ANNOUNCEMENT – Annual HR Compliance Package
|
|
||
|
BREAKING NEWS: New Exemption Rules Finalized (Exempt Vs. Non Exempt)
– Sarah Zasso, SHRM-SCP, SPHR
It’s finally here.
Today, the U.S. Department of Labor (DOL) released the revised regulations affecting overtime exemptions under the Fair Labor Standards Act (FLSA). The final rules are scheduled to be published on May 23, 2016. And YES, this affects your company, regardless of size.
Basics:
Employees are generally classified as exempt or non-exempt. An exempt employee is salaried and is exempt from overtime (meaning if they work more than 40 hours per week, they receive the same salary and vice versa). A non-exempt employee is generally hourly and is entitled to overtime for hours worked over 40 at 1.5x’s their regular rate (42 hours=40 at regular rate, 2 at 1.5x’s regular rate). To qualify for exempt, the position must satisfy 2 tests: Salary and Job Duties. The current salary threshold is $455/week or $23,660/year.
What’s changed?
- The minimum salary threshold is increasing to $913/week or $47,476/year (up from $455/week or $23,660/year). DOL says that this figure is set at the 40th percentile of data representing what it calls “earnings of full-time salaried workers” in the lowest-wage Census region (currently the South).
- This amount will now be “updated” every three years (meaning that it will likely increase with each “update”), beginning on January 1, 2020. DOL will announce these changes 150 days in advance.
- Employers will be able to satisfy up to 10% of this new threshold through non-discretionary bonuses and other incentive payments, including commissions, provided that the payments are made at least quarterly. This crediting will not be permitted as to the salaries paid to employees treated as exempt “highly compensated” ones.
- The total-annual-compensation threshold for the “highly compensated employee” exemption will increase from $100,000 to $134,004 (which will also be “updated” every three years). DOL says that this figure is set at the 90th percentile of data representing what it calls “earnings of full-time salaried workers” nationally.
When does this take effect?
All employees must be correctly classified by December 1, 2016.
What do I do now?
- Review your active employee census and determine if those that are currently exempt meet the new salary requirements.
- Determine which employees do not currently meet the salary threshold.
- Create a plan to adjust status to ensure your employee classifications are FLSA compliant.
- Create a plan of communication to affected employees (remember, many employees look as exempt classification as a higher “status” within the organization. It’s critical that this is communicated to them in a way that does not unnecessarily reduce morale.)
Consider This:
When you are creating your approach to adjusting exempt status, there are a myriad of things to consider…
- Will this affect PTO status?
- Will this affect benefits status?
- If an exempt employee is now exempt, do I need to ask them to return company equipment (cell phone, etc)?
- How do we manage workload?
- Is there discrimination risk with our strategy?
Note: Job titles do NOT determine exempt status. In order to qualify as exempt, the job duties and salary requirements must both be met. The job duties test varies and has not had any announced changes.
There is no “one size fits all” solution:
This is a very new regulation, we have yet to see the effects and consequences, and there is no clear guidance on how to implement the changes as of yet. Each employer must first collect data, analyze and evaluate all aspects and consequences before implementing changes. What may work for one company or industry may not work for another.
If you have any questions about these new regulations, how they might affect your organization, or how to implement the changes, please contact me at sarah@sabezahr.com or 843-668-4041. Sabeza HR is “Your Human Resources Solution.”
Sarah Zasso is the Owner/Principal HR Consultant of Sabeza HR (www.SabezaHR.com), a Human Resources Consulting and Recruiting company. Sarah has almost 15 years of Human Resources experience, achieved both the SHRM-SCP and SPHR certifications, earned a Bachelor’s degree in Organizational Leadership and Communication, and currently serves on the Board of the Coastal Organization of Human Resources. If you have any questions, please do not hesitate to contact Sarah at sarah@sabezahr.com.
This article is for general information purposes only. I am not an attorney; accordingly, the information presented is not legal advice, and is not to be acted on as such.
TOP 11 EMPLOYER FMLA MISTAKES
See the article below recently published by SHRM. FMLA is a “hot topic” court issue – it is CRITICAL that you and your supervisors are trained properly to effectively administer FMLA for your organization. If you need assistance with FMLA Administration or are interested in Sabeza HR conducting a FMLA Training for Supervisors, please contact me at sarah@sabezahr.com.
– Sarah Zasso, SHRM-SCP, SPHR
Top 11 Employer FMLA Mistakes
By Allen Smith 3/30/2016
Employers should never take a holiday from dealing with the Family and Medical Leave Act’s (FMLA’s) requirements. Legal experts say the law is full of traps that can snag employers that let their guard down, and they recommend that employers shore up FMLA compliance efforts by avoiding the following common missteps.
1.No FMLA Policy
Employers shouldn’t skip having a written FMLA policy, Annette Idalski, an attorney with Chamberlain Hrdlicka in Atlanta, told SHRM Online. “If employers adopt a written policy and circulate it to employees, they are able to select the terms that are most advantageous to the company,” she said. For example, employers can choose to use a rolling 12-month period (rolling forward from the time any leave commences) rather than leaving the selection of the 12-month period to employees, who almost inevitably would choose the 12-month calendar period. The calendar period, unlike the rolling period, allows for employees to stack leave during the last 12 weeks of one year and the first 12 weeks of the new year. Check to see if state or local laws give employees the right to choose a 12-month period that would give them the right to stack leave.
2.Counting Light-Duty Work as FMLA Leave
Idalski said employers also often make the mistake of offering light-duty work to employees and counting it as FMLA leave. Light-duty work can be offered but must not be required in lieu of FMLA leave. For example, an employer can offer tasks that don’t require lifting to an employee who hurt his or her back and cannot perform heavy lifting. But if the worker wants the time off, the individual is entitled to take FMLA leave.
3.Silent Managers
Managers sometimes fail to tell HR right away when an employee is out on leave for an extended period, Idalski noted. If a manager waits a week to inform HR, that could delay the start of the 12-week FMLA period. The employer can’t make the FMLA leave retroactive, and letting the employee take more than 12 weeks of leave affects staffing and productivity, Idalski said. “Management must initiate the FMLA process with HR right away,” she emphasized.
4.Untrained Supervisors
Untrained front-line supervisors might retaliate against employees who take FMLA leave, dissuade workers from taking leave or request prohibited medical information, all of which violate the FMLA, said Sarah Flotte, an attorney with Michael Best & Friedrich in Chicago. Just because front-line supervisors shouldn’t administer FMLA leave doesn’t mean they shouldn’t be trained on the FMLA, she noted.
5.Missed Notices
Employers sometimes fail to provide required notices to employees, Flotte said. “The FMLA requires employers to provide four notices to employees seeking FMLA leave; thus, employers may run afoul of the law by failing to provide these notices,” Flotte remarked. Employers must give a general notice of FMLA rights. They must provide an eligibility notice within five days of the leave request. They must supply a rights and responsibilities notice at the same time as the eligibility notice. And employers must give a designation notice within five business days of determining that leave qualifies as FMLA leave.
6.Overly Broad Coverage
Sometimes employers provide FMLA leave in situations that are not truly FMLA-covered, such as providing leave to care for a domestic partner or a grandparent or sibling, noted Joan Casciari, an attorney with Seyfarth Shaw in Chicago. If they count that time off as FMLA leave, this could prove to be a violation of the law if the employee later has an event that is truly covered by the FMLA, she said. But the leave may count as time off under state or local FMLA laws, depending on their coverage.
7.Incomplete Certifications
Casciari added that employers sometimes accept certifications of a serious health condition that are incomplete and inconsistent. In particular, she said that businesses sometimes make the mistake of accepting certifications that do not state the frequency and duration of the intermittent leave that is needed.
8.No Exact Count of Use of FMLA Leave
Another common mistake is failing to keep an exact count of an employee’s use of FMLA leave, particularly in regards to intermittent leave, said Dana Connell, an attorney with Littler in Chicago. This failure is “highly dangerous,” he stated. An employer might give the employee more FMLA leave than he or she is entitled to. “The even greater risk is that the employer counts some time as an absence that should have been counted as FMLA, and that counted absence then plays a role—building block or otherwise—in an employee’s termination.”
9.No Adjustment to Sales Expectations
Some employers take too much comfort in an FMLA regulation that says that if a bonus is based on the achievement of a specific goal, and the employee has not met the goal due to FMLA leave, the payment of the bonus can be denied. “Notwithstanding that regulation regarding bonuses, courts have held that employers need to adjust sales expectations in assessing performance to avoid penalizing an employee for being absent during FMLA leave,” Connell emphasized.
10.Being Lax About FMLA Abuse
The FMLA is ripe for employee abuse, according to Connell, who said, “Some employers, especially in the manufacturing sector, find themselves with large numbers of employees with certified intermittent leave.” Those employers need a plan to keep all employees “honest with respect to their use of FMLA.” Connell said that surveillance may be a necessary part of an employer’s plan for dealing with potential FMLA abuse.
11.Overlooking the ADA
Employers sometimes fail to realize that a serious health condition that requires 12 weeks of FMLA leave will likely also constitute a disability under the Americans with Disabilities Act (ADA), noted Frank Morris Jr., an attorney with Epstein Becker Green in Washington, D.C. Even after 12 weeks of FMLA leave, more leave may be required by the ADA or state or local law as a reasonable accommodation.
“Document any adverse effects on productivity, ability to timely meet client demands and extra workload on co-workers resulting from an employee on extended FMLA leave,” Morris recommended. While the FMLA doesn’t have an undue hardship provision, “The information will be necessary for a proper analysis of whether any request by an employee for further leave as an ADA accommodation is reasonable or is an undue hardship” under the ADA.
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.
OVERTIME RULE CHANGES ARE COMING!
By: Sarah Zasso, SHRM-SCP, SPHR
Do you have exempt employees? If so, there are some big changes on the horizon that may make a large impact on your organization, regardless of size. By the close of 2016, the new FLSA overtime rules are anticipated to take effect.
What is exempt? Exempt, put simply, means exempt from overtime. The employee makes the same weekly salary whether they work 35 hours or 55 hours per week. Currently, there are two thresholds that must be met for a position to be exempt: 1) the salary must be at least $455 week and 2) satisfy the job duties test.
The DOL (Department of Labor) has proposed a revision to FLSA (Fair Labor Standards Act) regulations in concern to overtime. The DOL has proposed to change the salary minimum from $455/week to $970/week. What does this mean for you? This means that you may have employees who are currently exempt who will no longer qualify as exempt under the new salary test. They would become nonexempt and you will be required by law to pay them overtime for all hours worked over 40 in a scheduled workweek. Now, you may be thinking – this isn’t going to pass, there’s no way! I’m sorry to disappoint you, but all signs are pointing to the change getting approval and put in effect by the end of 2016. However, the salary may not increase as much, but will almost certainly have some form of a significant increase.
So, what do you do? If you have exempt employees, the time is now to start determining their status if this change does in fact take effect. I wish I could tell you that there is a “one size fits all” answer, but that would be untrue. Each situation/company is different.
Note: Before you take ANY action, please consult an HR Consultant ( like Sabeza HR!) or an employment law attorney. It is critical to think “big” picture. Not only do you have to take into consideration salary, but also potential discrimination risk.
Below are some initial steps provided by SHRM to help with your compliance efforts in preparation of the final overtime rule release:
- Identify currently exempt jobs with salaries that fall below the proposed new salary threshold for exempt employees, using $970 per week, or $50,440 per year.
- Determine whether to have a zone within which employees close to the new threshold will get bumped up to maintain exempt status, or whether the approach will be to reclassify as nonexempt all employees whose current salary is below the new minimum.
- For employees who probably will be reclassified, understand now how many hours they are working per week so employers can model pay going forward with reasonable accuracy.
- Determine what approach to take in setting nonexempt pay rates. Will the hourly rate simply be the current weekly salary divided by 40, or will there be an effort to replicate current pay and hours, such as by lowering the hourly rate to account for the possibility of overtime compensation.
- Consider whether to reclassify other positions at this time to manage risk and enhance compliance.
REMINDER: This is all based on “position,” not the “employee.” These are initial steps, please consult a human resources consultant and/or an employment law attorney before you take any action.
It is also important to consider what operational changes will be made to account for the reduction or shift in workload. Should you hire more employees? Can you afford more employees – what if you can’t? These are questions you should be asking yourself now.
Lastly, how will you communicate this to employees? Some employees like the “status” of being exempt, it’s important to express the change to them in a manner that does not reflect their performance or stature within the company negatively. Some may just not understand – it’s important to provide clear, concise, and consistent communication.
I recommend you start this process now, so that you are not unprepared when the change takes effect.
If you have questions or concerns, please do not hesitate to contact Sabeza HR. As your Human Resources Solution, we are here to help you navigate this confusing process.
Sarah Zasso is the Owner/Principal HR Consultant of Sabeza HR (www.SabezaHR.com), a Human Resources Consulting and Recruiting company. Sarah has almost 15 years of Human Resources experience, achieved both the SHRM-SCP and SPHR certifications, earned a Bachelor’s degree in Organizational Leadership and Communication, and currently serves on the Board of the Coastal Organization of Human Resources. If you have any questions, please do not hesitate to contact Sarah at sarah@sabezahr.com.
This article is for general information purposes only. I am not an attorney; accordingly, the information presented is not legal advice, and is not to be acted on as such.
Is Your Company at Risk?
Owners/Managers BEWARE!
We live in a litigious society. An unfortunate, but true fact. The article below published by SHRM, demonstrates how claims filed with EEOC are on the rise – particularly with regard to retaliation and ADA. And yes, this affects you and every company!
You may “think” you are doing the right thing, but in actuality, you may be violating an employment law or regulation. Educate yourself or hire an HR professional. If you are unsure what retaliation or the ADA interactive process are, then you need to hire an HR professional who can expertly guide you through the processes. And don’t forget, your managers and supervisors represent you and your company in the eyes of the law, they must be educated too and understand when/how they need to respond and when to escalate in regard to employee matters. If you are not training and educating your managers and front line supervisors, you are at risk.
Fortunately, Sabeza HR can help. We can help you put the appropriate policies/processes/training in place and help you navigate employment law. Call us today at 843-668-4041 to schedule a consultation! And visit www.SabezaHR.com for additional services we have to offer.
The article below from SHRM provides some valuable information related to Retaliation and ADA.
Retaliation, ADA Charges Rise
Take action to reduce claims filed with the EEOC
By Allen Smith
2/17/2016
Employee-friendly U.S. Supreme Court decisions on retaliation and legislative changes to the Americans with Disabilities Act (ADA) that occurred years ago are still boosting the number of charges filed with the Equal Employment Opportunity Commission (EEOC). However, employers can take steps to reduce the likelihood that they will get hit with those types of charges, legal experts say.
Retaliation charges increased by nearly 5 percent in 2015, rising from 37,955 charges in 2014 to 39,757 last year, according to EEOC enforcement data released Feb. 11. ADA claims rose by 6 percent, from 25,369 in 2014 to 26,968 in 2015, surpassing gender discrimination charges as the third most common type of allegation. Retaliation remains first, and race discrimination is second. Overall charges rose from 88,778 in 2014 to 89,385 in 2015.
The upward trend in retaliation claims is due to the Supreme Court deciding every retaliation case before it in the last 10 years in favor of employees, said Frank Morris Jr., an attorney with Epstein Becker Green in Washington, D.C. ADA claims continue to rise because of the ADA Amendments Act of 2008, which expanded the definition of “disability,” he added.
Staving Off Retaliation Claims
Many jurors believe retaliation is commonplace, said Michael Reiss, an attorney with Davis Wright Tremaine in Seattle.
And employers should expect to see more retaliation claims in light of the EEOC’s Jan. 21 proposed guidance, which broadly interpreted “retaliation,” noted Bernard Tisdale, an attorney with Ogletree Deakins in Charlotte, N.C.
So, employers should have a specific policy that retaliation against anyone in response to a complaint or investigation will not be tolerated, Morris said. Threatened retaliation should be prohibited as well.
When a lawsuit by an employee includes claims against a manager, that manager should be “intensively trained” on the law’s prohibition on retaliation. Thoughts about retaliation may be a natural reaction, but the manager must not take action along those lines, Morris noted.
If an employer receives a complaint of discriminatory activity, it should properly and promptly investigate and take appropriate action. This might prevent the claim from escalating into a retaliation claim. In addition, the information gathered may help an employer make smart decisions about how to handle the claim (e.g., whether to settle a claim early through mediation), depending on how big a problem it is, noted James Hux Jr., an attorney with Fisher & Phillips in Chicago.
If a discrimination charge has been filed and the supervisor wants to discipline the employee who brought the charge, HR needs to review the proposed discipline to determine whether the action is retaliation rather than merited. That includes analysis of whether a rule, such as a tardiness or absenteeism rule, is being enforced more harshly against the employee than it typically is against others, Morris explained.
Discipline may go forward in some cases, Reiss noted, saying that the filing of a claim isn’t a get-out-of-jail-free card.
Discipline just needs to be consistent and fair, Hux agreed.
ADA Pointers
Just as some supervisory training may be in order to prevent retaliation claims, ADA claims can be reduced through managerial training as well. Specifically, supervisors need to be trained to recognize an accommodation request even when an employee doesn’t use the words “reasonable accommodation,” Morris noted.
Front-line supervisors also should be trained to immediately get HR involved when someone comes forward with an accommodation request, Reiss said. The reason? Supervisors may be afraid to ask anything, but HR will know that an employer can legitimately ask for documentation of a disability if it is not apparent and an accommodation has been requested.
ADA cases today are more often about what took place in the interactive process for identifying a reasonable accommodation than about whether a disability is covered by the law. So, employers should have protocols in place on how to respond to accommodation requests and should document those efforts. This is “incredibly important” if there is litigation, Morris said.
If there is an agreement on an accommodation, put it in writing and have the employee sign the document, he recommended.
Remember that under the ADA, the accommodation obligation is ongoing. “Just because you’d done everything right in 2015 doesn’t mean you don’t need to do everything right in 2016,” he said. Things change, and the employer should be ready to start the accommodation conversation on fresh footing if the employee requests a new accommodation.
“Treat all assertions of disability seriously,” said Stanley Pitts, an attorney with Honigman in Detroit. “Be consistent in handling such claims, and if you choose to keep accommodation records, be sure they are complete.”
Sarah Zasso is the Owner/Principal HR Consultant of Sabeza HR (www.SabezaHR.com), a Human Resources Consulting and Recruiting company serving the United States. Sarah has almost 15 years of Human Resources experience, achieved both the SHRM-SCP and SPHR certifications, earned a Bachelor’s degree in Organizational Leadership and Communication, and currently serves on the Board of the Coastal Organization of Human Resources. If you have any questions or would like to schedule a consultation, please do not hesitate to contact Sarah at sarah@sabezahr.com.
This article is for general information purposes only. I am not an attorney; accordingly, the information presented is not legal advice, and is not to be acted on as such.
