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News Detail

Employment Law Update

By Michael Patrick O’Brien06.13.2016

As noted in the last update, the United States Department of Labor (DOL) has finalized a new Fair Labor Standards Act (FLSA) rule that raises the minimum salary threshold required to qualify for a “white collar” overtime pay exemption to $47,476 per year, which is $913 per week. The current threshold is $23,660/year ($455/week). This salary threshold must be met regardless of whether an employee’s job duties satisfy a particular exemption’s requirements. The threshold will be adjusted to automatically increase every three years based on a formula set out by DOL. The new regulation also allows employers to use nondiscretionary bonuses and incentive payments (e.g. commissions) to meet as much as ten percent of the new required salary threshold. A new threshold salary for the highly-compensated employee exemption is set at $134,004 annually (currently set at $100,000 annually). No changes were made to the various exemption job duties tests. Employers must comply with the new DOL rule by no later than December 1, 2016.

Tips on Dealing with New DOL Overtime Exemption Regulations

One legal commentator has suggested that employers take five steps to deal with the new FLSA overtime regulations. First, “review work classifications” to determine which jobs will remain exempt (with salary increases if they pay less than $913 per week) and which will be reclassified as non-exempt. Second, “bolster training” as needed, for example newly-reclassified employees will need instruction on how to record all their hours worked. Moreover, supervisors will need to be reminded on legal requirements related to any of their newly-reclassified employees. Third, “rethink telecommuting and travel policies” because previously-exempt travelling employees must be paid differently once they travel as non-exempt employees. Fourth, “plot out employee conversations” because formerly exempt employees may feel demoted once you reclassify them. Finally, “consider a compliance audit” because while FLSA is on your mind, it is not a bad time to ensure your overall FLSA compliance.

Other Essential Areas of Supervisor Training

In addition to training on the new FLSA regulations and what it means for employees they supervise, another article I recently read made some great suggestions on other areas of necessary supervisor training. These include how Equal Employment Opportunity (EEO) rules and policies apply to employment decisions such as hiring and promotions, how to prevent and deal with discrimination and harassment and how to avoid and prevent retaliation. In addition, it is wise to educate supervisors about employee health issues at work, such as dealing with accommodations under the Americans With Disabilities Act (ADA) and requests for leave under the Family and Medical Leave Act (FMLA). The article also suggests training on how to avoid general misbehavior problems, such as bullying, etc. Finally, the article recommends that supervisors should be trained on how to appropriate document problems, employee performance and coaching moments.

Court Says Constructive Discharge Claim Starts at Resignation

The United States Supreme Court recently ruled that the statute of limitations filing period for a constructive discharge employment law claim starts to run when an employee resigns as a result of alleged discriminatory behavior, not when the last act of alleged inappropriate behavior occurred before resignation. The constructive discharge legal concept allows an employee to claims he/she was effectively fired, because the employer acted to make the workplace unreasonably intolerable.

Legislative/Regulatory Update

Here are several interesting news items regarding recent employment law legislative and regulatory issues. First, ten states have filed a lawsuit challenging the United States Department of Education’s guidance letter to schools re: use of bathrooms by transgender students. Second, two bills (S. 2707 and H.R. 4773) have been introduced in Congress to block the new FLSA overtime exemptions (discussed above). Third, the House of Representatives has passed a bill that would uphold President Barack Obama’s executive order prohibiting employment discrimination against LGBT employees. Finally, the United States Department of Justice is currently developing new rules, under the accessibility provisions of the ADA, to require websites to become accessible to disabled users. Stay tuned for news on these and lots of other employment law issues.

Michael Patrick O'Brien is an employment attorney with Utah law firm of Jones Waldo Holbrook & McDonough. He also serves as the Legal and Legislative Director for Utah’s Society for Human Resource Management chapter. Contact him at 801-534-7315 or mobrien@joneswaldo.com.

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