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Archive for the ‘Employment Law Blog – GA’ Category

DOL Releases New Overtime Rule And Increases Minimum Salary To $35,568

Posted on: September 30th, 2019

By: Brad Adler

On Tuesday, September 24, 2019, the U.S. Department of Labor released its long-awaited new minimum salary threshold for the Fair Labor Standards Act’s white collar exemptions (i.e., executive, administrative and professional exemptions).  Under the new rule, which is set to take effect on January 1, 2020, the DOL has set the minimum salary threshold at $684 per week, or $35,568 per year (up from $23,660).  The DOL anticipates that the updated threshold will expand overtime pay obligations to an estimated 1.3 million additional workers.

Commenting on the new rule, acting U.S. Secretary of Labor Patrick Pizzella stated: “For the first time in over 15 years, America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans. . .This rule brings a commonsense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers.”

Here are the highlights of the new rule:

  • The minimum salary threshold will be $684 per week, which equates to $35,568 per year.
  • Employers will still be able to use a nondiscretionary bonus, incentive pay or commissions to satisfy up to 10% of the standard salary level for the white collar exemptions (and the highly compensation exemption)
    • A one-time “catch-up” payment of up to 10% of the total standard salary level may be made within one pay period falling at the end of the 52-week pay period for those employees who have not earned enough to maintain their exempt status.
  • The highly compensated employee exemption’s additional total annual compensation requirement will increase to $107,432 per year.
  • The new rule did not make any changes to the duties test of the white collar exemptions
  • There are no automatic increases included within this new rule

Finally, while it seems inevitable that employee advocate groups are going to challenge the threshold, which they wanted to see much higher, we still believe it makes sense for employers to prepare for this new rule now.  As a part of their preparation, employers should be assessing whether they have employees they are classifying as exempt, but are making less than the new $35,568 requirement.  If so, employers need to decide whether to increase the employee’s salary, convert the employee to a non-exempt employee paid on an hourly basis or consider use of the fluctuating workweek method.

Please reach out to Brad Adler (Chair of FMG’s National Labor & Employment Practice Group) at [email protected] if you have any questions or need any assistance in navigating the new overtime rule.

EEO-1 Portal for Pay and Hours Data to Open July 15, 2019

Posted on: July 2nd, 2019

By: Brent Bean

The EEOC reported last week that its Portal for receiving Component 2 information, employee pay and hours worked data, will open on July 15, 2019. The deadline for submission of this information by covered entities is September 30 of this year. Companies with 100 or more employees, along with federal contractors who employ 50 or more employees, are covered and are required to submit to the EEOC annual Employer Information Reports, so-called EEO-1 reports. These reports disclose information concerning the number of employees a company employs broken down by job category, race, sex, and ethnicity, known as Component 1 information. Following a recent ruling in National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019), the Commission will now begin collecting pay and hours worked data, Component 2 information.

FMG will keep you updated on activity by the Commission and the Courts.  Employers should prepare now with a thorough review of their pay structures in order to identify not only any disparities that may draw increased scrutiny, but also to discern the legitimate, non-discriminatory reasons which exist for their present pay practices. Again, the deadline for submission of Component 2 information is September 30.

If you have any questions or would like more information, please contact Brent Bean in the Labor & Employment Practice Section at [email protected].

Discrimination Without A Difference: Supreme Court To Decide Whether Section 1981 Requires “But For” Causation Or Whether Same-Decision Defense Applies

Posted on: June 24th, 2019

By: Michael Hill

The U.S. Supreme Court is poised to answer the question of where to draw the line when a decision is motivated in part by race discrimination. Must the plaintiff show the decision would not have been made but for his or her race, or is it sufficient to show that race was one factor behind the decision, even if the same decision would have been made for other, race-neutral reasons?

The case at issue, Comcast Corp. v. National Assoc. of African American-Owned Media, is not actually an employment discrimination case, but the Supreme Court’s decision will impact the realm of employment law because of the statute at issue, 42 U.S.C. § 1981 (“Section 1981”), prohibits race discrimination in making and enforcing contracts (which includes employment contracts).

The issue is whether Section 1981 requires “but for” causation, or whether a “mixed motive” analysis can be used. In Comcast, an African American-owned television network operator sued the cable company, alleging Comcast’s refusal to contract with the networks was racially motivated. The federal district court in California dismissed the case three times at the pleading stage, holding the complaints failed to allege facts to show Comcast had no legitimate business reasons for its decision not to contract with the networks. On appeal, a three-judge panel at the Ninth Circuit Court of Appeals unanimously reversed, holding a Section 1981 claim can proceed as long as race is alleged to have been one factor in the contract decision, even if there were other, race-neutral factors that would have led to the same decision.

The Supreme Court’s decision in Comcast will have a significant impact on the amount of damages available in cases alleges race discrimination in employment. Race discrimination claims under Section 1981 frequently are pled in tandem with Title VII of the Civil Rights Act. Title VII was amended in 1991 expressly to allow for “mixed motive” claims, but the only forms of relief available under a Title VII “mixed motive” claim are declaratory relief and attorney’s fees – no damages, back pay, or right to reinstatement. The language of Section 1981, however, contains no such limitation. Also, unlike Title VII, damages under Section 1981 are not capped; the statute of limitations is longer; and there is no requirement to submit the claim to the EEOC before suing in court. Thus, if the Supreme Court rules that Section 1981 covers “mixed motive” claims (and not just claims of “but for” discrimination), then claims alleging “mixed motive” race discrimination could become more valuable (and thus more costly to defend).

If you have questions or would like more information, please contact Michael Hill at [email protected].

Did You Really Terminate That H-1B Employee?

Posted on: May 21st, 2019

By: Layli Eskandari Deal

U.S. Department of Labor Awards $43,366 Back Pay to Engineer.

In January, a Microfabrication Engineer, employed under the H-1B visa program by Minnesota-based TLC Precision Wafer Technology, Inc., was awarded $43,366.67 in back wages and interest after an investigation by the Department of Labor’s Wage and hour Division.

The employment began in October 2008 under the H-1B visa program. After a downturn in business, the company began experiencing financial difficulties. In a letter dated November 16, 2008, TLC notified the Engineer that he would be laid off effective immediately. However, TLC continued to employ the Engineer until January 2009, at which point he was advised by email that his hours would be reduced to part-time. The Engineer resigned his position in February 2010 and in the same month filed a complaint with the Department of Labor’s Wage and Hour Division alleging that the company had failed to pay him the required wage.

Department of Labor Regulations set the wage requirement employers must meet in employing H-1B workers. Employers must pay the H-1B employee the greater of the prevailing wage for the occupational classification or the amount they pay other employees with similar experience or qualification. The H-1B employee must be paid beginning on the date that they “enter into employment” with the employer. This condition occurs when the employee becomes “available for work or otherwise comes under the control of the employer, such as reporting for orientation or training.” H-1B employees must be paid the required wage even if they are not performing work and are in nonproductive or idle status.

In the instance case, the Administrative Law Judge found that TLC was obligated to pay the Engineer $43,000 per year starting in October 2008 until his departure in February 2010.

How can employers limit exposure?

U.S. Citizenship & Immigration Services (USCIS) regulations address the employer’s obligations with regard to material changes to H-1B employment.

  1. Employer must notify USCIS immediately of any changes in the terms and conditions of employment which may affect eligibility under the H-1B regulations. This includes changes in position or duties, changes in job location, changes in any condition of employment such as going from full-time to part-time status.
  2. If the employer no longer employs the H-1B worker, the employer must send a letter to USCIS indicating the termination of employment. DOL considers such communication to USCIS to effectively terminate the employer’s wage obligation.

It is clear that DOL will look at the actions of the employer and communication with USCIS to determine whether the employer has abided by rules governing the employment of H-1B workers.  It is vitally important for employers to be familiar with the rules and timely communicate with USCIS when dealing with changes in employment status of foreign national employees.

For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws, you may contact Layli Eskandari Deal of the law firm of Freeman Mathis & Gary, LLP at (770-551-2700) or [email protected].

 

And The Saga Continues… EEO-1 Pay Data Likely Due September 30, 2019

Posted on: April 26th, 2019

By: Brad Adler and Brent Bean

As we have previously reported, in 2016, the EEOC adopted additional EEO-1 pay data collection requirements commanding employers to report employee wages and hours worked by race, ethnicity and sex. By way of background, companies with 100 or more employees, along with federal contractors who employ 50 or more employees, have long been required to submit to the EEOC annual Employer Information Reports, so-called EEO-1 reports. These reports disclose information concerning the number of employees a company employs broken down by job category, race, sex, and ethnicity. But with the additional pay data collection requirements, pay data also must be sorted by race, ethnicity and sex.

In August 2017, the Office of Management and Budget announced a stay of this pay data collection requirement, citing the burden imposed on businesses. In response, the National Women’s Law Center brought suit in the District Court for Washington, D.C., challenging the OMB’s basis for taking that action and seeking to reinstate the pay data collection.

On March 4, 2019, that court ruled that the EEOC must reinstate the pay and work hours reporting component of the EEO-1 Report. See National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019). Since that ruling (which was a blow to employers and a surprise to everyone, including the EEOC), the EEOC and the plaintiffs have been battling with each other (and the Court) over the timeline for collection of this data.

The same District Court judge has now ruled that the EEO-1 pay data (sorted by race, ethnicity and sex) must be collected from covered employers by September 30, 2019.  The Commission advises that the portal will be open for pay data by July 15, 2019. As such, it is advisable that covered employers prepare now to submit 2018 pay data by September 30, 2019. Be advised, however, that reporting of customary EEO-1 data for 2018 is still due by May 31, 2019.

While there remains the option of an appeal of the District Court’s order, such an appeal may, or may not, have the effect of staying compliance with the order. As a result, we advise employers to start now in preparing for submission of the required pay data. In doing so, employers should work with outside counsel to identify any disparities that may draw increased scrutiny and to understand what legitimate, non-discriminatory reasons exist for their present pay practices.

FMG will keep you updated on activity by the Commission and its actions (and reactions) on this continuing saga.

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Brent Bean at [email protected].