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CLIENT ALERT: New Overtime Rule Raises Minimum Salary Requirements and Other Changes to the Fair Labor Standards Act

Today, the U.S. Department of Labor (DOL) issued its Final Rule updating the regulations under the Fair Labor Standard Act:

Effective January 1, 2020, employees who make less than $35,568 are now eligible for overtime pay under a final rule issued by the U.S. Department of Labor (“DOL”). The DOL expects 1.3 million workers to become newly eligible for overtime by updating the thresholds.  The new rule will raise the salary threshold to $684 per week ($35,568 annualized) from $455 per week. This means that even if your employee qualifies under one of the overtime exemptions, if the employee is not earning at least $684/week, the employee will be eligible for overtime and minimum wage requirements.

The new rule which revised the regulations issued under the Fair Labor Standards Act (FLSA) is expected to prompt employers to reclassify exempt workers to nonexempt status and raise the pay for others above the new threshold. 

In addition to raising the salary threshold for exempt workers, the new rule raised the threshold for highly compensated employees from $100,000 a year to $107,432 a year for full-time salaried workers. This means that employees classified as highly compensated for purposes of obtaining overtime exemption will now need to be paid at least $107,432/year.

The Final Rule also allows employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.

How does this affect Employers?

In order to comply with the Final Rule, employers will need to consider a few different options for employees classified as exempt but earn less than $684/week. Employers must review their roster of current exempt earners and, if they earn less than $684/week, the employers must implement one of the following options:

  • Beginning January 1, 2020, employers can remove the exemption status from these employees and begin paying overtime for all hours worked over 40 hours per week.

 OR

  • Beginning on January 1, 2020, employers can remove the exemption status from these employees, forbid overtime, and hire or reassign additional employees to cover any increase in workflow.

OR

  • Beginning on January 1, 2020, employers can increase the salaries of these employees to meet the minimum salary threshold of $35,568/year and at least $684/week, thus qualifying them for the overtime exemption.

Employers must weigh the cost of raising employee salaries above the new threshold against the cost of reclassifying employees as nonexempt and paying overtime. 

The ultimate decisions made by the employer should be strongly considered as any change in employee classification or reorganization of employee structure may impact employee morale. In addition, we view the “duties test” as even more important for employees whose salaries are on the border of the revised threshold. For these employees, it is now more important than ever before that employers ensure correct exemption classification and, if employers ultimately discover improper classifications, they should use this time as an opportunity to reclassify the exemption status for these employees.

If you have any questions about the changes to the Fair Labor Standards Act’s minimum salary requirements to qualify for overtime exemption status, as discussed in this Client Alert, or labor & employment, generally, please do not hesitate to contact one of the following members of the Brennan, Manna & Diamond’s Labor & Employment Team:  In Akron contact: John N. Childs at (330) 253-1946, Adam D. Fuller at (330) 374-6737, Richard L. Williger at (330) 253-3770, or Bryan E. Meek at (330) 253-5586, or Jeffrey C. Miller at (216) 658-2323 in our Cleveland Office; or John Gast (239) 992-1841 in our Bonita Springs, Florida Office; or Cody L. Westmoreland at (904) 366-2326 and Erin R. Whitmore at (904) 366-2324 in our Jacksonville, Florida Office.

The Masks Are Back: New OSHA Regulations for Healthcare Employers

Employment Law After Hours is back with a News Break Episode. Yesterday, OSHA published new rules for healthcare facilities, including hospitals, home health employers, nursing homes, ambulance companies, and assisted living facilities. These new rules are very cumbersome, requiring mask wearing for all employees, even those that are vaccinated. The only exception is for fully vaccinated employees (2 weeks post final dose) who are in a "well-defined" area where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.

New OSHA Guidance for Workplaces Not Covered by the Healthcare Emergency Temporary Standard

On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) for occupational exposure to COVID-19, but it applies only to healthcare and healthcare support service workers. For a detailed summary of the ETS applicable to the healthcare industry, please visit https://youtu.be/vPyXmKwOzsk. All employers not subject to the ETS should review OSHA’s contemporaneously released, updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. The new Guidance essentially leaves intact OSHA’s earlier guidance, but only for unvaccinated and otherwise at-risk workers (“at-risk” meaning vaccinated or unvaccinated workers with immunocompromising conditions). For fully vaccinated workers, OSHA defers to CDC Guidance for Fully Vaccinated People, which advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, or local laws or individual business policies.

Employer Liability for COVID-19 Vaccine Side Effects

As employers encourage or require employees to obtain a COVID-19 vaccine, they should be aware of OSHA recording obligations and potential workers’ compensation liability. Though OSHA has yet to revise its COVID-19 guidance in response to the latest CDC recommendations, OSHA has revised its position regarding the recording of injury or illness resulting from the vaccine. Until now, OSHA required an employer to record an adverse reaction when the vaccine was required for employees and the injury or illness otherwise met the recording criteria (work-related, a new case, and meets one or more of the general recording criteria). OSHA has reversed course and announced that it will not require recording adverse reactions until at least May 2022, irrespective of whether the employer requires the vaccine as a condition of employment. In its revised COVID-19 FAQs, OSHA states:

The New Rule 1.510 - Radical Change for Summary Judgement Procedure in Florida

In civil litigation, where both sides participate actively, trial is usually required at the end of a long, expensive case to determine a winner and a loser. In federal and most state courts, however, there are a few procedural shortcuts by which parties can seek to prevail in advance of trial, saving time, money and annoyance. The most common of these is the “motion for summary judgment”: a request to the court by one side for judgment before trial, generally on the basis that the evidence available reflects that a win for that party is legally inevitable and thus required. Effective May 1, 2021, summary judgment procedure in Florida has radically changed.

Vacating, Modifying or Correcting an Arbitration Award Under R.C. 2711.13: Three-Month Limitation Maximum; Not Guaranteed Amount of Time

In a recent decision, the Supreme Court of Ohio held that neither R.C. 2711.09 nor R.C. 2711.13 requires a court to wait three months after an arbitration award is issued before confirming the award. R.C. 2711.13 provides that “after an award in an arbitration proceeding is made, any party to the arbitration may file a motion in the court of common pleas for an order vacating, modifying, or correcting the award.” Any such motion to vacate, modify, or correct an award “must be served upon the adverse party or his attorney within three months after the award is delivered to the parties in interest.” In BST Ohio Corporation et al. v. Wolgang, the Court held the three-month period set forth in R.C. 2711.13 is not a guaranteed time period in which to file a motion to vacate, modify, or correct an arbitration award. 2021-Ohio-1785.