iStock_000000901325XSmallOn June 30, 2015 the Department of Labor issued long awaited proposed regulations under the Fair Labor Standards Act (FLSA). The FLSA regulations have not been revised since 2004 when the salary level amount to be exempt was raised to its current amount of $455 per week or $ annually. The new proposed regulations seek to raise the salary level amount for an employee to be exempt to $970 a week or $50,440 a year by 2016. This is a significant increase which will mean that for the current white collar exemptions of executive, administrative, learned professionals and some computer employees, if they now make less than $970 a week, they will no longer be exempt under the white collar exemptions. They will therefore now be entitled to overtime for all those hours they work over 40 in a given work week.

Not only will this mean a significant amount that employers will now have to pay in overtime but it can also be viewed as almost a demotion by previously exempt employees. Employers will now be faced with either paying these employees overtime to which they were previously ineligible for or raising their salary level to more than $970 a week so that they will meet the three part test to be exempt under the FLSA.

This three part test requires that the employee be (1) paid on a salary basis, and (2) at a salary level now of not less than $970 a week and (3) that they meet the duties test set forth for each of the white-collar exemptions. The Notice of Proposed Rulemaking also sets forth that the proposed regulations would establish a mechanism for automatically updating the salary and compensation levels going forward each year to ensure that they will continue to provide a useful and effective test for exemption.

The DOL estimates that these proposed regulations could change the exempt status of close to five million white-collar workers within the first year of implementation. The rulemaking period includes extensive time for comments and revisions so employers should not expect that these revised regulations will be effective until at least the end of 2015 or early 2016. But one thing is for sure. Employers may soon be paying significantly more in overtime to close to five million currently exempt workers.

By:  Melissa Fleischer, Esq.


iStock_000012564637XSmallRecently, the U.S. Supreme Court issued its decision in Young v UPS. The case addresses the application of the Pregnancy Discrimination Act of 1978 (“PDA”) and the level of accommodations that must be provided to pregnant woman seeking to have modified duty because of temporary impairments or work restrictions (such as lifting limits). The Court determined that (under the law in place pre-2009) a pregnant employee may be affirmatively entitled to additional reasonable accommodations, regardless of whether she is technically “disabled” under the ADA, if other similarly limited employees receive such accommodations, even if an employer offers a facially “neutral” policy that does not differentiate against pregnant women specifically.
However, the Court also indicated that pregnant employees are not automatically entitled to the same degree of accommodation that others might be afforded for reasons that have specific justifications, such as seniority/tenure, rejecting Ms. Young’s position that pregnant women should be entitled to essentially a “most favored nation” status. The case was remanded for further consideration. Thus, this Supreme Court decision is a mixed bag for employers, neither validating UPS’s earlier approach (UPS has since revised its policy) nor determining that it was a violation.
It is important to view this ruling in the bigger context, because the ADA Amendments Act of 2008 (which went into effect in 2009) trumps any application of earlier law. The PDA remains in effect, but complying with it is not sufficient, where the ADA as amended is now more stringent. To comply with the 2008 Amendments, employers should recognize that they are required to provide accommodations to employees who need temporary accommodations (such as lifting restrictions), including pregnant employees, even where the cause of the restriction was not job-related. Thus, whether an employee cannot lift heavy items because of an injury playing basketball or because of being pregnant, the employer should make reasonable efforts to provide an accommodation just as much as if the injury happened while at work. Further, the EEOC’s interpretation of the current law, which takes a pro-employee stance in affording pregnant employees increased protection to retain their jobs, is entitled to deference.
Employers should also keep in mind that the Pregnant Workers’ Fairness Act is before Congress and could change the landscape yet again. Meanwhile, similar legislation and mandates, providing specific protections to employees based on pregnancy or childbirth, already have been adopted in numerous states and cities, including: California, Delaware, Hawaii, Illinois, Iowa, Maryland, Minnesota, New Jersey, West Virginia, Central Falls, New York City, Philadelphia, Providence, and Washington, DC. Other states, such as Alaska (for public sector employees), Connecticut, Louisiana, and Texas, also offer more limited rights for pregnant employees to be transferred to different positions.) Some of these laws and requirements have gone into effect recently, so businesses with employees in these locations should monitor developments carefully and check with legal counsel to make sure that their current approach is compliant.
The ultimate take-away here is that when employers offer benefits — such as light duty — to one group of employees, the companies should consider carefully whether they are required to provide those same benefits to pregnant employees also. The safer, advisable course would be to make the same accommodations available to pregnant employees unless there is a clear reason why it would not be feasible to do so and a defensible basis for the distinction that is not discriminatory. Even then, having a different approach will invite litigation and may therefore prove costly. It is important to have legal counsel review such employment policies and practices to assess exposure under federal, state, and local laws.

By: S. Adam Spiewak, Esq.

HR Consultant

HR Learning Center LLC


iStock_000000901325XSmallPresident Obama has announced that the DOL plans to address the “white collar” overtime exemption regulations and issue proposed rules soon. This could potentially affect the current overtime exemptions.

The last revision to this monetary amount required to be exempt occurred in 2004, when the rate was $250 a week. With the revisions that occurred in 2004 the rate almost doubled that $250 amount when it went to the current rate of $455.
To be exempt, an employee must meet a three-part test. This includes the following:

• the employee must be paid on a salary basis at not less than $455 per week which is equivalent to $23,660 annually
• the employee must be paid on a salary basis; AND
• the employee must meet the “job duties test”.
Thus, under the proposed regulations that will be issued the salary level test is expected to be changed to increase from $455 per week equivalent to $23,660 annually to a much higher figure such as $700 per week. If this occurs, obviously it will have the effect of including more people who are currently exempt and making them non-exempt because they do not meet this higher threshold. As non-exempt employees they will be entitled to overtime pay at the rate of time and a half for all those hours they currently work over 40 in a given work week that they are not being compensated for.

Thus, if the threshold under the proposed regulations increases to what many believe it will which is $700 a week ($36,400 annually), this would mean that all employers would be required to now pay overtime to any employees who make $700 a week or less as opposed to the current rules which only require you to pay overtime to those that are paid on a salary basis at a salary level of $455 per week who meet the applicable duties tests. Thus, by increasing this monetary threshold there will be many more employees who employers will have to pay overtime to.

There are other changes proposed as well. These changes will affect the duties test under each exemption. Under the proposed regulations, if less than 50% of an employee’s work time is spent performing “executive, administrative or professional” duties, they would no longer qualify to be exempt and would thus be entitled to overtime. The burden of course will be on the employer to prove that the employee spends more than 50% of his/her time engaging in executive, administrative or professional duties sufficient to meet the duties tests for these exemptions.

Therefore employers should be very careful to make sure that they can prove that exempt employees are spending at least 50% if not more of their working time performing executive, administrative or professional duties as set forth under the duties tests for the white-collar exemptions.
©HR Learning Center 2015

US Supreme CourtUPDATE – The Supreme Court Speaks

By: S. Adam Spiewak, Esq.
HR Consultant for HR Learning Center

The US Supreme Court issued its Opinion in the case Integrity Staffing Solutions, Inc. vs. Busk on December 9, 2014. The issue presented in this case was whether the Employer (Integrity Staffing Solutions), which had placed many workers at an Amazon fulfillment warehouse in Nevada, had to pay their employees for time that the employees spent waiting to go through security checks when they leave the facility each day. The Employees claimed that this added up to as much as 25 minutes each day that they were required to be at work after they had already clocked out and that they thus were not getting paid for this time.

This situation involves a well-known FLSA issue for most HR Professionals, dealing with the question of what time is compensable under the FLSA. The general rule, which has not changed after this decision, is that time is compensable including activities such as this one that are either preliminary or postliminary to the regular workday only if they are integral and indispensable to the employees’ job duties. Thus, in this case, the question was whether waiting to go through the employer’s security checkpoints is an integral and indispensable part of these warehouse workers’ job duties.

Originally, the District Court held that these screenings were not integral and indispen­sable but instead fell into a non-compensable category of postliminary activities. The 9th Circuit reversed in relevant part, agreeing with the employees and holding that the time they spent waiting to go through security checkpoints was compensable time under the FLSA because it benefited the employer by preventing theft.

In a unanimous decision authored by Justice Thomas, the Supreme Court reversed the judgment of the Ninth Circuit Court of Appeals. The Supreme Court held, as the District Court had originally, that the employees’ time spent waiting to undergo and undergoing the security screenings is not compensable under the FLSA, as amended by the Portal-to-Portal Act of 1947.

Importantly, the Supreme Court held that the Ninth Circuit applied the wrong analysis in concluding that the time was compensable because it was spent for the benefit of the employer in trying to prevent theft. Moreover, the Ninth Circuit erred by focusing on whether the employer required the particular activity. Instead of looking to whether the employer benefited from the way that the time in question was spent, the proper question is whether the activity in question is “integral and indispensible to the principal activities that an employee is employed to perform.”

To meet this test and be compensable, the Court held that an activity must be intrinsic to the employee’s core job and indispensible to performing the principle job responsibilities. This standard was clarified by citing past decisions, as the Court followed existing precedent. For instance, preliminary and postliminary activities that do meet this standard and are compensable include battery-plant employees spending time showering and changing their clothes before leaving the plant (because the chemicals are toxic and therefore those activities are critical safety measures) and meatpacker employees spending time sharpening their knives (because having sharp knives is necessary to perform the cutting safely and effectively). By contrast, the ability of the workers in the Amazon fulfillment center to pack boxes for shipment safely and effectively does not require that they go through the security screening procedure.

The Court reiterated that Federal Regulations explain that activities including waiting in line to check in and out or to receive pay checks, as well as changing clothes, where it is done as a convenience to the employee, are preliminary or postliminary activities that are non-compensable. There is thus an important distinction between a retail employee who is permitted to change into a work shirt in an employee locker room rather than having to arrive already dressed properly (the time not being compensable) and the chemical worker showering and changing to eliminate the toxic residue (that time being compensable).

As a secondary point, the Court addressed the employees’ contention that the time should be compensable because so much waiting time was being required while it could be reduced to a de minimus amount, indicating that it was not relevant to the pivotal determination regarding the nature of the activities in question. The Court did, however, indicate and practically invite that such issues could be presented more properly at the collective bargaining table. Therefore, employers with union workers may anticipate that the battleground will simply shift.

It is important to note that although this decision is useful to employers in clarifying the requirements to pay for such time under federal law, state law may still dictate that these activities are compensable and would potentially impose greater obligations on employers. In California, for instance, there is already case law that is undisturbed by this decision holding that under California law, time employees spend waiting to undergo and undergoing mandatory security screening before entering and exiting their work facility is compensable.

In the wake of this Supreme Court decision, it is imperative that employers nationwide understand the distinctions that the Supreme Court made in this case between activities that are indispensible and integral to employees’ basic job and those that are not and that they carefully assess any activities that employees perform while off the clock.   Where preliminary or postliminary activities are intrinsic to the employees’ core job, the time involved must be compensated under the FLSA. Furthermore, before making any changes to pay practices, employers should also examine their obligations under state law. Of course, when in doubt, it is advisable to consult with legal counsel, particularly for companies that have employees working in California.

Blog.Trans.ImageThe Equal Employment Opportunity Commission filed lawsuits recently against two employers located in Florida and Michigan alleging that both employers had violated Title VII by discriminating against transgender employees. These cases mark the first time the EEOC has brought suit under Title VII of the Civil Rights Act of 1964 against a private employer to protect transgender workers. The EEOC in 2012 had commenced an administrative proceeding against a federal agency alleging discrimination under Title VII to protect transgender rights.

The EEOC alleged in the Florida case that the employer, a medical clinic, terminated an employee who presented as a male and then began dressing as a female. This employee also revealed that she was undergoing a gender transition from male to female. The EEOC also alleged that the employer, after claiming that it was eliminating the transgender employee’s position, then only two months later hired a male employee for that position.

A similar case was filed in Michigan against a funeral home when the EEOC alleged that the funeral home discriminated by firing an employee who also revealed she was in the process of transitioning from a male to a female. In this case, the EEOC alleged that the employer had told the employee that the fact that she was transitioning from a male to a female was “unacceptable”.

These most recent lawsuits follow many other legal developments to protect the civil rights of transgender workers and signify the EEOC’s desire to strengthen the protections for transgender employees under Title VII. President Obama in July 2014 issued an Executive Order prohibiting federal contractors from discriminating against lesbian, gay, bisexual and transgender workers. Shortly thereafter a new directive was issued by the Department of Labor which clarified the DOL’s position that sex-based discrimination under Title VII includes any bias an employer has based on an employee’s gender-identity or transgender status.

What does this mean for all of you as employers. That even though federal law does not yet prevent discrimination based on gender-identity and even though your state’s law may not either, you need to be aware that the EEOC takes the position that to discriminate based upon gender identity or transgender status is prohibited by Title VII because it constitutes sex-based discrimination. This is so even though Title VII does not yet include gender identity as a protected class.

Details on SHRM’s controversial new competency-based certification program have begun to emerge, but experts suggest it could still be a while before the program’s impact on HR is clear.   

In May of this year, the Society for Human Resource Management’s announcement that it was introducing its own human resource certification program was met with a flurry of questions from all corners of the HR universe.

For example, would already-credentialed HR professionals have to give up any of their current credentials in order to obtain the new SHRM certification? Which of the two new certification paths (SHRM-Senior Certified Professional or SHRM-Certified Professional) should non-certified HR professionals follow? And would certifications sponsored by the Human Resource Certification Institute—the organization SHRM previously partnered with to offer HR certification for nearly 40 years—be discontinued?

For that matter, many observers were befuddled by SHRM’s decision to even offer its own certification pathway, and wondered aloud whether the organization’s competency-based model—which stresses teaching and testing practical, real-life HR-related information, knowledge and skills—was really what HR practitioners wanted or needed.

And while SHRM has recently revealed more details about its two new certifications, and has sought to clear up the confusion surrounding it, experts say it could take some time before a true picture of the program’s impact on the HR profession becomes clear.

For instance, the Alexandria, Va.-based organization has developed its Body of Competency and Knowledge, which documents the nine behavioral and technical competencies—leadership and navigation, business acumen and ethical practice, for instance—that serve as the basis for the SHRM Certified Professional and SHRM Senior Certified Professional program.

certMore recently, SHRM announced that its new certification program will launch on Jan. 5, 2015, when HR professionals will be able to apply to take exams for the SHRM-CP and SHRM-SCP certifications, with the first testing window open from May 1 to July 15, 2015.

(The SHRM-CP designation will be available to those already holding senior- or advanced-level certification, while those with an existing generalist- or professional-level certification will be eligible for the correlating SHRM-CP credential.)

SHRM revealed the program’s launch date at its Nov. 20 Volunteer Leaders’ Summit in Washington, during which 495 volunteer leaders from SHRM chapters and state councils completed a certification pathway process. In addition, more than 1,000 HR professionals sat for a pilot exam in October, the results of which they will receive in the first quarter of 2015, according to SHRM.

The organization has also begun offering an online tutorial pathway designed to present HR professionals with competency-based information. The online tutorial will include a series of questions at the conclusion of the program, and provide participants with “the opportunity to answer the questions in order to demonstrate their mastery of the concepts covered in the tutorial,” according to SHRM.

The “core difference” between the new competency-based certification program and other available certifications is that “this is about how you practice the craft,” says Jon Decoteau, SHRM’s divisional director of the West region.

For HR leaders, the new competency-based certification provides “another indicator of knowledge and level of competencies to select from” in sizing up candidates for HR positions, he says.

“Among most HR professionals—and among HR executives, particularly—there’s really no disagreement on the importance of competencies. What [this certification program] does is take that body of knowledge and applies it to a certification.”

While acknowledging SHRM’s efforts to provide “continuing updated information” on the program, and its attempts to clarify the new certification’s impact on members’ current HRCI-sponsored certifications, “there is certainly going to be a period of confusion as HR professionals try to grasp what this new certification means for them, and what employers will require,” says Melissa Fleischer, founder and president of HR Learning Center, a Rye, N.Y.-based human resource consulting firm.

“Although SHRM alleged that this decision [to create its own certification program] was in the works for years, the fact is that few if any HR professionals saw this coming,” says Fleischer, who recently presented a webinar on the implications of the new SHRM certification program.

“It appears that, at least for now, the best course of action for HR professionals is to have both certifications, at least until the dust settles and we figure out whether the HRCI certification will continue to be used by employers to evaluate HR professionals.”

The new SHRM program could also help pad the resume of those at the vice president and CHRO level, says Fleischer, as it “will provide them with a way to distinguish themselves as more experienced HR professionals who have attained a certain level in their field by having earned both the HRCI and the new SHRM certification.”

Regardless of their title or career level, individuals pursuing SHRM certification—either independently or along with HRCI certification—will have several factors to consider, says Jim Steele, a member of the HRCI board of directors and associate professor management at George Fox University in Newberg, Ore.

“Those seeking certification need to weigh the decision carefully,” says Steele. “And while there is one more choice in the marketplace, the questions are still fundamentally the same.”

For example, he says, one must weigh whether the new credentials represent his or her professional knowledge and abilities, whether the credential has received independent validation through accreditors such as the National Commission for Certifying Agencies and American National Standards Institute and whether employers are seeking these credentials.

In the meantime, Fleischer advises those seeking certification to pursue both certifications simultaneously.

Ideally, “there should be room for both [HRCI and SHRM] to be able to provide certifications to HR professionals,” says Fleischer. “However, it means a lot of extra work for HR professionals to maintain both certifications, and it seems to be duplicative. With the amount of marketing SHRM is doing, it may just be that they win out and become the new leader in HR certifications for HR professionals, but we will only know if this is so in time.”

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Copyright 2014© LRP Publications

Handsome Delivery Man or MoverRecently, on October 8, 2014 the US Supreme Court heard argument in the case Integrity Staffing Solutions, Inc. vs. Busk. The issue at hand in this case was whether the Employer, Integrity Staffing Solutions that had placed many workers at an Amazon fulfillment warehouse in Nevada, had to pay their employees for time the employees spent waiting to go through security checks when they leave the facility each day. Employees who worked at Amazon claimed that this added up to sometimes 25 minutes each day that they were required to be at work and yet they had already clocked out and were not getting paid for this time. Integrity is a staffing company who had placed these employees at the Amazon fulfillment warehouse and thus Amazon is not a party to this suit.
Of course, this issue involves a well-known FLSA issue for most HR Professionals which is what time is compensable under the FLSA. The general rule is that time is compensable including activities such as this one that are either preliminary or postliminary to the regular workday if they are integral and indispensable to the employees job duties. Thus, in this case the question is whether waiting to go through the employer’s security checkpoints is an integral and indispensable part of these warehouse workers job duties. The administration has allegedly argued that it is not an integral and indispensable part of their job duties. Rather, it is merely a task the employees may need to do as part of their job, but not one that’s at the core of their employment with the company. The 9th Circuit however agreed with the employees and held that the time they spent waiting to go through security checkpoints was compensable time under the FLSA because it benefited the employer by preventing theft.
As alleged in documents filed in this case, employees who leave Amazon fulfillment warehouses at the end of their shift are required to go through security checkpoints in which they must remove their personal items from their pockets such as keys, belts and wallets and then pass through a metal detector similar to the ones located in airports. Jesse Busk and Laurie Castro, who previously worked at this Amazon fulfillment warehouse as Integrity Staffing Solutions, Inc.’s employees, alleged that they were required to wait up to 25 minutes to get through this security checkpoint each day. However, in response to questioning by MSNBC, an Amazon spokesperson reported that employees usually travel through these security checkpoints with little or no wait time.
The impact of this decision could be monumental. Many large retailers such as Apple and CVS have similar requirements of their employees. Class action lawsuits involving these retailers over the same issues have been put on hold pending the Supreme Court’s decision in this case. However, if Amazon and other retailers had to pay employees for this time spent waiting to go through security checkpoints, the amount of money they could potentially have to pay for this to all employees could be millions. Keep your eyes and ears peeled to hear what the Supreme Court decides in this precedent-setting case that could potentially reshape how retailers do business throughout the country.

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