You have less than thirty days. That is how much time employer’s (regardless of company size) have left to prepare for the Department of Labor’s new FLSA Overtime Rule. Key changes include increased salary threshold (from $23,660/year to $47,476/year) and intermittent increases every three years. The FLSA changes go into effect on Thursday, 12/1/16.
ARE YOU READY?
By this time, you should have already reviewed your employee census and determined which employee’s are affected (employee’s who are currently Exempt, but will not meet the new salary threshold), determined if you are increasing the salary to meet the new requirement or converting the employee to Non-Exempt, and communicated (or have a plan to) the changes to affected employees and supervisors.
If you feel that you are not ready for 12/1/16 or have questions, Sabeza HR is here to help. Please do not hesitate to contact me at [email protected] or 843-691-9092.
Effective August 1, 2016, employers must post new Fair Labor Standards Act (FLSA) and Employee Polygraph Protection Act (EPPA) postings. Penalty amounts listed on previous versions of posters are incorrect as of that date.
The Department of Labor has removed penalty amounts from the posters and has added a section about the rights of nursing mothers to the FLSA poster. Employers are required to post the revised versions of these federal posters.
How To Comply
Order a new labor law poster online, there are a variety of options and pricing. Ensure you are ordering the Federal All in One/State Poster combination for the best value and to save wall space. Order in multiple languages, if applicable to your organization.
You are not required to have the “pretty” poster, you can print the updated posters for FREE by clicking on the links below:
Reminder: If your company operates in multiple states, you must have a poster for the applicable state in each appropriate state location. Ex: SC must have a SC poster, NY must have a NY poster, etc. Also, the postings must be posted in a conspicuous location – such as a breakroom or by the timeclock – where all employees have routine access. If your company has multiple locations, you must have a compliant labor law poster in each location.
Questions? Please do not hesitate to contact me at [email protected] or 843-691-9092.
*Make Sabeza HR your HR Department. For an affordable monthly fee, we become your hiring manager, create and revise policies, handle employee issues and give you expert, one-on-one HR guidance from an experienced professional. Contact Sabeza HR for a free, no-obligation discussion. Sabeza HR is “Your Human Resources Solution.”
– 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.
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.
- 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.)
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 [email protected] or 843-691-9092. 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 [email protected].
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.
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 [email protected]
– 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.
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.
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.
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.
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.