HR Law

The New Overtime Rule – Legal Update

Planned for a December 1, 2016 effective date, the new overtime rule which raised the salary level test to $913 per week under the Fair Labor Standards Act (FLSA) has been suspended by a federal court which issued a temporary injunction.

This means that you do not have to make changes to who gets overtime or to raise pay based on this rule now. At this time we do not know what will happen next. The US Department of Labor could appeal the ruling, the court could move to hearings over a final decision, or the entire matter could get ignored until the next administration takes action.

If you have taken any actions to meet the $913 salary level test, be careful what you do. Rolling back raises is legal, but is fraught with employee morale and retention risks. Walmart has already announced that it will not do so, as it had granted wage increases in preparation to meet this rule.
If you have communicated any plans or information on this change to your employees, do communicate that the change has been temporarily blocked by a federal court and that you will comply with current law fully while awaiting further information.
Even if you have not communicated anything to employees, do expect that many may know of this rule change and have been expecting a pay raise or overtime pay. Pay attention to your employees and address any specific concerns individually.

This salary level test is only one of three tests under the FLSA which must be met to decide whether an employee must be paid overtime or not. It is the duties test which is the most problematic for small businesses – and the most […]

By |November 29th, 2016|Compensation|Comments Off on The New Overtime Rule – Legal Update

Which Are Employees? Trouble Ahead or Not?

Many small and mid-size organizations use a range of people to meet their goals. Some are employees; others are vendors, independent contractors, freelancers, consultants, temporary, or casual labor.

States and federal government agencies are in significant enforcement efforts to ensure that anyone who is really an employee is actually treated as an employee. States complain that they are losing tax revenues. There are legal concerns about who is covered by various laws, like workers compensation. And there is concern about benefits and financial security. The increase in company efforts to reduce costs plus the use of freelancers and companies like TaskRabbit have aggravated these issues.

So how do you know who is really your employee?

Certainly there are monetary costs to making everyone who does anything for your organization an employee. And there are some people who do work for you who are easily outside the employee relationship. If you use a CPA or legal firm, for example, you know those are not your employees. When you hire someone through a temporary employment agency to do a short-term job, the agency is the employer.

If you hire temporary, seasonal, or casual labor directly, they are usually employees.

But what happens if you have a bookkeeper who comes in on a regular basis for a couple days each week? Does the bookkeeper have multiple clients for her own business? If so, she is not your employee. If not, she is likely to be your employee.

If you use a business which offers services to the public to provide you with services, contract work, or consulting then you are not likely to be the employer — unless your firm is the only client of that business.

When you consider bringing someone in to […]