(Post by Rick Dacri, November 28, 2016)
Time to take a deep breadth.
By now you know that a federal judge in Texas has put on hold the implementation of the changes to the Fair Labor Standards Act. The law, with a scheduled December 1 effective date, would have increased the salary level to qualify for overtime, virtually doubling the existing rate to $913 per week.
The overtime rate (“means test”) needed adjusting, but the Department of Labor’s proposal was excessive, so a hold is a good thing, albeit a bit last-minute. If Labor had asked me (they didn’t) I would have suggested a modest adjustment, along with a closer look at modifying the “duties test,” which many employers do not fully understand. It was the biggest area of misunderstanding from employers who called into my HR HelpLine.
Now that the law is on hold, what should employers do? Unfortunately, since the enforcement was enjoined at the last minute, most employers have either put the changes in place or at least announced the changes. And, Labor is likely to appeal the ruling, so an implementation of the law may still happen. So, here is what I suggest:
- If in the course of your review you found positions that did not meet the duties test, implement those changes.
- If you have not put in place compensation changes based on the new means test (raised salaries to meet the threshold and/or reclassified positions), you may want to put these on hold until we get clarity on Labor’s next move. Keep in mind, if you announced the changes, you will need to address the employee’s potential expectations.
- If you implemented salary changes and reclassified employees, it would be hard to pull these back. Besides it being an employee relations nightmare to do so and because you could still be in violation of some state laws, if the law is finally implemented, it could requires restoring them again.
- Communicate your plans to your employees. They may not know that the law is on hold and clearly do not know your plans. Be open and frank.
Employers have been put into a box with these actions. Consider what I have suggested above and put together your new plan. You may also want to seek professional legal guidance before you take any action.
Proposed changes in the Department of Labor overtime rules will force you to make significant changes to your pay and benefit structure; a changing economic market is driving wages upward; and an increasing number of wage and hour lawsuits has all put compensation at center stage.
In this one-hour webinar, scheduled for November 12th at 2PM, Rick Dacri will show where wages are going in 2016; how to prepare for the 2016 proposed changes to the overtime rules; and how to avoid the most common wage and hour violations.
This webinar is designed for all executives, managers, supervisors and HR professionals—anyone who supervises staff.
In this 60-minute webinar, you will learn:
- What the expected pay increases will be in 2016
- What will be the important 2016 compensation trends you should know
- How to remain competitive when new hires are driving pay upward
- Strategies to address the proposed doubling of the overtime minimum
- A definitive way to differentiate between a salary and hourly position
- Understanding if you must pay someone who does work on his or her time
- Knowing when you can deduct pay from a salaried worker
- Methods to correct mistakes in employee’s pay
- Pay requirements when employees work through lunch, at home, or before the start of a shift
- Avoiding mistakes in paying Independent Contractors
- Whether you can prevent employees from discussing their pay
These are just some of the things we will cover in this packed webinar. In addition, by attending, you will also receive a copy of the PowerPoint slides and 3 white papers (Understanding Exempt Status under the FLSA; FLSA Fair Pay Questionnaire; and Improper Deductions of salaried workers).
The entire program is just $125 (my clients will receive a complimentary pass). To enroll, simply email (firstname.lastname@example.org) or call me (207-229-5954). It’s that easy. I’ll take your information and you can send me a check.
Got questions? Give me a call and I’ll give you an answer.
Sound good. Then sign up now…and tell your colleagues too!
You may want to read:
Compensation Trends and Pitfalls: What You Must Know and Do
(Post by Rick Dacri, October 15, 2015)
What and how you pay your workers is becoming a major issue managers are being forced to address. The ability to recruit and retain star employees is driving wages upward. And both the states and federal government are zoning in on wage violations, while at the same time proposing stricter, more costly guidelines.
In this post, I will outline some key compensation trends and the potential pitfalls which could prove very costly to you and your organization.
- Wage Growth: expect to see a steady increase in wages. In 2014, we saw a 2.5% increase followed by 3% this year. Plan on another 3% in 2016. The Northeast has been experiencing greater growth and certain positions, such as electrical engineers, IT, line workers and nurses are demanding and getting greater increases. Review all your wages to ensure they are in line.
- Wage Equity: Recruitment is impacting existing wage programs. The need to pay job candidates higher wages than your current employees to get them to accept your job offer is throwing internal equity out of whack. Employers must remain competitive to attract talent, but you must also maintain parity so as to retain your current employees. It’s a difficult balancing act. Review your compensation program to insure you have both internal and external competitiveness and equity. As a best practice, this type of study should be done every 2 years. (As an aside, I have been asked to conduct several compensation reviews and analyses just this year).
- Wage Violations: There are a wide range of wage regulations that are getting significant attention. The Fair Labor Standards Act (FLSA) is one of the employment laws that employers frequently violate, often without intent and knowledge that they have gone afoul of the law. Unfortunately, intent is not a good defense and the consequences are severe and include 2-3 years back pay for each infraction, legal fees and in extreme cases, criminal penalties. Here are some of the problem areas:
- Misclassification of salaried workers (exempt versus non-exempt): You cannot simply pay an individual a salary to avoid paying overtime. The Department of Labor has developed a complex testing process to determine whether a job is legitimately exempt or not. You should review and test all your salaried positions to ensure they meet the requirements. Here is the DOL link to the test. Call me if you need help.
- Prohibited deductions of exempt employees wages: You cannot arbitrarily reduce the wages of an exempt worker for missing work or leaving early to go to the dentist. In doing so, you jeopardize the position’s exempt status and frankly, open up a huge can of worms. I have developed a white paper on making proper deductions. Give me a call and I will send it to you.
- Failure to pay for all time worked: This is a big problem. While Wal Mart continues to grab the headlines for these violations, I regularly get calls from clients on my HR HelpLine concerning obligation to pay for work done off the clock, work being done during breaks, eligibility for comp time (both for municipal and private sector workers), requiring workers to be on-call, storm closings, travel pay, and expecting all workers to monitor and respond to emails and calls 24/7. Review your policies and procedures to ensure employees are properly paid.
- New Proposed White Collar Regulations. The DOL is proposing to increase the means test requirement (that’s the minimum dollar amount you must pay a salaried worker) to $50,444, up from $23,660. If this passes for 2016, and many experts believe it will, that will double the amount required. Prepare now by reviewing every exempt worker you have; determine whether they fall below the threshold; and then develop a strategy around how you will deal with this issue. There are a variety of options. Call me if you need help.
- Independent Contractors: For the last few years, the various states, IRS and DOL have been hammering employers who employ Independent Contractors. In many cases they have declared these contractors as employees and have required employers to pay back pay, back taxes, workers comp, unemployment comp, and back benefits to the workers. Each state has their own tests and the IRS has another. Before you hire an Independent Contractor, test the position. Here’s the IRS test.
- Student Interns: While most unpaid student interns meet the required educational standards, DOL has been clamping down on abusers. Follow the 6 criteria point test to ensure you are not in the wrong.
Listed above are just some of the trends and pitfalls. What you should do now includes:
- Auditing your compensation and pay practices today.
- Making sure your entire compensation program is up-to-date, compliant and competitive.
- And, If you need assistance, give me a call.
Other Dacri posts you should read:
- FLSA Record Keeping Requirements
- How to Comply with Massachusetts Minimum Wage Increase
- Linkedin Gets Burned for Overtime Violations
- Overtime: Should Holidays and Vacation be Included?
(Post by Rick Dacri, September 25, 2015)
The issue of sexual harassment just won’t go away. Most employers work hard to make sure that they develop a workplace culture of respect, where issues of harassment are not tolerated. But it is hard enough to constantly monitor behaviors in the workplace. Do you also have to scrutinize your employees actions outside? This is a question I frequently get from clients and unfortunately, the answers is often “maybe.”
The law may apply to harassment that occurs between co-workers that takes place outside the workplace. When the conduct complained of occurs outside of the workplace, consider the following factors in assessing whether the conduct constitutes sexual harassment:
- Whether the event at which the conduct occurred is linked to the workplace in any way, such as at an employer-sponsored function;
- Whether the conduct occurred during work hours;
- The severity of the alleged outside-of-work conduct;
- The work relationship of the complainant and alleged harasser, which includes whether the alleged harasser is a supervisor and whether the alleged harasser and complainant come into contact with one another on the job;
- Whether the conduct adversely affected the terms and conditions of the complainant’s employment or impacted the complainant’s work environment.
If you become aware of a situation or if a complaint is presented, take it seriously. Listen to the complainant. Evaluate the situation. Contact the Dacri HR HelpLine or your attorney to determine your next steps. Just because the actions took place outside of work, does not mean the harassment did not occur. And remember, if it is determined to be harassment or not, the impact of the situation is sure to bleed into your workplace, impacting your employees, productivity and employee relations.
Other posts you may like:
(Post by Rick Dacri, September 24, 2015)
When discussing sexual harassment, I am frequently asked what to watch for to determine whether harassment might be occurring in their workplace. It is a problem for managers, who are rightfully concerned about it, but can’t be everywhere all the time.
As a manager, you might not be present when an alleged incident of sexual harassment takes place. But, some warning signs may point to potential problems. Here are a few things you should watch for:
- Whispered sexual comments and staring when members of the opposite sex pass by.
- People frequently gather and tell sexual jokes, stories, or make innuendos.
- Employees are subjected to sexual looks, stares, leering or ogling.
- Sexually explicit materials, screen savers, pictures, or calendars are in the workplace.
- There is deliberate touching, cornering, back rubs or leaning over individuals.
- Employees get addressed in a sexual manner.
Management Principal: Make clear to your employees that harassment by supervisors, co-workers and third parties will not be tolerated and that reporting objectionable behavior will not result in any form or retaliation–even when the harasser is a key person in the organization.
So what should you do to ensure that they have a harassment free workplace? There are five key steps to take:
- Send the message loud and clear to all employees (and vendors, customers, and visitors) that harassment of any kind will not be tolerated here. And if it does occur, it will be dealt with swiftly and severely.
- Model respectful behavior. Position and power does not mean dominance and disrespect. Productive companies value and respect all their employees, regardless of their position or gender. They foster a culture that can best be described as egalitarian.
- Train all managers annually on harassment prevention and investigation procedures. Educate all employees on harassment with a clear message that we won’t tolerate it, but if it occurs we will protect you and we will do something about it.
- Have clear policy in place—and make sure that everyone reads it and understands it. There must never be any question in anyone’s mind about the company’s position and everyone must know what will happen if harassment occurs.
- Train everyone in interpersonal communications and conflict resolution. Give employees the tools to address problems as they occur—but always provide them with a safety net if they can’t resolve the issue.
There is no place in the workplace for harassment. Employers and employees need to get that.
If you need assistance developing a sexual harassment prevention program or want training for your managers, call me. I can help.
Other Posts You Might Like:
(This post was written by attorney Kai McGintee, Bernstein Shur on 6/10/15)
With summer right around the corner, the federal Department of Labor hasn’t taken off on vacation quite yet. Rather, the DOL has been hard at work issuing new Family and Medical Leave Act notices and medical certification forms for employers to use. The new DOL forms are good through May 31, 2018:WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition. (Click for Forms)
WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition
WH-381 Notice of Eligibility and Rights & Responsibilities
WH-382 Designation Notice
WH-384 Certification of Qualifying Exigency For Military Family Leave
WH-385 Certification for Serious Injury or Illness of Current Servicemember — for Military Family Leave
WH-385-V Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave
The forms are substantially similar to the DOL’s prior versions. The only notable change is that the DOL added a reference to the Genetic Information Nondiscrimination Act in its instructions to health care providers on the certification form for an employee’s serious health condition (WH-380-E). Specifically, the DOL added the following: “Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), genetic services, as defined in 29 C.F.R. § 1635.3(e), or the manifestation of disease or disorder in the employee’s family members, 29 C.F.R. § 1635.3(b).” Employers who use their own medical certification forms rather than the DOL version should be sure to add this instruction for GINA compliance purposes.
Although the DOL had at one time created a form for employees to use to request FMLA leave, that form is a thing of the past. Because no magic words, let alone a form, are needed to request FMLA leave, the DOL did away with its model request for leave form. Employers should remember that for foreseeable leave, an employee only needs to provide “verbal notice sufficient to make the employer aware that the employee needs FMLA-qualifying leave, and the anticipated timing and duration of the leave.” For unforeseeable leave, an employee only needs to provide “sufficient information for an employer to reasonably determine whether the FMLA may apply to the leave request.”
Once an employee requests leave, the employer’s responsibilities under the FMLA are triggered if it has “knowledge that an employee’s leave may be for an FMLA-qualifying reason.” As a result, when any doubt exists over whether an employee is seeking time off for a reason that could qualify under the FMLA, employers should err on the side of caution. If an employee mentions illness or injury as the reason for an absence, then the absence “may” be FMLA-qualifying and the Notice of Eligibility and Rights & Responsibilities should be provided to the employee. Although Maine has its own version of FMLA, the state has not developed its own forms. Accordingly, Maine employers who wish to utilize the federal forms for Maine FMLA purposes should specifically advise the employee that the federal form is being used for that purpose, and that mere usage does not confer federal FMLA rights. New Hampshire does not have a separate state family medical leave law and therefore follows the federal FMLA.
The DOL FMLA forms are simple, fairly straightforward, and legally compliant. As long as employers use them consistently and correctly, administration of FMLA will be a warm summer breeze!
(This post was written by David P. Mason, ESQ of the firm Ogletree Deakins on April 28, 2015)
As we detailed in November 2014, Massachusetts voters last fall approved a new law mandating that employers provide earned sick time to their employees. Under the new law, employers with 11 or more employees must provide paid sick leave for workers and smaller employers must provide unpaid sick time. The law is set to take effect on July 1, 2015, and employers have raised many questions about how the law will be implemented. The Massachusetts Attorney General’s Office (AGO) recently issued proposed regulations that provide detailed guidance concerning implementation of the new law. The AGO has scheduled six public hearings to gather public feedback on the regulations and has invited any interested parties to submit written comments on the regulations.
The proposed regulations provide definitions and guidance on many issues that were unclear based on the statutory text. However, they raise some additional compliance challenges for employers as well. Of particular note, the proposed regulations:
- Broadly define “employer” to include entities that have very small Massachusetts operations. All employees will be counted toward the 11-employee threshold that requires an employer to provide paid sick leave, regardless of whether those employees work in Massachusetts or are eligible to accrue and use earned sick time.
- Broadly define the types of employees entitled to sick leave. Employees may accrue and use earned sick time on all hours worked regardless of whether those hours are worked in Massachusetts, so long as the employee’s “primary place of work”—the location they spend the most time working—is Massachusetts. Also, all full-time, part-time, temporary, or seasonal employees are entitled to earned sick time under the law.
- Outline how employers should take steps to comply in 2015 in light of the statute’s mid-year effective date (July 1).
- Permit employers to define their own “calendar year” for purposes of accrual and use of earned sick time, provided the employer gives written notice to employees as described in the regulations. This will assist employers in coordinating use of earned sick time with their existing paid time off and leave policies.
- Define the rate that must be paid to employees who use earned sick time (including a requirement that salaried employees be paid at an “hourly rate” determined by dividing their total earnings by hours worked from the previous pay period), and when those payments must be made.
- Allow employers to require employees to use a full shift of earned sick time if their absence required the employer to hire a replacement for the shift, even though the statute generally requires that employers allow employees to take earned sick time in hourly increments or the smallest increment the employer’s payroll system allows.
- Modify the statute’s mandate that employers must allow employees to carry-over 40 hours of earned sick time from year to year. Employers can, but are not required to, establish policies that provide for the payout of up to 40 hours of earned paid sick time at the end of each calendar year so long as the employee would maintain at least 16 hours of previously-accrued time.
- Allow employers to create notice policies mandating that (1) employees give advanced notice of up to seven days for pre-scheduled or foreseeable absences, and (2) require daily notification if an employee anticipates a foreseeable multi-day absence.
- Allow employers to require “written verification” from employees that they have used earned sick time for purposes permitted by the statute for any amount of earned sick time used. However, an employer may not require medical documentation unless the employee is absent for more than 24 consecutive work hours.
- Permit employers to discipline employees for misuse of sick leave if the employee is “committing fraud or abuse by engaging in an activity that is not consistent with allowable purposes for leave (e.g., being sick, caring for an ill family member) or by exhibiting a clear pattern of taking leave on days when the employee is scheduled to perform duties perceived as undesirable.”
- Permit employers to maintain “good attendance” rewards policies if those policies do not subject employees that use earned sick time under the statute to any adverse action. The inability of employees to qualify for such rewards because they used earned sick time does not constitute a statutorily-prohibited adverse action or interference with employees’ rights.
- Require employers to maintain records of accrual and use of earned sick time for three years, with those records being subject to inspection by the AGO and the employee.