Tag Archives: DOL

FFCRA and CARES ACT WEBINAR

Yesterday, my partner Kevin Perkey, who focuses his practice on tax law, and I presented a Webinar entitled COVID-19: THE IMPACT ON YOUR BUSINESS AND EMPLOYEES.  The webinar focuses on the FFCRA and certain provisions of the CARES Act.  Thank you to the hundreds of you who watched.   If you were unable to watch the Webinar, or want to see it again, it can be accessed at the following link. https://vimeo.com/401032682/9969809358

Also, one clarification on the small business (under 50 employees) exception.  While it does apply to both Expanded FMLA and Emergency Paid Sick Leave, it only applies when leave is requested because the child’s school or place of care is closed, or the child care provider is unavailable, due to COVID-19 related reasons.  And if that is the reason you still must show that one of the following apply:

 

       1.The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  

       2.The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  

      3.There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

 

Again, the DOL expects you to act in good faith when claiming this exemption and in all of your efforts to comply with the FFCRA.

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DOL Clarifies FFCRA Small Business and Health Care Provider Exemptions

Late Saturday afternoon the Department of Labor issued more FAQs on the FFCRA.  These additional FAQs provide guidance on two subjects I have received many questions about:  1. What employees qualify for the “health care provider and emergency responder exemption”?; and 2.  What must I show for the small business exemption to apply?

The health care provider and emergency responder exemption allows the employer to designate certain employees as exempt from the FFCRA’s provisions.  In a bit of a surprise the DOL clarified that, for the purposes of the FFCRA health care provider and emergency responder exemption, a health care provider is “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy , or any similar institution, employer, or entity.”   Furthermore, any individual employed by an entity that contracts with any of the above institutions or employers is also included in the definition of “health care provider” for the purposes of the FFCRA exemption.

Emergency responder is equally broad, and includes anyone in law enforcement, firefighters, paramedics, EMTs, 911 operators, and military and national guard among others.

On the small business exemption the Department of Labor states:

 

  1. When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing paid sick leave and expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:
    1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  
    2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  
    3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

 

The Department of Labor makes clear that the business does not have to “apply” for the exemption, and does not have to call or write the Department to seek exempt status.  Instead, an authorized officer must make the call that one of the three tests set forth above will be met.  The Department does stress that it expects employers claiming this exemption to have documentation to support their claim.  This could include, for example, financial documentation showing that complying with the Act and granting leave will cause business expenses and financial obligations to exceed available business revenues, a description of how letting the employee with specialized skills take leave will create a substantial risk to the business’s ability to continue to operate, the lack of availability of qualified replacements who are ready, willing and able to work, and other similar documentation.

The Department of Labor has also stated that it will grant a 30 day grace period on enforcing penalties to those employers who have violated the FFCRA but have acted in “good faith ” in doing so.  With this small business exemption, make sure there are facts to support your claim so that you are at least acting in good faith in the event the Department determines your business is not exempt.

 

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DOL Updates FFCRA FAQs

Last night the DOL issued updated FAQS for the FFCRA ( that’s a lot of alphabet soup!). You can find the new FAQs here https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

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DOL Releases Required FFCRA Poster

The DOL just released  the FFCRA poster that covered employers ( those with less than 500 employees) must post.  It must be posted  in a conspicuous place that is a high traffic area for employees .  This is usually the break room, the employee bulletin board- you know, where you post your other workplace required posters.

 

Here is the link https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

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DOL Says FFCRA Is Effective April 1st!

On March 18th the President signed the Families First Coronavirus Response Act ( FFCRA) which provides for expanded FMLA and Emergency Paid Leave in certain limited circumstances related to the Coronavirus pandemic.  You can read my recent blog posts on the FFCRA for more detail.  Yesterday the DOL issued some guidance, which provided some clarity on a few issues, including the effective date of the FFCRA.

The DOL states that the FFCRA will be effective April 1st, which is one day earlier than everyone expected.  This is not a case of the DOL changing the rules, since the FFCRA states that it will be effective “no later than 15 days from passage”.  Still, you have one less day to prepare.

The  DOL also clarified the following issues:

  • Overtime must be included when calculating pay due to employees under the FFCRA
  • Paid Sick Leave is capped at 80 hours
  • Paid Sick leave and Expanded FMLA run concurrently

And, the DOL had this to say about the potential small business exemption from the FFCRA that I have had so many questions about:

If providing child care-related paid sick leave and expanded family and medical leave at my business with fewer than 50 employees would jeopardize the viability of my business as a going concern, how do I take advantage of the small business exemption?

To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.

You should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.

So, more details are forthcoming about the potential exemption, but apparently submitting information to the DOL in order to “apply” for the exemption will not be necessary.

The DOL is supposed to issue FFCRA regulations in April.  Until then, you can get additional details from the DOL by accessing this link

www.dol.gov/agencies/whd/pandemic/ffcra-questions

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U.S. Department of Labor Issues Final Overtime Rule

In March 2019, the U.S. Department of Labor (“DOL”) announced a Notice of Proposed Rulemaking that, if passed, would increase the minimum salary thresholds to qualify for the Executive, Administrative, and Professional Exemptions, often referred to as the “white collar exemptions.”  Following public comments and listening sessions on the proposal, the DOL has issued a Final Overtime Rule.  Although announced on September 24, 2019, the Final Overtime Rule will not take effect until January 1, 2020.

The Final Overtime Rule updates the standard salary thresholds necessary to exempt Executive, Administrative, or Professional employees from the minimum wage and overtime requirements set forth in the Fair Labor Standards Act (“FLSA”) by:

  • raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (which is equivalent to an annual salary of $35,568 for a full-time worker);
  • raising the total annual compensation level for “highly compensated employees (“HCE”)” from the currently-enforced level of $100,000 to $107,432 per year; and
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to ten percent (10%) of the standard salary level, in recognition of evolving pay practices.

The DOL stated that these changes are intended to account for and reflect growth in employee earnings, since the currently enforced standard salary thresholds were set in 2004.

Although the Final Overtime Rule does not take effect until January 1, 2020, employers should begin planning now for the change.  Employers should analyze whether increasing a certain employee’s salary is feasible in order to maintain the applicable exemption, or if their business is better served by reclassifying the employee as non-exempt and paying the employee overtime when required.  If you have any questions about the Final Overtime Rule and how it will affect your business, give us a call.

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DOL May Change Its Approach to Joint Employers

This week the United States Department of Labor announced a proposed rule to revise and clarify its  joint employer test.

The Department proposes a clear, four-factor test that would be used to consider whether the potential joint employer actually exercises the power to:

  • hire or fire the employee;
  • supervise and control the employee’s work schedules or conditions of employment;
  • determine the employee’s rate and method of payment; and
  • maintain the employee’s employment records.

The proposal also includes a set of examples for comment that would further help clarify joint employer status.  I have set forth two of the examples below which illustrate when joint employer status will and will not exist under the proposed new rule:

    Example:  An office park company hires a janitorial services company to clean the office park building after hours. According to a contractual agreement with the office park and the janitorial company, the office park agrees to pay the janitorial company a fixed fee for these services and reserves the right to supervise the janitorial employees in their performance of those cleaning services. However, office park personnel do not set the janitorial employees’ pay rates or individual schedules and do not in fact supervise the workers’ performance of their work in any way. Is the office park a joint employer of the janitorial employees?

    Application:  Under these facts, the office park is not a joint employer of the janitorial employees because it does not hire or fire the employees, determine their rate or method of payment, or exercise control over their conditions of employment. The office park’s reserved contractual right to control the employee’s conditions of employment does not demonstrate that it is a joint employer.

 

    Example:  A country club contracts with a landscaping company to maintain its golf course. The contract does not give the country club authority to hire or fire the landscaping company’s employees or to supervise their work on the country club premises. However, in practice a club official oversees the work of employees of the landscaping company by sporadically assigning them tasks throughout each workweek, providing them with periodic instructions during each workday, and keeping intermittent records of their work. Moreover, at the country club’s direction, the landscaping company agrees to terminate an individual worker for failure to follow the club official’s instructions. Is the country club a joint employer of the landscaping employees?

    Application:  Under these facts, the country club is a joint employer of the landscaping employees because the club exercises sufficient control, both direct and indirect, over the terms and conditions of their employment. The country club directly supervises the landscaping employees’ work and determines their schedules on what amounts to a regular basis. This routine control is further established by the fact that the country club indirectly fired one of landscaping employees for not following its directions.

 

The proposed rule will be available for public comment for a period of time before it, or any version of it, takes effect.  Here’s hoping the clear test that is set forth above is adopted, and employers get the clarity they need to accurately assess whether they are or are not joint employers due to the amount of control exercised.

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DOL Issues Notice Of Proposed Rule to Increase Overtime Threshold

The U.S. Department of Labor (Department) announced a Notice of Proposed Rulemaking (NPRM) that, if passed,  would make more than a million more American workers eligible for overtime. The NPRM would increase the minimum salary threshold to qualify for the Executive, Administrative and Professional Exemptions, often referred to as the “white collar exemptions”.

Under the current law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. This salary level was set in 2004.

This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary level from $455 to $679 per week (equivalent to $35,308 per year).  The NPRM does not call for automatic adjustments to the salary threshold.

Importantly, the NPRM is not yet law.  Once the rule is published in the Federal Register the public will be able to submit comments for 60 days.  But, given that this increase is approximately $12,000 less than the Obama DOL’s proposed increase enjoined by the U.S. District Court for the Eastern District of Texas in November 2016, it likely has a very strong chance of becoming law.

Employers should prepare accordingly by auditing  exempt positions to ensure that the “duties test” is met.  Remember, if the duties test is not met it does not matter what amount of salary is paid.  Employers should also assess whether an increase to the employee’s salary in order to maintain the exemption is feasible, or if the better business approach is to reclassify the employee as nonexempt and pay overtime when it is required.

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DOL Announces Voluntary Payroll Audit Program

On March 6th the Wage and Hour Division (WHD) of the U.S. Department of Labor announced a new pilot program called the Payroll Audit Independent Determination  ( PAID) Program.  According to the DOL PAID is designed to expedite the resolution of “inadvertent overtime and minimum wage violations under the Fair Labor Standards Act “(FLSA).

Participation in PAID is voluntary.  If an employer chooses to participate in the program and FLSA violations are discovered the WHD will not impose penalties or liquidated damages as part of any settlement.  Instead, the employer will only pay the backpay owed to the employee or employees.

Employers may not participate in the program if they are in litigation (presumably involving the FLSA but the press release does not specify) or currently under investigation by the WHD for the wage and hour practices at issue.  Participation in PAID also requires employers to review the WHD’s compliance assistance materials, carefully audit their pay practices and agree to correct the pay practices at issue going forward.

WHD will implement PAID nationwide for approximately six months and will then evaluate the program and consider future options.  More information about PAID is available at http://www.dol.gov/whd/paid

For employers who believe they may have “inadvertent” violations of the FLSA participation in PAID may be a good option.  But before you agree to invite the WHD into your place of business I recommend that you conduct your own audit of your compensation practices to identify any potential violations or areas of concern.  We assist clients with self-audits frequently.   Remember, an ounce of prevention is worth a pound of cure!

 

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Prepare For Upcoming FLSA Changes Now

Last month the Department of Labor announced that the final rule changing the Executive, Administrative and Professional Exemptions under the FLSA, the so called white collar exemptions, is expected to be released in July 2016. After the final rule is released the changes will likely become law 60 to 90 days later. The proposed changes will increase the annual minimum salary for these exemptions from $23,660 to $50,440. And, while there has been no announcement yet, it is still possible that the final rule will change the duties test for these exemptions which could greatly impact what employees qualify as exempt.

Now is the time for employers to begin planning on how to deal with these changes. Certainly, if there is a change to the duties test the change will likely be to narrow the exemption. Employers should conduct an analysis to determine whether it is more economically beneficial to increase the salary of some exempt employees, or reclassify them as nonexempt and pay them overtime. If the decision is made to continue to treat the employees as exempt employers should analyze whether any of that increase in salary can be passed on to their customers and if so, how much.

The analysis should also focus on the duties of every employee that is currently classified as exempt. If there is doubt about whether a particular employee is properly qualified as exempt the employer should determine whether that employee can be given additional duties and responsibilities to remove doubt about the exemption. If that is not possible the employer should consider how to best go about reclassifying the employee.

Reclassification may be viewed as an insult to some employees, so this must be considered in determining how to approach and resolve the issue. Also, employers must determine whether they will increase the pay of reclassified employees, in an effort to soften the blow of reclassification.

Proactive employers who conduct these analyses now will save themselves headaches in the future and be well positioned to comply with the new law as soon as it takes effect.

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