Seminar | The New Overtime Regulations: Practical Strategies and Tips for Compliance

Please join us on Wednesday, July 13, as David Barron, a member of Cozen O’Connor’s Labor & Employment Department, and a panel of Human Resources Professionals from Briggs & Veselka Co., along with other industry professionals, host a seminar on The New Overtime Regulations: Practical Strategies and Tips for Compliance.

The final overtime regulations have been released and it is critical that all employers, large and small, ensure they are in compliance by December 1, 2016. If your business employs exempt salaried employees, you will now be required to pay a minimum annual salary of $47,476 (almost double the old requirement of $23,660) to avoid overtime.

Houston City Club
1 City Club Drive
Houston, TX 77046
Wednesday, July 13

Registration and Breakfast is from 7:30 a.m. – 8:30 a.m.
Seminar from 8:30 a.m. – 10:30 a.m.

CLE credits pending approval.
Please RSVP by Wednesday, July 6.

This seminar will cover:

  • Strategic options for re-classifying exempt employees as non-exempt eligible for overtime;
  • Practical tips from both lawyers and Human Resources Professionals for messaging of re-classification to avoid confusion and potential litigation;
  • Overview of new allowance for up to 10 percent of non-discretionary incentives to be included in salary; and
  • Refresher on all white collar exemptions, and strategies for broader wage and hour audits in light of increased scrutiny

Join us for this comprehensive and informative seminar on regulations that will have a profound impact on every company’s labor costs and the risk for wage and hour litigation. Bring your questions!

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New Overtime Regulations Put Spotlight on Incentive Plans

One of the few concessions made by the Department of Labor (DOL) to employers in the new overtime regulations is permission to count non-discretionary incentive payments towards the minimum salary threshold for exempt employees. Our firm’s alert on the new regulations can be found here, and, in a nutshell, the new rules bump the minimum salary amount for exempt employees from $455 per week to $913, starting December 1, 2016.

To make the huge increase more palatable, DOL will allow employers to count bonuses and commissions towards the minimum salary, but there are important caveats.

  • 128px-US-DeptOfLabor-Seal_svgFirst, the payments must be made quarterly, or more frequently. Annual bonuses won’t count.
  • If you pay more frequently than quarterly, and don’t hit the minimum, an employer may also make a “catch up” payment no later than the next pay period after the end of the quarter.
  • A “catch up” payment only counts against the previous quarter’s salary amount, not the one in which it is paid.
  • The DOL still requires that 90 percent of the salary be fixed, and not dependent upon the quality or quantity of work. Payroll records should reflect the fixed salary separately from any fluctuating incentive payments.

Lastly, and most important, the bonus or commissions must be “non-discretionary.” The regulations define this term as “promised bonuses such as those announced to employees to induce them to work more efficiently or to remain with the firm.” The DOL has given examples such as “individual or group production bonuses, or bonuses for quality and accuracy of work.” See 29 C.F.R. 778.211. I suspect that the amount of litigation over whether incentive plans are non-discretionary will increase dramatically with the new regulations because this analysis could be determinative of whether an employee is owed overtime. Simply, if done properly, the employee is lawfully exempt. If a mistake is made, and the employee’s salary does not otherwise meet the minimum threshold without the incentive payment, overtime would be owed. For that reason, employers relying on this 10 percent provision should make sure they thoroughly review their plans with counsel.

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Is Your Sexual Harassment Training Making Things Worse?

classroomA recent article about a study on the effectiveness of sexual harassment training caught my eye. The article (link here) explains: “Some researchers believe trainings have no positive effects, tend to be more about legal cover than meaningful prevention or may even have unintended consequences – raising serious concerns about the way colleges and companies heavily focus on training as a solution to harassment.” If true, this would mean most organizations are, at best, throwing money away on training and, at worst, potentially encouraging disputes.

Like most things in life, the truth probably lies somewhere in the middle. No doubt, many companies offer perfunctory training with low budget videos or silly examples of inappropriate behavior. If you are wasting people’s time to check off a box on the compliance checklist, everyone will know it. The last thing you want is to have employees ridiculing the effectiveness of the training or viewing the subject as one not taken seriously by the company. The question should not be whether to train or not (you should!) but how to implement training that is practical, timely, and aimed at the appropriate audience.

Here are some tips on how to craft an effective sexual harassment training program:

  1. The training should not just cover sexual harassment! Harassment based on any protected classification is unlawful, and focusing on sexual harassment will only make male employees feel targeted or defensive.
  2. Employees and management should be trained separately. First, the training should be aimed at the appropriate level, and supervisors need to know different information than rank and file employees. Management won’t ask questions in front of their subordinates (and vice versa). Make everyone more comfortable by splitting up these groups.
  3. Hire a qualified and experienced speaker. Playing a videotape or having every employee watch a PowerPoint on a website is cheaper (maybe) but will likely be viewed as a waste of time. Hire someone who is actually interesting and who can give practical examples of what to do/not to do.
  4. Keep it simple – employees (as opposed to management) don’t really need to know the law. The relevant standard is company policy, which is often much stricter than the law. For example, employees don’t need to know the elements of a prima facie Title VII claim or the Latin origin of quid pro quo harassment – they need to be reminded to be careful when texting coworkers of the opposite sex and to be understanding of diverse employees who may not look or talk like them. Similarly, they need to understand the company’s complaint procedure and why it is important – not whether they have a good case to take to a plaintiff’s lawyer.
  5. Make the training interactive, and let employees become invested in the discussion. Ask what they think – you might learn something.
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Schilling Firing: Can You Fire An Employee for What They Say on Social Media?

This week ESPN fired pitcher-turned-broadcaster Curt Schilling for an allegedly offensive tweet about the recently passed law in North Carolina requiring persons to use the restroom associated with the sex of their birth. As an example, transgender men in North Carolina would be required to use the men’s bathroom, and not the female bathroom, even if they dress and live as a female. An article about the firing can be found here.


This case drives home that even a high profile celebrity can be fired for what he or she says on social media. Simply put, with limited exceptions, a private employer can lawfully fire an employee for posting an embarrassing or offensive statement on social media. Government employment is different because of constitutional rights to free speech, but no such rights exist for private employees. What happens on Facebook does not stay on Facebook; and every user of social media should consider the ramifications of their message being read by the Human Resources department or their supervisor.

So what are the exceptions? First, if an employee has an employment contract or collective bargaining agreement limiting termination to “just cause,” employers should proceed with caution. There is little authority that an offensive tweet or Facebook posting meets this standard. The second exception is “protected concerted activity,” which means certain communications among employees about the workplace are protected from retaliation under federal labor laws. As an example, a tweet in support of a $15 minimum wage accompanied by a complaint about the wages earned by the employee, which is “liked” by numerous coworkers, is probably protected. An embarrassing tweet about a poorly dressed customer (think Wal-Mart) would typically not be protected. Lastly, some states have laws protecting employees from retaliation for engaging in lawful activities outside the workplace. Although there is little authority on this point (as the laws were not written to protect this conduct), it is reasonable to expect that lawsuits may be brought in such states against employers who fire employees for engaging in speech outside the workplace that is not otherwise unlawful (i.e. defamatory, threatening, etc.)

Obviously, most political statements by employees won’t make the news because they are not famous like Schilling. That said, HR departments are increasingly being inundated with complaints about insensitive or non-politically correct social media posts by coworkers. This issue is not going away any time soon, so it is important for employers to understand the lines that cannot be crossed.

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“Packing Heat” in the Workplace: The HR Guide to Managing Guns and Violence at Work

firearmI will be speaking at the upcoming monthly meeting of the Texas Bay Area chapter of SHRM on Thursday, April 14, 2016. The meeting will host a luncheon and workshop on the topic of guns in the workplace.

With the recent legislation of “Open Carry” rights in Texas (in addition to the prior “Concealed Carry”), employees have been pushing the boundaries of what is allowed in the workplace.

Employers must manage both the danger presented by employees carrying firearms, and the potential for a workplace violence or terrorist incident in the workplace where an armed employee may be able to save lives.  These are tough choices.

During the luncheon (12:00-1:00), speakers will cover the intersection of gun laws and the workplace, and provide practical suggestions for workplace policies.

During the workshop (1:15-3:00), multiple speakers will delve into common practical and legal issues arising out of workplace violence, and other related issues such as background checks and employer responsibility for violence in the workplace.

In addition to the legal policy perspective, Webster’s Chief of Police Danny Presley will be discussing how to identify and prepare for a violent incident in the workplace.  Also, he will share possible ways to diffuse a violent situation and when to solicit help.

Come join us at the Bay Oaks Country Club, 14545 Bay Oaks Blvd., Houston, TX 77059, on April 14th!

Registration opens at 11:30 a.m. Get tickets here!




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Department of Labor Getting Close to Release of Final Overtime Regulation

128px-US-DeptOfLabor-Seal_svgLast year, the Department of Labor (DOL) announced a proposed regulation to increase the minimum salary threshold for salaried exempt workers from $23,000 to approximately $50,000 and to index the amount to inflation. Understandably, this proposal to double the required salary for overtime exemption was met with great resistance and comment by employers across the country. Many companies have been waiting with baited breath to see what the final proposal will entail, and when it will become effective.

On Tuesday, March 15, 2016, DOL sent its final regulations to the Office of Management and Budget, which is the final step before the rules are announced to the public and become effective. Although DOL officials had publicly announced that the rules would be issued sometime in July of this year, it now looks like that timetable could be pushed up, with the final rules being issued in May or June.

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Kesha Lawsuit Shows that Employment at Will is Not So Bad

shutterstock_375508717I was recently quoted in an article for the Society for Human Resource Management (SHRM) website regarding the legal battle between pop singer Kesha and her producer Dr. Luke. It is an interesting read about the differences between recording artist contracts and employment contracts. The article can be found here.


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Cutting Hours to Avoid Obamacare Challenged Under ERISA

obamacareSince the passage of the Affordable Care Act in 2010, opponents have said that the law will actually hurt employees in two ways. First, companies on the cusp of hiring a 50th full-time employee may hold off in fear of triggering the burden of the employer mandate to provide coverage or else face penalties. Second, employees with variable hours may find themselves limited to 30 hours, the threshold for “full time” status under the ACA that triggers the mandate and penalty provisions. Some employers actively publicized their intention to cut the hours of part-time workers because the expense of providing coverage was too expensive. Until now, there has been an academic debate as to whether employers have the right to cut expenses and manage healthcare costs, or whether such actions would run afoul of Section 510 of ERISA, which makes it unlawful to “discharge, fine suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of a benefit plan.”

That debate is no longer an academic one, as a class action has been filed against Dave and Busters alleging that the curtailment of working hours constituted discrimination “for the purpose of interfering with the attainment” of healthcare coverage.  My firm’s full client alert on this case can be found here.

This case is an important one as the New York court found that the plaintiffs stated a claim and denied the employer’s motion to dismiss. That means the case will proceed with discover and potentially a trial. The case will no doubt encourage other plaintiff’s lawyers to take up this theory around the country, especially against companies who have openly stated that their reasons for cutting employee hours are related to the ACA. One takeaway from this suit is that employers should exercise extreme caution in openly making political statements opposing the ACA or suggesting that employee hours will be cut to avoid triggering healthcare coverage. Supervisors should be trained to stay away from this topic, as anything they say “can and will be used against them.” Notably, in the Dave and Busters case, the plaintiffs allege that management told employees during meetings that the ACA would cost the company two million dollars, and it was cutting hours to reduce those costs.

In sum, it is still very much an open question as to how the courts will resolve the conflict between an employer’s right to manage its business (including healthcare costs) and the protections of Section 510. For example, a strong argument can and will be made that Section 510 does not protect part-time workers who have not yet obtained healthcare (as opposed to cutting hours of an employee who already has coverage), and the company has a right to manage its business and to plan how many covered employees it can afford. This is still a gray area of the law; and employers should remain cautious and conservative when it comes to making public statements to employees or the media.


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White House Announces New Requirement for Pay Data to Be Included in Form EEO-1

White House

Today, the White House announced yet another executive action. For the first time, private employers will be required to include pay data on the Form EEO-1, which is required annually for all employers with more than 100 employees. Details on the announcement can be found here.

The proposed regulation should be issued next week and will have more details. Currently, employers that complete the EEO-1 are required to report the number of employees by race, sex, ethnicity, and job group. This proposal would add a new requirement for pay ranges, and the administration stated that employers would be allowed to group salaries to protect privacy.

This is the first time that private employers will be required to publicly announce pay data, so this proposal will be highly controversial. Putting aside the stated purpose of highlighting gender gaps in pay, the new requirement will also highlight executive pay as salary data for all levels of employees must be included on the EEO-1. It is easy to predict that union organizers and plaintiff lawyers will find such information useful for attacks on employers. This requirement is almost certain to be challenged in the courts, so stay tuned.


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Looking Forward to 2016

shutterstock_333981827A new year is upon us, and it is shaping up to be a big one in terms of political and regulatory change. As the last year of the Obama presidency, there is a lot of pressure on the administration to leave a mark – including in the area of labor law. It is also an election year, which may increase the pace of legislating in both Congress and state houses around the country. Here are five possible changes on the horizon of which every company should be aware:

  1. New Salary Threshold for Exempt Employees: We know this new rule is coming in 2016. It was announced last year; and employers collectively gasped as the minimum salary amount was proposed to be raised from $23,000 to over $50,000. No one knows what the new minimum salary will be for exempt employees, but it will likely be close to the proposed amount, and a large increase from the current status quo. If you have not already analyzed how many exempt employees would fall under this threshold, and developed a plan to either offer wage increases or convert these employees to hourly, you have a “to do” list for 2016.
  2. Changes to Overtime Duty Tests: Increasing the salary threshold for exempt employees is a big change, but many believe the administration will not stop there. Possible changes to overtime regulations include re-focusing the tests on the amount of time an employee spends on non-exempt tasks, instead of the importance of their exempt tasks. For litigation, this change is a nightmare because it makes it easier for employees to exaggerate, or outright fabricate, a description of their duties to benefit their case. Most employers only track total time at work, not how much time an employee spends on a particular task. Litigating how much time a manager spends managing, versus helping subordinates on a production line, devolves very quickly into a “he said, “she said.”
  3. Ban the Box: These laws have been sweeping the country, outlawing application questions related to an individual’s criminal record. In 2016, the trend is likely to continue with more cities and states passing such laws. It will prove harder than ever for multi-state employers to keep track of which application forms can be lawfully used in which jurisdiction, and push many to throw out the conviction question nationwide for consistency.
  4. Local Minimum Wage Increases: If you have employees in a “blue state” or city with a predominantly Democratic city council, you likely have already seen an increase in minimum wage, or will have one on the ballot next year. The federal minimum wage rate of $7.25 has not changed since 2009. As of 2015, 29 states plus the District of Columbia had minimum rates above the federal amount. Many of these states also index their minimum wage rate to inflation, which means an automatic increase periodically. The takeaway is that it will become harder than ever to keep track of all of the different minimum wage rates if you have a workforce spread out geographically.
  5. LGBT Rights: Last year was the year the Supreme Court opened the door for a constitutional right to gay marriage. That decision will be relied upon to push for additional rights in all areas of society, including the workplace. The federal government has already ruled that “spouse” under the FMLA includes same sex spouses, and most employers have made similar allowances for paid sick time and bereavement policies which reference a “spouse.” If you have not already, conduct a review of your policies and procedures to analyze whether you have any inconsistencies that could serve as the basis for a discrimination claim.



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About HR Headaches
HR Headaches is a blog for Human Resources professionals, business owners, and in-house counsel to get the latest news, analysis and tips in the area of labor and employment law. Every day there are new court decisions, agency interpretations, and regulations which affect the workplace, making it difficult, if not impossible, for many employers to keep current. HR Headaches is dedicated to providing information in a practical, no-nonsense manner to help employers avoid legal disputes and keep policies up to date.
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