APRIL 2, 2020

On April 1, 2020, the U.S. Department of Labor (DOL) issued a temporary rule to implement the public health emergency and paid sick leave provisions.  The regulations are consistent with the questions and answers previously issued, and discussed below, as well as the webinar discussed below.  The most important clarification in the regulation is the type notice an employee must provide to the employer, and the documentation the employer may require the employee to provide as to the need for such leave.  Therefore, the applicable regulations in these areas are attached, Sections 826.90 and 826.100. 

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On September 24, 2019, the U.S. Department of Labor announced its long-anticipated Final Rule on exemptions and overtime under the Fair Labor Standards Act (FLSA).  The new rule takes effect January 1, 2020.

Unlike its Obama-era predecessor, which was challenged in court and enjoined by the U.S. Court of Appeals for the Fifth Circuit, the new Final Rule is more of an update than a reinvention of the regulatory structure.  It increases the salary thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker).  It also allows employers to count a portion of certain nondiscretionary bonuses and commissions towards meeting that salary level:  this will allow an employer to “catch up” an employee’s earnings at year end so the employee qualifies for the exemption. The total annual compensation level for highly compensated employees (HCE) is increased from the currently-enforced level of $100,000 to $107,432 per year.  Long-standing exemptions for teachers, lawyers, and other professionals remain unchanged.

The new salary thresholds basically just reflect growth in employee earnings since the current thresholds were last updated in 2004.  Similar revisions to special salary levels allowed for workers in U.S. territories and in the motion picture industry also are included.  Detailed information about the final rule is available at https://www.dol.gov/whd/overtime2019/.

What does this mean for you?  Now is the time to take a look at your current payroll.  Make sure that salaried, exempt employees’ earnings meet or exceed the new $684/week threshold: but know that if you fall short, you may be able to make it up to them at year end (that will be December 2020) with a bonus.  Also check any “highly compensated” employees to be sure they are meeting or exceeding the new $107,432 level. 

Comment:  Unlike the previous Administration’s proposal, which sought to completely revamp the rules for overtime pay, this Final Rule should not pose difficult compliance problems.  As always, we will be happy to work with you to ensure that your questions are answered and that you can confidently plan and execute compensation policies in accordance with the law.

Questions?  Need more information?  Call Larry Stine at 404-365-0900.

On August 7, 2019, U.S. Immigration and Customs Enforcement (ICE) personnel arrested about 680 persons during seven food processing plant raids in Mississippi.  Published reports indicated that 243 employees were arrested at the Morton, Mississippi plant of Koch Foods of Mississippi.  Three other companies were also raided, some at more than one plant, but Koch Foods has taken an aggressive action to defend itself.  On September 3, 2019, Koch Foods of Mississippi, LLC, filed a Motion to Suppress and Return of Property taken during the raids, contending that the raid was not legal, and that the "exclusionary rule" should bar the government's use of the information illegally seized during the raid.  The exclusionary rule applies as an application of the Fourth Amendment to the U.S. Constitution, which applies when government authorities exhibit deliberate, reckless, or grossly negligent disregard for Fourth Amendment rights in searches and seizures of a person's or entity's property.

Thanks to a lawsuit, an Obama-era initiative requiring large employers to submit detailed pay data sorted by race and gender has been revived.  Employers with more than 100 employees must complete a disclosure form and upload this data for 2017 and 2018, which may be used against them, no later than September 30, 2019.

On August 7, 2019, seven food processing plants in Mississippi were the subject of “raids" conducted by Immigration and Customs Enforcement (ICE).  The Secretary of the U.S. Department of Homeland Security said the raids had been planned for approximately a year.  In some respects, such raids are hardly news:  ICE conducted enforcement actions for many years, though the last ones targeting poultry processors occurred approximately 10 years ago.  But in last week’s raids, ICE conducted high-profile actions at 7 facilities owned by 5 different companies:   Peco Foods, Koch Foods, PH Food, Pearl River Foods and MP Food Inc., almost all poultry processors.  Nearly 700 employees were arrested for possible immigration violations: 300 were released the same day.  As of this writing, only approximately 370 remain in custody in a Louisiana detention facility.  ICE also reported that 18 children were found to be working illegally in the plants. 

After what must be record-setting deliberations, the U.S. Department of Labor (DOL) has published plans to raise the salary threshold – the amount a salaried administrative, executive, or professional employee must be paid in order to qualify as exempt from overtime – from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). This is the minimum amount an employee must be guaranteed as a weekly salary, not subject to deductions for missed days or hours of work, in addition to satisfying other job-duty criteria to qualify as exempt from the Fair Labor Standards Act (FLSA) general obligation to pay 1.5 times an employee’s “regular rate” for every hour worked over 40 in any work week.  DOL is soliciting yet more comment from the public, but the change is estimated to take effect January 1, 2020.

On January 24, 2019, OSHA issued a notice in the Federal Register (84 FR 380) amending the recordkeeping regulation by rescinding the requirement for establishments with 250 or more employees to electronically submit information from OSHA Forms 300 and 301. These establishments will continue to be required to maintain those records on-site, and OSHA will continue to obtain them as needed through inspections and enforcement actions. Establishments will continue to submit information from their Form 300A's.  Employers' responsibilities to report fatalities, hospitalizations, amputations and loss of an eye to OSHA remain the same.

Because of the enormous increase in legal claims and disputes over the past few years, Wimberly & Lawson suggests that employers should consider the following projects in early 2019 as they are quite important and timely.  Wimberly & Lawson would be pleased to provide fixed fee estimates for each project or otherwise advise employers in these important pro-active steps to avoid the adverse publicity and headaches of expensive litigation.  If your company has not reviewed and updated these policies since the substantial changes in 2018 from the U.S. Supreme Court, it is extremely likely that your policies do not reflect current law and "best practices" as to compliance.

Effective January 1, 2019, the Georgia Department of Labor (GDOL) will reject Quarterly Tax and Wage Reports containing certain invalid Social Security numbers (SSN) and may assess delinquency fees against employers failing to submit complete or correct reports by the due date.  However, an employer submitting a corrected report after the due date when it timely submitted the original probably will not receive an assessment if the corrected report is submitted in a timely manner as directed by GDOL.  Regardless, GDOL will keep the unemployment insurance taxes paid to it with the rejected reports.