DOL Set to Raise Salary Level to Qualify as Exempt Under the FLSA

The Department of Labor (DOL) is poised to implement revised regulations that will make it more difficult for a worker to qualify as an exempt employee under the Fair Labor Standards Act.  The DOL’s final rule will go into effect on January 1, 2020 and does the following:

  • raises the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • raises the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year; and
  • allows employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level

More information can be found at the following DOL link:  https://www.dol.gov/whd/overtime2019/.

What should you do?   First, you should assess the salary  level of your organization’s exempt employees to determine if anyone will lose their exempt status because of these new regulations.  If that scenario exists, you should consider raising the worker’s salary to meet the new test or reclassify that worker as non-exempt.

 

We are available to assist in your analysis and/or implementation of adjustments necessitated by these new regulations.

New EEO-1 Reporting Requirements

The EEO-1 is an annual survey mandated by federal law that requires all private employers with 100 or more employees and federal government contractors/subcontractors with 50 or more employees and a federal contract, sub­contract or purchase order of $50,000 or more to file the EEO-1 Component 1 employee demographic report in March of each year (although in 2019, the deadline was extended to May 31).

In addition, the EEOC is now requiring covered employers, including federal government contractors, with 100 or more employees, to submit EEO-1 Component 2 employee compensation and hours worked data, by job category, for 2017 and 2018 by September 30, 2019.

Filers should refer to the EEOC website at https://eeoccomp2.norc.org/info  and https://eeoccomp2.norc.org/Faq for guidance on filing requirements for Component 2 data. We can also be of assistance if needed.

EEO-1 Surveys for 2018

Due to the government shutdown, the opening of the EEO-1 Survey has been postponed until early March 2019. The deadline to submit EEO-1 data will be extended until May 31, 2019. The EEO-1 is an annual survey mandated by federal law that requires all private employers with 100 or more employees and federal government contractors or first-tier subcontractors with 50 or more employees and a federal contract, sub­contract or purchase order amounting to $50,000 or more to file the EEO-1 report.

Filers should refer to the EEO-1 website at (https://www.eeoc.gov/employers/eeo1survey/index.cfm) in the coming weeks for updates on the new schedule and filing instructions. We can also be of assistance as needed.

Supreme Court Validates Class/Collective Action Waivers in Employment Arbitration Agreements

What Happened?

On May 21, 2018, the United States Supreme Court ruled in Epic Systems Corp. v. Lewis that employers can require employees to arbitrate disputes with the employer (including disputes arising under the Fair Labor Standards Act) individually and waive their right to pursue or participate in class or collective actions against their employer.  This ruling resolved a split among circuit courts because some circuits (including the 9th Circuit) found such waivers were unenforceable as a matter of law. The Supreme Court concluded, “Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.”

What this Means?

This decision is a significant win for employers.  Before Epic Systems, the wisdom of requiring employees to arbitrate employment disputes was debatable.  That debate is over.  The benefit of avoiding the oppressive expense and catastrophic legal exposure faced by employers in defending class and collective employment law actions far outweighs any arguable downside of arbitration.

What to Do?

Implement an employment dispute arbitration agreement (or amend your organization’s existing arbitration agreement) to include an explicit class and collective action waiver.  We are available to assist your organization with this process.

 

EE0-1 2017 Survey Filing Deadline on the Horizon (3/31/18)

The EEO-1 is an annual survey that requires all private employers with 100 or more employees and federal government contractors or first-tier subcontractors with 50 or more employees and a contract/subcontract of $50,000 or more to file the EEO-1 report.  The EEO-1 report provides employment data by race/ethnicity, gender and job categories. The filing of the EEO-1 report is not voluntary and is required by federal law.  The annual filing deadline is March 31.

Employers who meet the criteria listed above and have not received the 2017 EEO-1 Notification Letter by Jan. 29, 2018, should imme­diately contact the EEO-1 Joint Reporting Committee at 1-877-392-4647 (toll-free) or by e-mailing e1.techassistance@eeoc.gov.   The EEOC’s EEO-1 Survey website at https://www.eeoc.gov/employers/eeo1survey contains reference documents such as a EEO-1 User’s Guide, sample form, instructions, FAQs, a fact sheet and a EEO-1 Job Classification Guide.