august 2016

Step-by-Step Process for the FLSA Audit

Before the final rule takes effect on December 1, you should start thinking seriously about how compliance with the rule will impact your business operations and finances. This will require a critical analysis of your organization’s budget and payroll structure.

Initially, you should conduct a thorough audit of your workforce to determine the employees who will no longer be considered exempt due to the new minimum salary threshold. This is also a great time to review the primary duties of employees currently classified as exempt to ensure proper classification.

The audit should include an analysis of the type and number of employees currently classified as nonexempt, as well as the number of hours those employees usually work in a given day and week. Further, this process should include a determination of whether the company has current job descriptions which accurately reflect job duties and essential functions.

You will then need to determine and budget for the hourly pay rate for newly classified nonexempt employees. The obvious method is to divide the employee’s current salary by work hours in a year to calculate the hourly rate. However, if the employee typically works more than 40 hours per week, you should calculate the hourly wage to include the overtime so that the employee’s total weekly wages are relatively equivalent to the employee’s former exempt salary.

Finally, from a human resources standpoint, you will want to prepare effective communication and education strategies for employees being transitioned from exempt to nonexempt status, because such changes may be perceived negatively by affected employees.

RLG Takeaway
Because implementation of the FLSA’s new minimum salary threshold is just around the corner, it is critical that an audit be conducted to comply with the new standards.

Update Your Posters NOW!

The U.S. Department of Labor (DOL) recently published two updated workplace posters: Federal Minimum Wage poster and Employee Polygraph Protection Act (EPPA) poster.

The posters have been visually redesigned and include a QR Code, which when scanned takes the user to the DOL’s Wage & Hour Division pages for “Wages and the Fair Labor Standards Act” and the EPPA.

The updated posters are dated 07/16 and went in effect on August 1, 2016. This means that employers must have these posters up now!

RLG Takeaway
Employers should follow these action steps:

Print out the new poster in color (note: it requires letter size paper) and place over the existing federal minimum wage and EPPA posters in the workplace.
Update the electronic copies of the posters on your intranet site for employees (if applicable).
Update the electronic copies of the EPPA poster on your online application site. Remember, the EPPA poster must be visible to your applicants.

OSHA Penalties Increase (A Lot!)

As of August 1, 2016, the civil penalties assessed by the Occupational Safety and Health Administration (“OSHA”) will increase by 78%. The new maximum penalties will be as follows: (1) Serious, Other-than-Serious, and Posting Requirement Violations—$12,471 per violation; (2) Failure-to-Abate Violations—$12,471 per day beyond the abatement date; and (3) Willful or Repeat Violations—$124,709 per violation. These new maximum penalties will apply to alleged violations occurring after November 2, 2015, but cited after August 1, 2016.

These increases could go one of two ways: First, OSHA could cite less varied violations and focus on actual or perceived safety issues, which would help build safer workplaces. Or, second, OSHA could use the penalty increases to assess huge total penalties, which may lead to more litigation between employers and the agency.

Smaller employers should be concerned by the increases. OSHA indicates that it will continue to provide penalty reductions based on employer size, but these reductions are still less than the total increase by the agency. As a result, smaller employers may be impacted more severely.

RLG Takeaway
Ensure that you have strong safety programs in place and find ways to provide incentives to employees for supporting a safe workplace as opposed to penalizing employees for not having an injury-free workplace.

New EEOC Wellness Sample Notice

The Equal Employment Opportunity Commission’s (“EEOC”) new rules on employer-sponsored wellness plans were finalized in May 2016 and state that employers may offer limited financial and other incentives to employees to participate in wellness programs.

While wellness programs are voluntary, they can take many forms, such as financial incentives for participation. If employers choose to offer wellness programs there are certain precautions they should consider, according to the EEOC. For example, employers cannot require wellness programs as a condition of employment; employers must ensure that wellness programs “are reasonably designed to promote health and prevent disease, that they are voluntary, and that employee medical information is kept confidential;” and employers may not limit health insurance for those who do not participate in wellness programs.

On June 16, 2016, the EEOC issued a sample notice for employers offering wellness programs. Notice must be provided by either the employer or the wellness program provider. The sample notice explains to wellness program enrollees that they will be asked to complete a voluntary health risk assessment and biometric screening. It also explicitly says that they will not be discriminated against because of any medical information they provide or because they choose to not participate, and that their health information “will not be sold, exchanged, transferred or otherwise disclosed.” While employers are not required to use the EEOC’s sample notice language, any notice given must spell out the same requirements in plain language. Additionally, the EEOC provides a brief question-and-answer document describing the notice requirement and how to use the sample notice.

RLG Takeaway
Use the sample forms. It’s easier to use the EEOC’s forms rather than create anew and risk a problem in drafting.

Employment Terminations Under USERRA: Veterans Are Not Employed At-Will

The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) imposes various obligations on employers with respect to members of the U.S. military returning to their civilian workplace. USERRA differs from other employment laws (e.g., Title VII). For example, USERRA applies to all public and private employers, regardless of size. In addition, USERRA contains an “escalator” requirement that returning service-members are reemployed in the job that they would have attained had they not been absent for military service with the same seniority, status, and pay, as well as other rights and benefits determined by seniority. Also, USERRA has no statute of limitations of any kind for claims that accrued after October 10, 2008 (and claims that accrued after October 10, 2004, are probably timely as well).

Another very important distinction is that USERRA modifies at-will employment by creating a “for cause” standard of discharge for veterans who return to work after a month or more of military service. If a veteran’s service was between thirty (30) and one-hundred and eighty (180) days, he or she may not be discharged except for cause for six (6) months following their return to work. Veterans returning from more than one-hundred and eighty (180) days of service are afforded the same protection from discharge for one year. To meet the burden – which is the employer’s – of showing “cause,” an employer must produce evidence demonstrating not only that it was reasonable to discharge the employee for the conduct at issue, but that the employee had notice that the conduct would constitute cause for discharge.

Recently, in Starr v. QuikTrip Corp., No. 15-5079, 2016 U.S. App. LEXIS 12972 (10th Cir. July 13, 2016), the Court of Appeals for the Tenth Circuit reversed the district court’s grant of summary judgment for the employer, finding that the “for cause” standard was not met by the employer. Although the employer had a written policy requiring employees to provide notice of their lateness or inability to work a shift within two-hours of the start time of the shift, a manager had provided verbal assurance to the veteran that notice of a missed shift by the following working day would be sufficient. However, the veteran was discharged when he did not provide notice in compliance with the written policy on three occasions. The court found that “a rational jury could find that the personnel manager’s promise to excuse a missed shift as long as [veteran] called before the next working day deprived [veteran] of notice that violating [employer’s] written policy could result in termination.”

RLG Takeaway
Employers need to make sure that Human Resources and managers understand the full range of obligations with regard to returning veterans and consider a centralized approach to their reemployment.

This newsletter is provided for informational purposes only, not as legal advice. The reader of these materials should seek legal advice before using this or any other materials from this author.