The California Supreme Court recently ruled on a change to the test that a hiring entity must use in order to determine if a worker is an independent contractor or not. It’s a much stricter and, as a result, clearer test than what existed before or which exists now with the Department of Labor. Worker classification is notoriously nebulous. Now in California, the definition is much easier to interpret.
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There are a few industries in which employees are often misclassified as independent contractors, and salons are one of the big ones. Most salon workers should be employees but are often classified incorrectly. It’s a widespread problem – a problem which costs workers money and, if they’re caught, costs employers a huge amount of money.
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The FLSA is a set of federal laws regarding minimum wage, overtime, and other important workplace practices. The rules aren’t always easy to understand, however, and sometimes they get misinterpreted by business owners and even by the courts. (As an example, the supreme court recently had to step in and give the final word on a type of overtime exemption.) This is why the Department of Labor has provided opinion letters to help clarify some of the more confusing scenarios.
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While the April 2nd Supreme Court ruling may only apply to a very small segment of workers and probably only affects a single wage and hour lawsuit currently, this departure from the longstanding approach at interpreting overtime exemptions will likely have broader implications and affect more workers in the future.
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On March 6, 2018 the Department of Labor launched a pilot program allowing employers to audit their own pay practices and catch and report their own wage and hour mistakes. It’s called the Payroll Audit Independent Determination (PAID) Program and will operate for six months as a pilot program.
Prior to now, wage and hour mistakes would land employers in court where they would have to pay court and lawyer fees, back wages, and liquidated damages. With the PAID program, if mistakes are caught independently and in good faith, employers can avoid the extra costs and simply pay employees back for the mistakes made.
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With the exempt salary threshold saga finally behind us, the latest Bed Bath & Beyond wage and hour suit is a good reminder that following the FLSA’s exemption status requirements is just as important as ever.
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We’ve been waiting on something to happen to Obama’s overtime rule since December when federal judge, Amos Mazzant, put an injunction on it following a challenge put forth by 21 states and dozens of business groups. Finally, 8 months later, we have an answer.
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Employers hear a lot about overtime violations and other wage and hour offenses. There are so many rules to learn and so many cases in the news. It can be a little scary to think about the consequences of getting an employee’s payroll wrong.
There’s some good news and some bad news for employers in this regard.
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Changing the overtime threshold was never going to be easy but pausing the rule complicates things in a big way. Do employers undo what was already done – take back their promises of a salary increase or eligibility for overtime? How will employees deal with the news? What does the law allow?
2 CommentsThe new overtime rule employers have begrudgingly prepared for and employees have eagerly awaited over the last several months received a nationwide injunction by a Texas judge, Tuesday.
This news comes only 10 days before the DOL’s new rule was scheduled to go into effect and after many businesses had already started preparing for it.
The rule was challenged by 21 states and over 50 business groups and, while a federal judge in Texas reviews the potential impact of president Obama’s overtime rule, the deadline is on hold. With the Trump administration taking over the DOL in January and a republican held congress, it’s conceivable that rule will undergo some changes, but what those might be is anyone’s guess.
For now, businesses are advised to continue to make plans, assuming some kind of change to the overtime threshold will take place.
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Owners of very small businesses often do everything themselves. They don’t have an HR person to tell them what’s legal and what’s not. They just have to try to keep up with the changing federal and state laws on their own. The problem with that is many of them don’t and, as a result, employers frequently have to deal with employment lawsuits. Employers can keep themselves out of trouble by following some time and attendance best practices:
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Well, it’s finally here. After almost a year of discussion, the landscape of worker classification is finally set to change. Once the new overtime threshold of $47,476 per year goes into effect on December 1, 2016 all of the remaining salaried employees in the country will fall into the middle class bracket.