HR Strategies continues to boost and expand their client’s knowledge of important management strategies and business regulations through their Management Training Series.
The world of regulatory compliance is changing rapidly, are you ready?
Important Topics to be Discussed
- Crucial upcoming FLSA changes
- Possible new overtime exemptions that will drastically affect all employers
- Salary Exemption to potentially double for exempt employees (Currently it is $455 per week, some saying it will be raised to almost $1000 per week = $50,440 per year!)
- Updated rules for classifying employees and independent contractors
Furnishing top-notch management training sessions to their clients affords HR Strategies to prepare their client’s for a variety of workplace regulations, as well as to deliver the support needed to foster and promote a sound workplace. As always the training session is completely free for clients, who can expect to enjoy a top of the line speaker along with a delicious catered lunch compliments of HR Strategies. The Management Training Series proves to be another way that HR Strategies bestows the value of HR outsourcing to their client companies.
Yesterday marked the 25th anniversary of the signing of the ADA, a civil rights law that strengthens the inclusion of people with disabilities at work, school, or other community settings. According to a recent article by the CDC, “an estimated 37 million to 57 million people are living with a disability in the United States, and many people will experience a disability at some time during the course of their life. Enacted on July 26, 1990, the goals of the ADA are to promote equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities.”
The stimulus for the ADA began with the Civil Rights movement in the 1960’s. Advocates for the disabled watched as the federal government became involved with the protection of racial minorities, and began to seek protection for their community as well. The beginning steps of the ADA, as we know it today, were laid by the passage of section 504, of the 1973 Rehabilitation Act, which prohibited discrimination against someone with a disability who received public assistance. However, section 504 did not cover discrimination by employers or the private sector. In April 1988, a draft bill prepared by the National Council on Disability was introduced as the first version of the ADA to the 100th Congress, with the main purpose of the bill being to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities, and to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities. The bill, as most usually encounter, went through several revisions before receiving a Senate vote of 76 to 8 on September 7, 1989. The bill went on to the House, and on January 23, 1990, the 101st Congress passed the “Americans with Disabilities Act of 1990”, which consists of five titles: Title I – Employment, Title II – Public Services, Title III – Public Accommodations, Title IV – Telecommunications, and Title V – Miscellaneous Provisions. The Americans with Disabilities Act (ADA) was signed into law on July 26, 1990, with the effective date for the employment provisions in Title I of the ADA taking place on July 26, 1992.
Through the ADA we have come to see that people with disabilities are no longer “out of sight, out of mind” as society may have once positioned them to be. Instead, we are shown that they want to and are capable of working, and that they want to and are able to be members of society and their communities. Business owners are affected both on the employment side and provider side of the ADA, in order to be in compliance. Business owners must be proactive and accommodate their customer’s needs equally, by actively seeking and implementing solutions that are easily accomplishable and able to be carried out without much difficulty or expense, for their customers with disabilities. The most recent updates to ADA, for which business owners may need to make alterations for their customers, include effective communication, mobility devices, service animals, and entry barriers. The ADA doesn’t just affect businesses in terms of assisting customers, but also when it comes to employment. Businesses with 15 or more employees are forbidden from discrimination against “qualified individuals (an individual, who with or without reasonable accommodation can perform the essential functions of the job in question) with disabilities” in hiring, firing, advancement, compensation, training, and all other aspects of employment and employment related activities, such as fringe benefits. (Please note that PEO’s use a co-employment model, and therefore businesses with fewer than 15 employees who are contracted as a larger pool of employees within a PEO, may or may not be viewed as having more than 15 employees and subject to the guidelines of the ADA, depending on the unique circumstances of their contract with the PEO. In addition, individual states may also have a unique set of laws regarding disabilities that exist in addition to the federal ADA that may supersede federal guidelines, to which employers may be subject.) Employers are also required to make a reasonable effort to accommodate the applicant or employee, as long as it does not impose undue hardship on the business, so that otherwise qualified applicants and/or employees with disabilities can work and compete with their peers. However, employees with disabilities may be disciplined or dismissed for incompetence or acts of misconduct in the same manner as other employees, regardless of whether they have disabilities.
As with any legal matter, there are strict guidelines, but ultimate decisions regarding the ADA are in fact legal matters and decided within the courts. Each business, individual, and circumstance is unique, and while the ADA law is intact all matters regarding it are in fact due to interpretation by legal representation. HR Strategies continually provides our clients with the information necessary to handle any matters arising from and with the Americans with Disabilities Act, based upon legal counsel provided to us. We are hopeful that this has given you some background and insight into exactly what the ADA can mean to all of us.
On June 30, 2015, after more than 15 months of waiting, the 295 page Notice of Proposed Rulemaking (“NPRM”) on overtime and administrative exemptions was released. Though this does not cover the identification and classification of Independent Contractors versus Employees, Wage and Hour Division Administrator David Weil issued an Administrator’s Interpretation letter regarding the status of Independent Contractors versus Employees on July 15th, 2015.
It should not come as a surprise that the WHD has put out Administrator’s Interpretation No. 2015-1, Subject: ‘The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors’, at the same time that NPRM on overtime exemptions has been opened for comment. Both are congruent on each other to make sure that everyone performing duties for an employer are correctly classified. It is also a reminder that there are very specific “rules” to 1099- independent contractors, and that it is not an option to classify as such to possibly avoid the upcoming changes to overtime exempt status. The Interpretation Letter clearly narrows the definition of “Independent Contractor”, and states “in sum, most workers are employees under the FLSA’s broad definitions… The very broad definition of employment under the FLSA as ‘to suffer or permit to work’ and the act’s intended expansive coverage for workers must be considered when applying the economic realities factors to determine whether a worker is an employee or an independent contractor.” Be warned that the economic realities test regarding Independent Contractors is the main determinative for Employee vs. Independent Contractor, but that no single factor is weighed heavier than another. Rather the qualitative result of all 6 factors determine the outcome of Independent Contractor or Employee.
- The extent to which the work performed is an integral part of the employer’s business.
- The worker’s opportunity for profit or loss depending on his or managerial skill.
- The extent of the relative investments of the employer and the worker.
- Whether the work performed requires special skills and initiative.
- The permanency of the relationship.
- The degree of control exercised or retained by the employer.
As a business you should take this letter as indication for the need to review any arrangements and agreements regarding anyone paid as an independent contractor, to make sure that they do comply with the rules regarding 1099 Independent Contractor status. Though the letter does not state any new legislation or compliance obligations, it may be seen as a foresight that there will be more enforcement to come on the Contractor vs. Employee front.
On May 25th, 1961, President John F. Kennedy made the appeal to a joint session of Congress, “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to Earth.” For many, this seemed an outlandish and impossible goal. However, on this day, June 20th, in 1969, Neil Armstrong took the first steps on the moon, and spoke these words to more than a billion people listening at home, “That’s one small step for man, one giant leap for mankind.” Those 8 years between President John F. Kennedy’s appeal and the successful mission saw several setbacks; but the determination and hard work of the thousands of NASA employees saw the goal come to fruition.
Business owners themselves set goals. While they probably are not as lofty as landing on the moon, they too at times can seem unattainable. Though the goal measurements for each business and entrepreneur may vary greatly, the one thing each needs is a great team behind them to reach those goals through determination and hard work. HR Strategies becomes the behind the scenes Human Resources part of the team, helping to attract and retain the best employees, while enabling business owners to focus on the goals that they set for their business as a whole; rather than focusing on running payroll, providing employee benefits, or the many other facets of human resource administration.
The United States declared independence this month in 1776. Now it’s time for you to declare your independence as a business owner.
Independence has been a goal of Americans since the founding of our country, and those with their own companies tend to be particularly independent. Some people start their own business believing that it is the only route to “life, liberty, and the pursuit of happiness”; only to later realize the headaches that can come along with owning and managing a business. While they began their business to gain independence, they lose the freedom that they dream of. They become saddled with letting their business’ rule their lives, depriving them of time with family and friends, and even at times their health.
It is time as business owners to create your own Declaration of Independence!
- Independence from rising administrative costs. Outsourcing your HR administration relieves business owners from the complex HR matters of benefits, workers’ compensation claims, payroll, tax administration, regulatory compliance, etc., and by doing so reduces your overhead.
- Independence from focusing on the mundane. Outsourcing your HR enables small business owners to focus on their core competencies, rather than focusing on running payroll, providing employee benefits, or the many other facets of human resource administration. Outsourcing allows business owners to concentrate on their passion, without being distracted by countless human resources responsibilities.
- Independence from the worry of regulatory compliance. Outsourcing your HR administration can keep business owners compliant by working as their off-site HR department, with the back-up of legal counsel partners, firms specializing in workplace law. Outsourcing can help you reduce your risk and vulnerabilities to Federal, State, Local and Professional Regulatory changes.
- Independence from the nightmare of Workers Compensation Insurance and Risk Management. Outsourcing can help improve the work environment and make it safer by focusing on workplace risk management, safety programs, and good human resource practices. Additionally, when you outsource with a PEO, such as HR Strategies, they can arrange workers’ compensation coverage with major insurance carriers, provide their clients with training on safety and government compliance in regards to workers compensation and risk management, and manage the complexity of claims.
- Independence from the burden of human resource administration and paperwork. When you outsource your HR needs to a PEO you receive assistance with all of the complications and paperwork that go along with the employee lifecycle: writing help wanted ads and job descriptions; drug screening and verifications; new hire candidate assessment tools; new hire paperwork, including I-9 compliance; customized employee handbooks; employee policies and procedures; Federal and State required postings; human resource, supervisor, and compliance training; EEOC claims; Employment Practices Liability Insurance; Employee Assistance Program; compliance with IRS, INS, ADA, EEOC, FMLA, FLSA, DOT, COBRA, Title VII, etc.; discipline and termination counseling; investigation of employee/employer and employment complaints.
Declare Your Independence today by calling HR Strategies at 770-339-0000!
Our staff loves the Minions and with their new movie release coming out today, we thought it would be HR appropriate to take a look at their dress code.
Now that we know the Minion Dress code – what does your company dress code look like?
Company dress codes can be laid out in a variety of different ways. For instance, your employee handbook can state that your employees’ should wear Professional Business Attire. Casual Attire would be the opposite extreme. Or, you may require your workers to wear a certain uniform, for example khakis and a company polo. Very common nowadays is Business Casual, which coincidentally is what we wear here at the HR Strategies’ main office. Our internal employee handbook defines Business Casual as “A comfortably relaxed version of classic business attire, with no sacrifice of professionalism or personal power.”
How does your company handle the dress code policy? Generally, one of the overarching types of dress codes (listed in the first paragraph) is specified, with a few extra pointers. You can choose to give examples of what is acceptable, and have your employees work around that. Or, you can list things that would not be unacceptable if worn, such as athletic wear, torn or tattered clothing, and flip-flops.
Other types of dress codes may revolve around safety. Some companies require employees to wear steel-toed boots, close-toed shoes, hard hats, or masks to keep them safe while doing their job. What type of dress code do you have in place? When was the last time you updated it? Have you checked to make sure that your appearance policy is compliant with all discrimination and safety laws? These are small changes that can greatly reduce your risk of unnecessary legal headaches!
No matter what type of dress code your company requires; HR Strategies can personalize your Employee Handbook to fit your business’ needs. Call us today at (770) 339-0000 or check out our website at http://www.hr-strategies.com/ for more information!
Notice of Proposed Rulemaking for new Overtime Requirements
On March 13th, 2014 the White House’s Office of the Press Secretary released the Fact Sheet: Opportunity for All: Rewarding Hard Work by Strengthening Overtime Protections. As an excerpt from the fact sheet states, “The overtime and minimum wage rules are set in the Fair Labor Standards Act, originally passed by Congress in 1938, and apply broadly to private-sector workers. However, there are some exceptions to these rules, which the Department of Labor has the authority to define through regulation. One of the most commonly used exemptions is for “executive, administrative and professional” employees, the so-called “white collar” exemption.” A Presidential Memorandum was signed in 2014 instructing the Secretary of Labor to update regulations regarding who qualifies for overtime protection.
After more than 15 months of waiting, the 295 page Notice of Proposed Rulemaking (“NPRM”) was released on June 30, 2015. The NPRM is just the proposed regulations and are subject to a 60 day public comment period that will end on September 4th, 2015. This public comment period allows for all to comment with any dissatisfactions or concerns that they may have. The results of this comment period are then to be taken into consideration before the final rule is published. The comment period and subsequent review is expected to take between 6-8 months; thus, a final rule is not expected until 2016. To voice your opinions and concerns you may go to: http://www.regulations.gov/#!docketDetail;D=WHD-2015-0001.
The Proposed Changes
The NPRM as stated is 295 pages long, so here is a brief summary of what you need to know:
- The current salary threshold for the executive, administrative, and professional exemptions is $455 a week ($23,660 a year). The DOL proposes to establish the minimum qualifying weekly salary commensurate with the 40th percentile of weekly earnings for all full-time salaried employees in the United States. This would mean that the minimum weekly salary for the executive, administrative and professional exemptions will increase to $921 per week, or $47,892 annually. However, if the rule is not in effect until 2016, those numbers based on the 40th percentile will be $970 a week, or $50,440 annually.
- The proposed Rule also increases the minimum annual compensation for the highly-compensated employee exemption from $100,000 to $122,148, which is based on the 90th percentile of salaried workers’ weekly earnings.
- For the first time since the Fair Labor Standards Act was passed in 1938, the DOL proposes to automatically increase the minimum weekly salary requirement each year based on data from the Bureau of Labor Statistics. The Department, however, has not chosen between the two different indexing methods that it has studied.
- Keeping the levels chained to the 40th and 90th percentiles of earnings.
- Adjusting the amounts based on changes in inflation by tying them to the Consumer Price Index.
- There had been talk of changing the “duties test” for the executive, administrative, and professional exemptions; however, at this time there is nothing proposed regarding the duties test in the NPRM. Rather the DOL is only seeking public comments on the issue, which means that there may be revisions in the future.
Why the Change?
The last time the rule for the weekly salary that must be paid to an employee in order for the employee to be eligible for the executive, administrative and professional FLSA overtime exemptions were updated was in 2004. The minimum annual salary level for these exempt classifications under the 2004 regulations is $23,660, which is now below the poverty line for a family of four. By changing the exemption qualifications there will be a dramatic increase in the number of salaried employees who are entitled to overtime pay. It is estimated that these proposed changes will qualify approximately 4.6 million more employees nationally for overtime if the proposed rule is adopted.
What Comes Next?
By possibly changing the rules as to who qualifies as exempt vs. non-exempt from overtime, in regards to the income threshold for salary exempt status being raised; many employers are sure to be exposed to further FLSA cases. Now is the time to review your employee’s exemption classifications and to prepare to look into your compensation plans for your exempt employees, especially those who are salaried exempt making less than $970 a week.
We urge you to review the following:
DOL Press Release on the NPRM at http://www.dol.gov/whd/overtime/NPRM2015/
The Wage and Hour Fact Sheet at http://www.dol.gov/whd/overtime/NPRM2015/factsheet.htm
The FAQ’s regarding the Overtime NPRM at http://www.dol.gov/whd/overtime/NPRM2015/faq.htm
As always, HR Strategies is here to answer any questions or concerns that you have regarding the NPRM or other aspects of the FLSA and Wage & Hour. You may contact us at 770-339-0000.