What s Happening at the DOL? Wage & Hour Division and OFCCP News

Transcription

1 What s Happening at the DOL? Wage & Hour Division and OFCCP News 2015 Ask the Lawyers Program Washington Area Compensation and Benefits Association McClean, Virginia September 17, 2015 Catherine E. Walters, Esquire Saul Ewing LLP cwalters@saul.com

2 Today s Agenda What s Up at the DOL? Wage and Hour Division - FLSA update Overtime exemptions - salary level overhaul New frontiers in compensable time OFCCP update Implementation of recent Executive Orders relating to compensation and benefits Other discussion as time allows

3 Why do most people work?

4 They Want Money.

5 Lots of Money.

6 That is What They Want.

7 You Know the Score The best things in life are free But you can keep 'em for the birds and bees Now give me money yeah, That's - what I want... A lotta money - that's - what I want Yeah, give me money whole lotta money That s - what I want (paraphrased lyrics from Barrett Strong, Berry Gordy, and others)

8 So How Do They Get Money? Enforcement activity by government agencies focused on employer pay practices Department of Labor (DOL) Wage and hour Federal contracts Employee benefits compliance Internal Revenue Service (IRS) Income tax, FICA, FUTA Employee benefits compliance State Agencies Workers compensation Unemployment Compensation

9 And More Money? Employee vs. Independent Contractor Classification Investigations More audits of employers suspected of misclassifying workers More resources to combat employee misclassification IRS and DOL Wage and Hour Division have joined forces to lead misclassification initiative to seek out such cases and hold employers liable Bounties for state agencies WATCH OUT FOR ACA!!!

10 And Even More Money? Wage & Hour audits (FLSA, SCA) Overtime and wage calculation audits training time, waiting time, commissions Wage determinations and health and welfare contributions (SCA) Exempt classifications executive, professional, administrative, computer, outside sales Fair Pay (Lilly Ledbetter Fair Pay Act)

11 Violations, Enforcement and Money Back wage collections for FLSA violations for FY 2014 Over $170 million in back wages for FLSA violations 21% for minimum wage violations 79% for overtime violations Continued focus on low wage industries Agriculture, day care, health care, restaurants, hotels/motels, garment manufacturing, guard services, janitorial services, temporary help

12 Time and Money What is the primary basis upon which most workers are paid? Time worked For non-exempt (hourly) workers, the more time worked, the more money earned

13 Time and Money Not the same for exempt workers, who are typically paid a straight salary regardless of how much time they work How can exempt workers be paid more money?

14 Revise the White Collar exemptions to: Increase the Salary Level Make it more difficult to classify employees as exempt

15 Overtime Overhaul?

16 The White Collar Regulations Overhaul President Obama Presidential Memorandum: Updating and Modernizing Overtime Regulations (3/13/2014) - - DOL ordered to modernize and streamline FLSA white collar regulations to make more workers eligible for overtime The DOL s Response Rulemaking process still under way Proposed rule finally published July 6, 2015 Comment period closed September 4, 2015 Awaiting publication of Final Rule

17 The White Collar Regulations Overhaul Proposed changes for exemption from overtime based on salary level : Significant increase in salary level amount, from $455 per week or $23,660 per year, to $970 per week or $50,440 per year Significant increase in salary level amount for Highly Compensated Employees (HCE), from $100,000 per year to $122,148 per year

18 The White Collar Regulations Overhaul Proposal seeks to index standard salary level to 40 th percentile of weekly earnings for fulltime salaried workers, with HCE salary level indexed to the 90 th percentile Proposal includes automatic updates of the salary level on an annual basis DOL has also proposed indexing both salary levels to inflation as an alternative to the 40th and 90th percentile measures

19 The White Collar Regulations Overhaul Such increases would result in loss of exempt status for a substantial number of employees and increase the number of employees subject to overtime coverage requirements Revisions to the duties tests have not been proposed, but DOL is currently considering If duties tests are revised, a substantial number of employees whose salary levels are increased to meet the new standards might still become non-exempt

20 The White Collar Regulations Overhaul Proposed changes potentially could: Further complicate employee classification determinations Eliminate or diminish career opportunities and employee advancement because of loss of exempt status Impact employee morale if reclassified Impact access to workplace flexibility options for employees who become non-exempt

21 When Can Employers Expect Changes? Notice of Proposed Rulemaking (NPRM), including public comment period closed September 4, 2015 May be an additional 30+ days for reply comments DOL may then hear testimony, review public comments, prepare a final version of revised regulations and have it approved by the Office of Management and Budget (OMB) DOL will then have to issue Notice of Final Rule, with an effective date in the future DOL will likely have to contend with legal challenges, which could also cause further delay

22 So for the latter part of 2015 and into 2016, we shall be in

23 What Else is Happening at the DOL? FMLA Regulations (definition of spouse) Guidance on independent contractor misclassification Compensable time audits My supervisor told me to work through lunch. My supervisor told me not to record so much time on this project because we have to save costs. My company has a policy against working overtime, but I can t get my work done without working extra hours, so I would rather do it on my own time than get a bad performance review.

24 Compensable Time: The New Frontier New ways of working > new FLSA violations How to define work How to document hours worked Personal electronic devices > 24 hour access Remote accessibility to work Remote communications Employer policies and off-the-clock work Prohibit off-the-clock work Require all time worked to be recorded Train supervisors

25 Update: The Supreme Court and the FLSA Sandifer v. U.S. Steel Corp., 571 U.S. _ (2014); 134 S. Ct. 870 (2014) time spent by employees donning and doffing protective gear constituted time spent changing clothes for purposes of collective bargaining agreement between the parties and was not compensable under Section 203(o) of the FLSA Integrity Staffing Solutions v. Busk, 574 U.S. _ (No , 12/9/14) time spent by warehouse workers waiting to pass through anti-theft security screenings at the end of their work shifts was not compensable

26 Executive Orders and Federal Contractors

27 Executive Orders and Federal Contractors President Obama s recent Executive Orders directed at federal contractors and subcontractors E.O Minimum Wage ($10.10/hour) E.O Retaliation and Disclosure of Compensation Information E.O Discrimination LGBT Protections E.O Fair Pay and Safe Workplaces E.O. Paid Sick Leave

28 Executive Orders and Federal Contractors Executive Order Minimum Wage Requires many federal contractors to pay at least $10.10 per hour to employees working on federal contracts Increases to $10.15 per hour effective January 1, 2016 Contracts covered - must result from solicitations issued on or after January 1, 2015 (or be awarded after January 1, 2015 if there is no solicitation) Must be covered by Fair Labor Standards Act (FLSA), Service Contract Act (SCA), or Davis Bacon Act (DBA) Must fall into one of several specific categories

29 Executive Orders and Federal Contractors Executive Order Retaliation and Disclosure of Compensation Information Federal contractors and subcontractors prohibited from maintaining pay secrecy policies and from discriminating against employees and applicants who discuss, disclose or inquire about compensation Contractors must incorporate new non-discrimination requirements into their employee manuals or handbooks, and disseminate it to employees and applicants

30 Executive Orders and Federal Contractors Executive Order Discrimination; LGBT Protections Amends Executive Order to include sexual orientation and gender identity to the list of personal characteristics (race, color, religion, sex, national origin) that cannot be used by government contractors to discriminate against employees or applicants for employment Applies to contractors, subcontractors and vendors of government contractors

31 Executive Orders and Federal Contractors Executive Order Fair Pay and Safe Workplaces Requires government contractors bidding on procurement contracts in excess of $500,000 to make numerous disclosures (both pre and post- contract award) relating to violations of 14 federal wage and hour, discrimination, health and safety, family and medical leave, labor and other workplace laws Contractors required to disclose similar information for subcontractors on subcontracts valued over $500,000

32 Executive Orders and Federal Contractors Extends limits on arbitrability of Title VII and sexual abuse/harassment claims to all federal contracts Requires contractors to give employees detailed information concerning their hours worked, overtime hours, pay, and any additions to or deductions made to/from pay Effective dates of new requirements to be driven by regulations and guidance issued by the FAR Council and several other agencies (primarily DOL)

33 Executive Orders and Federal Contractors Executive Order Paid Sick Leave Issued 9/7/2015 Labor Day Effective with 2017 contracts, workers will be able to earn up to one hour of paid sick leave for every 30 hours worked May cap at 56 hours and permit carryover, but not required to pay for unused hours Employers with same or more generous paid leave policies (not necessarily sick leave policies) - little effect

34 Questions?

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