Is The Minimum Pay Required For Commissioned Employees To Qualify For An Overtime Exemption Increasing In Your State In 2018?

While the minimum pay required for commissioned employees to qualify for an overtime exemption is not changing in 2018, there are several states where the minimum pay requirements for a “commissioned employee overtime exemption” are increasing.

These increases (i.e. in California, Colorado, Minnesota, Oregon, Washington, and Washington DC) are occurring because the pay an inside or commissioned salesperson must receive to qualify for the inside or “commissioned” sales exemption (as established under state law) are scheduled to increase in 2018 (December 31st for New York employers).

Under the Fair Labor Standards Act (FLSA), in order for a commissioned salesperson to qualify for the FLSA’s 7(i) overtime exception (Commissioned Salesperson Exemption), the following three conditions must be met:

  1. The employee must be employed by a retail or service establishment, and
  2. The employee’s regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked, and
  3. More than half the employee’s total earnings in a representative period must consist of commissions.

Unless all three conditions are met, the Commissioned Salesperson Exemption is not applicable, and overtime premium pay must be paid for all hours worked over 40 in a workweek at time and one-half the regular rate of pay.

The below table sets forth the changes to the minimum salary requirements for exempt employees in these states.  In those instances where the state minimum salary requirements are lower than the above-listed FLSA requirements, the higher salary threshold applies for employers who are subject to FLSA in order for employees to qualify for an exemption under the FLSA. Read more

Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

While the minimum salary requirements for “white collar” employees (executive, administrative, or professional employees) is not changing in 2018 (at least not until/unless the Department of Labor announces a new Overtime Rule), there are several states where the minimum salary requirements for exempt employees is increasing in 2018 (December 31st for New York employers).

These increases (i.e. in Alaska, California, Colorado, Maine, New York, and Oregon) are occurring because the minimum exempt salary rates for these employees (as established under state law) are scheduled to increase in 2018 (December 31st for New York employers).

Under the Fair Labor Standards Act (FLSA), the minimum salary requirements for white collar employees is as follows:

Payment Schedule Minimum Salary
Weekly $455
Bi-Weekly $910
Semi-Monthly $985.83
Monthly $1,971.66
Annual $23,660

Read more

Washington State Supreme Court Expands the Protections of the Washington Law Against Discrimination

In a new case (Zhu v. North Central Educational Services), the Washington State Supreme Court has held that the Washington Law Against Discrimination protects job applicants from “retaliatory discrimination” (i.e. an employer who refuses to hire an applicant in retaliation for the applicant opposing discrimination in a prior job).

The Case

In this case, the plaintiff had previously been a math teacher in the Waterville School District. In 2010, the plaintiff sued the District for race discrimination and retaliation.  The case was ultimately settled and, as a part of the settlement, the plaintiff resigned from his teaching job.

Following his resignation, the plaintiff applied for a position with North Central Educational Services District No. 171 (an agency that provides cooperative and informational services to local school districts – including the Waterville School District).  The hiring committe for North Central Educational Services District was aware of the plaintiff’s past lawsuit and ultimately, the plaintiff was not hired for the position. Read more

NEW GUIDANCE: California DLSE Updates Its Position On Rest Periods

The California Department of Labor Standards Enforcement (DLSE) recently published updated guidance materials (Rest Periods/Lactation Accommodation) relating to the 10-minute rest period. 

These new materials re-emphasize the DLSE’s previous position that employees must be relieved of all duty during rest breaks and further clarify that employees must be permitted to travel off-site during their ten-minute rest breaks. However, even with this new position, the DLSE did not that “as a practical matter, however, if an employee is provided a ten-minute rest period, the employee can only travel five minutes from a work post before heading back to return in time.”  In addition to the foregoing, the DLSE’s new materials clarify that employers are prohibited from requiring employees to monitor pagers or radios during rest breaks.

The updated guidance materials align the DLSE’s position on rest periods with the California Supreme Court’s 2016 decision in Augustus v. ABM Security Services, Inc. (discussed in our previous article “Gimme A Break, California – A New Look at California Rest Periods”).

NEW FORM – New York Releases Model Paid Family Leave Policy and Paid Family Leave Statement of Rights

As all New York employers are undoubtedly aware, the New York State Paid Family Leave Law goes into effect on January 1, 2018.

In addition to a requirement that employers provide eligible employees with Paid Family Leave (see New York Employers – Are You Ready for Paid Family Leave? for an explanation of the New York State Paid Family Leave Law), employers are also required to give all of their employees information regarding their Paid Family Leave rights.  This information may be provided in an Employee Handbook or separate materials distributed to employees.  To assist employers in developing these materials, the New York State Workers’ Compensation Board has released a manual (entitled “Model Language for Employees Materials”) that identifies the topics that must be included in employee materials.  The manual also provides model language that employers can incorporate in such materials.

Employers are also required to provide an employee with a “Statement of Rights” whenever an employee takes Paid Family Leave and when an employee takes time off from work for a Paid Family Leave qualifying event but has not requested paid family leave.  To help employers meet this obligation, the New York State Workers’ Compensation Board has released a Statement of Rights for Paid Family Leave that employers can provide to an employee to meet this obligation.

It is recommended that all New York employers review these materials prior to the start of the new year.

New York Employers — Don’t Forget About These Other New Year’s Eve Wage Increases …

As New York employers are undoubtedly aware, New York’s minimum wage is increasing on December 31, 2017 as follows:

Size/Location of Employer Minimum Wage as of 12/31/17
“Upstate” employers (excluding fast food employees) $10.40 per hour
“Downstate” employers (excluding fast food employees) $11.00 per hour
“Small” NYC employers (excluding fast food employees) $12.00 per hour
Fast food employees outside NYC $11.75 per hour
“Large” NYC employers (excluding fast food employees) $13.00 per hour
Fast food employees inside NYC $13.50 per hour
·         “Upstate” = employers in all counties “upstate” from the greater NYC area

·         “Downstate” = employers in Nassau, Suffolk, and Westchester Counties

·         “Small” NYC employers = employers with 10 or fewer employees

·         “Large” NYC employers = employers with 11 or more employees

 

However, New York employers may be surprised to learn about the other types of wages that are accompanying the increase in minimum wage – specifically:

  • An increase to the salary threshold for exempt employees; and
  • An adjustment to the amounts employers can deduct from employees’ wages for items such as tip credits, uniform allowances and meals

New Salary Threshold for Exempt Employees

Effective December 31, 2017, the salary threshold for exempt employees will increase as follows:

Size/Location of Employer Salary Threshold as of 12/31/17
“Upstate” employers $780 per week
“Downstate” employers $825 per week
“Small” NYC employers $900 per week
“Large” NYC employers $975 per week

 

Adjustment to Permissible Deductions

Under the New York wage orders (those applicable to hospitality employers, employers in “miscellaneous industries,” and employers in the “building service industry”), employers are permitted to make deduct from employees’ wages for items such as tip credits, uniform allowances and meals.  Starting December 31, 2017, those amounts have been adjusted dependent on employer location and size.  It is recommended that all employers review these summaries to determine how much they can deduct for a uniform allowance and claim as a meal, lodging and tip credits.

Watch for These Wage and Hour Challenges this Holiday Season

It’s the most wonderful time of the year!  While the holiday season certainly brings joy, it can also cause employers a lot of stress – particularly with respect to wage and hour issues that can arise.  Avoid this unwanted holiday headache by keeping an eye out for the following wage and hour challenges that can arise during the holiday season:

 

  1. Holiday Parties Could Be Considered Working Time.

Everyone enjoys a good party and the holiday season presents a good reason to celebrate a profitable year and boost employee morale.  However, to avoid a potential wage and hour issue, employers need to exercise caution with scheduling and communicating with employees about the holiday party.

Under most state laws, a holiday party that is scheduled during an employee’s regular working hours is considered working time; therefore, employees must receive compensation if they attend the party.  In addition, if an employee is required to attend a holiday party (or made to feel that they are required to attend – e.g. through a manager’s encouragement), the time an employee spends at the party can also be considered compensable.

To avoid these issues, schedule the holiday party outside of regular working hours (and consider holding it in an offsite location).  In addition, make it abundantly clear to your nonexempt employees that attendance at the party is 100% voluntary.

  1. Special Holiday-Related State Wage and Hour Laws

While under federal law (the FLSA) employers are not required to provide any time off or additional compensation (i.e. holiday pay) to employees during the holiday season, there are laws in some states that impose special requirements on employers.

For example, a few states require certain types of employers to provide employees with time off on specific days (i.e. Christmas and New Year’s Day).  Other states require that certain employers pay employees overtime if they are required to work on specific holidays (i.e. Christmas and New Year’s Day) – regardless of the amount of time worked by the employee in that week.

In addition, several states have “day of rest laws” where employers are required to provide a day of rest, which require an employer to provide employees with a day of rest on their Sabbath or when they have worked a certain number of hours or days in a row.  Due to the busyness of the holiday season, an employee’s work schedule can violate a state’s day of rest law.

Finally, some states have enacted “reporting time laws” (where an employer must pay an employee additional wages if he/she shows up for work and is not provided a full shift of work) and several large cities (San Francisco, San Jose, Seattle and, New York City) have enacted “scheduling laws” (which limit how and when employers can change employees’ schedules).  Due to the unpredictable nature of the holidays, employers should be aware of these laws and exercise caution when scheduling employees for the holidays – otherwise they run the risk of wage and hour penalties.

NEW GUIDANCE – EEOC Issues Guidance On Workplace Harassment

In the wake of the recent sexual harassment scandals, the Equal Employment Opportunity Commission (EEOC) recently published new guidance materials (entitled  “Promising Practices for Preventing Harassment“) which provides employers with numerous suggestions regarding best practices employers can adopt to help prevent workplace harassment (including sexual harassment).

Highlighted in this new publication is the importance of employers developing strong anti-harassment policies and providing regular anti-harassment training to all employees (with a additional recommendation that employers provide their managerial employees with more detailed training).

With respect to anti-harassment policies, the EEOC recommends that employers develop an anti- harassment policy that is comprehensive, easy to understand, and regularly communicated to all employees

This policy should include the following elements:

  • A statement that the policy applies to employees at every level of the organization, as well as to applicants, clients, customers, and other relevant individuals;
  • An unequivocal statement that harassment based on, at a minimum, any legally protected characteristic is prohibited;
  • An easy to understand description of prohibited conduct, including examples;
  • A description of any processes for employees to informally share or obtain information about harassment without filing a complaint;
  • A description of the organization’s harassment complaint system, including multiple (if possible), easily accessible reporting avenues;
  • A statement that employees are encouraged to report conduct that they believe may be prohibited harassment (or that, if left unchecked, may rise to the level of prohibited harassment), even if they are not sure that the conduct violates the policy;
  • A statement that the employer will provide a prompt, impartial, and thorough investigation;
  • A statement that the identity of individuals who report harassment, alleged victims, witnesses, and alleged harassers will be kept confidential to the extent possible and permitted by law, consistent with a thorough and impartial investigation;
  • A statement that employees are encouraged to respond to questions or to otherwise participate in investigations regarding alleged harassment;
  • A statement that information obtained during an investigation will be kept confidential to the extent consistent with a thorough and impartial investigation and permitted by law;
  • An assurance that the organization will take immediate and proportionate corrective action if it determines that harassment has occurred; and
  • An unequivocal statement that retaliation is prohibited, and that individuals who report harassing conduct, participate in investigations, or take any other actions protected under federal employment discrimination laws will not be subjected to retaliation.

The EEOC further recommends that employers provide their anti-harassment policy to its employees in several different ways, including:

  • At hire;
  • In the employee handbook;
  • At any anti-harassment training; and
  • Posting the policy in the workplace.

Finally, the EEOC recommends that employers translate the policy into all languages commonly used by employees.

With respect to training, the EEOC recommends that employers provide regular interactive, comprehensive anti-harassment training to all employees.

The EEOC further recommends that an employee-level training program should the following elements:

  • Descriptions of prohibited harassment, as well as conduct that if left unchecked, might rise to the level of prohibited harassment;
  • Examples that are tailored to the specific workplace and workforce;
  • Information about employees’ rights and responsibilities if they experience, observe, or become aware of conduct that they believe may be prohibited;
  • Encouragement for employees to report harassing conduct;
  • Explanations of the complaint process, as well as any voluntary alternative dispute resolution processes;
  • Explanations of the information that may be requested during an investigation, including: the name or a description of the alleged harasser(s), alleged victim(s), and any witnesses; the date(s) of the alleged harassment; the location(s) of the alleged harassment; and a description of the alleged harassment;
  • Assurance that employees who report harassing conduct, participate in investigations, or take any other actions protected under federal employment discrimination laws will not be subjected to retaliation;
  • Explanations of the range of possible consequences for engaging in prohibited conduct;
  • Opportunities to ask questions about the training, harassment policy, complaint system, and related rules and expectations; and
  • Identification and provision of contact information for the individual(s) and/or office(s) responsible for addressing harassment questions, concerns, and complaints.

With respect to managerial-level anti-harassment training, the EEOC recommends that these employees receive more in-depth training that also includes the following elements:

  • Information about how to prevent, identify, stop, report, and correct harassment, such as:
    • Identification of potential risk factors for harassment and specific actions that may minimize or eliminate the risk of harassment;
    • Easy to understand, realistic methods for addressing harassment that they observe, that is reported to them, or that they otherwise learn of;
    • Clear instructions about how to report harassment up the chain of command; and
    • Explanations of the confidentiality rules associated with harassment complaints;
  • An unequivocal statement that retaliation is prohibited, along with an explanation of the types of conduct that are protected from retaliation under federal employment discrimination laws, such as:
    • Complaining or expressing an intent to complain about harassing conduct;
    • Resisting sexual advances or intervening to protect others from such conduct; and
    • Participating in an investigation about harassing conduct or other alleged discrimination; and
  • Explanations of the consequences of failing to fulfill their responsibilities related to harassment, retaliation, and other prohibited conduct.

It is recommended that all employers review these new guidance materials and consider adopting most, if not all, of the EEOC’s recommended best practices.

NEW LAW: Missouri’s Minimum Wage to Increase January 1, 2018

Missouri employers, mark your calendars: The Missouri Department of Labor  recently announced that on January 1, 2018, New Jersey’s minimum wage will increase from $8.44 to $8.60 per hour. The minimum wage rate for tipped employees will increase to $3.93 per hour (as employers are required to pay tipped employees at least 50% of minimum wage)

Once available, it is recommended that all Missouri employers prepare for these increases and download the new Missouri minimum wage poster.

NEW POSTER — California Publishes New Mandatory Transgender Rights Poster

As previously reported (in NEW LAW: New Requirements for California Sexual Harassment Training) aside from increasing California’s sexual harassment training requirements to include discussing harassment based on gender identity, gender expression, and sexual orientation and including practical examples inclusive of harassment based on gender identity, gender expression, and sexual orientation, Senate Bill 396 also requires all California employers post a workplace poster related to transgender rights. 

In order to help employers comply with this new posting requirement, the California Department of Fair Employment and Housing (DFEH) recently published the English and Spanish language versions of the poster.  Starting January 1, 2018, the “Transgender Rights in the Workplace” poster (as with all DFEH-mandatory posters) must be posted “in a prominent and accessible location in the workplace” where it can be “easily seen and read by all employees and job applicants.”   In addition, if ten percent or more of a company’s workforce speaks a language other than English, the poster must also be displayed in that language (or languages).

It is recommended that all California employers download the new poster and display it in the workplace as soon as possible.

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