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Breaking Federal Developments in Labor and Employment September 2017

Salary Test for Exempt Status Invalidated

Under the prior administration the DOL had issued amendments to certain exemptions from the overtime requirements of the Fair Labor Standards Act (“FLSA”), which would have dramatically increased the number of employees eligible for overtime pay to over 4 million workers within the first year of implementation. The amendments were to be effective on December 1, 2016, however their implementation was stayed by a federal judge last November, as reported in our November 2016 Client Alert.

The new regulations were to essentially double the salary threshold for employees who would be exempt from overtime payments, assuming they met one of the three exemptions, from $455 per week or $23,660 per year, to $913 per week or $47,476 per year. Under these regulations, even if employees performed duties that would otherwise indicate they were exempt from overtime, if they made less than $47,476 per year, their employers would have to pay them overtime regardless of their duties. Just last week, a federal judge in Texas invalidated the new regulations, and specifically found that, while a salary test was permissible, the minimum threshold of over 47K per year was too high, and in fact obviated the need for any other duties based analysis, which has always been at the heart of the executive, administrative, or professional exemptions.

Employer Tip

For the time being, employers can feel comfortable relying on the duties test to determine eligibility for overtime, however, the DOL has indicated that it is still looking at the minimum salary threshold, and employers should expect that threshold to increase from the current number of $23,660. Employers would be well advised to take a look at their currently classified exempt employees making between 24-35K per year to determine whether such employees truly meet the duties test, and whether such employees are being paid at appropriate levels.

EEO-1 Salary Reporting Requirements Blocked

The new EEO-1 forms with reporting information for 2017 were to have included salary information in addition to the usual reporting requirements. The EEOC was presumably intending to use such information to target companies for Equal Pay investigations and complaints. Reporting is still due using the EEO-1 forms in March 2018, but the OMB has just announced that the forms are not going to require the reporting of salary information by gender and other protected characteristics, so employers have a reprieve with respect to federal reporting requirements.

Employer Tip

Employers should be mindful that the state and federal equal pay laws are still applicable, and it is always a good idea to do a self-audit of comparative pay data based on gender, race, and other protected characteristics in order to ensure compliance with such laws. Please also refer back to our April 2017 Client Alert with respect to NY pay equity laws and the salary history ban that goes into effect next month for NY employers.

New I-9 Form in Effect September 18, 2017

Employers should be aware that a new I-9 form is going into effect on September 18th. The link to the new form can be found here.

© Copyright 2017 Sills Cummis & Gross P.C.

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About this Author

David I. Rosen, Sills Cummis Gross, Wrongful Dismissal Lawyer, Labor Arbitration Attorney
Member

David I. Rosen has practiced labor and employment law on behalf of management clients since 1977. He handles employment litigation in the federal and state courts, before administrative agencies and through arbitration and mediation, and has broad experience with wrongful dismissal and employment discrimination claims, having successfully defended employers following jury and bench trials. His litigation experience extends to the enforcement and defense of restrictive covenants, NLRB unfair labor practice trials and appellate advocacy. Mr. Rosen also represents employers in labor...

(973) 643-5558
Galit Kierkut, Employment Litigation Attorney, Sills Cummis Gross, Social Media Matters Lawyer
Member

Galit Kierkut concentrates her practice on employment litigation and counseling. She conducts human resources audits, performs management and employee training in all areas, including sexual harassment, social media and electronic communications use, and counsels clients regarding compliance with state and federal employment laws, including discrimination laws, the Fair Labor Standards Act (FLSA), family and medical leave, and the Worker Adjustment and Retraining Notification (WARN) Act. She also reviews and drafts employee handbooks, social media policies and employment contracts, including restrictive covenants and severance agreements. Her employment litigation practice is primarily focused on resolving claims in the areas of discrimination, sexual harassment, restrictive covenants, whistleblowing and employment contract disputes in state and federal courts and before the Department of Labor and the Equal Employment Opportunity Commission (EEOC).

973-643-5896
Charles Kaplan, Sills Cummis Gross, Labor Employment Attorney, Affirmative Action Matters Lawyer
Member

Charles H. Kaplan is a Member of the Sills Cummis & Gross Employment and Labor Practice Group and is resident in the Firm’s New York Office.  Mr. Kaplan represents employers in federal and state trial and appellate courts, as well as before enforcement agencies, including the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the Office of Federal Contract Compliance Programs of the U.S. Department of Labor, the New York State Division of Human Rights, the New York State Department of Labor and the New York City Commission on Human Rights.

212-500-1563