The U.S. Department of Labor (“DOL”) released the final version of its highly anticipated Fair Labor Standards Act overtime and minimum wage exemption rule, setting qualifications for exemption at an annual salary of $35,568. The final rule is effective January 1, 2020.

Change is Coming 

Under the new rule, the salary level threshold will increase from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). The increase is in between the current threshold last updated during the Bush administration in 2004 ($23,660) and the increase proposed by the Obama administration in 2016 ($47,476). The DOL estimates 1.2 million currently exempt workers will be eligible for overtime as a result of this increase.

Other changes include:

• Increasing the salary threshold for the so-called “highly compensated employees” from $100,000 to $107,432; and

• A commitment to periodically review the salary threshold, using the notice-and-commenting rulemaking process every four years.

The DOL has indicated that industries most likely to be affected by the new rule are education, wholesale and retail businesses, and businesses that provide professional services.

The rule does not make any changes to the job duties test.

Decisions, Decisions, Decisions 

Employers have until January 1 before the new rule takes effect, forcing quick decisions about employees whose salaries will be below the new threshold and, without any modification, would automatically lose their exempt-status.

It is possible that pro-employee groups will challenge the new rule in court. The Obama administration’s 2016 overtime rule was litigated by business groups, management-side lawyers and workers’ advocates in court.

Stay tuned!

On September 12, 2019, the Equal Employment Opportunity Commission (“EEOC”) published a formal notice in the Federal Register that it does not intend to renew collection of EEO-1 Component 2 pay data at this time. The EEOC is pausing the requirements after discovering it severely miscalculated the cost burden to employers of collecting the data. The EEOC initially estimated that the annual burden costs for employers to collect Component 1 and Component 2 data would be $53.5 million; however, after reviewing and updating its methodology the EEOC determined the actual burden would be roughly $614 million. The EEOC has a duty to balance the utility of the data to its enforcement programs against the burden the data collection imposes on the employers who must submit it. The EEOC concluded that the benefit of collecting the Component 2 data utilizing the EEOC’s current methodology for collection is outweighed by the cost of the burden imposed on employers.

What does this mean for employers?

Required filers must still submit EEO-1 Component 2 data for 2017 and 2018 by September 30, 2019. Recall that this includes wages and hours worked for all employees by race, ethnicity and sex. However, employers will not be required to submit Component 2 data for future years unless the EEOC resumes the requirements or a lawsuit is brought against the agency to enforce the requirements.
Also, note that the EEOC explicitly stated that it plans to continue collection of Component 1 data. Therefore, required filers will have to continue filing Component 1 data in future years.

On Thursday, Governor Andrew Cuomo signed several pieces of legislation that bolster New York’s growing workplace protections.

These laws will be implemented over the course of the next year. They will:

• Increase protections for employees who are members of protected classes as well as for those who have been sexually harassed;

• Prohibit nondisclosure agreements in discrimination cases, preventing employers from effectively silencing their employees;

• Prohibit mandatory arbitration provisions in discrimination cases, allowing employees to bring a claim and have it reviewed outside of their employer and potentially have their day in court;

• Require employers to give notice to employees regarding their sexual harassment prevention training programs in English and the employees’ primary languages, ensuring employees comprehend available resources;

• Extend the statute of limitations to three years for claims resulting from unlawful or discriminatory practices constituting sexual harassment;

• Require review and update of the model sexual harassment prevention guidance document and sexual harassment prevention policy; and

• Eliminate the strict “severe or pervasive” standard required to show that sexual harassment occurred;

• Eliminate the employer’s affirmative defense to avoid liability (requiring employees to follow the proper procedure for addressing a sexual harassment claim or else be prevented from moving forward with a claim);

• Broaden New York’s law to cover all employers of the state;

• Allow for punitive damages and attorney’s fees in employment discrimination cases; and

• Direct the commission of labor to run a study on strengthening sexual harassment prevention laws.

• Prohibit nondisclosure agreements from barring the disclosure of facts surrounding the discrimination case to particular parties.

Check out our recent blogs covering changes to New York laws and stay tuned for more:

Updates to the New York anti-harassment and anti-discrimination laws

New York City releases guidance on race discrimination on the basis of hair

Sweeping sexual harassment laws in New York

Carmody Torrance Sandak & Hennessey LLP will hold a training session for supervisors on Thursday, September 12th on the prevention of sexual harassment in the workplace. The program will be presented from our Waterbury office, but individuals may also participate by video conference in our New Haven and Stamford offices. Registration starts at 8:15 a.m. and the program begins at 8:30 a.m. The fee is $75 per person and includes a continental breakfast.

Connecticut law requires employers with 50 or more employees to provide sexual harassment training for supervisory employees. State law also requires that new supervisors receive this training within six months of assuming their positions. New York law requires employers with 15 or more employees to provide sexual harassment training. Our training session meets Connecticut and New York State requirements for supervisory employees. We will inform supervisors on how to identify and handle incidents concerning sexual harassment. We also will outline steps employers can take to assert and defend their rights against challenges of harassment.

We offer this training session in response to your requests for an efficient way to ensure that all of your supervisory personnel are in compliance with the law. We will provide written confirmation to your attendees upon completion of the session. If you or your supervisors are unable to attend this session, we can provide customized on-site training upon request.

Click here to register!

If you have any questions, please contact any member of the Carmody Labor and Employment Practice Group for more information:

D. Charles Stohler
(203) 575-2626; cstohler@carmodylaw.com

Giovanna T. Weller
(203) 575-2651; gweller@carmodylaw.com

Domenico Zaino, Jr.
(203) 578-4270; dzaino@carmodylaw.com

Alan H. Bowie
(203) 784-3117; abowie@carmodylaw.com

Maureen D. Cox
(203) 575-2642; mcox@carmodylaw.com

Stephanie E. Cummings
(203) 575-2649; scummings@carmodylaw.com

Vincent Farisello
(203) 578-4284; vfarisello@carmodylaw.com

Sarah S. Healey
(203) 578-4225; shealey@carmodylaw.com

Howard K. Levine
(203) 784-3102; hlevine@carmodylaw.com

Mark F. Williams
(203) 575-2618; mfwilliams@carmodylaw.com

Holly G. Wheeler
(203) 784-3158; hwheeler@carmodylaw.com

Carmody Torrance Sandak & Hennessey LLP is excited to announce Lauren M. Hopwood as a new Partner practicing immigration law in the New Haven office.

Lauren represents clients in a variety of industries, including the health care, science, financial services, information technology and educational sectors. She has extensive experience in a wide variety of business immigration matters, including nonimmigrant and immigrant visa petitions. She counsels employers on immigration considerations in the hiring context, including I-9 compliance and E-Verify. Lauren also regularly advises clients on immigration due diligence and compliance arising from mergers and acquisitions.

If Lauren may be of legal service to you, please contact her at (203) 784-3104 or lhopwood@carmodylaw.com.

Last week, the National Labor Relations Board (“Board”) announced that it had proposed three rules aimed at protecting employee free choice on questions concerning representation. These rules address the NLRB’s blocking charge policy, voluntary recognition, and collective bargaining in the construction industry.

  • Blocking Charge Policy. Generally, the Board suspends the processing of an election petition if an unfair labor practice charge is filed alleging that a party coerced workers to vote a certain way. Under the proposed rule, the Board would institute a “vote-and-impound” procedure where it would no longer pause the election and instead would seize the votes until the charges are resolved.
  • Voluntary Recognition Bar. Currently, a union that has been voluntarily recognized by an employer as a bargaining representative cannot have its status challenged during a “reasonable period” for bargaining, which is defined as six months to a year.  Under the proposed rule, the Board would return to the standard articulated in the Dana Corp.  Under this standard, employees and rival unions would be given a 45-day window after voluntary recognition to either file a decertification petition or election petition respectively before the voluntary recognition bar period takes effect.
  • Section 9(a) Recognition in the Construction Industry. Section 9(a) of the National Labor Relations Act (the “Act”) covers most unions and requires that unions obtain support from a majority of workers, which is usually obtained by a vote. However, the construction industry is unique in that Section 8(f) of the Act allows unions and employees in the construction industry to enter into “pre-hire” agreements before the union achieves majority status.  This is usually done for short-term construction work on a project.  The proposed rule would overrule a decision titled Staunton Fuel which held that a full-fledged Section 8(f) bargaining relationship can transition to a Section 9(a) bargaining relationship based on the contract language alone.  The Board’s proposed rule would require a construction union to show “extrinsic evidence” of a majority of support and will no longer allow the union to rely on contract language alone.

Board Chairman Jonathan Ring is a proponent of using the rulemaking process to change Board Rules.  For example, the Board proposed a new rule to overturn the current joint employer rule last year.  Based on his support, we can expect the Board to continue to use the rulemaking process in the future.

If you are interested in commenting on any of these proposed rules you can do so here until October 11, 2019.

The U.S. Department of Labor’s Wage and Hour Division has announced proposed changes to the information forms used by employers in the administration of the Family and Medical Leave Act (FMLA). Qualification for FMLA leave requires disclosure of information to employers and employees about their FMLA rights and it also requires collection of information to determine whether FMLA leave is applicable. The proposed changes include the following:

  • Questions requiring written responses replaced by statements answered by checkboxes
  • Reorganized medical certification forms to expedite determination of seriousness of health condition
  • Reduce follow-up information required of health care providers
  • Added details on notification forms to communicate leave conditions to employees
  • Clarification to qualifying exigency certification form noting what information is required
  • Changes to military caregiver leave forms for consistency and ease
  • Formatting changes to improve readability

The public has a 60-day comment period on the proposed revisions before they can go into effect.

Stay tuned!

Please save the date for our 2019 Annual Labor and Employment Seminar on Friday, October 18th at the Aqua Turf Club in Plantsville, CT. This year’s seminar is particularly important because of new Connecticut laws that affect all employers.

Schedule of Events:

8:00 a.m. Registration and Networking Breakfast
9:00 a.m. Program
12:30 p.m. Lunch

For more information, please click here.

On August 1, 2019, the United States Senate voted to confirm Attorney Sharon Gustafson as the General Counsel of the Equal Employment Opportunity Commission (“EEOC”) and Obama-era appointee Charlotte Burrows to another four-year term on the Commission.  General Counsel Gustafson was sworn into her position today (August 8, 2019).

EEOC Confirms New General Counsel

The EEOC now has its first General Counsel in over two years.  The position had been vacant since Obama-era General Counsel David Lopez resigned in late 2016.

General Counsel Gustafson practiced employment law in Virginia for nearly 25 years, having represented both employers and employees.  Gustafson is most known for representing the plaintiff, Peggy Young, before the United States Supreme Court in Young v. United Parcel Service.  In that case, the Supreme Court held that employers were required to provide reasonable accommodations for pregnancy and related conditions in certain situations.

As General Counsel, Gustafson will be responsible for determining which cases the EEOC will bring on behalf of former and current employees and will issue guidance clarifying the EEOC’s position on importance issues of employment law.

EEOC Regains A Quorum With Confirmation of New Member

After confirming Charlotte Burrows to another four-year term, the EEOC has regained a quorum.  By way of background, the EEOC is a commission comprised of five presidentially appointed members including a Chair, Vice Chair, and three Commissioners. A quorum, meaning three of five members, is necessary for the EEOC to make any important decision.  Prior to Burrows’ confirmation to another term, the EEOC was functionally down to two members (Chair Janet Dhillon and Commissioner Victoria Lipnic.)  Now, the EEOC again has enough members to make important decisions, however, there are still two vacancies.

President Trump recently nominated United States Department of Labor Wage and Hour Division Deputy Administrator Keith Sonderling to fill one of the remaining commission vacancies.

We will keep you updated as the EEOC continues to fill its leadership positions.

A year ago, the California Supreme Court’s Dynamex ruling complicated the classification of workers as independent contractors. Employers are still trying to determine how the decision affects them, especially as the decision did not address whether it applied retroactively.

In April 2018, the California Supreme Court ordered courts to apply the strict “ABC test” to job misclassification claims, putting pressure on businesses to show that workers must provide services distinct from their core business in order to be classified as contractors. Typically, employees cost businesses more and have more protections than those of a contractor. As a result, classifying a worker as an independent contractor can be more appealing to businesses.

To prove a worker is an independent contractor under the ABC test, a company must show that the worker (1) is free from the company’s control, (2) performs work outside the company’s usual business, and (3) separate from their work for the company, is regularly working in the trade they have been hired to work.

As a result of this ruling, California employers have been left wondering whether they should reclassify independent contractors as employees. Additionally, the decision did not clarify whether it applied only to cases brought after the 2018 decision or whether it would also apply retroactively to claims as far back as four years. In late July, the Ninth Circuit issued an order stating that it would ask the California Supreme Court to determine whether the ABC test applies retroactively. Simultaneously, in the California legislature, Assembly Bill 5 is under consideration. That bill would codify the ABC test. Business are fighting to add many exemptions to the bill. The next few months will be pivotal in California as the courts and legislature could change the standard for worker classification.

Stay tuned!