The Biden Cabinet and other federal agencies are moving forward to act prior to the upcoming election to enact some employee-friendly rules that employers should start preparing for now. The US Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Commission are all poised to move and change existing standards that will affect all employers.
The US Department of Labor (DOL) has proposed a rule concerning overtime regulations that will affect employers who classify employees as exempt under one of the overtime exemptions, thus making them ineligible for overtime pay. For an employee to be classified as exempt they must be paid a minimum salary ($35,568 under current federal law) and meet a duties test. The DOL has proposed increasing the minimum salary (anywhere from $50s to $80s have been heard by those in the know) and there may be big changes coming to the duties test as well, slashing the number of your employees who can be qualified as exempt and putting you on the hook for more overtime than ever before.
Employers have currently been relying on the Trump administration’s two factor test to determine whether a worker is an employee or an independent contractor: the degree to which the worker has control over the work and whether the worker can realize a profit or loss. The DOL will soon issue a final rule on its new test, which may look vastly different. Employers would be forced to use a “totality of the circumstances test,” which would come out in favor of employee status much more frequently.
The National Labor Relations Board has already issued a proposed rule which, when finalized, would make two employers joint employers if “they share or co-determine those matters governing employees’ essential terms and conditions of employment.” This increases the odds of joint employment being found for franchise operators and temporary or staffing agencies, which would require many employers to change the fundamental nature of their operations.
The EEOC is likely to resume its push to collect pay data that was shelved in 2019, creating another administrative burden on employers. Other EEOC initiatives include investigating and regulating corporate Diversity, Equity, and Inclusion (DEI) programs.
All federal agency rules are subject to court challenges, but employers are expected to comply as of the effective date of the rule, regardless of whether the rule is winding its way through the justice system. Following rules that favor labor can pose a hardship for a company, but failure to comply could be disastrous.
Are you more confused than ever about these changes? You are not alone. Do these changes really affect your business? Yes, they really do. Do you need to do anything about it? Yes, you need to make sure you have legal complaint policies that reflect these changes, so you avoid investigations from the DOL and EEOC. Be assured that your employees will be keeping an eye on these changes and if not administered correctly (i.e., legally), you can expect employee claims that will be extremely costly.
The good news is that you already know someone who can help. myHRcounsel will walk you through all the changes, our attorneys will personally draft legal policies specifically for your company and will answer any questions that you have regarding these and other HR/Employment issues. For information on how myHRcounsel can protect your business from monumental employment pitfalls, visit www.myhrcounsel.com/packages or contact us at email@example.com.
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