Each Congress and each Administration pursue various changes to the laws and rules governing how employees are paid. The current Congress and DOL have before them some ambitious legal changes. Many of these may not see the light of day during the next year or so, but what’s presented today often eventually makes it into the books. Therefore, knowing what’s in the mind of legislators and regulators is of value to employers. This blog summarizes those changes pending as of September 14, 2011.
PROPOSED DOL REGULATORY CHANGES
Plan /Prevent/Protect Initiative
In the Spring of 2010, the DOL announced a plan to establish a comprehensive set of regulations requiring employers to establish formal compliance plans with respect to the various laws administered by the Department, to document training with respect to those plans, and to document how they are complying with their legal obligations. Failure to have such a plan and properly administering it will be deemed to be a penalty. The DOL indicated that it intends to require employers to be more proactive in their compliance, in lieu of what it perceives to be a “catch me if you can” mind-set.
The DOL has announced its intent to greatly alter the recordkeeping required under the FLSA. This initiative was initially announced as an “FLSA Recordkeeping” proposal, but it has since been the labeled “Right to Know Under the Fair Labor Standards Act.” According the Department’s December 2010 Regulatory Agenda, this proposal was to be published in April 2011, but now it is not anticipated until sometime in June. Under the proposal, employers are expected to be required to provide greater disclosure for each pay on how each employee’s pay is computed (including deductions), and also to require that employers create, maintain and make available to the DOL a “classification analysis” for each person classified as an exempt employee under the FLSA or an independent contractor.
Break Time for Nursing Mothers
On December 21, 2010, the Wage and Hour Division of the U.S. Department of Labor published a request for information (“RFI”) from the public regarding the recent amendment to the Fair Labor Standards Act which requires employers to “provide reasonable break time and a place for nursing mothers to express breast milk for one year after their child’s birth.” The new amendment and break time requirement for nursing mothers is set forth in Section 4207 of the Patient Protection and Affordable Care Act, P.L. 111-148, and became effective on March 23, 2010. The RFI is the first step in rulemaking, and employers can expect DOL to issue new regulations perhaps as early as later this year. The key issues to be addressed by regulation include: should nursing mothers receive compensation for break time of 20 minutes or less; what is considered a “reasonable break time”; what “space provided to the nursing mother for expressing breast milk” is adequate and meets the requirements of the statute; and what would be considered “reasonable notice” to the employer of an employee’s intent to take breaks to express milk?
Veterans Day Off Act
On January 19, 2011, the “Veterans Day Off Act” (HR 319) was introduced to require employers of veterans who worked for the employer at least one year to take off Veterans Day. The veteran may take the day without pay, or use accrued paid time off for the absence. The employer may only deny the leave in the interest of public safety or if the leave would cause the employer significant or operational disruption.
On April 8, 2011, the “Payroll Fraud Prevention Act” (S 770) was introduced. The Act would expand current FLSA recordkeeping requirements to all workers, including non-employees. Also, employers that misclassify employees would be subject to a civil penalty, not to exceed $1,100 per employee who was the subject of such a violation, with higher penalties for repeat violators. The bill would also require employers to give the following notice to employees and nonemployees: “Your rights to wage, hour, and other labor protections depend upon your proper classification as an
employee or non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor.” In addition, the bill would require the Secretary of Labor to establish a single webpage on the Labor Department’s website that “summarizes in plain language the rights of employees and non-employees under the Fair Labor Standards Act.” The bill would also require states to investigate and audit employers who may be misclassifying employees, in order for those states to continue to receive federal unemployment insurance grants.
On January 12, 2011, the “Living American Wage (LAW) Act of 2011” was re-introduced. Under this bill, the federal minimum wage would be adjusted every four years to be equal to “the Minimum hourly wage sufficient for a person working for . . . 40 hours per week, 52 weeks per year, to earn an annual income in an amount that is 15 percent higher than the Federal poverty threshold for a family of 2, with one child under the age of 18, and living in the 48 contiguous States, as published for each such year by the Census Bureau.” Similar bills have been introduced since 2006.
On February 10, 2011, the “Working for Adequate Gains for Employment in Services Act,” or “WAGES Act” (HR 632), was introduced to amends the Fair Labor Standards Act to establish a base minimum wage for tipped employees of at least: (1) $3.75 an hour beginning 90 days after the Act’s enactment; (2) $5.00 an hour one year thereafter; and (3) for every year thereafter, to be the greater of 70% of the minimum wage and $5.50 an hour.
On January 5, 2011, the “Health Care Incentive Act” (HR 42) was introduced H.R. 42. The bill would require that the Secretary of Labor promulgate a rule that for any employer engaged in interstate commerce that is required by Federal of State law to pay a minimum wage at a rate set higher than the minimum ceiling as in effect on September 1, 1997, to receive a credit towards the wage for “any creditable health care benefits.”
On June 3, 2011, the “Electronic Paycard Protection Act” (HR 2125) was introduced. The act would amends the Fair Labor Standards Act to require an employer who pays or wishes to pay an employee by means of an electronic payroll card to provide certain disclosures to the employee at the time the employee is provided the option to enroll in the electronic payroll card program. Included among such disclosures, in addition to all terms and conditions governing the card’s use, are that: (1) the employee has the ability to access his or her wages as well as electronically check the available balance through use of the card; (2) no fees are assessed to the employee for ordinary card use; (3) the employer maintain payroll funds accessible by means of the card only in an insured depository institution; (4) the employer offers the employee the option of wage payment through direct deposit to the employee’s checking or savings account; and (6) the employee not be terminated for opting
not to participate in the program.
Direct Care/Companionship Workers
On June 23, 2011, the “Direct Care Job Quality Improvement Act of 2011” (HR 2341) was introduced to overcome the outcome the Supreme Court’s decision in the Long Island Care at Home v. Coke case and make most domestic caregiver employees subject to the FLSA and no longer exempt. This would be accomplished by the bill’s new definition of “casual basis” in domestic service employment to provide companionship services to mean: “employment which is irregular or intermittent, and which is not performed by an individual (1) whose vocation is the provision of companionship services; or (2) who is employed by an employer or agency other than the family or household using the services of such employer or agency.” The bill further states that “[e]mployment is not on a casual basis if any family or household employer employs an individual performing companionship services for more than five (5) hours per week or has employed the individual for a time period that has extended beyond twelve (12) weeks in a calendar year.” In other words, if the bill passes, any direct care worker such as nursing aide, home health aide, or personal and home care aide who works more than 5 hours per week or is employed by the individual needing care for longer than 12 weeks per year would be entitled to minimum wage and overtime pay. The bill also provides for data collection and analyses to evaluate the needs for and uses of domestic caregivers. The Department of Labor has indicated that it may propose regulations to redefine the meaning of “casual”, as well.