Tag Archives: HR Law

U.S. Department of Labor Releases Proposed Overtime Rule

March 27, 2019


On March 7, 2019, the U.S. Department of Labor (DOL) released a Notice of Proposed Rulemaking (“NPRM”) proposing to revise the overtime salary thresholds under the Fair Labor Standards Act (FLSA). The proposed rule would increase the weekly salary threshold for exempt employees from $455 ($23,660 annually) to $679 ($35,308 annually).

The DOL made earlier efforts to revise the overtime salary threshold, which stalled due to heavy legal opposition.  This NPRM is a new effort by the DOL to address the current salary threshold that dates back to 2004.

Determining Exempt Status

In order to be exempt from FLSA overtime requirements, an employee must meet both the “salary test” and “duties test.”

Salary Test

An employee must meet two prongs of the salary test:

  1. The salary basis test – With limited exception, the employee be paid a predetermined amount, regardless of quality or quantity of work, and the amount must at least equal the required minimum wage.
  2. The salary level test – The minimum salary for an employee to qualify as exempt would be $679 per week or $35,308 annually.  This is the primary focus of the NPRM.

Duties Test

The duties test exempts those that primarily perform executive, professional and administrative duties. For additional information on the duties test, please refer to the DOL wage and Hour Division (WHD) Fact Sheet #17A.

Overtime Eligibility

Non-exempt employees, as defined under FLSA, must be compensated at 1 ½ times their normal rate of pay for any hours worked over 40 hours in a work week. Pay for time not worked such as vacation, sick leave, or holiday pay is not counted toward the overtime requirement. Non-exempt employees can be paid on an hourly, salary, piece rate, or commission basis so long as:  (i) they are compensated at or above the required minimum wage rate for all hours worked;  and (ii) are paid overtime for any hours worked in excess of 40 hours in a single work week.

In addition to FLSA requirements, an employer is still required to comply with any applicable state or local wage and hour laws.

Other Proposed Changes

The NPRM also includes the following:

  • An increase in the total annual compensation requirement for  “highly compensated employees” subject to the “minimal duties” test from $100,000 to $147,414 annually;
  • Employers may use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level; and
  • A statement of commitment by the DOL to periodically review the salary threshold.

The NPRM does not change the “duties test” for determining exempt status or change the current overtime protections for police officers, firefighters, paramedics, nurses, laborers or non-management employees working in maintenance, construction, or other similar occupations.

Additional information about the proposed rule is available at here.  Once the proposed rule is published in the Federal Register, interested members of the public will have 60 days to submit comments by visiting www.regulations.gov.

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Overtime Rule On Hold (For Now)

November 29, 2016


Last week, employers had a lot to be thankful for. On November 18, the IRS gave employers additional time and flexibility to complete their 1094/1095 filing obligations. More significant news came on November 22, when a federal judge issued a preliminary injunction preventing the Department of Labor (DOL) overtime regulations from taking effect on December 1 as planned.

Judge Mazzant of the Eastern District of Texas ruled in favor of a group of 21 states and a collection of business entities who sued the DOL, challenging its authority to enforce the overtime rule. Accordingly, he issued a preliminary injunction to preserve the status quo, preventing the regulations from taking effect.

This is almost certainly not the last shoe to drop in the ongoing overtime regulation saga. A federal judge issues a preliminary injunction if the plaintiff (the party bringing the lawsuit) can show, among other things, a substantial likelihood of success on the merits of the case and that the potential harms to the parties and public weigh in favor of the injunction. In this case, Judge Mazzant found that the plaintiffs were likely to prevail because the Fair Labor Standards Act (FLSA) did not clearly give the DOL the authority to implement a new salary threshold, particularly the automatic update provision in the final regulation. Interestingly, the Court noted it was “not making a general statement on the lawfulness of the salary-level test for the EAP (executive, administrative, and professional) exemption.” (Order, Dkt. 60, FN 2). Much of the reasoning in the opinion, however, could be used to question the legality of the salary threshold.

What does the court’s ruling mean? It means employers do not need to comply with the overtime rule on December 1, 2016. It does not mean – at least not at this point – that employers will never have to comply with the overtime rule. The DOL issued a statement indicating its strong disagreement with Judge Mazzant and indicated it is weighing its legal options.

They don’t have many. Whether the DOL immediately appeals the ruling or continues litigating the next phase of the case – the permanent injunction – it’s almost certain that we will not have a final resolution this year. And with President Elect Trump set to be inaugurated in January 2017, it’s unlikely that any legislation will provide clarity before then.

So if you’re an employer who has not taken any action to comply with the overtime rule – you’re in luck; you can continue with a wait and see approach for the foreseeable future. If you are like most employers that have already made plans, adjusted salaries and/or converted employees to hourly positions – you’ve got some difficult choices to make. Before “undoing” any of your changes, it’s prudent to wait and see what action the DOL takes in the next month or two. If it becomes clear that the overtime rule will never take effect (a real possibility) then you need to balance the potential cost-savings of undoing your changes against the impact that will have on employee morale, retention, etc.

Employers should resist the urge to make sweeping decisions in response to this ruling. But additional time to comply – or the possibility of never having to comply – certainly gives employers more flexibility.

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Federal Contractors & Close Friends

September 30, 2016


While the overtime changes have been stealing the headlines lately, there is another significant change on the horizon for federal contractors. The Department of Labor (DOL) issued the Paid Sick Leave Rule  (Executive Order 13658) for federal contractors and it takes effect on January 1, 2017. The ruling requires all employers with federal contracts (new or replacement of expired contracts) on or after January 1, 2017, to offer their employees at least 56 hours of paid sick leave per year. Sick Family

A federal contractor is a person or entity that contracts with the federal government to provide services, supplies, or other work. While that may seem like a general definition the DOL has clarified that the Paid Sick Leave Rule applies to four major categories of contractual agreements:

  1. Procurement contracts for construction that are not subject to the Davis-Bacon Act (i.e., procurement contracts for construction under $2,000);
  2. Service contracts;
  3. Concessions contracts, including any concessions contracts excluded from the Service Contract Act; and
  4. Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

Furthermore, any subcontract of a covered contract that falls into one of these four categories is subject to the Paid Sick Leave Rule.

If you are not an applicable federal contractor or subcontractor the rule does not apply to you. The federal contract employer can either grant (frontload) 56 hours of paid sick leave at the beginning of each accrual year, or use the accrual method, employees accrue one hour of paid sick leave for every 30 hours worked on a federal contract.  The choice on how to provide the benefit will be completely based on the operation of the organization.  While frontloading may be easiest to administer it could incentivize more absences.  On the other hand, if you have more exempt employees, frontloading may be preferred.  Employers may also use both methods: non-exempt use the accrual and exempt use the frontloading.  The particulars would really depend on the situation.

The Paid Sick Leave Rule requires physician certification, as most leave policies do, and it covers the employee own illnesses and family members illnesses. Interestingly, it also covers “an individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”. This is where the ruling gets interesting and challenging.  The definition of “affinity of close association” includes: an individual who was a foster child in the same home in which the employee was a foster child for several years and with whom the employee has maintained a sibling-like relationship; a friend of the family in whose home the employee lived while she was in high school and whom the employee therefore considers to be like a mother or aunt to her; or an elderly neighbor who is like a grandfather to the employee, and, a close friend “to the extent that the connection between the employee and the individual was significant enough to be regarded as having the closeness of a family relationship, even though the individuals might not be related by blood or formally in law.” So in this respect, the Paid Sick Leave Rule is broader than existing law and most employer policies.

Employers who frequently work on federal contracts should consider updating their employee handbook and/or paid sick leave policies to conform to the new rule.

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EEOC Wellness Notice

September 30, 2016


As employers continue to develop wellness programs at the workplace, it is important that EEOC, ADA and GINA regulations are met. These regulations require wellness programs that collect health information to provide a notice to the participants.

What notice should be provided?

The EEOC has provided a sample notice that can be tailored to the organization and distributed or the employer can provide their own notice. Employers that provide their own notice should refer to the EEOC website for guidance, as the regulations are very specific as to the information that must be included in the notice.

Who receives the notice?

Under the final rule, employers must provide notice to all wellness program participants if health information is collected health through:

  • Biometric screenings
  • Health risk questionnaires
  • Other means (for example, testing percent body fat at a health fair and collecting the data to use for future programming)

When should the notice be provided?

The notice is required for plan years beginning on or after 1/1/2017. The notice needs to be provided before the employee submits any health information so that employees have enough time to decide whether or not they want to participate. Employers may provide the notice at open enrollment, but it should also be provided prior to the data collection.

How is the notice communicated?

The employer can determine the best means that is most appropriate for employee communication.

Further information can be found in a previous TerrillConnect article.

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House Votes to Delay New Overtime Rule

September 30, 2016


Back in May, the Department of Labor (DOL) issued final rule under the Fair Labor Standards Act (FLSA), which raised the minimum salary threshold to $47,476, or $913 per week for exempt employees. In other words, to treat an employee as exempt, an employer must pay the employee a salary of at least $47,476 a year to meet the new salary basis test. In addition, the employer will still be required to ensure that the employee’s job responsibilities meet the exempt “duty test,” which the new rule does not change. The duties test is simply a test to ensure the actual job duties meet the job requirements for an exemption. Exempt employees have always had to satisfy the salary basis test and the duties test; the DOL rules just raised the dollar amount for the salary basis test. That rule is currently scheduled to take effect December 1, 2016.

On September 28, 2016, the U.S. House of Representatives voted 246-177 to delay the effective date of the DOL rule for six months to allow businesses more time to adjust. Some Representatives are also concerned that the rule would stunt seasonal hiring and that small businesses would be forced to lay people off right before the holiday season.  The Senate introduced a companion bill the same day, which would also need to pass before the delay could be considered by the President.

Many believe the President will not support the six month delay. “We all know the bill is not going anywhere,” said Representative Jim McGovern (D – Mass.) The Office of Management and Budget (OMB) issued a statement on September 27 stating that the “administration strongly opposes H.R. 6094, which would delay implementation of the Department of Labor’s overtime rule until the middle of next year, endangering a critical step toward promoting higher pay and undermining efforts to allow workers to better balance their work and family obligations.” The OMB also stated that if the bill passed the Senate, the President would veto it.

So what should employers do in response to Congress’ efforts? Nothing. Employers should continue planning as if the overtime rule will take effect on December 1, 2016. The odds of a delay do not appear favorable at this time, so counting on additional time for compliance would not be a prudent strategy. Of course, if anything changes, we will write about it here on TerrillConnect.

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Employer Social Media and Technology Policies

September 11, 2016


It all started with a little extra guacamole…and ended up violating the National Labor Relations Act (NLRA).

Does this leave you scratching your head wondering how in the world these two things would even be connected? Well Chipotle was too. In January 2015, a Chipotle employee tweeted complaints about how much the company charged for extra guacamole and that Chipotle underpays its employees. His manager was not pleased. Citing the Chipotle social media policy, the manager ordered the employee to delete the tweets. After deleting the tweets, the employee began circulating a petition among Chipotle employees about meal and rest breaks.  Management asked him to stop distributing the petition. The employee refused and was subsequently fired.

While this still might sound fairly clear cut, there are two huge problems with this scenario, as Chipotle later found out. The first problem is that the manager was using an outdated social media policy. And the second is that the old policy prevented workers from posting “disparaging” comments about Chipotle on social media. Unfortunately this policy violates employees’ rights to concerted activity, which is protected by the NLRA.

The National Labor Relations Board (NLRB) ordered Chipotle to rehire the employee and give back pay for the eleven months he was unemployed. Ouch! Chipotle happened to get into trouble with their social media policy, but in reality there are all sorts of problem areas that employers need to watch out for when it comes to today’s tech heavy world.

While the Chipotle case was centered on the Twitter post, Twitter is just the tip of the iceberg. Technology and media platforms have substantially evolved in recent years. In light of this, it’s a good idea to revisit your handbook policies.

Make sure the parameters of internet and smart phone use are addressed. For example, maybe your handbook has a robust policy on internet use, but nothing about:

  • Smart Phones – Does your company provide devices? Who owns that device and how should the employee use it? Do employees sign an acknowledgement allowing the company to remote swipe their lost phone if need be?
  • Gaming – Think Pokémon Go. Are you losing productivity and focus on the job?
  • Streaming Media – How much YouTube can one employee watch? Do you have the bandwidth to keep up with it?
  • Apps – Can employees access Facebook and Snapchat during working hours?

These are just a few issues to consider. But one thing’s certain: technology will continue to advance and employers should make sure their workplace policies keep up. The HR Consultants at J.W. Terrill are experts at tackling these issues and offer an employee handbook development service to keep you up to date and compliant.

If you would like information regarding our handbook development service, please contact J.W. Terrill’s Human Resources consulting group at hrconsulting@jwterrill.com.

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November 6th is Around the Corner – Have You Reviewed Your State Requirements?

October 26, 2012


As Election Day approaches, employers should review the state requirements to ensure they are compliant. Some states have no rules, but others require all employers to provide employees with time off to vote and impose civil and criminal penalties for noncompliance.

To help you ensure compliance, please see the voting leave requirements for Missouri and Illinois.


As you may know, the Missouri polling places are open from 6:00 a.m. until 7:00 p.m. In Missouri, the Missouri Revised Statute Section 115.639 requires the employees have at least three (3) consecutive hours off to vote either before or after their scheduled shift. If the employee’s work schedule does not meet this timeframe, the employer is required to provide a period of three (3) consecutive hours of paid time to vote.

For example, if an employee is scheduled from 9:00 a.m. until 5:00 p.m., and the Missouri State polls are open from 6:00 a.m. until 7:00 p.m., the employee would have enough time, per Missouri State law, to vote outside of work hours and would not be eligible for paid time off to vote. If the employee’s work schedule does not meet this timeframe, then the employer would be required to provide a period of three (3) hours of paid time off.

Two things to keep in mind as Election Day approaches in Missouri: 

  1. The employee is required to advise the company the day before he or she needs time off to vote.
  2. The employer can select the paid three (3) hour time period (between the time of opening and closing of the voting polls) in which the employee can take off to vote.

Please see the Missouri statute for additional information.

For additional information on Missouri State polling hours, please see the following website:


As you may know, the Illinois State polling places are open from 6:00 a.m. until 7:00 p.m. In Illinois, Illinois Compiled Statute 5/17-15 requires the employees have at least two (2) consecutive hours off to vote if the employee’s work shift begins less than 2 hours after the opening of the polls and end less than 2 hours before the closing of the polls. If the employee’s work schedule does not meet this timeframe, the employer is required to provide a period of two (2) consecutive hours of paid time to vote.

For example, if an employee is scheduled from 7:00 a.m. until 3:00 p.m., and the Illinois State polls are open from 6:00 a.m. until 7:00 p.m., the employee would have enough time, per Illinois State law, to vote outside of work hours and would not be eligible for paid time off to vote. If the employee’s work schedule does not meet this timeframe, then the employer would be required to provide a period of two (2) hours paid time off.

Two things to keep in mind as Election Day approaches in Illinois: 

  1. The employee is required to advise the company the day before he or she needs time off to vote.
  2. The employer can select the paid two (2) hour time period the employee can take off.

Please see the Illinois statute for additional information:

For additional information on the State of Illinois polling hours, please see the following website.

As a reminder, Election Day is right around the corner, be sure to review the state laws on voting leave. If you have any questions or would like more information please contact HR Consulting at: HRConsulting@jwterrill.com or 314-594-2700.

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