Navigating 2018 Changes: FLSA and the U.S. Department of Labor #IowaLeague18 Navigating 2018 Changes: FLSA and the U.S. Department of Labor Melissa Schilling, Attorney, Dickinson Law Michael Staebell, Compliance Specialist, Dickinson Law Handouts and presentations are available through the event app and at www.iowaleague.org.

White Collar Exemptions In August, 2017, the Federal District Court for the Eastern District of Texas struck down the Obama administration’s Final Rule on the Fair Labor Standards Act White Collar Exemptions. Previously, in July 2017, the DOL had published a request for information (RIF) soliciting public comments on the White Collar overtime exemptions. 

White Collar Exemptions The DOL sought comments regarding: whether the standard salary level set in the rule effectively identifies employees who may be exempt; whether a different salary level would more appropriately identify such employees; the basis for setting a different salary level; why a different salary level would be more appropriate or effective. The comment period closed September 25, 2017

White Collar Exemptions DOL has stated they expect to publish a new proposed rule in the spring of 2019. Proposed rule will address only salary levels. Salary level of around $33,000/year has been mentioned by Labor Secretary Acosta In August 2018, DOL announced “Listening Sessions” for public input.

Employment Relationship Joint Employment When joint employment is established, the employee’s hours worked for both employers are added together and considered as one employment for purposes of determining when overtime is due. Moreover, both employers are jointly and severally liable for the total amount of wages due to the employee, even if contracts between them say otherwise.

Employment Relationship Joint Employment Traditionally, the amount of control over the employee that was exercised by the potential joint employer was a major factor in determining whether a generic joint employment relationship existed. January 2016 Wage and Hour guidance announced a joint employment analysis under the FLSA that was much broader than the traditional approach. The 2016 WHD guidance rejected control as a primary test for determining joint employment and replaced it with the “economic realities” test.   Under this new test any joint employment analysis must primarily determine if the employee is economically dependent on the potential joint employer.

Employment Relationship Save Local Business Act In November 2017 the U.S. House of Representatives passed HR 3441, the Save Local Business Act. If passed by the Senate and signed into law by President Trump The legislation would establish that joint employment could only be found if an entity “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment” of a worker. The Save Local Business Act sets at least five factors to determine whether businesses are considered joint employers.   If passed and signed into law, it would ensure that joint employment could be found only if a business entity directly and actually controlled such aspects of employment as: Hiring and firing; Determining individual employee pay rates and benefits; Day-to-day supervision of employees; Assigning work schedules, positions, and tasks; and Administering employee discipline.

Employment Relationship In essence, the Save Local Business Act limits joint employer liability to entities who have actual, as opposed to potential, control over essential terms and conditions of employment. This law would impact the determination of independent contractors as well, as did the pre- 2016 WHD enforcement. DOL-WHD withdrew its 2016 guidance, signaling that their enforcement would comport with the SLBA language.

Unpaid Interns On January 5, 2018, the U.S. Department of Labor issued a Fact Sheet with new guidelines for determining whether interns and students working for "for profit" employers are entitled to the minimum wage and overtime pay under the FLSA. The new guidelines apply a "primary beneficiary" test to determine whether interns and students must be paid as employees rather than the more restrictive six-factor test previously used by the DOL.

Unpaid Interns Under the former test used by the DOL since 2010, interns and students would need to be treated and paid as regular employees unless all six of the test’s criteria were met: Former 6 Criteria: The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment; the internship experience is for the benefit of the intern; the intern does not displace regular employees, but works under close supervision of existing staff; the employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded; the intern is not necessarily entitled to a job at the conclusion of the internship; and the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Unpaid Interns New Guidance – Primary Beneficiary Test The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

Unpaid Interns New Guidance – Primary Beneficiary Test The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. The extent to which the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Opinion Letters Wage and Hour Opinion Letters are official written opinions that set forth how wage and hour laws apply in very specific circumstances as presented to the DOL Wage and Hour Division via specific employer questions. Employers submit questions based on their factual circumstances and policies, and the DOL issues a written opinion as to the legality of the employer’s policies. Opinion Letters sometimes can be considered part of a good faith defense in court cases and generally in Wage and Hour investigations.

Opinion Letters In June 2017, the USDOL announced that it would be reinstating Opinion Letters issued by its Wage and Hour Division, a practice in place prior to 2010. From 2010 to July 2017, Opinion Letters were replaced by Administrator Interpretations, which set forth a more general interpretation of the law and regulations as they pertained to a particular industry or set of employees.

Opinion Letters In January 2018, the Wage and Hour Division reissued 17 Opinion Letters which were originally published under President Bush, and later withdrawn in the early days of the Obama Administration. Until these most recent letters, no opinion letters had been issued since January 14, 2009. www.dol.gov/whd/opinion/guidance.htm Latest batch of new OL’s published August 28: FLSA2018-20: Compensability of time spent attending voluntary ER-sponsored benefits fairs -19: Compensability of frequent rest breaks required by a FMLA-protected SHC -18: Compensability of travel time for EE’s wit irregular work schedules FMLA2018-2A: Organ donation may be a SHC if qualifying conditions are met -1A: No-fault attendance and “rolling off” of attendance points.

“PAID” Program Effective April 3, 2018 Proactive resolution of inadvertent FLSA violations w/o litigation or civil money penalties Overseen by DOL-WHD Payments and Releases limited to violations found Six month pilot program; to be evaluated for permanency

“PAID” Program Employer Reviews electronic compliance materials Audits compensation practices for violations Identifies and submits to DOL/WH WHD Evaluates information Contacts E to discuss next steps and/or request additional information Assesses 100% of back wages due Issues forms for payment and releases Makes payments by the end of the next full pay period Submits proof of payment to DOL

Civil Money Penalties $1,964 per employee for repeated or willful violations of FLSA MW or OT provisions $12,529 per employee for violations of FLSA child labor laws $56,947 per employee for CL violations resulting in serious injury or death (doubled if due to repeat or willful violation) Annual indexing of civil monetary penalties has been in place for several years now: per the “Civil Penalties Inflation Adjustment Act Improvements Act of 2015” Changes for 2018 announced 1/3/2018 2% increase over 2017

FLSA Case update

OSHA Electronic Reporting Recording Requirements Generally Electronic Reporting Requirements Federal OSHA Iowa OSHA Purpose More Changes in the Future?

OSHA Silica Standards What is Silica? Danger to Humans?

OSHA Silica Standards Standards Impact on Public Sector Penalties

Questions? https://www.dickinsonlaw.com/blogs-articles/wage--hour-watch/ https://www.dickinsonlaw.com/blogs-articles/iowa-employer-law-blog/