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The Wage and Hour Division of the U.S. Department of Labor (DOL) held public listening sessions on October 30, 2018 to gather views on the Part 541 white collar exemption regulations, the 2016 “Overtime Rule.” Sessions were held in Atlanta, GA, Seattle, WA, Kansas City, MO, Denver, CO, Providence, RI, and Washington DC. A review of the actual transcripts reveals that many different interests presented comments, including human resource professionals, small business, nonprofits, employees, employers, attorneys, and large businesses. Full renditions of the transcripts by city can be found here.

The DOL posed these questions for addressing at the Listening Sessions: Continue Reading Key Takeaways from the Recent Overtime Rule Listening Sessions

On July 31, 2018, the Department of Justice (DOJ) and the Department of Labor (DOL) signed an agreement that sets guidelines for inter-agency collaboration to combat suspected employer non-compliance with immigration laws. The agencies have agreed to share resources, including records, and education and training where necessary, and refer cases to one another when an agency learns of employer non-compliance. Continue Reading DOJ and DOL Combine Forces to Combat Employment Discrimination Against U.S. Workers

The 2018 federal appropriations bill signed into law on March 23rd includes an addition to the Fair Labor Standards Act (FLSA) stating that “[a]n employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” The amendment also nullifies certain regulations issued by the Department of Labor in 2011, including regulations which prohibited an employer from using an employee’s tips as part of an invalid tip pool even where the employer was paying the employees the full minimum wage without utilizing a tip credit. Continue Reading Congress Addresses Who Can Share Tips

Perry MacLennan, Chris Gantt-Sorenson and Denny Major
Perry MacLennan, Chris Gantt-Sorenson and Denny Major

Haynsworth Sinkler Boyd recently hosted our annual Employment Law Seminars across South Carolina. These complimentary seminars educated Human Resource professionals on recent employment law updates and changes.

Here is a brief summary of the presentations from our seminars.

LGBTQIA: What Human Resource Professionals Need to Know by Chris Gantt-Sorenson

  • The 4th Circuit Court of Appeals has already stated in dicta that it would recognize a claim alleging gender discrimination or harassment under Title VII for any employee who has been discriminated against on the basis of their gender identity, gender expression, sexual orientation or sexual preference.
  • OSHA states, “All employees, including transgender employees, should have access to restrooms that correspond to their gender identity.”
  • OSHA reports 22% of 700,000 transgender employees surveyed indicated they were denied access to gender appropriate restrooms.
  • OSHA’s Sanitation Standard 1910.141(c)(1)(ii) requires employers to provide toilet facilities that are close to their workspace for each gender. OSHA also issued guidance recommending that employers offer single occupancy, gender neutral facilities rather than gender specific. However, if an employer could not do so, OSHA advised employers should provide lockable stalls in each restroom.

Wage and Hour Update by Denny Major

  • The Department of Labor has issued a request for information to solicit input on the salary level test used to help determine if an employee meets the executive, administrative, or professional exemption for the FLSA’s overtime requirement. The DOL has indicated that it intends to use the comments to develop a new proposed regulation regarding this exemption. For now, the 2004 salary level test ($455/week) remains in effect.
  • In recent opinions, the Fourth Circuit Court of Appeals, which is the federal court of appeals that covers South Carolina, has taken a fairly broad view of who is an employee versus an independent contractor and who constitutes joint employers under the FLSA. In a recent case, the Fourth Circuit, after examining several fact specific factors, determined that an exotic dancer was an employee of an exotic dance club rather than an independent contractor. In another recent case, it held that a general contractor was a joint employer over the employees of the contractor’s drywall subcontractor. While these are very fact specific inquiries, it suggests a trend in the way the Fourth Circuit is treating these cases.

Politics in the Workplace by Perry MacLennan

  • The Problem: According to a recent survey from BetterWorks, 50% of respondents have witnessed a political conversation turn into an argument at work (63% of millennials say the same). Thirty percent of respondents say they are less productive since the election due to the political environment. Employees are increasingly taking to social media to express their political beliefs and opinions, sometimes crossing the line into harassment and discrimination, or embarrassing the company and creating a public relations nightmare.
  • The Challenge: Foster a cooperative, productive, inclusive work environment that does not discourage workers from having their own opinions and does not create a workplace that feels more like a dictatorship than a democracy. Develop policies and procedures that strike a balance between being strong enough to justify discipline in certain situations, while not being overly broad, which are tough to enforce and could be illegal.
  • The Solution: Review your current policies and procedures (Social Media Policy, Code of Conduct Policy, etc.) to determine if your organization is compliant with the National Labor Relations Act and other laws governing the regulation of employee speech in the workplace. Make sure the policies emphasize mutual respect, civility, and productivity at work. Finally, include a reminder that anti-discrimination and other company policies apply to an employee’s outside activities, including social media posts.

Immigration Law Update by Garrett Steck and Suyash Raiborde

  • Immigration is seeing and will likely continue to see major changes under the current Administration.
  • Internal immigration compliance enforcement has increased in recent months.
  • The government may eliminate several visa programs, and significantly alter existing visa programs.

Recent Trends with the ADA

  • Both the EEOC and the US District Court of South Carolina have taken the position that an employee’s request for a service animal may be a reasonable accommodation under the ADA even though Title III of the ADA which governs employers does not specifically address service animals.
  • The failure to engage in the interactive process with the employee once a request for a service animal as a reasonable accommodation is made will most likely result in a violation of the ADA and subject the employer to liability for failing to engage in the interactive process.
  • The EEOC’s recent position on service animals as well as recent court decisions do not foreclose the possibility that the EEOC or the courts would find that an emotional support animal may be a reasonable accommodation under the ADA. If a request for an emotional support animal as a reasonable accommodation is made, employers should engage in the interactive process to determine whether the animal is reasonable under the circumstances.
  • Both the EEOC and the courts take the position that leave may be a form of reasonable accommodation under the ADA. Employer’s may have to modify existing leave policies to accommodate an employee’s request for accommodation.

DOR and the Unemployment Insurance Tax Rate by Demetrius Pyburn

  • Respond timely, adequately and effectively to SCDEW’s request for information regarding the reason the employee no longer works for the company.
  • Implement clear employee policies and keep records of any trainings, orientation and counseling.
  • Understand the Unemployment eligibility and appeals process to prevent improper payment and higher tax rates.

Stay on top of all employment law issues and subscribe to our SC Employers’ Blog.

And don’t miss next year’s seminar. Sign up for HSB emails and be the first to know about upcoming events.

On January 5, 2018, the United States Department of Labor announced that, going forward, it would utilize the “primary beneficiary” test for determining whether interns are employees under the FLSA, consistent with recent rulings from appellate courts. Its updated Fact Sheet #71, a copy of which is linked here, explains the test, which examines “the ‘economic reality’ of the intern-employer relationship to determine which party is the ‘primary beneficiary of the relationship.” Fact Sheet #71 outlines 7 factors that courts should apply on a fact specific basis in making this determination, with no single factor being dispositive:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

This test replaces the older 6 factor test contained in Fact Sheet #71, which some courts had rejected as too rigid. While this guidance from the DOL is persuasive, rather than binding, authority, it should be noted that a version of the “primary beneficiary” test was already being applied by the Fourth Circuit Court of Appeals, at least in the context of whether trainees constitute employees. The adoption of this test by the DOL provides additional support for the application of it by the Fourth Circuit Court of Appeals and District Court for the District of South Carolina.

While employers continue to prepare for the Department of Labor’s proposed new overtime rules, the DOL’s Solicitor of Labor recently announced that the final regulations will not appear until “late in 2016.” While this gives employers more time to consider how they will handle the changes to the overtime rules, it could also mean a shorter window of time between publication of the final rule and the date which the rule becomes effective. The DOL received more than 290,000 comments to the proposed rule.

You can read more about the DOL’s informal announcement here: http://www.shrm.org/legalissues/federalresources/pages/late-release-overtime-rule.aspx.

tipThe plethora of litigation against restaurants for alleged improper tip practices continues.  Follow this link to see new litigation brought against a restaurant for requiring tipped employees to perform non-tipped work.

If a restaurant takes a tip credit, those employees who are paid pursuant to the tip credit cannot perform non-tipped work more than 20% of the time.   (The DOL has indicated that an employee’s status will be viewed on the basis of his activities over an entire workweek.  See DOL Opinion Letter, 1997 WL 998047 (Nov. 4, 1997).)  In other words, if a tipped employee is performing related duties not directed at tips, then the related duties can be compensated pursuant to the tip credit as long as those related duties only comprise 20% or less of the employee’s time.  No tip credit may be taken for time spent on unrelated duties, and a tipped employee must be paid full minimum wage for such duties.

For example, a waitress may be employed in a dual job.  If she customarily and regularly receives at least $30 a month in tips for her work as a waitress, then she is a tipped employee only with respect to employment as a waitress. While a tip credit can be taken for the time worked in the tipped position, she must be paid at least minimum wage for those hours spent working in the non-tipped position.  Such a situation is distinguishable from that of a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses. These are considered related duties in an occupation that is a tipped occupation even though they are not by themselves directed toward producing tips.

You can find helpful guidance on assessing and using tip credit here.

New guidance released July 15, 2015, from the Department of Labor (DOL) narrows independent contractor classification so that “most workers are employees under the FLSA.” The DOL’s guidance makes it clear that the amount of control an employer has over a worker is not as important in properly classifying the worker. Instead, the DOL details an “economic realities” test that must be used “to determine whether the worker is economically dependent on the employer (and thus the employee) or is really in business for him or herself (and thus its independent contractor.)”

According to DOL, you need to consider the following factors when determining if a worker is truly an independent business or is economically dependent upon the employer:

  1. Is the work an integral part of the employer’s business? DOL says that an independent contractor’s work is unlikely to be an integral part of the employer’s business.
  2. Does the worker’s managerial skill affect the worker’s opportunity for profit or loss? An independent contractor is one whose managerial decisions (whether to hire others, purchase more equipment, advertise, etc) are more likely to lead to profit or loss beyond the current job.
  3. How does the worker’s relative investment compare to the employer’s investment? The worker’s investment must be significant in magnitude relative to the employer’s investment in the overall business to indicate an independent contractor. DOL emphasized a Tenth Circuit opinion that determined a rig welder’s investment in equipment of $35,000-$40,000 did not indicate the welders were independent contractors when compared to the employer’s investment in the business.
  4. Does the work performed require special skill and initiative? This factor considers special business skills and judgment in moving the business forward, rather than technical skills in performing the work.
  5. Is the relationship between the worker and the employer permanent or indefinite? The more permanent the job, the more likely the worker is truly an employee.
  6. What is the nature and degree of the employer’s control? Again, the DOL guidance de-emphasizes the importance of this factor, explaining that this should not be given undue weight. However, the amount of control an employer has over a worker helps determine if the worker is truly in business for himself or not.

It is clear from the guidance that DOL views most workers as employees; therefore, the classification of independent contractors should be used sparingly. You should review all of your independent contractors in light of this guidance to make sure they are properly classified because a finding of misclassification can result in significant liability for unpaid overtime, unemployment and worker’s compensation insurance premiums, as well as other potential statutory penalties and liabilities.

You can read the full guidance, with examples of each factor, here: http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.pdf