From recruiting to termination, 2016 is looking like the perfect storm for HR, says Attorney John Husband, whose panel opened the Advanced Employment Issues Symposium held recently in Las Vegas.
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Husband, with Holland & Hart LLP, was joined by Attorneys Mario Bordogna of Steptoe & Johnson PLLC; William Bowser of Young Conaway Stargatt & Taylor, LLP; and Kara Shea of Butler Snow LLP.
Perfect HR Storm
What’s making up the perfect storm?
- Laws are ever more complex.
- Government agencies are more aggressive than ever before. (Yes, agreed Shea; there’s been a total change—they were reasonable, now they are unreasonable.)
- Judges are pushing the limits of laws.
- States and municipalities are adding more laws.
AND, says Husband, the law assumes you know it all.
Key Wage and Hour Developments
Bowser says that the U.S Department of Labor (DOL) has been engaging in increasingly aggressive tactics with respect to investigations, including assessing liquidated damages for first-time offenders, and he expects this trend to continue and increase in 2016, leading up to the fall election.
Wage and hour lawsuits are still the fastest growing category of employment litigation, in some measure because they are attractive to attorneys. “I could find wage/hour violations in any one of your companies,” plaintiffs’ attorneys tell Bowser.
‘White-Collar’ Exemption Rule Changes
Major changes are on the way with respect to the salary level requirements for exempt white-collar employees, and there may be other changes as well. All recruiters need to be aware of these impending rules.
The public comment period on proposed rules ended in September 2015. We are awaiting publication of DOL’s final rule in the Federal Register. Proposed rules are expected to be finalized in the first half of 2016.
The DOL has proposed a huge—over 100%—increase in the minimum salary threshold for exempt white-collar employees. After pushback from commentators, will the final rule stick with the proposed increase (to about $50,000 per year) or offer a compromise? We don’t know, but regardless, employers will need to either reclassify or raise pay for large segments of their workforce in 2016.
Duties tests may be altered as well, including possibly eliminating exempt status for working supervisors.
Employers should now be taking stock of their workforces, identifying employees who are likely to be affected, and evaluating the various options available to comply with the expected rules.
Independent Contractor or Employee?
Independent contractor misclassification is a hotter topic than ever, Bowser says. In making independent contractor decisions, agencies are playing down the “control” angle; instead they are looking at “economic independence.”
As independent contractors are brought in, recruiters should be wondering, Are they actually employees? (Did I actually just accidently hire them?)
Administrator’s Interpretation No. 2015-1, July 15, 2015, says, “Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States, in part reflecting larger restructuring of business organizations.”
What should you do if the DOL shows up at your company’s doorstep? Bordogna suggests you call trusted counsel. You want to be cooperative with the DOL, but not too cooperative; your attorney can help walk you through it.
Joint Employer—Are You One or Not?
The Browning Ferris Industries (BFI) decision (Browning Ferris Industries of California, Inc. 362 NLRB No. 186) has impacted the joint employer issue. BFI operated a recycling facility; Leadpoint Business Services (LBS) supplied workers who sorted the recyclable materials inside, by contract with BFI.
- LBS had its own supervisors inside the facility and recruited/tested/hired its workers.
- LBS was responsible for disciplining its workers, but BFI had contract power to reject them.
- BFI set hours of facility, shifts, and work priorities; LBS put workers on particular shifts.
The upshot is that entities can be joint employers if they share/codetermine essential terms and conditions of employment, including wages; hours; number of workers; scheduling; and determining seniority, overtime, or method/manner of work.
Furthermore, this determination is no longer based on actual, immediate control; right to control is enough.
In tomorrow’s Advisor, more about the “perfect storm” that’s brewing for HR in 2016, including the National Labor Relations Board’s aggressive march into HR territory. Plus an introduction to BLR’s HR Playbook: HR’s Game Plan for the Future.