An analysis of the NLRB General Counsel’s Memorandum

Introduction

On June 6, 2018, the National Labor Relations Board’s (“NLRB”) General Counsel (“GC”) released a memorandum providing guidance on the NLRB’s recent decision in The Boeing Company, 365 NLRB No. 154. When responding to unfair practice charges involving employer handbook rules, the memo provides employers with an easy to follow roadmap to evaluate the legality of employer handbook language and rules.

Continue Reading How to Analyze Employer Handbook Rules in Light of <i>Boeing</i>

In a prior post, we discussed the Department of Labor’s issuance of a new final rule that expanded disclosure requirements for companies that hire union avoidance consultants.  The Department’s new “persuader” rule required employers to report the hiring of such consultants whenever these third parties engaged in indirect persuader activities (e.g., planning employee meetings, training supervisors to conduct meetings, and drafting or providing speeches to be made to employees), whereas the previous rule required disclosure only when the consultants engaged in direct contact with workers.

Subsequent to the DOL’s publication of the final version of the rule in late March, business groups and law firms sued to invalidate the rule.  Several states joined the case later as intervenors.  On November 16, a federal judge in Texas entered a “permanent injunction with nationwide effect,” blocking the DOL from enforcing the rule.  Judge Sam R. Cummings of the Northern District of Texas, had previously issued a preliminary injunction relating to the rule back in June.  In that earlier ruling, the Court had found that the rule effectively eliminated the Labor Management Disclosure Act’s advice exemption, was arbitrary capricious, and constituted an abuse of discretion.  In last week’s decision, the Court granted the Plaintiffs’ summary judgment motions and converted the preliminary injunction into a permanent injunction.

The Obama administration now faces the decision of whether to appeal the ruling, as they did with the Court’s preliminary injunction.  However, it is unlikely that the Fifth Circuit Court of Appeals would make any rulings on these issues prior to the inauguration of President-elect Donald Trump, after which the Department’s positions and strategy may change dramatically.  We will continue to keep you apprised of developments related to the persuader rule.

Executive, Professional and Administrative employees are exempt from overtime requirements if they meet three tests:  the salary level test; the salary basis test; and the duties test. As I am sure you have heard, new overtime regulations raise the required annual salary level from $23,660 to $47,476 (or $913 each week). Under the new salary level test, which goes into effect on December 1, 2016, exempt employees paid less than $47,476 no longer qualify for exempt status. So what is an employer to do?  Here are some potential options:

1. Retain Exempt Status. Increase the employee’s annual salary to at least $47,476 and the employee will remain exempt. Please note, however, that the rules establish a mechanism for automatically updating the salary and compensation levels every three years; thus, you may be required to again increase the employee’s salary in three years to meet the new threshold. Additionally, the employee still needs to meet the duties test, and this is a good time to review compliance with that test. This is the only option that does not require the employer to track the employee’s work hours.

a. Example.  Currently an exempt employee has an annual salary of $41,600 ($800 weekly) and, therefore, no longer passes the new salary test.  Employer raises the employee’s annual salary to $47,476.  Employee retains the exemption from overtime pay under the new regulations.

2. Convert to Hourly. Convert the exempt employee from a salary to an hourly wage and begin paying overtime for more than 40 hours worked in a week. The employer must begin tracking the hours worked by the employee. Overtime hours can be controlled by limiting or forbidding overtime without the employer’s express approval.

a. Example.  Currently exempt employee has an annual salary of $41,600 ($800 weekly).  Employer converts the employee to the equivalent hourly wage of $20 an hour ($800 ÷ 40 hours).  The employee’s overtime rate would be $30 an hour ($20 x 1.5).  Thus an employee who works 45 hours during one week would be paid $950 (($20 x 40 hrs) + ($30 x 5 hrs.)).  Assuming the employee averages working 45 hours a week during a year, this equates to an annual salary of $49,400 ($950 a wk x 52 wks).  Under these particular facts, it would be cheaper to pay the employee the $47,476 annual salary and have the employee remain exempt.

3. Remain Salaried, but Pay Overtime. Have the employee remain on a salary, but pay overtime when the employee exceeds 40 hours in a workweek. This will require the employer to track the employee’s time. The regular rate will be calculated by dividing 40 hours into the weekly salary and then paying 1 ½ times that amount for overtime hours. This may be a good option where an employee enjoys the status of a salaried employee and doesn’t want to become an hourly employee. Overtime hours can be controlled by limiting or forbidding overtime without the employer’s express approval.

a. Example.  Currently exempt employee has an annual salary of $41,600 ($800 weekly).  Employer retains the employee at this salary, but pays the employee overtime for any hours worked over 40 in a week.  The employees overtime rate would be $30 an hour (($800 ÷ 40) x 1.5).  Thus, an employee who works 45 hours during one week would be paid $950 ($800 + (30 x 5)).  Assuming the employee averages working 45 hours a week during a year, this equates to an annual salary of $49,400 ($950 x 52).  Please note that the employee is paid the same amount whether he is paid hourly or paid a salary.  Under these particular facts, it would be cheaper to pay the employee the $47,476 annual salary and have the employee remain exempt.

4. Fluctuating Workweek Plan. Use the Fixed Salary/Fluctuating Work Week plan, which is approved by the DOL regulations. Under this plan, the employee is paid a fixed salary that covers the straight time for all hours worked, including overtime hours. Thus, overtime is paid at a ½ time rate (compared to 1 ½ time rate) for the hours worked over 40 hours.  Under this plan, the regular rate must be calculated each week (by dividing the total number of hours worked by the fixed salary). Certain conditions, including prior employee agreement and paying the same salary when the employee works less than 40 hours in a week, are necessary to use this plan. Continue Reading Employer Options Under the New DOL Regulations

On February 3, 2016, Husch Blackwell Labor and Employment attorneys Terry Potter and Robert Rojas presented a webinar on Workplace Safety vs. Workplace Gun Rights. The webinar focused on the legal landscape of current gun legislation, how certain legislation affects employers and the workplace, and how to minimize any risks associated with that legislation. Specifically, the presentation covered state-specific parking lot laws and posting requirements, both of which regulate where and how an employer may prohibit weapons on its property. Parking lot laws make it illegal for employers to prohibit the possession of firearms in personal vehicles on employer-owned property while posting laws require employers to use certain signage to notify employees, customers, and others that firearms are prohibited inside an employer’s buildings or worksite.

As discussed during the webinar, the laws are state-specific so particular requirements and compliance issues will vary depending on the state in which you operate. To help navigate those laws, Husch Blackwell has prepared a 50-State Survey summarizing the state-specific parking lot and posting requirements.

If you missed the webinar and would like more information on the subject, we have included a link to the on-demand recording of the presentation.

As I was driving in to work the other day, I was listening to a program on National Public Radio regarding the differences in how Eastern and Western cultures tackle the learning process.  In summary, in Eastern cultures, struggle is viewed more as an opportunity versus an indication of failure, unlike Western cultures where the emphasis is upon one’s intelligence so that if one engages in a struggle to obtain a solution to a problem, then that is an indication of someone with less than desirable abilities.  I think this distinction is an important concept to keep in mind when you are seeking out applicants for employment, no matter the position.  In reviewing the resume or during discussions with the applicant, perhaps it would be appropriate to discuss any struggles which the individual has overcome in his or her life.  Perhaps even more importantly, how did they view the struggle, as an opportunity or simply a burden that got in their way.  I have always been a fan of those individuals who have “fire in the belly.”  Those are the individuals who embrace struggle.  They are willing to go outside their comfort zone to reach a goal.  So perhaps we should be looking less at the credentials an applicant for employment possesses and more about how they obtained those credentials.  It may be a better approach in terms of determining who is going to be the best employee in the long run.