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HR & the Law in the News
July 2016, Volume 15, Issue 7
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Please enjoy this latest edition of FiveL Company's monthly e-newsletter, bringing you current news related to employment policies, practices and programs.
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Ignorance is Bliss?
Figuring the FLSA's Fiscal Impact
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Much has happened since I addressed the new FLSA regulations in last month's newsletter. Allow me to share some updates with you.
I am honored to share that on June 23, 2016 I testified before the US House Small Business Committee on behalf of SHRM regarding the new regulations. You can watch and listen to it here or read the opening statement here. Two days prior to that I was also honored to present at SHRM's request on the same issue at their annual conference to an audience of approximately 300 HR and business professionals. The new regulations are and I am sure will continue to be the talk of the town in the upcoming months.
So, in last month's newsletter I shared five strategies employers may use to respond to the new regulations. Allow me to share two more and at least one additional consideration.
- Employers in the private sector have the ability to use volunteer workers to a much greater extent than employers in the private sector. Thus, another option for non-profit employers who convert an employee who is currently exempt to non-exempt is to limit that employee to working no more than 40 hours in a work week and then have a volunteer perform the remaining work. This option, however requires an analysis to ensure you are properly classifying the volunteer. The US Department of Labor's (DOL) Fact Sheet #14A will guide you in that process.
- An employer could also convert the exempt employee to non-exempt and continue to pay the employee on a salary, rather than hourly basis. But do not be mislead. The non-exempt remains entitled to overtime pay for hours worked over 40 in a work week whether he is paid a salary or on an hourly basis. This can become an administrative burden as it requires a retrospective review, every pay period to determine if the employee worked more than 40 hours in any work week and, if so to then calculate the overtime pay that is owed. There are two ways to do this depending upon whether the employee works a fixed or fluctuating schedule. These are covered in the current, federal regulations at 778.113 and .114.
- For employers considering simply converting your exempt employee to non-exempt at his or her current rate of pay (current, annual salary / 2080, assuming full time) be sure you take minimum wage considerations into account. For example, if you have an exempt employee earning a guaranteed, minimum salary of $30,000 per year the new hourly rate of pay would be $14.42. Next let's assume your employee works in one of at least 14 cities, counties or states that has enacted a $15/hour minimum wage. Now you will have to increase your employee's hourly rate to $15.00, effectively giving him or her an annual increase of $1,200.
The question I have been most frequently asked since the final regulations were published is, "What are the odds that they really will take effect December 1, 2016?" I have no idea. I can tell you this. Momentum is growing to delay implementation. If you have any concern that the new rule will adversely impact your company, employees or you need more time to understand and prepare, then I urge you to contact your Senator and Congressman and ask them to support H.R. 4773 and S. 2707, The Protecting Workplace Advancement and Opportunity Act. This bill proposes to postpone implementation of the new rule until the DOL is able to conduct a more in-depth economic study of the impact this rule will have on business of various industries, sizes, sectors and locales. Every week I check and find more Congressmen have signed on as Co-Sponsors.
In the interim, assess, plan and prepare. Talk to your employees whom you think will be impacted. And if you missed FiveL's June 22nd webcast in which we crunched some numbers and walked through at least five possible responses, you can register and access the archived version here. $25 pp and p re-approved by SHRM and HRCI for 1.25 business credits.
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Time Flies and the ADA Continues to Evolve
Employers employing 15 or more employees are covered by the Americans with Disabilities Act (ADA). The law was enacted 25 years ago and by now we know the basics...or do we? We know that the law prohibits discrimination against:
- an individual with a disability;
- an individual whom we perceive to have a disability even if that perception is wrong; and
- an individual who associates with a person with a disability.
We know a disability is a physical or mental impairment that substantially limits a major life activity. And we know that a person with a disability is generally one who is able to perform the essential functions of a job with or without a reasonable accommodation and the employer must provide that reasonable accommodation. The challenge is defining and interpreting each of those terms and more! Thus, the continued evolution and interpretation of the law. Take a recent example.
On June 23rd the 6th US Circuit Court of Appeals (covers MI, OH, KY, TN) ruled in favor of the employer (I know, I don't usually tell employer-friendly stories). An employee was denied an apprenticeship opportunity because he was restricted by a physician from climbing a 30-50' ladder and working at heights on overhead catwalks and elevated platforms, both of which were required for this particular apprenticeship. The restriction was the result of his addiction and continuing use of opioids. So the employer placed the employee in another position and the employee sued.
The court considered several questions that were good reminders. While working is generally a major life activity (at least until we hit the Lotto) being barred from working a job as compared to a class of jobs is not being substantially limited in a major life activity. And discrimination based upon perception depends upon the reasonableness of the employer's perception. Here the employer relied upon a physician's statement and the employee's own admission to prior opioid use. Even if the employee was no longer using, the employer's reliance upon the information it had received at the time of the decision was reasonable.
Small employers: Remember that even if you are not covered under the ADA you may be covered under similar and broader state or local laws.
What Else? On May 17th the US EEOC issued a new rule on Workplace Wellness programs and how they impact ADA compliance. On May 9th the EEOC published new guidance on Employer-Provided Leave and the ADA. Not to mention plenty of case law in the last year that has continued to shape employers' related policies, programs and practice.
What Next? For more information join the July 27th webcast, " Happy Anniversary: The ADA in the News" from 10:00 - 11:15 ET. Click here for more information or to register. Hope to chat with you then!
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Upcoming Events!
Next Webcast: "Happy Anniversary: The ADA in the News" Wednesday, July 27th 10:00 - 11:15 a.m. Pre-approved by SHRM & HRCI for 1.25 credits. Click here for more information or to register.
Thursday, August 4th - "FLSA Update: The New Regulations and How They Impact You" presented for the members and guests of the Hunt Valley Business Forum (HVBF), 8:00 - 9:30 a.m., Hunt Valley, MD
Friday, August 5th, - "Up in Smoke - HR Summit" presented for the members of AICC Region 2, 8:45 - 12:30, Seattle, WA
Wednesday, August 31st - "Employment Law Update: From Hello to Goodbye," presented for the members and guests of Maryland Works, Inc., 9:00 - 12:00 noon, Columbia, MD.
For a full list of upcoming events click here. |
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Here it is...the infamous and oh-so-important disclaimer...This publication does not constitute the rendering of legal advice. You should consult your company's employment or legal counsel for guidance on any particular issue.
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