2017 Hot Topics in Employment Law Seminar Highlights
On February 24, 2017, the Miles & Stockbridge Labor, Employment, Benefits & Immigration practice group presented its fourteenth annual Hot Topics in Employment Law seminar to an audience of nearly four hundred clients and members of the Baltimore business community. Topics covered included best practices for conducting internal investigations, complicated scenarios under the FLSA, and anticipated changes to labor and employment regulation under President Trump. Here are the highlights:
Conducting an Internal Investigation
The importance of conducting a thorough investigation following an employee complaint took center stage last week when Uber made national news after a former employee posted on her personal blog that the company ignored her complaints of sexual harassment. Presenters described ten steps to an internal investigation, from receiving the initial complaint to preparing the report, and emphasized that there is no “one size fits all” approach to investigations, which may be triggered by anything from a formal complaint to a workplace rumor. Key takeaways from the presentation include: understanding that interview notes generally are not privileged even if they are written by an attorney, so avoiding opinions or credibility assessments in notes is key, and the importance of closing the loop with the employees involved in the investigation once it is concluded.
Meet the Workers
FLSA lawsuits have increased by 450% since 2010, and are now the most common type of employment lawsuit. The following scenarios were used to illustrate some of common challenges employers face when implementing federal and state overtime laws:
- An executive assistant who performs work directly related to management or general business operations may exempt from the FLSA’s minimum wage and overtime requirements under the administrative exemption even if she does not spend the majority of her time on exempt activities. The same employee may also be exempt under the highly compensated employee exemption if her annual salary and bonus total $100,000 or more. However, only rarely will executive assistants exercise significant enough discretion to qualify for the exemption.
- Non-exempt employees may be paid a salary but administrative challenges are presented related to overtime if the employee works different hours each week. The employee’s regular rate will vary each week depending on the number of hours worked. This necessitates calculating overtime each week at half the employee’s regular rate for that week. To avoid these administrative complications, employers can enter into a fluctuating workweek arrangement with employees where the overtime rate is consistent. Employers must be sure to check state law to ensure this method of payment is legal in their state.
- Commissioned employees of a retail or service establishment may be exempt if over half of their total earnings are commissions and their regular rate of pay exceeds one and one-half times the minimum wage for every hour worked in a workweek.
- The computer employee exemption is reserved for employees whose primary duties involve the application of systems analysis and procedures or the design, development, documentation, analysis, creation, testing or modification of computer systems or programs. This applies to employees such as computer systems analysts, programmers, and software engineers as opposed to IT help desk workers. Understanding IT-related tasks is critical to proper classification of these employees.
- On-call time may be compensable working time if the employee is not able to use the time for his own purposes. This will depend on the frequency of calls and restrictiveness of conditions around the on-call time. Regular home-to-work commuting time is generally not compensable working time, but travel time between jobsites during the day and weekend or overnight travel during normal business hours is compensable.
- Sales employees may be exempt under various FLSA provisions. To qualify for the outside sales exemption, the employee must be regularly engaged in making sales away from the employer’s place of business. The administrative exemption may not apply, even if the employee exercises discretion or independent judgment, because of the DOL’s focus on “production” positions. The learned professional exemption may apply if the employee has acquired specialized knowledge in an advance course of study which is required in the performance of the employee’s primary duties.
President Trump: The First 30 Days and What May Come Next
While we cannot know the many changes to come in the world of employment law under President Trump, we feel confident that the President will ease regulations on employers. For example, 2016’s increased salary threshold for white collar employees is unlikely to move forward. In contrast, the President has promised no major changes in the Equal Employment Opportunity Commission (EEOC), though cost cuts are anticipated as is an increased focus on disability and pregnancy claims. Growth of the “gig workforce” may expand as President Trump implements anticipated regulation reduction. Changes in labor law are also anticipated, though traditional labor alliances have been upended as President Trump has enjoyed far greater support from unions than recent Republican presidents. In the area of employee benefits, although the President and Congress are united on the idea of repealing the Affordable Care Act, there is no consensus on what replacement legislation will look like. One possible change is the expansion of Health Savings Accounts (HSAs) which could require employers to amend health plans to include HSAs as an option. Immigration reform is also expected given President Trump’s focus on increasing the jobs available to Americans. This may look like greater I–9 compliance enforcement and more site visits to review H1–B and L–1 petitions.
This blog was written by Nicole Whitecar at Miles & Stockbridge.
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