Employment Law Update - Summer 2016

DOL DOUBLES SALARY THRESHOLD FOR OVERTIME EXEMPTIONS

On May 18th the Wage and Hour Division of the U.S. Department of Labor (DOL) published its final overtime Rule doubling the salary requirement for the most commonly used overtime exemptions. Currently, workers earning $455.00 per week, or $23,660.00 per year are not entitled to overtime when they work over 40 hours in a work week if they also perform certain executive, professional or administrative duties. Effective December 1, 2016 this salary test will double to $913.00 per week or $47,476.00 per year. This has been a highly anticipated change that is now estimated to affect 4.2 million workers who currently are exempt from overtime compensation. When contacted for this article, a former Regional Enforcement Coordinator for the DOL Wage-Hour Division, Patricia Slate, stated:

“The changes in the final rules will impact the exempt status of employees throughout every industry. Time is short and employers must immediately consider the impact of reclassifying employees as non-exempt versus increasing their salary levels to comply with the new minimum guarantees.”

While this is a substantial change, employer groups were somewhat relieved that the DOL did not change the duties tests for the executive, administrative and professional employee exemptions. With all of the focus on the increased salary requirement, employers should not forget that, for an employee to be exempt from overtime, he/she must not only receive the appropriate salary, but he/she must also meet all of the duties requirements of any exemption relied upon. For example, any employee who is treated as an executive exempt employee would need to be primarily engaged in management activities and must supervise two or more full-time employees in addition to receiving the requisite salary before he/she will be exempt from overtime under wage-hour regulations.

Another change to the overtime regulations involves certain “highly compensated employees” who may be treated as exempt with only a minimum showing of exempt duties. Effective December 1, 2016 the salary threshold for treating highly compensated employees as exempt will increase from $100,000.00 per year to $134,004.00 per year.

FYI

The DOL changes to salary thresholds for overtime exemptions will be addressed at the upcoming 32nd Annual Employment Law Update to be held at the Hampton Roads Convention Center on July 21, 2016. Practical compliance advice will be provided to help employers avoid the substantial liability that could result if an employer is audited by the DOL or sued directly by current or former employees. To further help attendees avoid such risk, wage-hour compliance will be highlighted during the workshop on “Conducting an Effective Self-Audit”. This day-long seminar will include a number of other timely and relevant employment topics. To register, contact Andrea King at 757.624.3232 or adking@kaufcan.com or visit www.kaufcan.com/events.

RETALIATION REMAINS TOP EEOC CONCERN

During FY 2015, the Equal Employment Opportunity Commission (EEOC) received 89,385 discrimination charges. Retaliation claims remained the most frequently filed charge followed by race discrimination claims. More than 45% of all private sector claims filed with the EEOC last fiscal year were retaliation charges.

Since retaliation has consistently been the top private sector charge in recent years, the EEOC is in the process of updating its Enforcement Guidance addressing retaliation and related issues. The draft Guidance published earlier this year identifies five “best practices” for employers interested in minimizing the risk of retaliation. These practical suggestions are:

1. Written Employer Policies
2. Training On How To Avoid Retaliation
3. Providing Anti-Retaliation Advice and Individualized Support For Employees, Managers and Supervisors
4. Proactive Follow-Up; and
5. Review Consequential Employment Actions To Ensure EEO Compliance

The EEOC would like to see employers adopt anti-retaliation programs that encourage employees to raise concerns and supports them through all stages of the process, including investigating and resolving retaliation claims.


Practical Pointer

Many times, a supervisor’s natural reaction is to retaliate against someone who accuses him/her of discrimination. Keep in mind that even a meritless discrimination claim may lead to employer liability for retaliation. Retaliation can take many forms and sometimes may be very subtle which makes monitoring workplace reactions to discrimination claims very difficult but extremely important for employers trying to avoid EEO liability.

DOL ISSUES NEW FMLA GUIDE AND POSTER

In April, the U.S. Department of Labor (“DOL”) issued two new items on the Family and Medical Leave Act (“FMLA”). First, the DOL has published a new FMLA poster. Under the FMLA and its regulations, all employers covered by the FMLA are required to post notice of the FMLA and its requirements in all locations where it has covered employees in a place where it can readily be seen by employees and applicants. According to the DOL, the new poster is designed to be easier to read and more “user friendly.” However, employers are not required to replace their existing FMLA posters with the new poster. The DOL has stated that “[t]he February 2013 version of the FMLA poster is still good and can be used to fulfill the posting requirement.” A copy of the new poster can be downloaded from the DOL website at https://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf.

In addition to the new poster, the DOL also announced the issuance of its Employer’s Guide to the Family and Medical Leave Act as part of its efforts to “strengthen compliance with the FMLA by providing assistance to employers and helping increase their knowledge of the law.” According to the DOL, the Guide “is designed to provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA %u2026 [and] is organized to correspond to the order of events from an employee’s leave request to restoration of the employee to the same or equivalent job at the end of the employee’s FMLA leave.” The Guide can be obtained at www.dol.gov/whd/fmla/employerguide.htm.

NEW FEDERAL LAW PROVIDES ENHANCED PROTECTION OF TRADE SECRETS

The recently enacted Defend Trade Secrets Act of 2016 (“DTSA”) provides new mechanisms and stronger remedies for employers to protect their trade secrets. Until the passage of the DTSA, claims for misappropriation of trade secrets were largely handled under state law. But, effective May 11, 2016, a company or individual may file a lawsuit in federal court under the DTSA against an entity or person that improperly acquires, uses, or discloses a trade secret.

In addition to allowing a claim to be brought under federal law, the DTSA provides enhanced protections against and remedies for the misappropriation of trade secrets:

  • The law allows claims for theft of trade secrets to be brought within three (3) years from the time that the misappropriation was discovered or should have been discovered.
  • To prevent the dissemination of trade secrets, federal courts, without notice to the opposing side, may, under “extraordinary circumstances”, require that the disputed information or property be turned over to and held by the court until the resolution of the lawsuit.
  • The DTSA allows for remedies such as injunctive relief, damages for the actual loss of the trade secret, and damages for unjust enrichment of the other side. However, the DTSA provides even stronger remedies if it is found that the misappropriation was willful and malicious. In those circumstances, the prevailing party can receive punitive damages of up to double the actual damages and can recover its attorneys’ fees.

However, the DTSA also provides immunity for whistleblowers who disclose trade secrets in confidence to the federal or state governments or their attorneys solely for the purpose of reporting a violation of law or who disclose trade secrets in complaints or other documents filed with a court under seal. Employers are required to provide notice of the whistleblower exceptions in any confidentiality policies and confidentiality agreements with employees and independent contractors. If an employer fails to provide the required notice, it cannot recover the double damages and attorneys’ fees allowed by the DTSA.

Practical Pointer

The DTSA provides strong new protections against the theft of trade secrets, but employers will need to take immediate action if they want to take full advantage of the law. Employers must revise their confidentiality agreements – both with employees and independent contractors – and policies to provide the notice required under the DTSA. This should be done as soon as possible to ensure that, if necessary, the company can recover the double damages and attorneys’ fees allowed by the DTSA.

32ND ANNUAL EMPLOYMENT LAW UPDATE RETURNS TO HAMPTON

The third showing of the 32nd Annual Employment Law Update - Building a Solid Foundation will return to the Hampton Roads Convention Center on July 21, 2016. The seminar will offer 5 SHRM PDCs and 6 HRCI credits and will feature guests from key state and federal agencies. Join us to get the latest employment law updates including the Department of Labor’s recent changes to the FLSA Exempt Status and Overtime Regulations and the EEOC’s new Digital Charge System. To register or for more information contact Andrea King at 757.624.3232 or adking@kaufcan.com or visit www.kaufcan.com/events.


The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2017.

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