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US Chamber to File Lawsuit Challenging New FLSA Rules

Word on the street is that the U.S. Chamber of Commerce is getting ready to file a lawsuit challenging the Department of Labor’s (“DOL”) new rules under the Fair Labor Standards Act.  The new rules, which will increase the salary threshold requirement for exempt employees from $23,660 to $47,476 per year, are set to take effect on December 1, 2016.  That, my friends, is now less than three months away.

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The Chamber’s lawsuit will seek a restraining order prohibiting the new rules from being enforced.  However…and this is a BIG HOWEVER, the Chamber’s lawsuit will not challenge the new salary threshold.  Rather, it will seek to invalidate portions of the new rule that create automatic updates to the salary threshold every three years.  Specifically, the lawsuit will argue that although the DOL has been given authority to set the salary threshold “from time to time,” such authority did not empower the DOL to make those adjustments via automatic updates.

Therefore, even assuming the Chamber’s lawsuit is successful, it is likely that that the portions of the rule that implement an increase to the salary threshold on December 1 will still take effect.  Accordingly, employers are advised to continue preparing for the new rules, evaluate their exempt employees, determine whether pay increases are prudent, consider adjustments to staffing and job responsibilities, and start communicating with your employees about any upcoming changes.  In addition, as always, don’t forget to work with competent employment counsel or experienced and knowledgable HR consultants when figuring out how to prepare for the new FLSA rules.

To read more about the new FLSA rules, you can read a prior post here:  The New FLSA Rules.

 
Laura Beeman: Leading to Win

Wow.  Just wow.  I. Am. So. Inspired.  If you ever have a chance to see Laura Beeman, head coach of the University of Hawaii Rainbow Wahine basketball team, give a presentation or speech, I strongly recommend that you go see her.  This morning, as part of our Aloha United Way campaign, we had the privilege of having Coach Beeman come speak at HEC about her experiences as the head coach of the Rainbow Wahine basketball team.  The session was entitled “Leading to Win.”  Staff from HEC member companies, as well as HEC employees, were in attendance.

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Without a doubt, Coach Beeman is a fantastic storyteller. She talked to us about how she recently had to hire two new assistant coaches just before the start of the school year (and even got her players involved in the process), what it’s like to manage a squad of female college basketball players (there were some funny stories here!), and how she leads her team (and develops some of her players to lead as well).

In discussing what it took to be an effective leader, Coach Beeman stressed the importance of building relationships, trust & honesty, accountability, and psychological safety.  She also mentioned a team-building philosophy that focused on three things:  Vision, Goals, and Standards of Behavior.  The Vision equates to how the team wanted to be perceived, or their philosophy so to speak.  The Goals were accomplishments the team sought to achieve.  And finally, the Standards of Behavior were how they would reach those Goals (which in turn help fulfill the team’s Vision).

This three-tiered approached reminded me very much of philosophy presented by the author Simon Sinek in his book Start with Why.  In his book, Simon also discusses a similar approach:   Why, What & How.  The Why is similar to Coach Beeman’s Vision; it answers the question of why we do what we do or what is our personal philosophy.  The What is the things we do to fulfill the Why, similar to the Goals set out by Coach Beeman. Finally, the How addresses how we do What we do, similar to Coach Beeman’s Standards of Behavior.  As the title to his book explains, you must start with Why.

There are a lot of similarities between sports and business – i.e. common goals, teamwork, accountability, trust, relationships, etc.  It’s no secret that the success of a team, or a business, starts at the top and trickles down to the players or employees.  After hearing Coach Beeman speak, not only was I incredibly inspired, but I understood how the Wahine Basketball team was able to have such incredible success these past few years (including three consecutive WNIT appearances, a Regular Season Championship, a Conference Tournament Title, and an NCAA tournament berth).

I look forward to their continued success this season and for the years to come.  I am also thankful that Coach Beeman was able to spend her morning with us!

 
DOL Overtime Threshold Might Be $47K (Instead of $50K)

The Department of Labor’s (“DOL”) proposed new rules regarding the administrative, executive and professional exemptions (“EAP Exemptions”) under the Fair Labor Standards Act have created quite a stir, mainly because the DOL has proposed to raise the salary threshold for the EAP Exemptions from $23,660 to $50,440.  In addition, the DOL has also proposed to raise the salary threshold for the highly-compensated employee exemption from $100,000 to $122,148.  According to the DOL, these increases to the salary thresholds might cause as much as 4.7 million workers in the country to lose their exempt status.

That’s right.  4.7 million people.  Losing their exempt status.  Can you say “oh no…”?

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Just recently, news has leaked from a “Democratic staffer” that the salary threshold for the EAP Exemptions might be raised to $47,000 per year (instead of $50,440).  While this figure it not as high as originally proposed, it is still going to be double the current salary threshold amount.  So yeah, you can still say “oh no…”

Otherwise, it sounds like the DOL is putting its finishing touches on the new FLSA rules and could be issuing the rules shortly.

 
New DOL Fact Sheet on Joint Employers and the FMLA

The U.S. Department of Labor just issued a new fact sheet discussing Joint Employment and Primary and Secondary Employer Responsibilities Under the FMLA.

Under the FMLA, two or more employers can simultaneously employ an individual, making them joint employers of the individual.  Joint employment exists when an employee is employed by two (or more) employers such that the employers are responsible for compliance with the FMLA.  The analysis for determining joint employment under the FMLA is the same as under the FLSA.

Here are some highlights from the new fact sheet:

  • Where joint employment exists, one employer will be the primary employer while the other(s) will be the secondary employer(s).  Determining which employer is primary will depend on (1) who has authority to hire, fire, place and assign the worker; (2) who decides how, when and the amount the employee is paid; and (3) who provides the employee’s leave or other employment benefits.
  • In the case of temporary placement or staffing agencies, the agency is most commonly the primary employer.
  • Employees who are jointly employed get counted towards the 50-employee threshold for coverage under the FMLA for all employers.
  • For purposes of determining whether an employee works at a worksite where the employer empoys at least 50 employees within a 75 miles radius, the employee’s worksite is the primary employer’s office from which the employee is assigned.
  • Primary employers are responsible for giving required notices to the employees, providing FMLA leave, maintaining group health insurance benefits, restoring the employee to the same/equivalent job upon return from leave, and preserving all records required under the FMLA.
  • Secondary employers are prohibited from interfering with an employee’s exercise or attempt to exercise FMLA rights, or from discriminating against such an employee.

The end of the fact sheet also contains a helpful chart summarizing the responsibilities of primary and secondary employers.  A copy of the fact sheet can be viewed here:  DOL Fact Sheet #28N.

 
New Regulatory Requirements for Federal Contractors Take Effect

This is a brief summary of regulatory changes that recently took effect for federal contractors.

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First, the pay transparency requirements under Executive Order 13665 just took effect earlier this week and apply to covered contracts entered into or modified on or after January 11, 2016.   As a reminder, EO 13665 prohibits federal contractors from discharging or otherwise discriminating against any employee or applicant because the individual has inquired about, discussed, or disclosed his own compensation or the compensation of another employee or applicant.  In addition, covered contractors must include a Pay Transparency Nondiscrimination Provision - and are prohibited from including any “pay secrecy” policies – in their employee handbooks.  The Pay Transparency Nondiscrimination Policy must use the language provided by the Office of Federal Contracts Compliance Programs, which can be found here:  PTNP.  (Also, as a reminder, the National Labor Relations Act also provides employment protection for individuals who discuss wages and other terms and conditions of employment with others.)

In addition, there is a new EEO is the Law Poster Supplement that federal contractors need to utilize in conjunction with the existing EEO is the Law poster.  The supplemental poster includes updated language regarding Executive Order 11246 with respect to gender identity and sexual orientation discrimination, pay secrecy, disability discrimination, and protected veterans.

Finally, the minimum wage for federal contractors who are covered by EO 13658 has increased to $10.15 per hour (or $5.85 per hour for tipped employees).  The current minimum wage poster for federal contractors can be found here:  Federal Contractor MW.