By Michele L. Jakubs*
The United States District Court for the Eastern District of Texas vacated the Department of Labor’s (“DOL”) 2024 Rule that would have rendered millions of executive, administrative and professional employees nonexempt on January 1, 2025. The DOL 2024 Rule would have increased the salary threshold required for the most commonly used exemptions under the FLSA. Employees are exempt from overtime if they are paid on a salary basis and meet the duties requirements for one of these exemptions: executive, administrative, or professional.
The Court, in Texas v. DOL, previously issued a preliminary injunction preventing the DOL from enforcing the July 1, 2024 salary increase ($844 per week) for Texas as an employer only. On Friday, the Court ruled that the DOL did not have the authority to enact a rule that essentially replaced the duties tests for exempt status with a salary test and vacated the DOL rule nationwide. The Court stated that the exemptions require “that an employee’s status turn on duties—not salary—and because the 2024 Rule’s changes make salary predominate over duties for millions of employees, the changes exceed the Department’s authority to define and delimit the relevant terms.” The Court went on to state: “When a third of otherwise exempt employees who the Department acknowledges meet the duties test are nonetheless rendered nonexempt because of an atextual proxy characteristic—the increased salary level—something has gone seriously awry.”
Ultimately, the Court vacated the DOL’s 2024 Rule in its entirety. The DOL may appeal the decision or issue a revised rule. For now, however, the salary threshold for the executive, administrative and professional exemptions remains at the pre-2024 level of $684 per week or $35,568 per year and at $107,432 per year for highly compensated employees.
*If you have questions relating to the DOL’s new rule, or any other labor and employment law issues, please contact Zashin & Rich’s Wage and Hour Practice Leader, Michele Jakubs (mlj@zrlaw.com) at (216) 696-4441.
Showing posts with label Overtime. Show all posts
Showing posts with label Overtime. Show all posts
Monday, November 18, 2024
Wednesday, April 24, 2024
The Final Rule: The Department of Labor Increases the Salary Threshold for Exempt Employees
By Michele L. Jakubs*
On April 23, 2024, the U.S. Department of Labor announced its final rule amending the regulations interpreting the Fair Labor Standards Act (FLSA)at 29 CFR part 541, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which will take effect on July 1, 2024. The rule increases the salary threshold required for the most commonly used exemptions under the FLSA. Employees are exempt from overtime if they are paid on a salary basis and meet the duties requirements for one of these exemptions: executive, administrative, or professional. The new rule increases the salary level for these exemptions from $684 per week ($35,568 per year) to $844 per week ($43,888 per year). The FLSA also provides an exemption for highly compensated employees who meet a less onerous duties test. The new rule increases the required annual compensation for highly compensated employees from $107,432 to $132,964. The new rule provides for incremental increases as follows:
On July 1, 2024
It remains to be seen whether there will be legal challenges to the new rule and whether such challenges may delay or prevent the new rule from taking effect. In the meantime, employers should evaluate the salary levels of their exempt employees to determine whether these increases impact their eligibility for exempt status. For those employees falling below the new thresholds, employers need to consider the financial impact of increasing their salaries versus converting them to nonexempt status and paying them overtime.
*If you have questions relating to the DOL’s new rule, or any other labor and employment law issues, please contact Zashin & Rich’s Wage and Hour Practice Leader, Michele Jakubs (mlj@zrlaw.com) at (216) 696-4441 or Matthew Smallwood (mcs@zrlaw.com) at (614) 224-4411.
On April 23, 2024, the U.S. Department of Labor announced its final rule amending the regulations interpreting the Fair Labor Standards Act (FLSA)at 29 CFR part 541, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which will take effect on July 1, 2024. The rule increases the salary threshold required for the most commonly used exemptions under the FLSA. Employees are exempt from overtime if they are paid on a salary basis and meet the duties requirements for one of these exemptions: executive, administrative, or professional. The new rule increases the salary level for these exemptions from $684 per week ($35,568 per year) to $844 per week ($43,888 per year). The FLSA also provides an exemption for highly compensated employees who meet a less onerous duties test. The new rule increases the required annual compensation for highly compensated employees from $107,432 to $132,964. The new rule provides for incremental increases as follows:
On July 1, 2024
- The salary threshold for the executive, administrative, and professional exemptions increases to $844 per week ($43,888 per year);
- The highly compensated employees’ total annual compensation level increases to $132,964, including at least $844 per week paid on a salary or fee basis.
- The salary threshold for the executive, administrative, and professional exemptions increases to $1,128 per week ($58,656 per year);
- The highly compensated employees’ total annual compensation level increases to $151,164, including at least $1,128 per week paid on a salary or fee basis.
It remains to be seen whether there will be legal challenges to the new rule and whether such challenges may delay or prevent the new rule from taking effect. In the meantime, employers should evaluate the salary levels of their exempt employees to determine whether these increases impact their eligibility for exempt status. For those employees falling below the new thresholds, employers need to consider the financial impact of increasing their salaries versus converting them to nonexempt status and paying them overtime.
*If you have questions relating to the DOL’s new rule, or any other labor and employment law issues, please contact Zashin & Rich’s Wage and Hour Practice Leader, Michele Jakubs (mlj@zrlaw.com) at (216) 696-4441 or Matthew Smallwood (mcs@zrlaw.com) at (614) 224-4411.
Tuesday, September 24, 2019
Department of Labor Increases Salary Thresholds for FLSA Overtime Exemptions
On September 24, 2019, the United States Department of Labor (“DOL”) announced its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). The final rule sets the new salary threshold for “white collar” exemptions at $35,568 annually, or $684 weekly. Under the new rule, to satisfy up to 10 percent of this salary threshold, employers may use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually. For the highly-compensated employee exemption, the new salary threshold will increase from $100,000 to $107,432 annually. The final rule (including the new salary thresholds) goes into effect on January 1, 2020. The changes will have a major impact on employers, as an estimated 1.3 million formerly-exempt employees will become eligible for overtime.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” and highly-compensated employees from the overtime requirement, provided the employees meet specific criteria.
Employees qualify for an exemption by meeting three criteria: (1) the employee receives a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year); and, (3) the employee’s responsibilities primarily involve executive, administrative, or professional duties. Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
The final rule does not make any changes to the existing job duty requirements for the “white collar” and highly-compensated employee exemptions.
In light of the increases in the salary thresholds, employers should consult with counsel to ensure compliance with both the salary and duties tests. The change in the law presents a great opportunity for employers to evaluate whether they are properly classifying their employees as exempt under the FLSA and make any necessary corrections. The implications of misclassifying employees are significant and typically costly and may result in litigation or an investigation by the DOL. With just over three months to prepare and implement a plan to ensure compliance with the new salary thresholds, employers should establish a plan as soon as possible.
*Lauren M. Drabic practices in all areas of labor and employment law and is particularly adept at handling wage and hour issues. If you have questions about how the Department of Labor’s final rule may impact your company, please contact Lauren at lmd@zrlaw.com or 216.696.4441.
Thursday, February 21, 2019
EMPLOYMENT LAW QUARTERLY | Volume XXI, Issue i
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Recently, the National Labor Relations Board (“NLRB”) published a notice of proposed rulemaking on the standard for determining joint-employer status. The proposed rule makes it less likely that a company would be deemed a joint-employer liable for labor law violations involving workers the company engages at arm’s length, such as subcontractors or franchisees. Under the NLRB’s proposed standard, an employer may be deemed a joint-employer of another employer’s employees only if it possesses and exercises “substantial, direct and immediate control” over the essential terms and conditions of the employees’ employment and has done so in a manner that is not “limited and routine.” The proposed rule is intended to avoid forcing companies, who have not exerted control over the terms and conditions of employment of other companies’ employees, to be involved in collective bargaining negotiations or defending against unfair labor practice charges with respect to those employees.
The proposed rule could be even better for employers than the pre-2015 standard because, in listing the criteria for whether a company exercises enough control to be considered a joint-employer, the proposed rule requires substantial “direct and immediate control.” The NLRB maintains that the proposed rule fosters predictability, consistency, and stability in the determination of joint-employer status.
After releasing the proposed rule, the NLRB accepted comments from the public, which it will now consider in formulating its final rule. Regardless of the final rule’s language, employers must remain cognizant of the control they exert over subcontractors, independent contractors, etc., and analyze whether it creates an employment relationship with such individuals, giving rise to related liability.
*Jessi L. Ziska practices in all areas of labor and employment law. If you have questions regarding the NLRB’s proposed joint-employer rule, please contact Jessi at jlz@zrlaw.com or 216.696.4441.
By Lauren M. Drabic*
The Fair Labor Standards Act (“FLSA”) provides wage and overtime protections for full- and part-time workers in both the private and public sectors. In particular, it establishes the federal minimum wage and generally requires covered employers to pay their employees an overtime rate at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. However, the statute exempts certain employees from these minimum wage and overtime protections depending on the nature of the employee’s position, duties, and pay. The statute lists more than a dozen categories of positions that are exempt from the FLSA’s minimum wage and overtime protections. Federal regulations provide further guidance on positions that qualify as exempt.
Some FLSA provisions and related federal regulations are specific and leave little room for interpretation as to whether a certain position is exempt. For example, the FLSA specifically delineates that elementary and secondary school teachers are exempt from one or more of its protections, as are criminal investigators, police officers, firefighters, computer programmers, software engineers, cab drivers, babysitters hired on a casual basis, movie theater employees, and certain employees employed in agriculture. Federal regulations further delineate, by way of example, that doctors, lawyers, architects, and engineers typically are considered exempt employees. The applicability of other exemptions under the FLSA, however, are far from clear, even in light of additional guidance.
For nearly six decades, the Supreme Court held time and again that, when ambiguous, the provisions of the FLSA – including these exemption provisions – should be narrowly construed. In essence, this meant that unless the position at issue explicitly and irrefutably fell within the plain meaning of the FLSA’s exemption provisions – or as the Supreme Court once put it, “plainly and unmistakably [fell] within the terms or the spirit” of those provisions – such a position could not be considered exempt from the statute’s wage and overtime provisions. In practice, this meant that whenever it was unclear whether a particular position was exempt, courts were more likely to conclude it was not. This benefitted plaintiff employees bringing wage and hour claims alleging that their employers misclassified them as exempt.
In a recent decision, Encino Motorcars, LLC v. Navarro, the Supreme Court turned this longstanding precedent on its head. In Encino Motorcars, the Court interpreted the exemption under the FLSA that exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from its overtime provisions. The Court addressed whether car dealership service advisors – i.e., employees who consulted with customers about their automobile servicing needs and sold customers servicing solutions – fell under this exemption. The U.S. Court of Appeals for the Ninth Circuit concluded they did not. In reaching this conclusion, the Ninth Circuit applied the long-standing precedent that courts should narrowly construe the FLSA’s provisions.
The Supreme Court reversed the Ninth Circuit’s decision. After a lengthy discussion about the construction of the FLSA’s text, the Court determined that service advisors fell within the “salesman, partsman, or mechanic” exemption, despite the fact that they neither sold automobiles nor were generally responsible for servicing them. The Court reached this conclusion by determining that these employees were technically “salesmen.” Also, because these employees provided advice and sold services to customers, the Court found this technically could be interpreted to mean that they “serviced automobiles.”
One easily could argue that the Court did not base its holding on a narrow construction of the FLSA. Departing from the Court’s decades-long precedent, the Supreme Court explicitly rejected the principle of using narrow construction “as a useful guidepost for interpreting the FLSA.” Instead, the Court had “no license” to give the FLSA’s exemptions “anything but a fair reading.” With this simple statement, the FLSA’s provisions should now be interpreted “fairly” and no longer “narrowly.”
While it is too soon to say what the full impact of the Court’s Encino Motorcars decision will be, it likely will have far-reaching consequences. For the first time since the FLSA was enacted in 1938, the Supreme Court has given lower courts – and by extension, employers – license to take broader liberties in determining whether a position is exempt from the FLSA’s wage and overtime provisions.
When classifying employees, employers should still proceed with caution and err on the side of classifying positions as non-exempt, particularly when there is room for interpretation. Misclassifying an employee as exempt can result in costly litigation, including back pay for unpaid overtime wages, liquidated damages, and payment of attorneys’ fees and costs. However, the Supreme Court’s Encino Motorcars decision is a positive development for employers.
*Lauren M. Drabic works in Z&R’s Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the FLSA’s wage and hour exemptions or other employment-related matters, please contact Lauren at lmd@zrlaw.com or 216.696.4441.
By Patrick M. Watts*
The Cuyahoga County Council recently enacted Ordinance No. O2018-0009, which specifically outlaws discrimination based upon sexual orientation and gender identity or expression. The ordinance also outlaws discrimination based upon “race, color, religion, military status, national origin, disability, age, ancestry, familial status, and sex.” Finally, the ordinance creates a Commission on Human Rights.
The ordinance affords the commission the power to “review, hear, decide, and enforce final decisions rendered under” the ordinance. The commission also has the power to issue subpoenas, require production of evidence, require attendance of witnesses, order preservation of evidence, assess civil administrative penalties, issue cease and desist orders, take certain actions in court to secure evidence, and generally exercise other powers “reasonable and necessary to fulfill [its] purpose.”
Complaints regarding “unlawful employment practice[s]” must be filed within 150 days after the alleged unlawful discriminatory practices or acts occurred. A response to any complaint is due within 30 days after service of any complaint. The ordinance contemplates that a hearing occur concerning the allegations contained in the complaint. Thereafter, the commission is charged with issuing a Final Decision and Order regarding whether the allegations are substantiated. To the extent the commission finds a violation, the commission can issue a cease and desist order and may issue civil penalties. Civil penalties may not exceed $5,000. The commission also may award reasonable attorneys’ fees and costs to the complainant. Any party may appeal a commission decision to the Cuyahoga County Court of Common Pleas for judicial review.
In addition to provisions relating to fair housing and public accommodations, the ordinance specifically prohibits “any employer, because of race, color, religion, military status, national origin, disability, age, ancestry, sex, sexual orientation, or gender identity or expression,” from “discharg[ing] without cause,” “refus[ing] to hire a person or otherwise…discriminat[ing] against any person with respect to hire, promotion, tenure, discharge, or any terms, conditions or privileges of employment, or any matter related to employment.”
The ordinance also outlaws certain other actions, such as publishing or circulating discriminatory notices, advertisements, or failing to “classify properly” any individual within a protected class. The ordinance prohibits employers from eliciting information concerning membership in any protected class, including sexual orientation and gender identity or expression on any application for employment, unless based upon a bona fide occupational qualification. The ordinance further prohibits retaliation against any person for opposing practices forbidden by the ordinance. The ordinance has certain exceptions, including for religious organizations.
Cuyahoga County employers should implement necessary changes to existing policies to ensure compliance with this new ordinance.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about this ordinance or the Cuyahoga County Commission on Human Rights, please contact Patrick at pmw@zrlaw.com or 216.696.4441.
By Moriah L. Stutler*
At the beginning of the year, several states, including Ohio, increased their minimum wage. In Ohio, the minimum wage increased by twenty-five cents per hour to $8.55 for non-tipped employees and $4.30 for tipped employees. Ohio’s law applies to employers with gross revenue of $314,000.00 or more. Ohio employers grossing less than $314,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour to non-tipped employees and $2.13 per hour to tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states did not wait for the New Year to increase wages. On July 1, 2018, Maryland’s minimum wage increased to $10.10 per hour, while District of Columbia’s minimum wage increased to $13.25 per hour. On December 31, 2018, New York fast food employees saw a minimum wage increase to $12.75 per hour, and other New York employees saw an increase to $11.10 per hour. Other states will see increases later in 2019. For example, Oregon’s minimum wage will increase to $11.25 per hour on July 1, 2019.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including Florida, Hawaii, Maryland, Massachusetts, New Jersey, and New York have proposed bills that would increase their minimum wage to approximately $15.00 per hour within the next five to seven years.
Employers also should be aware that some municipalities have local laws setting higher minimum wages than the state minimum wage.
*Moriah L. Stutler practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Moriah at mls@zrlaw.com or 216.696.4441
Alison Buzzard represents public and private sector employers in all aspects of labor and employment law. Prior to joining Zashin & Rich in 2018 at the firm's Columbus office, Alison worked as a law clerk assisting with public and private sector labor matters while she attended The Ohio State University Moritz College of Law. At Moritz, Alison served as an Associate Editor for the Ohio State Law Journal and took part in Ohio State’s moot court program, both as a member of the Governing Board and a competitor and semifinalist in the National Moot Court Competition in Child Welfare and Adoption Law.
Moriah Stutler's practice encompasses all areas of labor and employment law. Prior to joining Zashin & Rich, Moriah spent several years at a big four accounting firm in the mergers and acquisitions tax practice, where she assisted large multinational companies execute multi-million dollar acquisitions, dispositions, and other global structuring transactions. Moriah earned her law degree and MBA from The University of Akron, where she was a graduate assistant in the department of finance.
March 6, 2019
Drew C. Piersall presents “Emerging Trends in Discrimination and Retaliation Law” at the Labor and Employment Law Section meeting of the Columbus Bar Association in Columbus, Ohio.
March 7, 2019
Jonathan J. Downes presents “FMLA, ADA & Interactive Process” at the Jobs and Family Services Human Resource Association Conference 2019 at the Quest Conference Center in Columbus, Ohio.
April 5, 2019
David R. Vance will be presenting on civil claims under Ohio Revised Code 2307.60, including civil theft, at the CMBA Litigation Section’s lunch and CLE in Cleveland, Ohio.
April 24, 2019
George S. Crisci presents “Train Your Supervisors to Mitigate Lawsuits” and “Create Documentation That is a Legal Shield” at the National Business Institute’s “Why Employers Get Sued: How You Can Stop It” seminar in Maumee, Ohio.
- The NLRB Proposes New Joint-Employer Standard Limiting Employers’ Liability
- FLSA & Car Dealer Alert: What’s Fair is Fair
- Cuyahoga County Council Passes Law Protecting Sexual Orientation & Gender Identity
- New Year, New Wages: Minimum Wage Increases in Several States
- Z&R SHORTS
The NLRB Proposes New Joint-Employer Standard Limiting Employers’ Liability
By Jessi L. Ziska*Recently, the National Labor Relations Board (“NLRB”) published a notice of proposed rulemaking on the standard for determining joint-employer status. The proposed rule makes it less likely that a company would be deemed a joint-employer liable for labor law violations involving workers the company engages at arm’s length, such as subcontractors or franchisees. Under the NLRB’s proposed standard, an employer may be deemed a joint-employer of another employer’s employees only if it possesses and exercises “substantial, direct and immediate control” over the essential terms and conditions of the employees’ employment and has done so in a manner that is not “limited and routine.” The proposed rule is intended to avoid forcing companies, who have not exerted control over the terms and conditions of employment of other companies’ employees, to be involved in collective bargaining negotiations or defending against unfair labor practice charges with respect to those employees.
The Current Joint-Employer Standard
In 2015, the NLRB’s decision in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015) (“Browning-Ferris”) established a new joint-employer standard to replace the decades-old standard set forth in TLI, Inc., 271 NLRB 798 (1984) and Laerco Transportation, 269 NLRB 324 (1984), both now reversed by Browning-Ferris. Under the the Browning-Ferris standard, which currently controls, multiple entities are deemed a joint-employer of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Essentially, if an employer retains the right to control another employer’s employees — regardless of whether it actually exercises that control — this is sufficient to establish a joint-employer relationship with respect to those employees. The Browning-Ferris standard potentially exposes more companies to legal liability as joint-employers than the pre-2015 standard. Prior to Browning-Ferris, the NLRB defined a joint-employer as one who exercised “direct and immediate” control over the workers’ terms and conditions of employment. A detailed discussion of the Browning-Ferris decision and pre-2015 standard can be found here.A Move to Return to the Pre-2015 Joint-Employer Standard
The NLRB’s December 2017 decision in Hy-Brand Industrial Contractors, Ltd, 365 NLRB No. 156 (2017) (“Hy-Brand”) overruled the controversial Browning-Ferris joint-employer standard. However, the Hy-Brand case was vacated by the NLRB in February 2018 for an alleged conflict of interest due to NLRB Member Emanuel’s participation in the case, leaving employers once again subject to the Browning-Ferris standard. This hiccup did not deter the NLRB from re-establishing the pre-2015 joint-employer standard. Unable to overturn the Browning-Ferris standard through case ruling, the NLRB is engaging in rulemaking to overturn the current standard. Further, a standard issued through rulemaking is less likely to be reversed than a standard established by case ruling, since those rulings easily can be overturned if the NLRB majority flips.The proposed rule could be even better for employers than the pre-2015 standard because, in listing the criteria for whether a company exercises enough control to be considered a joint-employer, the proposed rule requires substantial “direct and immediate control.” The NLRB maintains that the proposed rule fosters predictability, consistency, and stability in the determination of joint-employer status.
After releasing the proposed rule, the NLRB accepted comments from the public, which it will now consider in formulating its final rule. Regardless of the final rule’s language, employers must remain cognizant of the control they exert over subcontractors, independent contractors, etc., and analyze whether it creates an employment relationship with such individuals, giving rise to related liability.
*Jessi L. Ziska practices in all areas of labor and employment law. If you have questions regarding the NLRB’s proposed joint-employer rule, please contact Jessi at jlz@zrlaw.com or 216.696.4441.
FLSA & Car Dealer Alert: What’s Fair is Fair
By Lauren M. Drabic*
The Fair Labor Standards Act (“FLSA”) provides wage and overtime protections for full- and part-time workers in both the private and public sectors. In particular, it establishes the federal minimum wage and generally requires covered employers to pay their employees an overtime rate at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. However, the statute exempts certain employees from these minimum wage and overtime protections depending on the nature of the employee’s position, duties, and pay. The statute lists more than a dozen categories of positions that are exempt from the FLSA’s minimum wage and overtime protections. Federal regulations provide further guidance on positions that qualify as exempt.
Some FLSA provisions and related federal regulations are specific and leave little room for interpretation as to whether a certain position is exempt. For example, the FLSA specifically delineates that elementary and secondary school teachers are exempt from one or more of its protections, as are criminal investigators, police officers, firefighters, computer programmers, software engineers, cab drivers, babysitters hired on a casual basis, movie theater employees, and certain employees employed in agriculture. Federal regulations further delineate, by way of example, that doctors, lawyers, architects, and engineers typically are considered exempt employees. The applicability of other exemptions under the FLSA, however, are far from clear, even in light of additional guidance.
For nearly six decades, the Supreme Court held time and again that, when ambiguous, the provisions of the FLSA – including these exemption provisions – should be narrowly construed. In essence, this meant that unless the position at issue explicitly and irrefutably fell within the plain meaning of the FLSA’s exemption provisions – or as the Supreme Court once put it, “plainly and unmistakably [fell] within the terms or the spirit” of those provisions – such a position could not be considered exempt from the statute’s wage and overtime provisions. In practice, this meant that whenever it was unclear whether a particular position was exempt, courts were more likely to conclude it was not. This benefitted plaintiff employees bringing wage and hour claims alleging that their employers misclassified them as exempt.
In a recent decision, Encino Motorcars, LLC v. Navarro, the Supreme Court turned this longstanding precedent on its head. In Encino Motorcars, the Court interpreted the exemption under the FLSA that exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from its overtime provisions. The Court addressed whether car dealership service advisors – i.e., employees who consulted with customers about their automobile servicing needs and sold customers servicing solutions – fell under this exemption. The U.S. Court of Appeals for the Ninth Circuit concluded they did not. In reaching this conclusion, the Ninth Circuit applied the long-standing precedent that courts should narrowly construe the FLSA’s provisions.
The Supreme Court reversed the Ninth Circuit’s decision. After a lengthy discussion about the construction of the FLSA’s text, the Court determined that service advisors fell within the “salesman, partsman, or mechanic” exemption, despite the fact that they neither sold automobiles nor were generally responsible for servicing them. The Court reached this conclusion by determining that these employees were technically “salesmen.” Also, because these employees provided advice and sold services to customers, the Court found this technically could be interpreted to mean that they “serviced automobiles.”
One easily could argue that the Court did not base its holding on a narrow construction of the FLSA. Departing from the Court’s decades-long precedent, the Supreme Court explicitly rejected the principle of using narrow construction “as a useful guidepost for interpreting the FLSA.” Instead, the Court had “no license” to give the FLSA’s exemptions “anything but a fair reading.” With this simple statement, the FLSA’s provisions should now be interpreted “fairly” and no longer “narrowly.”
While it is too soon to say what the full impact of the Court’s Encino Motorcars decision will be, it likely will have far-reaching consequences. For the first time since the FLSA was enacted in 1938, the Supreme Court has given lower courts – and by extension, employers – license to take broader liberties in determining whether a position is exempt from the FLSA’s wage and overtime provisions.
When classifying employees, employers should still proceed with caution and err on the side of classifying positions as non-exempt, particularly when there is room for interpretation. Misclassifying an employee as exempt can result in costly litigation, including back pay for unpaid overtime wages, liquidated damages, and payment of attorneys’ fees and costs. However, the Supreme Court’s Encino Motorcars decision is a positive development for employers.
*Lauren M. Drabic works in Z&R’s Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the FLSA’s wage and hour exemptions or other employment-related matters, please contact Lauren at lmd@zrlaw.com or 216.696.4441.
Cuyahoga County Council Passes Law Protecting Sexual Orientation & Gender Identity
By Patrick M. Watts*
The Cuyahoga County Council recently enacted Ordinance No. O2018-0009, which specifically outlaws discrimination based upon sexual orientation and gender identity or expression. The ordinance also outlaws discrimination based upon “race, color, religion, military status, national origin, disability, age, ancestry, familial status, and sex.” Finally, the ordinance creates a Commission on Human Rights.
Commission on Human Rights
The ordinance creates a new Commission on Human Rights that is charged with promoting “principles of diversity, inclusion, and harmony in the County of Cuyahoga.” The commission will have three members who are appointed by the County Executive and confirmed by the County Council. The ordinance requires that these members be licensed attorneys. The commission is charged with receiving, investigating, and attempting to mediate all complaints filed under the ordinance. Of note, the commission is charged with generally encouraging complainants to file a complaint with the applicable state and federal bodies, including the Ohio Civil Rights Commission and U.S. Equal Employment Opportunity Commission. The commission is authorized to decline the exercise of jurisdiction in most circumstances. However, the ordinance requires that complaints exclusively alleging discrimination based upon “sexual orientation and/or gender identity or expression… be adjudicated by the commission… without deferral” to the related state and/or federal agency.The ordinance affords the commission the power to “review, hear, decide, and enforce final decisions rendered under” the ordinance. The commission also has the power to issue subpoenas, require production of evidence, require attendance of witnesses, order preservation of evidence, assess civil administrative penalties, issue cease and desist orders, take certain actions in court to secure evidence, and generally exercise other powers “reasonable and necessary to fulfill [its] purpose.”
Complaints regarding “unlawful employment practice[s]” must be filed within 150 days after the alleged unlawful discriminatory practices or acts occurred. A response to any complaint is due within 30 days after service of any complaint. The ordinance contemplates that a hearing occur concerning the allegations contained in the complaint. Thereafter, the commission is charged with issuing a Final Decision and Order regarding whether the allegations are substantiated. To the extent the commission finds a violation, the commission can issue a cease and desist order and may issue civil penalties. Civil penalties may not exceed $5,000. The commission also may award reasonable attorneys’ fees and costs to the complainant. Any party may appeal a commission decision to the Cuyahoga County Court of Common Pleas for judicial review.
Anti-Discrimination Law and Unlawful Employment Practices under the Ordinance
In addition to existing protections for various protected classes, the ordinance specifically adds protections for sexual orientation and gender identity or expression. The ordinance defines “[g]ender identity or expression” as “an individual’s actual or perceived gender-related identity, appearance, expression, mannerisms, or other gender-related characteristics, regardless of the individual’s designated sex at birth.”In addition to provisions relating to fair housing and public accommodations, the ordinance specifically prohibits “any employer, because of race, color, religion, military status, national origin, disability, age, ancestry, sex, sexual orientation, or gender identity or expression,” from “discharg[ing] without cause,” “refus[ing] to hire a person or otherwise…discriminat[ing] against any person with respect to hire, promotion, tenure, discharge, or any terms, conditions or privileges of employment, or any matter related to employment.”
The ordinance also outlaws certain other actions, such as publishing or circulating discriminatory notices, advertisements, or failing to “classify properly” any individual within a protected class. The ordinance prohibits employers from eliciting information concerning membership in any protected class, including sexual orientation and gender identity or expression on any application for employment, unless based upon a bona fide occupational qualification. The ordinance further prohibits retaliation against any person for opposing practices forbidden by the ordinance. The ordinance has certain exceptions, including for religious organizations.
Cuyahoga County employers should implement necessary changes to existing policies to ensure compliance with this new ordinance.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about this ordinance or the Cuyahoga County Commission on Human Rights, please contact Patrick at pmw@zrlaw.com or 216.696.4441.
New Year, New Wages: Minimum Wage Increases in Several States
By Moriah L. Stutler*
At the beginning of the year, several states, including Ohio, increased their minimum wage. In Ohio, the minimum wage increased by twenty-five cents per hour to $8.55 for non-tipped employees and $4.30 for tipped employees. Ohio’s law applies to employers with gross revenue of $314,000.00 or more. Ohio employers grossing less than $314,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour to non-tipped employees and $2.13 per hour to tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states did not wait for the New Year to increase wages. On July 1, 2018, Maryland’s minimum wage increased to $10.10 per hour, while District of Columbia’s minimum wage increased to $13.25 per hour. On December 31, 2018, New York fast food employees saw a minimum wage increase to $12.75 per hour, and other New York employees saw an increase to $11.10 per hour. Other states will see increases later in 2019. For example, Oregon’s minimum wage will increase to $11.25 per hour on July 1, 2019.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including Florida, Hawaii, Maryland, Massachusetts, New Jersey, and New York have proposed bills that would increase their minimum wage to approximately $15.00 per hour within the next five to seven years.
Employers also should be aware that some municipalities have local laws setting higher minimum wages than the state minimum wage.
The following table includes all increases to state minimum wages in 2019 (unless otherwise noted, all increases were effective January 1, 2019):
STATE | NON-TIPPED | TIPPED |
Alaska | $9.89 | $9.89 |
Arizona | $11.00 | $8.00 |
California | $12 for larger employers; $11 for smaller employer | $12 for larger employers; $11 for smaller employer |
Colorado | $11.10 | $8.08 |
District of Columbia (effective 7/1/2018) | $13.25 | $3.89 |
Florida | $8.46 | $5.44 |
Maine | $11.00 | $5.50 |
Maryland (effective 7/1/2018) | $10.10 | $3.63 |
Massachusetts | $12.00 | $4.35 |
Minnesota | $9.86 for larger employers; $8.04 for smaller employers | $9.86 for larger employers; $8.04 for smaller employers |
Montana | $8.50 | $8.50 |
New Jersey | $8.85 | $8.85 |
New York (effective 12/31/18) | $12.75 for fast food employees; $11.10 for other employees | $7.50 for food service employees; $9.25 for other service employees |
Ohio | $8.55 | $4.30 |
Oregon (effective 7/1/19) | $11.25 | $11.25 |
Rhode Island | $10.50 | $3.89 |
South Dakota | $9.10 | $4.55 |
Vermont | $10.78 | $5.39 |
Washington | $12.00 | $12.00 |
*Moriah L. Stutler practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Moriah at mls@zrlaw.com or 216.696.4441
Z&R SHORTS
Please join Z&R in welcoming Alison Buzzard and Moriah Stutler to its Employment and Labor Groups
Alison Buzzard represents public and private sector employers in all aspects of labor and employment law. Prior to joining Zashin & Rich in 2018 at the firm's Columbus office, Alison worked as a law clerk assisting with public and private sector labor matters while she attended The Ohio State University Moritz College of Law. At Moritz, Alison served as an Associate Editor for the Ohio State Law Journal and took part in Ohio State’s moot court program, both as a member of the Governing Board and a competitor and semifinalist in the National Moot Court Competition in Child Welfare and Adoption Law.
Moriah Stutler's practice encompasses all areas of labor and employment law. Prior to joining Zashin & Rich, Moriah spent several years at a big four accounting firm in the mergers and acquisitions tax practice, where she assisted large multinational companies execute multi-million dollar acquisitions, dispositions, and other global structuring transactions. Moriah earned her law degree and MBA from The University of Akron, where she was a graduate assistant in the department of finance.
Upcoming Speaking Engagements
March 6, 2019
Drew C. Piersall presents “Emerging Trends in Discrimination and Retaliation Law” at the Labor and Employment Law Section meeting of the Columbus Bar Association in Columbus, Ohio.
March 7, 2019
Jonathan J. Downes presents “FMLA, ADA & Interactive Process” at the Jobs and Family Services Human Resource Association Conference 2019 at the Quest Conference Center in Columbus, Ohio.
April 5, 2019
David R. Vance will be presenting on civil claims under Ohio Revised Code 2307.60, including civil theft, at the CMBA Litigation Section’s lunch and CLE in Cleveland, Ohio.
April 24, 2019
George S. Crisci presents “Train Your Supervisors to Mitigate Lawsuits” and “Create Documentation That is a Legal Shield” at the National Business Institute’s “Why Employers Get Sued: How You Can Stop It” seminar in Maumee, Ohio.
Wednesday, November 23, 2016
Texas Court Strikes Again – Halts the Implementation of the DOL’s Revised Overtime Regulations
By Michele L. Jakubs*
On November 22, 2016, the Court in State of Nevada, et al. v. U.S. Dept. of Labor, granted a nationwide preliminary injunction halting implementation of the Department of Labor’s rule increasing the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” overtime exemptions. The rule was set to take effect on December 1, 2016 and would have increased the minimum salary threshold from $23,660 per year to $47,476 per year. For the time being, the salary threshold for the “white collar” exemptions remains $23,660 per year ($455 per week).
As the Court’s ruling is only a preliminary injunction, subject to future modification, we will continue to monitor this case as it proceeds forward and will advise of any additional rulings.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
On November 22, 2016, the Court in State of Nevada, et al. v. U.S. Dept. of Labor, granted a nationwide preliminary injunction halting implementation of the Department of Labor’s rule increasing the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” overtime exemptions. The rule was set to take effect on December 1, 2016 and would have increased the minimum salary threshold from $23,660 per year to $47,476 per year. For the time being, the salary threshold for the “white collar” exemptions remains $23,660 per year ($455 per week).
As the Court’s ruling is only a preliminary injunction, subject to future modification, we will continue to monitor this case as it proceeds forward and will advise of any additional rulings.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Thursday, November 10, 2016
Will Trump Dump The New DOL Rule Regarding Exempt Status?
By Michele L. Jakubs*
Will President-Elect Donald Trump provide employers with a reprieve from the Department of Labor’s (“DOL”) new rule regarding overtime? We will all have to wait and see.
On May 18, 2016, the DOL announced its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). To meet an exemption from overtime under the new rule, employees must meet both the duties test and the increased salary requirement. The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” employees from the overtime requirement, provided the employees meet specific criteria: (1) the employees receive a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year) which increases to $913 per week, or $47,476 per year on December 1; and, (3) the employees’ responsibilities primarily involve executive, administrative, or professional duties (the “duties test”). Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
In September, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., in federal court, challenging the final rule. The Court consolidated this case with a similar case filed by various business associations and Chambers of Commerce. The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect. The Court has not yet ruled and briefing is not yet complete.
Employers should continue to prepare for the December 1, 2016 implementation of the final rule. At this point, it remains unclear whether President-Elect Trump will take action to repeal or modify the new rule once he takes office in January 2017. It also remains possible that the Court hearing the case from the States and business Plaintiffs may issue an order staying the effective date of the final rule pending resolution of the legal challenges. Absent an action by the government or the Court, the new rule will take effect on December 1, 2016. Z&R will continue to monitor the status of the new rule and will issue further client alerts as information becomes available.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Will President-Elect Donald Trump provide employers with a reprieve from the Department of Labor’s (“DOL”) new rule regarding overtime? We will all have to wait and see.
On May 18, 2016, the DOL announced its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). To meet an exemption from overtime under the new rule, employees must meet both the duties test and the increased salary requirement. The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” employees from the overtime requirement, provided the employees meet specific criteria: (1) the employees receive a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year) which increases to $913 per week, or $47,476 per year on December 1; and, (3) the employees’ responsibilities primarily involve executive, administrative, or professional duties (the “duties test”). Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
In September, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., in federal court, challenging the final rule. The Court consolidated this case with a similar case filed by various business associations and Chambers of Commerce. The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect. The Court has not yet ruled and briefing is not yet complete.
Employers should continue to prepare for the December 1, 2016 implementation of the final rule. At this point, it remains unclear whether President-Elect Trump will take action to repeal or modify the new rule once he takes office in January 2017. It also remains possible that the Court hearing the case from the States and business Plaintiffs may issue an order staying the effective date of the final rule pending resolution of the legal challenges. Absent an action by the government or the Court, the new rule will take effect on December 1, 2016. Z&R will continue to monitor the status of the new rule and will issue further client alerts as information becomes available.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Monday, September 26, 2016
21 States, Including Ohio, File Lawsuit Challenging the DOL’s Final Rule Increasing the Minimum Salary Threshold Under the FLSA
By Michele L. Jakubs*
On September 20, 2016, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., 1:16-cv-00407 (E.D., Texas 2016), in federal court, challenging the final rule recently implemented by the Department of Labor (DOL) increasing the minimum salary threshold required to qualify for the Fair Labor Standards Act's (“FLSA”) “white collar” overtime exemptions. The rule is set to take effect on December 1, 2016 and will increase the minimum salary threshold from $23,660 per year to $47,476 per year. Z&R previously reported on the scope of the changes.
The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect.
While employers should continue to prepare for the December 1, 2016 implementation of the final rule, it is possible that the Court may issue an order staying the effective date of the final rule pending resolution of the legal challenges advanced by the 21 states. Z&R will continue to monitor this case and will issue further client alerts as the case advances.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
On September 20, 2016, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., 1:16-cv-00407 (E.D., Texas 2016), in federal court, challenging the final rule recently implemented by the Department of Labor (DOL) increasing the minimum salary threshold required to qualify for the Fair Labor Standards Act's (“FLSA”) “white collar” overtime exemptions. The rule is set to take effect on December 1, 2016 and will increase the minimum salary threshold from $23,660 per year to $47,476 per year. Z&R previously reported on the scope of the changes.
The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect.
While employers should continue to prepare for the December 1, 2016 implementation of the final rule, it is possible that the Court may issue an order staying the effective date of the final rule pending resolution of the legal challenges advanced by the 21 states. Z&R will continue to monitor this case and will issue further client alerts as the case advances.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Wednesday, May 18, 2016
Department of Labor Issues Final Rule on Overtime Exemptions
By Michele L. Jakubs*
On May 18, 2016, the United States Department of Labor (“DOL”) announced it will publish its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016. The changes will have a major impact on employers, as an estimated 4.2 million formerly-exempt employees will become eligible for overtime.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” and highly-compensated employees from the overtime requirement, provided the employees meet specific criteria.
Employees qualify for an exemption by meeting three criteria: (1) the employee receives a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year); and, (3) the employee’s responsibilities primarily involve executive, administrative, or professional duties. Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
Under the final rule, the salary threshold for an exemption is set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. When the rule goes into effect on December 1, 2016, the salary threshold will increase to $913 per week, or $47,476 per year, more than twice the current threshold. Employers may, for the first time, use non-discretionary bonuses and incentive payments to satisfy up 10% of the new salary threshold. For the highly-compensated employee exemption, the new salary threshold is set at the 90th percentile of full-time salaried workers nationally, and will increase from $100,000 to $134,004 on December 1, 2016. These salary thresholds will be updated automatically every three years to maintain salary levels at the referenced percentiles.
The final rule does not make any changes to the existing job duty requirements for the “white collar” and highly-compensated employee exemptions.
In light of the dramatic increases in the salary thresholds, employers should consult with counsel to develop a course of action to ensure compliance with both the salary and duties tests. This change in the law presents an opportunity for employers to review whether employees classified as exempt truly meet the duties test, and the new salary threshold, under the FLSA and make any necessary corrections. The implications of misclassifying employees are widespread and costly and may result in litigation or an investigation by the DOL. With just over six months to prepare and implement a plan, employers should begin the process as soon as possible.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law and is particularly adept at handling wage and hour issues. If you have questions about how the Department of Labor’s final rule may impact your company, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
On May 18, 2016, the United States Department of Labor (“DOL”) announced it will publish its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016. The changes will have a major impact on employers, as an estimated 4.2 million formerly-exempt employees will become eligible for overtime.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” and highly-compensated employees from the overtime requirement, provided the employees meet specific criteria.
Employees qualify for an exemption by meeting three criteria: (1) the employee receives a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year); and, (3) the employee’s responsibilities primarily involve executive, administrative, or professional duties. Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
Under the final rule, the salary threshold for an exemption is set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. When the rule goes into effect on December 1, 2016, the salary threshold will increase to $913 per week, or $47,476 per year, more than twice the current threshold. Employers may, for the first time, use non-discretionary bonuses and incentive payments to satisfy up 10% of the new salary threshold. For the highly-compensated employee exemption, the new salary threshold is set at the 90th percentile of full-time salaried workers nationally, and will increase from $100,000 to $134,004 on December 1, 2016. These salary thresholds will be updated automatically every three years to maintain salary levels at the referenced percentiles.
The final rule does not make any changes to the existing job duty requirements for the “white collar” and highly-compensated employee exemptions.
In light of the dramatic increases in the salary thresholds, employers should consult with counsel to develop a course of action to ensure compliance with both the salary and duties tests. This change in the law presents an opportunity for employers to review whether employees classified as exempt truly meet the duties test, and the new salary threshold, under the FLSA and make any necessary corrections. The implications of misclassifying employees are widespread and costly and may result in litigation or an investigation by the DOL. With just over six months to prepare and implement a plan, employers should begin the process as soon as possible.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law and is particularly adept at handling wage and hour issues. If you have questions about how the Department of Labor’s final rule may impact your company, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Monday, November 16, 2015
DOL PRESSES PAUSE: Delays Implementation of its Proposed Changes to the FLSA
By Brad E. Bennett*
Have you prepared to comply with the Department of Labor’s (“DOL”) proposed rule amendment to the Fair Labor Standards Act’s "white collar" exemption tests for executive, administrative, and professional employees? You know, the proposed rule that will increase the salary basis test from $455 per week to $970 per week ($50,440 annually) beginning in 2016? As Z&R previously explained, the proposed rule will cause many employees that are currently exempt to lose their exemption and will dramatically increase the number of U.S. workers who are eligible for overtime pay.
Many have anticipated that the DOL would implement its pending final rule by the end of this year or in early 2016. According to a recent Wall Street Journal article, however, the rule will not appear until the end of 2016. Why the delay? Solicitor of Labor Patricia Smith recently stated that the DOL needed more time to draft the final regulations due to the sheer volume of comments it received during the comment period. The DOL received 270,000 comments from individuals and organizations during the comment period – more than three times what it anticipated.
While this is certainly good news for employers, employers should utilize this period to ensure compliance with existing employee classifications and plan for the implementation of the proposed FLSA rule amendment.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including FLSA compliance. If you have questions about the DOL’s proposed regulations, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Have you prepared to comply with the Department of Labor’s (“DOL”) proposed rule amendment to the Fair Labor Standards Act’s "white collar" exemption tests for executive, administrative, and professional employees? You know, the proposed rule that will increase the salary basis test from $455 per week to $970 per week ($50,440 annually) beginning in 2016? As Z&R previously explained, the proposed rule will cause many employees that are currently exempt to lose their exemption and will dramatically increase the number of U.S. workers who are eligible for overtime pay.
Many have anticipated that the DOL would implement its pending final rule by the end of this year or in early 2016. According to a recent Wall Street Journal article, however, the rule will not appear until the end of 2016. Why the delay? Solicitor of Labor Patricia Smith recently stated that the DOL needed more time to draft the final regulations due to the sheer volume of comments it received during the comment period. The DOL received 270,000 comments from individuals and organizations during the comment period – more than three times what it anticipated.
While this is certainly good news for employers, employers should utilize this period to ensure compliance with existing employee classifications and plan for the implementation of the proposed FLSA rule amendment.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including FLSA compliance. If you have questions about the DOL’s proposed regulations, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Wednesday, July 1, 2015
Department of Labor’s Proposed Rule Would Make Millions of Employees Eligible for Overtime
The United States Department of Labor’s Wage and Hour Division recently announced a proposed rule that would change the Fair Labor Standard Act (“FLSA”) overtime rules by increasing the salary thresholds for exemptions under the FLSA. The proposed rule, if ultimately implemented, will have huge implications for employers.
The FLSA generally requires that employers pay employees for any time worked in excess of forty hours per week at a rate of one and a half times the employee’s regular rate. Contrary to some people’s belief, salaried employees are not automatically exempt from the FLSA’s overtime requirements. The law does, however, exempt so-called “white collar” employees and highly compensated employees from its overtime requirements. The proposed rule would significantly raise the salary threshold for those exemptions.
Currently, employees qualify for a “white collar” exemption by meeting three criteria: (1) the employee receives a fixed salary; (2) the salary meets the minimum threshold requirement of $455 per week, or $23,660 per year; and (3) the employee’s responsibilities primarily involve executive, administrative, or professional duties. Highly compensated employees who regularly perform one or more exempt duties and receive a salary of at least $100,000 per year are also exempt. The Department of Labor last updated the salary thresholds in 2004.
Prompted by President Obama, the Department of Labor seeks to raise the threshold amounts to $921 per week or $47,892 per year for the “white collar” exemptions and to $122,148 for highly compensated employees. Under the new rules, these thresholds would increase annually and for 2016 are projected to be $970 per week, or $50,440 per year. The threshold for highly compensated employees’ is also projected to increase in 2016. Of course, the increases would have a significant effect on businesses. The Department of Labor estimates that approximately 4.6 million employees would fall in the salary gap between the current thresholds and newly proposed thresholds. Absent an increase in these employees’ salaries, they would no longer meet an exemption and would be entitled to overtime for hours worked in excess of forty hours per week.
The Department of Labor is currently accepting comments on the proposed rule. The comment period will be closed in sixty days. Zashin & Rich will monitor any developments concerning the proposed rule closely.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law and is particularly adept at handling wage and hour issues. If you have questions about how the Department of Labor’s proposed regulations may impact your company, please contact: Michele L. Jakubs | mlj@zrlaw.com | 216.696.4441
Thursday, March 19, 2015
EMPLOYMENT LAW QUARTERLY | Winter 2015, Volume XVII, Issue i
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Pursuant to recent legislation, Ohio employers now have an added defense to help prevent workplace violence: the ability to file for a protection order based upon an individual’s threats against the company or its employees. This change in the law provides employers an important tool to help protect employees and customers.
Ohio’s updated menacing, stalking, and protection order laws, which went into effect in September 2014, fixed a void that left employers in a compromised position when facing threats of workplace violence. Ohio’s prior menacing, aggravated menacing, and menacing by stalking laws prohibited individuals from knowingly causing another person (i.e., the victim) to believe that they would harm the victim (or their property, unborn child, or family member). The amended language now states that the victim’s belief that the offender will cause them harm may be based on the offender’s words or conduct directed at or identifying the victim’s employer.
In addition to the amendments to the menacing and stalking laws, the legislature added a provision (Ohio Revised Code § 2903.215) that allows employers of two or more alleged victims of a violation of Ohio’s menacing, aggravated menacing, or menacing by stalking laws to file a motion for a temporary protection order. In instances where a criminal proceeding against the offender is pending and the offender’s threat(s) or conduct identified the employer or was directed at the employer, the employer may file a motion for a temporary protection order in the already pending criminal proceeding. Additionally, in cases involving menacing by stalking, even when no criminal proceeding is pending, employers may file a petition for a civil protection order if the offender’s pattern of conduct identified the employer or was directed at the employer.
The changes to the laws arose in part out of concerns following an incident involving a Cincinnati-area company. After a former employee made threats to go on a shooting spree on the company’s premises, the former employee was charged with menacing. Eventually, the charge was dropped because the threats were directed generally at the company and not at specific employees. Under previous Ohio law, the company was without recourse to seek a protection order against the former employee.
The changes in the laws address the seriousness and reality of threats of workplace violence and provide needed legal recourse to employers faced with difficult and potentially deadly scenarios. Previously, employers would have to rely on the individuals targeted by a threat to seek a protection order against the offender. Now, employers have the ability to take legal action without relying on their employees, who may be hesitant or fearful of initiating legal action against an offender.
Employers should take all threats of workplace violence seriously and should seek guidance immediately upon learning of a threat. To help ensure the safety of their employees and customers, it is crucial that employers address threats in a timely manner and take necessary action, which may include seeking a protection order.
*David R. Vance, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about workplace protection orders or labor and employment law, please contact David (drv@zrlaw.com) at 216.696.4441.
The U.S. Court of Appeals for the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee, recently concluded a city did not have to pay firefighters for hours spent in paramedic training. Misewicz v. City of Memphis, Tenn., 771 F.3d 332 (6th Cir. 2014). The city required firefighters to obtain paramedic certification but did not compensate them for the training time. Rejecting the firefighters’ arguments that the time constituted “hours worked” under the Fair Labor Standards Act (“FLSA”), the court found this time fell under an FLSA exception.
Generally, the FLSA requires employers to pay their employees a minimum wage for all hours worked and pay overtime for hours worked in excess of forty hours in a work week. Time spent attending employer-sponsored training programs is typically considered compensable as hours worked. However, U.S. Department of Labor (“DOL”) regulations provide two exceptions. First, under Code of Federal Regulations Section 787.27, employers do not have to count “[a]ttendance at lectures, meetings, training programs and similar activities” as working time if: (1) attendance is outside the employee’s regular working hours; (2) attendance is in fact voluntary; (3) the training is not directly related to the employee’s job; and (4) the employee does not perform any productive work while at the training. In addition, pursuant to Code of Federal Regulations Section 553.226(b), training time for employees of state and local governments is not compensable if it occurs (1) outside regular working hours (2) at specialized or follow-up training (3) that is required for certification purposes of private and public sector employees whether by a particular governmental jurisdiction or by law.
In Misewicz, the case turned on whether the firefighters’ training time fell under the Section 553.226(b) exception. Specifically, the Sixth Circuit focused on whether the training was “required by law for certification.” Tennessee law does not require firefighters to be certified paramedics. However, Tennessee does require all employees performing paramedic-level care to obtain paramedic certification. Here, the city required all firefighters to obtain that paramedic certification within three years of employment.
The key issue was whether the exception’s “required by law for certification” requirement should focus on the employees’ job description or actual duties performed. The firefighters argued that the court should make its determination based on the employees’ job description which included duties that required state law certification. According to the firefighters, since the applicable job description was for fire recruits, state law did not require paramedic certification and the city should have to pay for their training time. The city argued the determination should hinge on whether state law required certification for the duties the employees actually performed. Once certified, firefighters spent one-half of their shift performing paramedic duties and responded to emergency medical services incidents much more frequently than fire suppression incidents.
Ultimately, the Misewicz Court ruled in the city’s favor: whether the training is “required by law for certification” hinges on whether the employer actually hired the employee to perform duties that require state certification, determined by whether the employer asks the employee to regularly perform those duties after training. Since the city hired the firefighters to perform both firefighting and paramedic duties, the exception applied. Therefore, the city did not violate the FLSA by failing to pay the firefighters for their paramedic training.
This is the first Sixth Circuit decision to interpret the FLSA “hours worked” Section 553.226(b) training exception. The Court rejected the argument that the city had to meet both “hours worked” training exceptions to escape liability under the FLSA. Therefore, employers do not have to compensate employees for training time if the employee training meets the Section 553.226(b) exception alone.
Public employers should review any compensation provided for training time. If employers pay for training necessary to obtain certification required by, for example, the Ohio Revised Code, the employer may not have to pay employees for that time. However, public employers must also remember to consider whether the employees utilize that certification in their day-to-day job. Employers should contact counsel with any questions about this “hours worked” training exception or the Misewicz decision.
*Jonathan J. Downes, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience advising public entities and employers. For more information about the Misewicz decision or the FLSA applied to public employers, please contact Jonathan (jjd@zrlaw.com) at 614.224.4411.
As the white fluffy stuff turns into hard, dirty, slowly melting stuff in cities and towns across our fair region, summer 2014 still seems like a distant memory . . . but one hot topic from our Summer ELQ remains hot as can be: paid sick leave.
Currently, three states – Connecticut, California, and Massachusetts – mandate paid sick leave, as well as a growing number of cities. Paid sick leave proponents got quite a boost from President Obama’s State of the Union Address on January 20, 2015, which was chock full of graphics, including one that showed thirty-two other countries are apparently more civilized than the United States when it comes to paid maternity leave. (http://www.whitehouse.gov/sotu at 17:50). The graphic was on a split-screen with the President during the following portion of his speech:
That bill, the Healthy Families Act, was previously introduced in the House of Representatives and the Senate in March 2013 but stalled in committee. In a joint statement issued January 14, 2015, Senator Patty Murray (D-WA) and Representative Rosa DeLauro (D-CT) promised to reintroduce the bill in the coming weeks. On February 12, 2015, they kept that promise. The bill (H.R. 932/S. 497) requires:
The Act would vest investigative and enforcement authority in the Secretary of Labor, but also authorize civil actions for damages by employees against employers who violate the Act.
As expected, proponents of the bill argue that it is critical to help working families and to fill gaps left by the Family and Medical Leave Act and other leave laws. Opponents focus on potentially untenable costs, especially to small businesses, and the possibility of employee abuse.
Considering the current composition of the U.S. Congress, it also seems likely that this one-size-fits-all proposition will stall once more, so why all the commotion? Perhaps more important than the outcome of the bill is the momentum built around this issue. Even more states and cities are enacting or considering their own paid leave laws, just as President Obama has called on them to do, including the following:
Stay tuned.
*Helena Oroz, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about paid sick leave or labor and employment law, please contact Helena (hot@zrlaw.com) at 216.696.4441.
Last year, as hospitals treated patients with the Ebola virus in the United States for the first time, many people worried about the spread of the dangerous virus. In particular, employers may have wondered how to accommodate employees affected by the virus or isolation periods intended to prevent spreading the illness. Should an individual be exposed to the Ebola virus, local and state public health authorities will likely monitor that person for signs of the virus and may recommend or require isolation during the virus’ 21-day incubation period. For more specific information, the Centers for Disease Control and Prevention (“CDC”) provides comprehensive information on preventing the spread of Ebola on its website. Thankfully, the Ebola virus has not spread in the United States. However, the annual cold and flu season remains a threat to employee health and employer productivity.
As cold and flu season comes to a close, employers can benefit from understanding employment laws addressing employee leaves due to illness. Cold and flu season can take a toll on employers, as illness affects employees’ attendance and productivity. Some reports tally the cost of lost productivity at up to seven billion dollars or 111 million missed work days. The flu also poses a serious threat to those with compromised immune systems, such as the elderly, those with cancer, and pregnant women. The contagious nature of the flu means that it can spread through offices quickly thanks to shared surfaces and human contact. Moreover, the CDC has stated that the flu vaccine appears to be less effective this year because of mutations to the current strain; so, even people who received the vaccine still may fall ill with the flu.
The two main employment-related laws implicated by cold and flu season are the Americans with Disabilities Act (“ADA”) and the Family and Medical Leave Act (“FMLA”). The ADA prohibits employers from discriminating against individuals in the workplace based on a disability or a perceived disability. The ADA applies when an employer makes disability-related inquiries of employees or requires medical examinations. A disability-related inquiry is one that is likely to elicit information about an individual’s disability (e.g., asking about a compromised immune system). The ADA prohibits disability-related inquiries and medical examinations unless they are job-related and consistent with business necessity. This occurs when an employer has a reasonable belief that an individual’s ability to perform essential job functions is impaired or that the individual is a direct threat to cause harm due to a medical condition. Except in the case of a severe flu pandemic (determined by the World Health Organization, Department of Health and Human Services, and CDC), neither of these exceptions apply in the case of common cold or flu, so employers should be careful about requiring medical examinations (including taking employee temperatures) and in wording inquiries regarding employee health. The ADA also prohibits employers from excluding individuals from the workplace based on a disability or perceived disability, so if an employer chooses to require ill employees to stay at home, it should apply the policy consistently.
By contrast, the FMLA allows up to 12 weeks of leave for serious medical conditions for employees who have worked at least 1,250 hours in a 12 month period for a covered employer. Typically, the FMLA does not cover colds or the flu unless it is severe or complications from the illness arise. The FMLA applies if the sick individual has been incapacitated for at least three full calendar days and either: (1) sees a doctor two or more times within 30 days; or (2) consults with a doctor and receives a regimen of continuing care (i.e., a prescription for medicine). Close family members of sick individuals also may qualify for FMLA leave to provide care for a parent, spouse, or child. Some employers may wish to prevent the spread of illness by accommodating sick employees with the option to work from home. However, employers ought to keep in mind that employees on FMLA leave cannot be required to work, even remotely, during leave.
While Ohio does not require employers to provide paid sick days to employees, some states mandate a certain number of paid sick days each year. Employers who wish to restrict or prevent the spread of a virus around the workplace have several options. Allowing employees who feel under the weather to work remotely may keep other employees from catching a contagious illness. Minimizing meetings and conferences also reduces the chances of employees coming into contact with individuals with the cold or flu. Finally, practicing simple hygiene habits, such as encouraging hand washing, covering one’s mouth when coughing or sneezing, and disinfecting frequently-used surfaces like telephones or door handles can help prevent the spread of germs. For more on the cold and flu, the Department of Health and Human Services, CDC, and World Health Organization all provide comprehensive information on the prevention and treatment of the cold and flu on their websites.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about the Americans with Disabilities Act, the Family and Medical Leave Act or other questions related to employee leave, please contact Patrick at (pmw@zrlaw.com) or (216) 696-4441.
After a prior failed attempt beginning in 2011 to “modernize” its rules governing union elections, the National Labor Relations Board (“NLRB”) recently adopted its final rules, which will make it significantly more difficult for employers to run an effective campaign against unionization. The rules, which have been published in the Federal Register, go into effect on April 15, 2015.
These “quickie” election rules amend the NLRB’s representation case procedures and, in most cases, will reduce the time between the filing of an election petition and the election date. As a result, the employer’s timeframe to educate its employees on the realities of union representation is limited.
Many of the critical changes limit the circumstances under which pre-election hearings will be held. For example, disputes regarding individuals’ ineligibility to vote (e.g., due to supervisor status) generally will not be resolved before the election. This bypassing of important legal issues potentially creates a “lose-lose” situation for employers. Employers may face liability for treating employees as supervisors during a campaign if the NLRB decides later those employees are not supervisors under the National Labor Relations Act (“NLRA”). Similarly, employers may face liability if these employees participate in the campaign and the NLRB decides later that they are supervisors under the NLRA and that their involvement in the campaign constitutes “supervisor interference” with the election and grounds for holding a new election.
Important changes resulting from the new rules include the following:
Since their adoption, the new election rules have become the subject of legal and congressional challenges. In two lawsuits, a number of pro-employer organizations have asked the U.S. District Courts for the District of Columbia and the Western District of Texas to strike down the new rules. Both lawsuits assert that the NLRB’s new rules violate the NLRA and the Administrative Procedure Act. The lawsuit pending before the U.S. District Court for the District of Columbia also asserts that the new rules violate employer free speech and due process rights under the U.S. Constitution. In addition to these legal challenges, the Senate and the House recently passed a “joint resolution of disapproval” of the new rules under the Congressional Review Act in an attempt to block the NLRB’s implementation of the rules. The resolution now heads to the President, who is expected to veto it. Zashin & Rich will provide periodic updates on the impact of these challenges on the enforceability of the NLRB’s new election rules as they proceed.
Overall, the NLRB’s new election rules change long-standing procedures governing the election process and reduce pre-election litigation (and the time associated with such litigation), while likely increasing post-election litigation. Employers subject to a union election should familiarize themselves with these changes to avoid making any procedural errors during the election process.
Employers must understand the impact that the new rules will have on their ability to run an effective campaign against unionization. Following the filing of a petition for an election, the time an employer has to lawfully educate employees on the perils of unionization is critical to countering the union’s efforts, which typically have been underway for months prior to an employer’s receipt of an NLRB petition. As the NLRB’s new election rules will greatly reduce the employer’s Post-Petition Campaign time, employers should develop strategies to avoid, anticipate, or counter unionization efforts before a union files a petition. In doing so, employers must be cautious and ensure that they are protecting their interests and not violating the NLRA. Employers no longer can afford to be surprised by the filing of an election petition because the very short timeline to conduct an election provides little opportunity to recover from such lack of knowledge. Once the NLRB’s quickie election rules take effect, non-unionized employers will have to implement an on-going, legitimate union-avoidance campaign to keep pace with union and NLRB efforts to unionize their workforce.
*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the NLRB’s new election rules or labor and employment law, please contact George (gsc@zrlaw.com) at 216.696.4441.
Congratulations!
Zashin & Rich is pleased to announce that the Ohio State Bar Association recently certified Helena Oroz and David Vance as specialists in Labor and Employment Law.
Zashin & Rich is proud to announce that it has been named to the BTI Client Service A-Team 2015. Zashin & Rich received special recognition in “Best at Handles Problems” and “Best at Provides Value for the Dollar.” Additionally, BTI recognized Stephen Zashin, the head of the firm’s Labor and Employment Groups, as one of only 29 labor and employment “Client Service All-Star” attorneys in the country.
Best Lawyers®
Z&R is happy to announce the following Z&R Labor and Employment Group lawyers have been selected for inclusion in Best Lawyers in America 2015:
Upcoming Speaking Engagements
Wednesday, April 1, 2015
Drew C. Piersall presents "The Intersection of the Americans with Disabilities Act, the Family and Medical Leave Act and Workers' Compensation: Managing Disabilities“ at 10:00 a.m. at the Ohio County Home Association's annual conference to be held at the Salt Fork Lodge and Conference Center in Cambridge, Ohio.
Wednesday, April 8, 2015
Jonathan Downes presents “Social Media” at the JFSHRA - HR Bootcamp for Supervisors beginning at 9:30 a.m. at the Union County JFS Building.
Thursday, April 16, 2015
Jonathan J. Downes presents “Social Media Challenges for Law Enforcement and Public Employers” for the Miami Valley Risk Management Association in Mason, Ohio. See mvrma.com for details.
Monday, April 20, 2015
George Crisci presents “Determining Worker Eligibility for Unemployment Benefits” at the Unemployment Compensation from A to Z, which begins at 9:00 a.m. at the Doubletree Hotel in Independence, Ohio.
To register, go to http://www.nbi-sems.com.
Wednesday, May 6, 2015
Jonathan Downes and Drew Piersall present “Social Media – Employment Law Issues” and “The Intersection of the Americans with Disabilities Act, the Family and Medical Leave Act and Workers' Compensation: Managing Disabilities” at the 2015 OJFSDA Annual Training Conference at the Hyatt Regency Columbus on High Street.
Friday, May 8, 2015
Jonathan Downes conducts Legal Update at the Ohio Association of Public Safety Directors Annual Conference at 11:15 a.m. at the Reynoldsburg Police Department.
Monday, June 8, 2015
Patrick Watts presents at the Lake, Geauga, Ashtabula SHRM Annual Conference.
- Changes to Ohio’s Menacing, Stalking, and Protection Order Laws Help Employers Defend Against Threats of Workplace Violence
- Train on Your Own Time: Firefighters Not Entitled to Overtime Pay for Hours Spent Training
- Paid Sick Days Ahead for All? The Healthy Families Act Reappears… Again
- What Goes Around: Another Cold and Flu Season Comes to a Close
- NLRB Pulls a Fast One: Final “Quickie” Election Rules for Union Elections Adopted
- Z&R SHORTS
Changes to Ohio’s Menacing, Stalking, and Protection Order Laws Help Employers Defend Against Threats of Workplace Violence
By David R. Vance*Pursuant to recent legislation, Ohio employers now have an added defense to help prevent workplace violence: the ability to file for a protection order based upon an individual’s threats against the company or its employees. This change in the law provides employers an important tool to help protect employees and customers.
Ohio’s updated menacing, stalking, and protection order laws, which went into effect in September 2014, fixed a void that left employers in a compromised position when facing threats of workplace violence. Ohio’s prior menacing, aggravated menacing, and menacing by stalking laws prohibited individuals from knowingly causing another person (i.e., the victim) to believe that they would harm the victim (or their property, unborn child, or family member). The amended language now states that the victim’s belief that the offender will cause them harm may be based on the offender’s words or conduct directed at or identifying the victim’s employer.
In addition to the amendments to the menacing and stalking laws, the legislature added a provision (Ohio Revised Code § 2903.215) that allows employers of two or more alleged victims of a violation of Ohio’s menacing, aggravated menacing, or menacing by stalking laws to file a motion for a temporary protection order. In instances where a criminal proceeding against the offender is pending and the offender’s threat(s) or conduct identified the employer or was directed at the employer, the employer may file a motion for a temporary protection order in the already pending criminal proceeding. Additionally, in cases involving menacing by stalking, even when no criminal proceeding is pending, employers may file a petition for a civil protection order if the offender’s pattern of conduct identified the employer or was directed at the employer.
The changes to the laws arose in part out of concerns following an incident involving a Cincinnati-area company. After a former employee made threats to go on a shooting spree on the company’s premises, the former employee was charged with menacing. Eventually, the charge was dropped because the threats were directed generally at the company and not at specific employees. Under previous Ohio law, the company was without recourse to seek a protection order against the former employee.
The changes in the laws address the seriousness and reality of threats of workplace violence and provide needed legal recourse to employers faced with difficult and potentially deadly scenarios. Previously, employers would have to rely on the individuals targeted by a threat to seek a protection order against the offender. Now, employers have the ability to take legal action without relying on their employees, who may be hesitant or fearful of initiating legal action against an offender.
Employers should take all threats of workplace violence seriously and should seek guidance immediately upon learning of a threat. To help ensure the safety of their employees and customers, it is crucial that employers address threats in a timely manner and take necessary action, which may include seeking a protection order.
*David R. Vance, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about workplace protection orders or labor and employment law, please contact David (drv@zrlaw.com) at 216.696.4441.
Train on Your Own Time: Firefighters Not Entitled to Overtime Pay for Hours Spent Training
By Jonathan J. Downes*The U.S. Court of Appeals for the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee, recently concluded a city did not have to pay firefighters for hours spent in paramedic training. Misewicz v. City of Memphis, Tenn., 771 F.3d 332 (6th Cir. 2014). The city required firefighters to obtain paramedic certification but did not compensate them for the training time. Rejecting the firefighters’ arguments that the time constituted “hours worked” under the Fair Labor Standards Act (“FLSA”), the court found this time fell under an FLSA exception.
Generally, the FLSA requires employers to pay their employees a minimum wage for all hours worked and pay overtime for hours worked in excess of forty hours in a work week. Time spent attending employer-sponsored training programs is typically considered compensable as hours worked. However, U.S. Department of Labor (“DOL”) regulations provide two exceptions. First, under Code of Federal Regulations Section 787.27, employers do not have to count “[a]ttendance at lectures, meetings, training programs and similar activities” as working time if: (1) attendance is outside the employee’s regular working hours; (2) attendance is in fact voluntary; (3) the training is not directly related to the employee’s job; and (4) the employee does not perform any productive work while at the training. In addition, pursuant to Code of Federal Regulations Section 553.226(b), training time for employees of state and local governments is not compensable if it occurs (1) outside regular working hours (2) at specialized or follow-up training (3) that is required for certification purposes of private and public sector employees whether by a particular governmental jurisdiction or by law.
In Misewicz, the case turned on whether the firefighters’ training time fell under the Section 553.226(b) exception. Specifically, the Sixth Circuit focused on whether the training was “required by law for certification.” Tennessee law does not require firefighters to be certified paramedics. However, Tennessee does require all employees performing paramedic-level care to obtain paramedic certification. Here, the city required all firefighters to obtain that paramedic certification within three years of employment.
The key issue was whether the exception’s “required by law for certification” requirement should focus on the employees’ job description or actual duties performed. The firefighters argued that the court should make its determination based on the employees’ job description which included duties that required state law certification. According to the firefighters, since the applicable job description was for fire recruits, state law did not require paramedic certification and the city should have to pay for their training time. The city argued the determination should hinge on whether state law required certification for the duties the employees actually performed. Once certified, firefighters spent one-half of their shift performing paramedic duties and responded to emergency medical services incidents much more frequently than fire suppression incidents.
Ultimately, the Misewicz Court ruled in the city’s favor: whether the training is “required by law for certification” hinges on whether the employer actually hired the employee to perform duties that require state certification, determined by whether the employer asks the employee to regularly perform those duties after training. Since the city hired the firefighters to perform both firefighting and paramedic duties, the exception applied. Therefore, the city did not violate the FLSA by failing to pay the firefighters for their paramedic training.
This is the first Sixth Circuit decision to interpret the FLSA “hours worked” Section 553.226(b) training exception. The Court rejected the argument that the city had to meet both “hours worked” training exceptions to escape liability under the FLSA. Therefore, employers do not have to compensate employees for training time if the employee training meets the Section 553.226(b) exception alone.
Public employers should review any compensation provided for training time. If employers pay for training necessary to obtain certification required by, for example, the Ohio Revised Code, the employer may not have to pay employees for that time. However, public employers must also remember to consider whether the employees utilize that certification in their day-to-day job. Employers should contact counsel with any questions about this “hours worked” training exception or the Misewicz decision.
*Jonathan J. Downes, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience advising public entities and employers. For more information about the Misewicz decision or the FLSA applied to public employers, please contact Jonathan (jjd@zrlaw.com) at 614.224.4411.
Paid Sick Days Ahead for All? The Healthy Families Act Reappears… Again
By Helena Oroz*As the white fluffy stuff turns into hard, dirty, slowly melting stuff in cities and towns across our fair region, summer 2014 still seems like a distant memory . . . but one hot topic from our Summer ELQ remains hot as can be: paid sick leave.
Currently, three states – Connecticut, California, and Massachusetts – mandate paid sick leave, as well as a growing number of cities. Paid sick leave proponents got quite a boost from President Obama’s State of the Union Address on January 20, 2015, which was chock full of graphics, including one that showed thirty-two other countries are apparently more civilized than the United States when it comes to paid maternity leave. (http://www.whitehouse.gov/sotu at 17:50). The graphic was on a split-screen with the President during the following portion of his speech:
Today, we are the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave. Forty-three million. Think about that. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home. So I’ll be taking new action to help states adopt paid leave laws of their own. And since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington. Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave. It’s the right thing to do.
That bill, the Healthy Families Act, was previously introduced in the House of Representatives and the Senate in March 2013 but stalled in committee. In a joint statement issued January 14, 2015, Senator Patty Murray (D-WA) and Representative Rosa DeLauro (D-CT) promised to reintroduce the bill in the coming weeks. On February 12, 2015, they kept that promise. The bill (H.R. 932/S. 497) requires:
- employers with 15 or more employees for each working day during 20 or more workweeks a year to permit each employee to earn at least one hour of paid sick time for every 30 hours worked, up to a maximum of 56 hours (seven days) of paid sick time in a calendar year.
- small employers (those with fewer than 15 employees) who opt out of proving paid sick time to provide at least 56 hours of unpaid sick time in a calendar year to each employee.
- employers to allow employees to use the time to: (1) meet their own medical needs; (2) care for the medical needs of certain family members (including a domestic partner or the domestic partner's parent or child); or (3) seek medical attention, assist a related person, take legal action, or engage in other specified activities relating to domestic violence, sexual assault, or stalking.
The Act would vest investigative and enforcement authority in the Secretary of Labor, but also authorize civil actions for damages by employees against employers who violate the Act.
As expected, proponents of the bill argue that it is critical to help working families and to fill gaps left by the Family and Medical Leave Act and other leave laws. Opponents focus on potentially untenable costs, especially to small businesses, and the possibility of employee abuse.
Considering the current composition of the U.S. Congress, it also seems likely that this one-size-fits-all proposition will stall once more, so why all the commotion? Perhaps more important than the outcome of the bill is the momentum built around this issue. Even more states and cities are enacting or considering their own paid leave laws, just as President Obama has called on them to do, including the following:
- Tacoma, Washington City Council voted on January 27, 2015 to require businesses in the city to provide their employees with at least three days of paid sick leave beginning in 2016.
- Philadelphia, Pennsylvania Mayor Michael Nutter signed mandatory paid sick leave into law on February 12, 2015, requiring employers with ten or more employees to permit each employee to earn at least one hour of paid sick leave for every 40 hours worked, effective in 90 days.
- State-wide mandatory paid sick time legislation requiring all employers to provide seven paid sick days per year is currently pending in Oregon (introduced prior to the State of the Union address).
Stay tuned.
*Helena Oroz, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about paid sick leave or labor and employment law, please contact Helena (hot@zrlaw.com) at 216.696.4441.
What Goes Around: Another Cold and Flu Season Comes to a Close
Patrick M. Watts*Last year, as hospitals treated patients with the Ebola virus in the United States for the first time, many people worried about the spread of the dangerous virus. In particular, employers may have wondered how to accommodate employees affected by the virus or isolation periods intended to prevent spreading the illness. Should an individual be exposed to the Ebola virus, local and state public health authorities will likely monitor that person for signs of the virus and may recommend or require isolation during the virus’ 21-day incubation period. For more specific information, the Centers for Disease Control and Prevention (“CDC”) provides comprehensive information on preventing the spread of Ebola on its website. Thankfully, the Ebola virus has not spread in the United States. However, the annual cold and flu season remains a threat to employee health and employer productivity.
As cold and flu season comes to a close, employers can benefit from understanding employment laws addressing employee leaves due to illness. Cold and flu season can take a toll on employers, as illness affects employees’ attendance and productivity. Some reports tally the cost of lost productivity at up to seven billion dollars or 111 million missed work days. The flu also poses a serious threat to those with compromised immune systems, such as the elderly, those with cancer, and pregnant women. The contagious nature of the flu means that it can spread through offices quickly thanks to shared surfaces and human contact. Moreover, the CDC has stated that the flu vaccine appears to be less effective this year because of mutations to the current strain; so, even people who received the vaccine still may fall ill with the flu.
The two main employment-related laws implicated by cold and flu season are the Americans with Disabilities Act (“ADA”) and the Family and Medical Leave Act (“FMLA”). The ADA prohibits employers from discriminating against individuals in the workplace based on a disability or a perceived disability. The ADA applies when an employer makes disability-related inquiries of employees or requires medical examinations. A disability-related inquiry is one that is likely to elicit information about an individual’s disability (e.g., asking about a compromised immune system). The ADA prohibits disability-related inquiries and medical examinations unless they are job-related and consistent with business necessity. This occurs when an employer has a reasonable belief that an individual’s ability to perform essential job functions is impaired or that the individual is a direct threat to cause harm due to a medical condition. Except in the case of a severe flu pandemic (determined by the World Health Organization, Department of Health and Human Services, and CDC), neither of these exceptions apply in the case of common cold or flu, so employers should be careful about requiring medical examinations (including taking employee temperatures) and in wording inquiries regarding employee health. The ADA also prohibits employers from excluding individuals from the workplace based on a disability or perceived disability, so if an employer chooses to require ill employees to stay at home, it should apply the policy consistently.
By contrast, the FMLA allows up to 12 weeks of leave for serious medical conditions for employees who have worked at least 1,250 hours in a 12 month period for a covered employer. Typically, the FMLA does not cover colds or the flu unless it is severe or complications from the illness arise. The FMLA applies if the sick individual has been incapacitated for at least three full calendar days and either: (1) sees a doctor two or more times within 30 days; or (2) consults with a doctor and receives a regimen of continuing care (i.e., a prescription for medicine). Close family members of sick individuals also may qualify for FMLA leave to provide care for a parent, spouse, or child. Some employers may wish to prevent the spread of illness by accommodating sick employees with the option to work from home. However, employers ought to keep in mind that employees on FMLA leave cannot be required to work, even remotely, during leave.
While Ohio does not require employers to provide paid sick days to employees, some states mandate a certain number of paid sick days each year. Employers who wish to restrict or prevent the spread of a virus around the workplace have several options. Allowing employees who feel under the weather to work remotely may keep other employees from catching a contagious illness. Minimizing meetings and conferences also reduces the chances of employees coming into contact with individuals with the cold or flu. Finally, practicing simple hygiene habits, such as encouraging hand washing, covering one’s mouth when coughing or sneezing, and disinfecting frequently-used surfaces like telephones or door handles can help prevent the spread of germs. For more on the cold and flu, the Department of Health and Human Services, CDC, and World Health Organization all provide comprehensive information on the prevention and treatment of the cold and flu on their websites.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about the Americans with Disabilities Act, the Family and Medical Leave Act or other questions related to employee leave, please contact Patrick at (pmw@zrlaw.com) or (216) 696-4441.
NLRB Pulls a Fast One: Final “Quickie” Election Rules for Union Elections Adopted
By George S. Crisci*After a prior failed attempt beginning in 2011 to “modernize” its rules governing union elections, the National Labor Relations Board (“NLRB”) recently adopted its final rules, which will make it significantly more difficult for employers to run an effective campaign against unionization. The rules, which have been published in the Federal Register, go into effect on April 15, 2015.
These “quickie” election rules amend the NLRB’s representation case procedures and, in most cases, will reduce the time between the filing of an election petition and the election date. As a result, the employer’s timeframe to educate its employees on the realities of union representation is limited.
Many of the critical changes limit the circumstances under which pre-election hearings will be held. For example, disputes regarding individuals’ ineligibility to vote (e.g., due to supervisor status) generally will not be resolved before the election. This bypassing of important legal issues potentially creates a “lose-lose” situation for employers. Employers may face liability for treating employees as supervisors during a campaign if the NLRB decides later those employees are not supervisors under the National Labor Relations Act (“NLRA”). Similarly, employers may face liability if these employees participate in the campaign and the NLRB decides later that they are supervisors under the NLRA and that their involvement in the campaign constitutes “supervisor interference” with the election and grounds for holding a new election.
Important changes resulting from the new rules include the following:
- Within two business days of receiving the petition for an election, employers must post a Notice of Petition for Election.
- Pre-election hearings generally will be scheduled to be held eight days after service of the hearing notice.
- Non-petitioning parties (e.g., employers or rival unions) must submit Statements of Positions one business day before the pre-election hearing identifying issues with the petition. Failure to identify an issue generally precludes litigation on the issue.
- Along with the Statement of Position, employers must submit a preliminary list of prospective voters, identifying their job classifications, shifts, and work locations.
- Issues for pre-election hearings generally will be limited to ones that are necessary to determine whether an election should be held.
- Other issues, including voter eligibility (e.g., supervisor status), often will be resolved after the election.
- In cases where a pre-election hearing is held, parties are no longer automatically entitled to file post-hearing briefs. Instead, the NLRB’s regional director has discretion to decide whether to allow post-hearing briefs.
- Elections are no longer automatically delayed pending the outcome of a party’s request for review of the regional director’s decision following a pre-election hearing. Elections only will be stayed when ordered by the NLRB.
- Employers must provide a final list of eligible voters (referred to as an “Excelsior List”), which now must include personal email addresses and phone numbers (if available to the employer) and must be submitted to the regional director within two days (formerly seven days) of the approval of an election agreement or the direction of an election.
- Petitions for an election can now be filed electronically.
Since their adoption, the new election rules have become the subject of legal and congressional challenges. In two lawsuits, a number of pro-employer organizations have asked the U.S. District Courts for the District of Columbia and the Western District of Texas to strike down the new rules. Both lawsuits assert that the NLRB’s new rules violate the NLRA and the Administrative Procedure Act. The lawsuit pending before the U.S. District Court for the District of Columbia also asserts that the new rules violate employer free speech and due process rights under the U.S. Constitution. In addition to these legal challenges, the Senate and the House recently passed a “joint resolution of disapproval” of the new rules under the Congressional Review Act in an attempt to block the NLRB’s implementation of the rules. The resolution now heads to the President, who is expected to veto it. Zashin & Rich will provide periodic updates on the impact of these challenges on the enforceability of the NLRB’s new election rules as they proceed.
Overall, the NLRB’s new election rules change long-standing procedures governing the election process and reduce pre-election litigation (and the time associated with such litigation), while likely increasing post-election litigation. Employers subject to a union election should familiarize themselves with these changes to avoid making any procedural errors during the election process.
Employers must understand the impact that the new rules will have on their ability to run an effective campaign against unionization. Following the filing of a petition for an election, the time an employer has to lawfully educate employees on the perils of unionization is critical to countering the union’s efforts, which typically have been underway for months prior to an employer’s receipt of an NLRB petition. As the NLRB’s new election rules will greatly reduce the employer’s Post-Petition Campaign time, employers should develop strategies to avoid, anticipate, or counter unionization efforts before a union files a petition. In doing so, employers must be cautious and ensure that they are protecting their interests and not violating the NLRA. Employers no longer can afford to be surprised by the filing of an election petition because the very short timeline to conduct an election provides little opportunity to recover from such lack of knowledge. Once the NLRB’s quickie election rules take effect, non-unionized employers will have to implement an on-going, legitimate union-avoidance campaign to keep pace with union and NLRB efforts to unionize their workforce.
*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the NLRB’s new election rules or labor and employment law, please contact George (gsc@zrlaw.com) at 216.696.4441.
Z&R SHORTS
Congratulations!
Zashin & Rich is pleased to announce that the Ohio State Bar Association recently certified Helena Oroz and David Vance as specialists in Labor and Employment Law.
Zashin & Rich is proud to announce that it has been named to the BTI Client Service A-Team 2015. Zashin & Rich received special recognition in “Best at Handles Problems” and “Best at Provides Value for the Dollar.” Additionally, BTI recognized Stephen Zashin, the head of the firm’s Labor and Employment Groups, as one of only 29 labor and employment “Client Service All-Star” attorneys in the country.
Best Lawyers®
Z&R is happy to announce the following Z&R Labor and Employment Group lawyers have been selected for inclusion in Best Lawyers in America 2015:
- George S. Crisci – Employment Law Management, Labor Law – Management, and Litigation – Labor and Employment
- Jon M. Dileno – Employment Law – Management
- Jonathan J. Downes – Employment Law – Management and Labor Law – Management
- Stephen S. Zashin – Labor Law – Management
Upcoming Speaking Engagements
Wednesday, April 1, 2015
Drew C. Piersall presents "The Intersection of the Americans with Disabilities Act, the Family and Medical Leave Act and Workers' Compensation: Managing Disabilities“ at 10:00 a.m. at the Ohio County Home Association's annual conference to be held at the Salt Fork Lodge and Conference Center in Cambridge, Ohio.
Wednesday, April 8, 2015
Jonathan Downes presents “Social Media” at the JFSHRA - HR Bootcamp for Supervisors beginning at 9:30 a.m. at the Union County JFS Building.
Thursday, April 16, 2015
Jonathan J. Downes presents “Social Media Challenges for Law Enforcement and Public Employers” for the Miami Valley Risk Management Association in Mason, Ohio. See mvrma.com for details.
Monday, April 20, 2015
George Crisci presents “Determining Worker Eligibility for Unemployment Benefits” at the Unemployment Compensation from A to Z, which begins at 9:00 a.m. at the Doubletree Hotel in Independence, Ohio.
To register, go to http://www.nbi-sems.com.
Wednesday, May 6, 2015
Jonathan Downes and Drew Piersall present “Social Media – Employment Law Issues” and “The Intersection of the Americans with Disabilities Act, the Family and Medical Leave Act and Workers' Compensation: Managing Disabilities” at the 2015 OJFSDA Annual Training Conference at the Hyatt Regency Columbus on High Street.
Friday, May 8, 2015
Jonathan Downes conducts Legal Update at the Ohio Association of Public Safety Directors Annual Conference at 11:15 a.m. at the Reynoldsburg Police Department.
Monday, June 8, 2015
Patrick Watts presents at the Lake, Geauga, Ashtabula SHRM Annual Conference.
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