained:  What Every Employer Must Do Next

By: Kara M. Maciel and Lindsay A. DiSalvo

shutterstock_losing moneyAfter receiving over 116,000 comments on its Proposed Rule to revise the version of the Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees Rule (“Overtime Rule”) promulgated in 2016, the U.S. Department of Labor (“DOL”) has issued a final, revised version of the Overtime Rule.  On September 24, 2019, the DOL announced the final Overtime Rule (“revised Overtime Rule”) through a press release touting the impact of the Rule and highlighting its major changes.  Notably, the press release reflects the significant impact the change in the threshold salary level for the white-collar exemptions is projected to have on employees – lowering the number of employees likely to become eligible for overtime pay from 4.2 million under the 2016 version of the Overtime Rule to 1.3 million.  This is due to the DOL decreasing the salary threshold level from $913.00 per week to $684.00 per week under the revised Overtime Rule.    

Significantly, the Rule takes effect on January 1, 2020 – in just under 100 days.  This timeline does not provide for a phase-in period as advocated for by many commenters and trade associations, and is a much shorter time period than 192 days employers were given in 2016 when the Overtime Rule was promulgated, and the 120 days given in 2004.  As justification for this timeline, the DOL stated that Continue reading

Hurricane Headaches: HR Tips for Employers

Hurricane.jpgHurricane Dorian is approaching the Southeastern United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.

Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.

Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes.  In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.

Frequently Asked Questions 

If a work site is closed because of the weather or cannot reopen because of damage and/or loss of utilities, am I required to pay affected employees?

The Fair Labor Standards Act requires employers to pay their non-exempt employees only for hours that the employees have actually worked. Therefore, an employer is not required to pay nonexempt employees if it is unable to provide work to those employees due to a natural disaster.

An exception to this general rule exists when there are employees who receive fixed salaries for fluctuating workweeks. These are nonexempt employees who have agreed to work a specified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.

For exempt employees, an employer will be required to pay the employee’s full salary if the work site is closed or unable to reopen due to inclement weather or other disasters for less than a full workweek. However, an employer may require exempt employees to use available leave for this time. Continue reading

California Employers Are Not Required To Reimburse Restaurant Workers For The Cost Of Slip-Resistant Shoes Under Labor Code Section 2802

shutterstock_34577875A recent California Court of Appeal decision, Townley v. BJ’s Restaurants, Inc., has further defined the scope of reimbursable business expenses under California Labor Code section 2802, this time in the context of slip-resistant shoes for restaurant workers.

A former server filed an action under the California Labor Code Private Attorneys General Act of 2004 (PAGA), seeking civil penalties on behalf of herself and other “aggrieved employees” for California Labor Code violations, including the failure to reimburse the cost of slip-resistant shoes.  Plaintiff alleged a violation of Labor Code section 2802, which requires an employer to reimburse employees for all necessary expenditures incurred by the employee in direct consequence of the discharge of their duties.

Plaintiff argued that, because the restaurant required employees to wear slip-resistant, black, closed-toes shoes for safety reasons, such shoes should be provided free of cost or employees should be reimbursed for their cost.

The Court of Appeal, persuaded by the reasoning in an unpublished Ninth Circuit Court of Appeals decision, Lemus v. Denny’s, Inc., and guidance from the California’s Division of Labor Standards Enforcement (DLSE), held that section 2802 did not require the restaurant employer to reimburse its employees for the cost of slip-resistant shoes.  Specifically, the Court held that the cost of shoes does not qualify as a “necessary expenditure” under section 2802.

Continue reading

SSA No-Match Letters Are Back: How Should Employers Respond?

Capitol BuildingRecently, the Social Security Administration (SSA) resumed their practice of sending Employer Correction Requests (informally “no-match letters”) to employers advising them that information submitted on an employee’s Form W-2 does not match SSA records.  The SSA stopped sending no-match letters in 2012, but in recent months, employers across many industries have received letters.

The no-match letter states that there is an error with at least one name and the Social Security Number (SSN) on a W-2 that is submitted by the employer.  Importantly, the no-match letter does not imply that the employer or the employee intentionally reported incorrect information.  They are educational in nature to advise employers that a correction may be needed for the SSA to post the correct wages to the right record because discrepancies could occur due to typographical errors, unreported name changes (such as changes due to marriage or divorce) and inaccurate employer records.

If your company has received a no-match letter, consider taking the following action: Continue reading

On the Basis of Personal Appearance

As you know, Title VII of the Civil Rights Act of 1964 (Title VII) is one of the principal federal statutes prohibiting employment discrimination.  It prohibits discrimination on the basis of race, color, national origin, religion, and sex (including gender and pregnancy).  shutterstock_Washington DCOther federal statutes that prohibit employment discrimination include Title I and Title V of the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), the Genetic Information Nondiscrimination Act (GINA), and the Uniformed Services Employment and Reemployment Rights Act (USERRA).  But, employers must also be aware of state and local laws that extend protection beyond these federally protected classes.  In the District of Columbia, for example, it is a violation of the law to discriminate on the basis of personal appearance, a category of protected class that has caused employers significant confusion with respect to what kinds of dress and grooming policies they may lawfully enforce.  So what does personal appearance discrimination mean?  And what should employers do to minimize their legal risk and ensure they do not run afoul of such laws?

Under the D.C. Human Rights Act (DCHRA), personal appearance is one of 20 protected traits for people that live, visit or work in D.C.  Personal appearance is defined as the outward appearance of any person, irrespective of sex, with regard to bodily condition or characteristics, manner or style of dress, and manner or style of personal grooming, including, but not limited to, hair style and beards.  To flesh this out, the D.C. Office of Human Rights, which administers Continue reading

Memorial Day Reminder: Remember Your Obligations to Employees Currently Serving and Those Returning From Service

As we pashutterstock_1371695303used on Memorial Day to remember those who gave their lives in active military service, employers should not forget that employees who are currently serving in the Army, Navy, Air Force, Marines and Coast Guard (collectively, the “uniformed services”) are afforded a broad range of rights and protections by the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).  USERRA is a federal law that protects civilian job rights and benefits for veterans and members of the Guard and Reserves.  USERRA, like the Family and Medical Leave Act, includes both substantive job restoration rights—at the conclusion of one’s service—as well as non-discrimination and non-retaliation provisions.  The job restoration rights provided by USERRA, however, impose heightened obligations on employers in an effort to ensure the returning service member is not disadvantaged when reentering the workforce because of his or her service.  Many employers also do not realize that returning service members—those that return to the same employer from which they took leave to serve—may only be terminated for just cause for certain periods of time depending on the length of their service.

No discrimination or retaliation.  Let’s start with the easy part.  As you might expect, employers must not deny initial employment, reemployment, retention in employment, promotion or any benefit of employment to an individual on the basis of his or her military service.  Additionally, an employer cannot retaliate against an individual by taking any adverse employment action against him or her because the individual has acted to enforce protections under USERRA, testified or otherwise Continue reading

U.S. Department of Labor Receives Close to 60,000 Comments to its Proposed Overtime Rule Raising the Minimum Salary Threshold for Exempt Workers

Increasing Money GraphOn March 22, 2019, the U.S. Department of Labor (DOL) released its proposed rule to raise the annual salary threshold for a worker to qualify as exempt under its “white collar” regulations from $23,660.00 to $35,308.00.  The public comment period closed yesterday, May 21, 2019, with almost 60,000 comments from the business and worker communities.

History of the Proposed Rule

The road to a final rule over the salary threshold has been long and bumpy for the DOL.  In 2014, President Obama directed the DOL to “update and modernize” the existing Fair Labor Standards Act’s (“FLSA”) white collar exemptions.  Two years later, the DOL released its final rule revising the regulations by doubling the salary threshold to $47,476.00.

The final rule dramatically increased the number of workers who would qualify for overtime pay, forcing every employer in the country to carefully assess how to handle the additional financial burden. Continue reading