<![CDATA[Palmer Law pllc - Blog]]>Thu, 21 Dec 2023 09:16:19 -0600Weebly<![CDATA[Alert: Federal Contractors Will Have to Provide Paid Leave]]>Thu, 01 Oct 2015 20:21:52 GMThttp://www.palmerlawpllc.com/blog/alert-federal-contractors-will-have-to-provide-paid-leaveOverview
Beginning January 17, 2017, employers signing new federal contracts will provide employees up to seven (7) days of paid sick leave per year.   President Obama signed the new Executive Order setting the requirement on September 7, 2015. The Department of Labor is responsible for rulemaking and employers should anticipate that there will be a Notice of Proposed Rulemaking and a 60-day period for public comments.  The Department of Labor is expected to issue implementing regulations by September 30, 2016

The Executive Order applies to federal contractors and to subcontractors at all levels (this includes a subs’ sub, and that subs’ sub, etc.).  Prime contractors and subcontractors must flow down the new sick leave requirement in all subcontracts.

The order does not displace state and local laws.  Employers should be mindful of the state and local laws of the jurisdictions in which they operate.  Examples of jurisdictions with such rules include California, Massachusetts, Washington, D.C., New York City, and Philadelphia.

How the Paid Sick Leave Works
The Executive Order requires that federal contractors offer at least 56 hours of paid sick leave to their employees each year. The paid sick leave will accrue based on hours worked.  Employees will earn one hour of paid sick leave for every 30 hours worked until they reach 56 hours (7 days) of paid leave.

Unused paid sick leave will carry over from one year to the next. 
The Executive Order does not require employers to pay out accrued but unused sick leave when an employee leaves the job.  But, if a worker leaves and is rehired within 12 months, the contractor must reinstate any leave that was lost at the time worker left.

Employees may use the paid sick leave for various reasons including:
  • to seek treatment for their own or a family member's (such as a child, parent, spouse, domestic partner or another loved one) physical or mental illness or injury;
  • to obtain a diagnosis or preventive care for themselves or a family member; or
  • to cover their own absences resulting from domestic violence, sexual assault or stalking.

Leave requests do not have to be formal; oral requests are allowed. 

Employees should give notice as soon as practicable, and when possible give a seven (7) day notice.  Employees must include the expected duration of the leave.  For leaves three or more consecutive workdays, the employer can require a medical certification of the need for absence.

Employers cannot make the leave dependent on the employee to find a replacement to cover his shift or work. 

The Executive Order states that employers may not interfere with or in any other way discriminate against employees for taking paid sick leave, but it does not set up a private right of action.

Further Consideration.
Employers should make sure they understand whether they are federal contractors (learn more about Federal Contractors) and that they understand the rules the Department of Labor ultimately issues.  And, contractors not immediately affected should remain mindful of the potential future application of the rules to them.  For instance, they may eventually enter into new contracts that are covered.   
 
The new rules set a minimum.  The rules do not preclude granting more paid leave, accruing all the paid leave at once at the start of the year (rather than accruing by hours worked), or paying out unused leave when an employee leaves.
 
Employers should evaluate their policies to ensure that there have clear, written policies in place establishing how much and how leave will accrue and how it will be treated on exit.

Finally federal contractors likely will start analyzing the effect on cost structure and pricing so that they determine whether they can include pricing strategies to recoup the anticipated costs of compliance.

]]><![CDATA[DOL Increases Focus on Misclassified Independent Contractors]]>Sun, 19 Jul 2015 21:01:05 GMThttp://www.palmerlawpllc.com/blog/dol-increases-focus-on-misclassified-independent-contractors
In Administrator's Interpretation No. 2015-1 (the "Interpretation"), the Department of Labor (the "DOL"), provides guidance on determining whether a worker should be classified as an employee rather than a independent contractor. The DOL's new guidance emphasizes that most workers should be classified as employees rather than independent contractors. 

The Interpretation outlines the DOL's view that worker misclassification is not harmless. Rather, the DOL notes that improper classification risks important workplace protections like minimum wage and overtime compensation under the Fair Labor Standards Act (the "FLSA"), unemployment insurance, and workers’ compensation. The DOL also points to other consequences like reducing tax revenues and an uneven playing field for employers who follow the rules. 

The DOL uses the economic realities test to focus analysis on whether the worker is economically dependent on the employer or in business for himself.  The economic realities test evaluates six factors: 

  1. is the work performed integral to the employer’s business; 

  2. does the worker’s managerial skill affect his opportunity for profit or loss; 

  3. is the engagement on a permanent or indefinite basis;  

  4. does the worker have a relatively minor investment as compared to the employer’s investment;  

  5. does the worker exercise business skills, judgment, and initiative in the work performed; and 

  6. whether the worker has control over meaningful aspects of the work performed. 

No one factor is determinative, and the factors must be considered in relation to one another and in totality.  The ultimate decision is made on a qualitative rather than a quantitative basis and is guided by the overarching principle that the FLSA should be liberally construed to provide broad coverage for workers.  The DOL notes that courts have described independent contractors as those workers with economic independence who are operating a business of their own.  The DOL's view of classification means that workers who are economically dependent on the employer, regardless of skill level, are employees covered by the FLSA.  

Allegations of worker misclassification may create problems for employers, including DOL investigations, enforcement actions, and private litigation. Independent contractor relationships are under increasing scrutiny.  Employers should closely review independent contractor relationships, agreements, and their practices to determine the extent of the risk and any need to re-evaluate worker classifications.

]]><![CDATA[Department of Labor Proposes New FLSA Rules]]>Sun, 05 Jul 2015 15:13:32 GMThttp://www.palmerlawpllc.com/blog/department-of-labor-proposes-new-flsa-rules The Fair Labor Standards Act (FLSA) applies to most employers, sets a federal minimum wage, and  requires overtime pay for working more than 40 hours in a week.  The FLSA allows employers to claim exemptions for bona fide executive, administrative and professional employees. The Department of Labor (DOL) sets rules to interpret the FLSA.  On Tuesday, June 30, 2015, the DOL proposed new rules that would affect is anticipated to significantly affect the number of employees who are protected by FLSA minimum wage and overtime requirements.

Current Rules
"White collar" exemptions require both a predetermined minimum salary and job duties that meet the executive, administrative or professional duties tests.

Under current regulations, employers must pay the exempt employee at least $455 per week ($23,660 per year). This wage is below the federal government's 2015 poverty threshold for a family of four.  Poverty guidelines are set by the United States Department for Health & Human Services.

An employer can claim an exemption for highly compensated employees who earn at least $100,000 in total annual compensation, if it can also meet a less onerous duties test.

Proposed Rules
The DOL’s proposed rule focuses on creating indices that allow the salary threshold to move with a changing economy.  The indexing mechanism allows for increases in required minimum salary levels in an effort to make sure the exemption thresholds stay current over time.  The indexing may be done by tying it to the Consumer Pricing Index or by tying it to federally calculated percentiles of weekly wages.

The proposed rules would limit the standard white collar exemptions to employers who pay at least the 40th percentile of weekly wages for all full-time salaried employees, or approximately $970 per week ($50,440 per year).

The proposal would also change the salary threshold for highly compensated employees to the annualized value of the 90th percentile of weekly wages of all full-time salaried employees ($122,148 per year).

The DOL is accepting comments on the proposed rules.  In addition, other proposed rules may be coming, including rules regarding the duties tests and percentage of time spent on primary duties (this may affect the treatment of managers who also perform some non-exempt work) and rules regarding the treatment of nondiscretionary bonuses and incentive payments toward satisfying the salary test.
Preparing for Change
The proposed regulations are not final and may change.  Employers can evaluate how the proposed salary threshold will affect their current classifications of employees, and the employers pay scales, overtime cost estimates, wage budgets, and bottom lines. For example, employers can immediately review current salaries to determine whether and how many exempt employees would fall under the proposed salary threshold and therefore no longer qualify for exemption, the estimated costs of such conversion, and the estimated cost of raising wages to the threshold minimum. 
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