Lunch & Learn 2020 Employment Law Update
We’re always so grateful to Amy Beckstead of Beckstead Terry PLLC for leading our annual Employment Law Update Lunch & Learn. The event this year had record attendance, and it’s no wonder: Plenty has happened when it comes to employment law for 2020, from a new overtime ruling to a shifting stance on joint employment to dozens of other federal, state and local issues. Below are some of the significant issues affecting employers that Beckstead recommends you take a close look at right now.
New Federal Overtime Rules
The U.S. Department of Labor (DOL) issued new final regulations surrounding an increased salary basis test for federal overtime pay. An estimated 1.3 million workers are newly eligible for overtime. Non-exempt employees can now make up to $684/week ($35,568/year), and the definition of a “highly compensated employee” has now increased to $107,432/year (up from $100,000).
“There’s no change in the duties test to determine who is exempt, but there are other changes that can affect how you might want to pay employees, particularly those close to the threshold,” Beckstead explained, outlining two in particular:
- The allowance of nondiscretionary bonus and incentive payments (including commissions) to satisfy up to 10% of the standard salary level.
- “Catch up” payments for employees who do not earn enough in nondiscretionary bonuses and incentive payments (including commissions) in a 52-week period to retain exempt status.
“The good news continues with a long list of reimbursements and perks that are newly excluded from the ‘regular rate’ calculation,” Beckstead added. Those include the cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance. Certain sign-on bonuses and longevity bonuses can be excluded, too.
DOL Joint-Employer Changes
To clear up confusion about what constitutes a joint-employer relationship (including relationships between employers and their staffing partners), the DOL issued a final rule that, if nothing else changes, will be effective March 16, 2020. This new ruling includes what’s called the “four-factor balancing test” and places certain employer responsibilities on an entity based on whether or not it:
- Has the ability to hire or fire the employee.
- Supervises and controls the employee’s work schedules or conditions of employment to a substantial degree.
- Determines the employee’s rate and method of payment.
- Maintains the employee’s employment records.
“No single factor is an absolute positive,” Beckstead stated. “You have to actually exercise control over that person to be considered a joint employer, which is much more favorable than the regulations and opinions coming out of the DOL just a few years ago.”
She pointed out that franchisors can benefit from these changes because the new DOL rules provide that franchisor status does not make joint employment status more or less likely. She said it also clarifies that if you—as a contracting business—require certain terms and conditions relating to employees of another company (such as requiring a subcontracting company institute sexual harassment policies), that does not increase the likelihood that you’ll be deemed a joint employer.
But, warned Beckstead, do keep in mind that this is the DOL’s ruling as it pertains to the Fair Labor Standards Act (FLSA). The National Labor Relations Board (NLRB) will be coming out with its own joint employer updates soon, “which I suspect will largely mirror the DOL’s. But the key thing to remember is to not work with a ‘fly by night’ company that may be a joint employer that is not following the law,” she said. “It’s important to make sure to utilize a staffing company that is established and reputable. If there is joint employment status between your company and the staffing company, you need to make sure the staffing company has done everything right.”
Other Legal Changes to Note
Beckstead identified other changes to investigate further, depending on your industry and where your employees live and work. These include paying attention to:
- DOL opinion letters: The DOL returned to publishing opinion letters in 2018 and has since released a few critical topics including overtime pay with certain bonuses, independent contractors who do “gig work,” employer-sponsored community service, paralegals who meet the highly compensated employee exemption, and even how to round time for hourly workers.
- Minimum wage increases: Texas is sticking to the federal minimum wage for now but, across the country, an increasing number of states, cities and counties are raising rates on their own.
- NLRB-related blanket rules: Company policies with blanket rules might interfere with National Labor Relations Act Section 7 rights, including those that prohibit employees from making disparaging or negative remarks about the company, criticizing their employer, making false or inaccurate statements, and more.
- New W-4 forms: New employees must use newly designed W-4s. The most significant change in these forms: There are no more allowances. Appropriate deductions are determined based on answers to a questionnaire.
- Paid sick leave: Austin and San Antonio’s paid sick leave laws remain enjoined, but jurisdictions around the country—including Dallas—are passing their own rules, so pay attention to changes that pertain to your workforce.
- New Texas statutes and regulations: There’s a new Texas Workforce Commission rule on “gig workers,” and the Texas Labor Code is now authorizing payroll card plans. Texas laws around breastfeeding at work and jury service protection have changed, too.
- Anti-harassment policies: Some states have increased or are planning to increase policy and training requirements around anti-harassment and related confidentiality and anti-retaliation issues. Again, be sure you’re aware of what’s happening in the jurisdictions that are home to your workforce.
And those are just a sampling of the changing laws for 2020. Beckstead recommends employers stay up to date on salary history bans, “ban the box” trends, Americans with Disabilities (ADA) and Family Medical Leave Act (FMLA) updates, arbitration agreements, and multi-state employee IP and non-compete matters as well. It’s a lot of stay on top of, and every employer’s situation is different.
Thank you, Amy Beckstead, for your tips and recommendations once again this year. And for staffing and search help from a reputable source, feel free to contact us.