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FLSA Overtime Regulations

Court: DOL’s FLSA Overtime Regulations Invalid

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In case you missed it, on August 31, 2017, Judge Amos Mazzant of the Eastern District of Texas determined that the 2016 Final Rule issued by the U.S. Department of Labor, which increased the minimum salary threshold to $47,476, was not a valid action by the agency.

After finding that the case was ready for judicial decision and the parties at hand could be injured if the court did not intervene, Mazzant addressed all three of the plaintiff’s arguments.

First, the court addressed the state plaintiff’s argument that the Fair Labor Standards Act’s (FLSA) overtime requirements violate the Constitution by regulating the states and coercing them to adopt wage policy choices that adversely affect state budgets. The court held the Supreme Court precedent of Garcia v. Metropolitan Transit Authority established that Congress has the authority under the Commerce Clause to impose FLSA’s minimum wage and overtime requirements on state and local employees.

Next, the court declined to accept the plaintiff’s argument that based on the clear statement rule, the FLSA does not apply to the states. Under that rule, “if Congress intended to alter the ‘usual constitutional balance between the states and the federal government,’ it must make its intention to do so ‘unmistakably clear in the language of the statute.”

The court discarded this argument simply by pointing out the law is applicable to any “enterprise engaged in commerce or in the production of goods for commerce,” and this phrase, by statutory definition, includes the activity of any public agency. Therefore, the court held that the Congress was clear enough in its intention to impact the states.

 Failing the Test

Finally, and most importantly, the court agreed with the plaintiffs in finding that the Department of Labor acted outside of the scope of its delegated authority by implementing a salary-level test that effectively eliminated the duties test.

The court adhered to the test established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., which requires courts to determine whether Congress has spoken directly to the precise question at issue. If Congress has, then the court and agency must follow the intent of Congress.

After interpreting the plain meanings of “executive, administrative and professional,” Mazzant found Congress intended the exemption to apply to employees who perform those duties, rather than those who simply are paid a certain amount. Furthermore, because the new regulations focused more on the salary level than Congress intended, they were found invalid, and the court held the agency acted outside of its delegated authority.

What’s Next?

The Department of Labor published a Request for Information in the July 26 Federal Register, which indicates the agency intends to continue its attempt at overhauling overtime.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.


Zachary Gregory

by Zachary Gregory


Author Bio: As a compliance attorney for Paycom, Zach Gregory monitors legal and regulatory changes at the state and federal levels, focusing on payroll and garnishment laws, to ensure the Paycom system is updated accordingly. He previously worked at a law firm as a tax attorney. He holds a bachelor’s degree from Oklahoma Christian University and a J.D. from Oklahoma City University. Outside of work, Gregory enjoys playing in the backyard with his two boys, and finding new restaurants with his wife and high school sweetheart, Kellyn.

EEO-1 Pay Data

EEO-1 Pay Data Requirements on Indefinite Hold

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The EEO-1 report is changing once again. Recently, the new pay data and hours worked requirements announced last year were suspended indefinitely by the Office of Information Regulatory Affairs. While employers will report Equal Employment Opportunity (EEO) information in a familiar format, they need to be aware of key date changes.

3 important changes

The biggest change to the report is the suspension of the requirement to report pay data and hours worked. For 2017, employers will report in the prior 2016 format, which only collects data on race, ethnicity and gender by occupational category. When the new EEO-1 requirements were announced by the Obama administration last year, the 2017 reporting deadline was moved from Sept. 30, 2017, to March 31, 2018.

According to an Equal Employment Opportunity Commission (EEOC) statement, “the previously approved EEO-1 form which collects data on race, ethnicity and gender by occupational category will remain in effect. Employers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.” Additionally, the previously approved “workforce snapshot” period of Oct. 1 through Dec. 31 will remain in effect. Therefore, employers must submit reports based on a payroll period within that time frame.

Summary of the changes:

  • The deadline to file EEO-1 reports for 2017 is March 31, 2018;
  • Reports must be based on a payroll period in October, November or December of 2017; and,
  • Employers may use the same EEO-1 form used in 2016.

The EEOC has not yet fully updated its website to reflect this new information, but the home page provides some explanation.

Pay data requirement gone?

The pay data and hours worked requirements simply have been suspended. Until the Office of Management and Budget (OMB) completes its review of the rule, their future is unclear. The OMB is concerned that some aspects of the revised rule “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” The acting chair of the EEOC, Victoria Lipnic, has been vocal with her opposition to the pay data requirement, which she voted against when it was initially proposed.

Although the EEO-1 report appears to be ditching the pay data requirement, state governments may step in to fill the void. Under a proposal in California, employers in the state with more than 500 employees would be required to submit information to the Secretary of State on gender wage differentials. Although this measure has not been signed by the governor, employers should monitor this legislation, which would go into effect in 2019.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in Blog, Compliance, Employment Law, Featured

Jason Hines

by Jason Hines


Author Bio: Jason Hines is a Paycom compliance attorney. With more than five years’ experience in the legal field, he monitors developments in human resource laws, rules and regulations to ensure any changes are promptly updated in Paycom’s system for our clients. Previously, he was an attorney at the Oklahoma City law firm Elias, Books, Brown & Nelson. Hines earned a bachelor’s degree from the University of Central Oklahoma and his juris doctor degree from the Oklahoma City University School of Law, where he graduated cum laude. A fan of the Oklahoma City Thunder, Hines also enjoys exploring the great outdoors with his wife and daughter.

Employee Experience

The Winning Workforce Equation

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The term “the employee experience” is thrown around frequently in HR today. It’s not the same as “employee engagement,” another well-known industry buzzword. With trends evolving at such a rapid pace, what is this new concept that’s making waves in the industry?

Looking for a deeper dive into the employee experience? Check out the HR Break Room podcast episode, “Happy Employees = Happy Customers: The Equation for a Winning Workforce” with author Jacob Morgan.

According to the author of The Employee Experience Advantage, Jacob Morgan, the employee experience is the sum of a worker’s experiences, good or bad, during his or her term of employment at an organization. A business can enhance that experience by addressing and influencing the elements of culture, technology and physical space. He calls the combination of these three things, “the employee experience equation.” As Morgan said, “When you invest in the employee experience, you’ll start to notice an engaged workforce. And an engaged workforce will deliver business outcomes.”

Culture – a side effect

A healthy corporate culture is one of the three critical pieces of a great employee experience. Employees spend a significant amount of their lives at work, which makes the atmosphere and community of the organization essential. When people spend 40 hours a week of what Morgan calls “prolonged exposure” in the workplace with their peers, certain company ideas and attitudes are all but contagious. A healthy culture can promote a fun environment, hard work ethic and cohesive teamwork. On the flip side, an unhealthy culture can promote stressful work, toxic drama and a “business first, people second” environment that inevitably will lead to high turnover.

It is important to remember no organization can have a truly “perfect” culture; the trick is to create your ideal culture by ensuring your organization’s core values align with the people you want to see in your organization.

Technology – supports employee growth

As the central nervous system of your organization, technology will continue to power the future of work. The employee experience is only possible because of the communication and collaboration available through today’s technology. Without advances such as applicant tracking systems or messenger apps, a business cannot have an optimal recruitment or talent-tracking process, or real-time feedback or recognition. Technology empowers everything when we think about the future of work: your people and your business needs.

Organizations that don’t invest in technology will find that the human aspects surrounding it will start to break down. Investing in technology ensures your employees have all the tools they need to succeed and grow.

Space – a symbol

Whether a corporate headquarters, coffee shop or home office, everybody works in a physical space, the last critical piece to the equation. The physical workspace is also a symbol that represents your organization, and as technology continues to evolve, leading companies are creating incentives to bring employees back to the office. Creating a vibrant, technological workplace connects your employees’ sense of belonging and purpose to their jobs.

The employee experience is the next future investment for organizations dedicated to workforce happiness. Ensure your employees’ well-being by taking the first steps in your organization by opening communication in these three key areas: culture, technology and physical space.

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Posted in Blog, Employee Experience, Featured, Talent Management

caleb.masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

Parental Leave

Leave Only a Mother Could Love: The Care of Pregnancy and Parental Leave

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Explaining the terms associated with leave taken for pregnancy or childbirth-related purposes

Pregnancy and parental leave are among the most common types of leave that employers must manage today. At the federal level, they are governed mainly by the Family and Medical Leave Act (FMLA); however, leave may be awarded under the Americans with Disabilities Act Amendments Act (ADAAA) or Pregnancy Discrimination Act (PDA) as well.

Need a refresher on FMLA, ADAA or PDA? Check out “Addressing Employer Confusion With Pregnancy Related Laws: What to Expect When Your Employees Are Expecting.

When it comes to these types of leave, similar-sounding terms can get thrown around, such as “pregnancy leave,” “parental leave,” “maternity leave” and “childbirth-related medical leave.” They do not necessarily have different meanings under the various pieces of legislation. In fact, the laws do not explicitly mention these terms, but instead provide circumstances under which leave may be entitled.

What’s the difference?

“Parental leave” or “family medical leave” are synonymous and fairly broad, and can be associated with leave taken for childbirth, for the care of a newborn or for other purposes unrelated to pregnancy, such as adoption placement. Both terms are gender-neutral, so they may be taken by both mothers and fathers.

Pregnancy leave can be a form of parental leave, but also encompasses leave taken only by a mother for a disability or serious health condition related to pregnancy or childbirth.

In general, leave provided under FMLA can be termed overall as “family medical leave” or “parental leave,” but a slight distinction can be made in certain circumstances. Although vague, the distinction under FMLA between parental and pregnancy leave comes into play when a pregnant employee and her spouse both work for the same employer. In such cases, the FMLA limits the combined amount of leave they may take for some qualifying reasons, and the spouse will be limited to a combined amount of leave taken for the birth and bonding.

However, the time taken by a mother for her own serious health condition related to pregnancy or for prenatal care will not be included in this combined limit. Therefore, the distinction between leave used for pregnancy-related medical conditions and parental leave used to bond with a newborn can have a significant impact on the overall amount allowed.

Whats the difference between the Pregnancy Discrimination Act and the Americans with Disabilities Act Amendment Act? 

“Pregnancy disability leave” is a term that has gained recent popularity. As the name suggests, this leave correlates to a pregnancy or childbirth-related disability that prevents the employee from performing essential duties of her job.

Employers may have their own policies in place to provide for types of leave. In these instances, terms like “maternity leave” or “paternity leave” may emerge. In general, these types are encompassed under the terms “parental leave” or “family medical leave,” but employers may choose to define them differently.

Ultimately, many terms can be used to categorize leave taken by employees for pregnancy or childbirth. The terms themselves generally do not have significantly differing meanings, but small distinctions may exist when it comes down to the specific reasons for taking such leave.

For more about the EEOC’s current focus on pregnancy-related limitations and how to address potential confusion with pregnancy related laws, be sure to read EEOC Cracks Down on Pregnancy Discrimination and Addressing Employer Confusion With Pregnancy Related Laws: What to Expect When Your Employees Are Expecting.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Tags: , , , , , , , ,
Posted in Blog, Compliance, Employment Law, Featured

Kristin Fisher

by Kristin Fisher


Author Bio: As a compliance attorney for Paycom, Kristin Fisher monitors legal and regulatory changes at the state and federal level, with a focus on labor and employment laws, to ensure the Paycom system is updated accordingly. Previously, she served as an attorney at the Oklahoma City law firm Derryberry & Naifeh LLP. Fisher earned a bachelor’s degree and MBA from the University of Central Missouri, and her Juris Doctor from the Oklahoma City University School of Law. Outside of work, she enjoys cooking, hiking, going to the movies and spending time with her fiancé.

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