The DOL Sets the Stage for an Active 2020

On January 16, 2020, the U.S. Department of Labor (“DOL”) issued its final rule regarding joint employment under the Fair Labor Standards Act (“FLSA”).  The new rule will go into effect on March 16, 2020 and creates a four-factor balancing test for determining joint employer status.  The question of joint employer status can become an issue when a company contracts to use the services of another company’s employees, such as a staffing agency, or when a company is a franchisor whose franchisees have employees. The four factors the DOL will examine are: 

Does the potential joint employer: 

  • Have the ability to hire or fire the employee; 
  • Supervise and control the employee’s work schedule or conditions of employment to a substantial degree; 
  • Determine the employee’s rate and method of payment; and 
  • Maintain the employee’s employment records. 

No single factor is determinative and the weight given to each factor will vary depending on the facts in each situation.  However, the rule does make clear that merely maintaining employment records will not, in the absence of other factors, establish joint employer status.  The final rule also makes it clear that the potential joint employer must actively exercise one or more of the four control factors.  The ability to control these factors, if not actually exercised, is not enough to establish a joint employer relationship. 

The final rule also indicates that the use of a franchise model does not make it more or less likely that a corporate franchisor will be considered a joint employer of its franchisees’ employees. Finally, the fact that a business requires a subcontractor, personnel provider, or franchisee to maintain policies that encourage legal compliance, such as requiring a personnel provider to maintain workplace safety or harassment policies, does not make joint employer status more likely, so long as the primary employer, not the contracting employer, is responsible for enforcing those policies. 

The final rule replaces an aggressive and expansive standard used by the prior administration, so this change is a win for the business community. While Iowa employers should continue to be cautious and use best practices when using contracted personnel, the new rule reduces one area of risk associated with a franchise model or the use of staffing agency personnel. 

In other DOL news, the agency continues issuing opinion letters at a rapid pace.  We are only a month into 2020 and the DOL has already issued letters addressing: (1) the calculation of overtime pay for a non-discretionary lump sum bonus paid at the end of a multi-week training period; (2) if per-project payments satisfy the salary basis test for the administrative, executive and professional exemptions and (3) if a combined general health district must count employees of the County where the district is located for purposes of determining FMLA eligibility.  Stay tuned for more as we get further into 2020!

About Sara G. Sidwell

Sara Sidwell recently joined Shuttleworth & Ingersoll, P.L.C. after spending six years as in-house employment counsel for a large financial services company and a multi-national furniture manufacturer and retailer.  Sara advises and represents clients in all aspects of employment law, including discrimination and harassment, disability management, workforce reductions or restructuring, employment contracts, wage and hour compliance, background checks and FCRA compliance, performance management, noncompetition claims, commission agreements and claims, safety issues, workers’ compensation, and whistleblower claims. As a former in-house attorney for two large, multi-state corporations, Sara has significant counseling experience associated with all aspects of the employment relationship, from hire through termination, as well as conducting complex workplace investigations and providing manager and employee training. Sara handles charges before federal and state administrative agencies as well as all aspects of employment litigation, from the initial investigation through trial.

Now is the Time to Review Paid Leave Policies

Now is the Time to Review Paid Leave Policies

Under the tax act signed into law at the end of December 2017, employers that provide paid family and medical leave to their employees are entitled to a federal tax credit for a portion of those wages paid. This applies in 2018 and runs through 2019. Even though it is only effective through 2019, for now, it is a valuable tax credit to consider taking advantage of, and it may end up being extended.

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Office Holiday Party: When the Weather Inside is Also Frightful

Holiday Party Champaign

Every HR professional’s favorite time of the year is near. Actually, it’s here. Office Holiday Party Season! I recently went to see the movie Office Christmas Party. It came out to mixed reviews, but I must admit that I actually laughed out loud (like, LOLed) at the movie theater, to my husband’s utter embarrassment.

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FLSA Overtime Regulations (Temporarily) Halted: What Should Employers Do Now?

Labor and Employment Law, Shuttleworth & Ingersoll, P.L.C.

Yesterday, a federal court judge in the Eastern District of Texas issued a preliminary nationwide injunction that temporarily blocks the Department of Labor (DOL) from enacting its revised Fair Labor Standard Act (FLSA) overtime regulations. The new regulations set to take effect next week would have doubled the salary basis amount for white collar exemptions from overtime pay. In essence, employers now have a temporary reprieve from implementing the increased salary threshold.

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Much-Anticipated FLSA Regulations Are Here!

Labor and Employment Law, Shuttleworth & Ingersoll, P.L.C.

By Mark Hudson

Today, the U.S. Department of Labor (“DOL”) published long-awaited Final Fair Labor Standard Act (“FLSA”) rules amending the “white collar” exemption test and, more specifically, increasing the salary basis amount required to meet the “white collar” exemption. The regulations become effective December 1, 2016. The key highlights are:

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When Divorce Enters the Workplace

When Divorce Enters the Workplace

QDRO, QMCSO, IWO Oh My! Divorce Orders Requiring Employer Action

All employers, whether today or tomorrow, will encounter court orders requiring their action as a result of an employee’s divorce. Court orders requiring employer action include qualified domestic relation orders (QDRO), qualified medical child support orders (QMCSO), and income withholding orders (IWO). With today’s divorce rate climbing over 50%, employers will increasingly have to accommodate such court orders.

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Businesses Beware: Considering Healthcare Costs to Weather an Economic Downturn in Your Business Might Expose You to Age Discrimination Charges

Considering Healthcare Costs to Weather an Economic Downturn in Your Business Might Expose You to Age Discrimination Charges

As healthcare costs continue to rise, businesses naturally shop around for the best healthcare rates. Shopping insurance rates requires the employer to provide the demographics of its workforce, particularly their ages. When those considerations coincide with other efforts to cut costs, such as reducing the workforce, businesses should be especially careful not to leave the impression that the healthcare premiums play any role at all in deciding which employees get the pink slip. In other words, if your business is considering terminating employees, as part of a reduction in force or just as a matter of everyday life dealing with employees, and happens to also be shopping insurance rates—not an uncommon scenario facing a struggling business—be especially careful in documenting the basis for any terminations. This is especially true if any of the affected employees are over age 40 and protected by the Age Discrimination in Employment Act, or the ADEA.

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Culture Clashes: Can Working at Home in My PJs Really be a Reasonable Accommodation?

Working From Home Reasonable Accommodation

Jim walks into your office, sits down across the desk from you and tells you he wants to work from home to accommodate his disability. You are confused and look at Jim carefully, wondering how this would even work. After all, his job is primarily teamwork problem-solving! You want to say, “But, I need you in the office!” Hold that thought.

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One of My Employees Just Injured Herself on the Job. What Do I Do?

One of my employees just injured herself on the job. What do I do?

Ensuring the safety of your workers is one of your company’s foremost concerns. Unfortunately, even the most conscientious employers with the best safety plans sometimes cannot prevent injuries from happening. Watching a colleague hurt himself at work is a difficult and unpleasant experience. Dealing with the legal repercussions of that event can also be confusing or frustrating.

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Final Employer Mandate Regulations Delay Some Penalties and Provide Additional Guidance

United States Department of the Treasury

The Treasury Department has released the long-awaited final regulations under Internal Revenue Code section 4980H, which implements the employer shared responsibility (the “pay-or-play” employer mandate) provisions of the Affordable Care Act (“ACA”). Generally, this mandate requires employers with 50 or more full-time and full-time equivalent employees (“FTE”) to either (1) offer full-time employees and their dependents “minimum essential coverage”, that is health coverage that meets affordability and “minimum value” requirements, or (2) pay a penalty. Employers with fewer than 50 workers are exempt from the employer responsibility provisions. A few highlights in the final regulations include:

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