Employment Law Update: It’s All About the Agencies

By Patti Bartis, Parker Poe Adams & Bernstein LLP

Patti Bartis will be one of our breakout session speakers at this year’s NCMGMA Annual Conference in Charleston (May 11-13th at the Marriott Charleston).  Patti will present “Employee Law / HR Updates” and her session will take place from 1:00 PM to 2:30 PM and from 3:00 PM to 4:30 PM on Thursday, May 12th.

DOL – New Overtime Rules Expected in 2016

In 2015, the Department of Labor’s Wage and Hour Division released its highly anticipated proposed changes to the Part 541 overtime and minimum wage exemption regulations.  Employers can expect to see the final rules issued in 2016.  These rules implement Section 13(a)(1) of the Fair Labor Standards Act, and cover Executive, Administrative and Professional employees.

The proposed rule would more than double the minimum salary requirement from the current $455 per week (or $23,660 per year), to about $970 per week, or $50,440 per year in order to claim the exemptions. In addition, the DOL proposes to index this amount, meaning that it will be adjusted annually. Employees paid less than the minimum salary will not be exempt from overtime and minimum wage obligations regardless of their job duties. In addition, the highly compensated employee salary level under Part 541 would rise from $100,000 to $122,148 and would be similarly indexed.

Although the rules are only proposed at this time, employers should review the salary levels of their current exempt employees. These proposals give employers advance warning about future labor budget adjustments based on the need to either increase salaries or pay overtime.

NLRB – In Your Business

Section 7 of the National Labor Relations Act (NLRA) gives both union and non-union employees the right to engage in protected concerted activities, such as discussing wages and other terms and conditions of employment. Employers can expect the National Labor Relations Board to continue its aggressive enforcement of these rights based on employment actions or policies that allegedly violate Section 7.  Employers should review their policies on confidentiality, social media, investigations, and other employee communications to ensure compliance with the NLRA.

EEOC – Pay Disclosure Requirements on the Horizon

On January 29, President Obama announced a new executive action, beginning in 2017, that will require employers with 100 or more employees to submit information to the EEOC about employee pay broken down by gender, race and ethnicity. The executive action amends the current EEO-1 form to add 12 pay bands to each general job category contained in the form.

The EEOC indicated that it will use this information to create compensation benchmarks based on industry and metropolitan area. The agency could initiate investigations and litigation based on disparities suspected from the pay information. These disclosure requirements should prompt employers to focus now on their internal pay practices and pay equity to identify and correct discovered problems.