Human Resources & Workplaces

Employers are well aware of the requirement to post various notices from the EEOC, DOL, and other acronym-bearing state and federal agencies.  Unfortunately, many employers have a “post it and forget it” mentality and fail to regularly update those posters and required notices.

These agencies, however, are often issuing updated required postings and employers who fail to heed those requirements can be assessed fines and potentially face criminal charges.  In California alone, there were 40 mandatory changes in 2017 and more than 30 mandatory changes in the first seven months of 2018, with more on the way.

A few recent noteworthy changes for employers in California and New York City deserve attention:

  • The California Employment Development Department has made a mandatory change to the notice to employees that provides information about unemployment insurance, disability insurance, and paid family leave. The EDD released this new, mandatory posting on July 3, 2018, although the revision date is May 2018.

    California employers should print the updated notice and post it where employee notices are generally posted.  The new notice (EDD 1857A) is available in both English and Spanish and may be downloaded here.

  • Beginning September 6, 2018, the “Stop Sexual Harassment in NYC Act” requires all employers with employees working in New York City to post a formal notice in a conspicuous location on their premises and distribute a fact sheet to newly hired employees. These documents, issued by the New York City Commission on Human Rights, provide information on the Act, as well as on what constitutes sexual harassment, how to report sexual harassment, and where to find additional resources.

The NYC legal notice can be downloaded here.

The NYC fact sheet is available here.

In addition to making these required updates, all employers should develop and maintain a tracking system to regularly check for mandatory updates for both federal and state postings and replace any out of date notices.

Refusing to serve a patron is a hot topic right now, and it is not something any employer should take lightly. When recently asked about this issue by Thomson Reuters, partner Seth Ford and staff attorney Matt Anderson outlined the do’s and don’ts for a refusal of service policy. The main point is that employees themselves should have very little leeway to make such decisions on their own or based on their own opinions, save for extenuating circumstances.

These quotes can be found in Thomson ReutersEmployment Alert dated August 6, 2018 in an article titled, “Stop Trouble Before It Starts With A Refusal Of Service Policy” by Maureen Minehan, found here (used with permission).

Pay equity is a hot topic – and not just in employment and HR circles.  Both inside and outside of the courts, the issue has gained national attention and is spurring legislators in states across the country to act. Recent developments are a timely reminder to all employers to start thinking proactively about pay equity and ensure pay is based on proper criteria (performance, experience, effort, skills) and never gender or other protected characteristics.

For instance, in March, a California Court made headlines after allowing a class action complaint alleging systemic pay discrimination on behalf of women in thirty enumerated job positions employed by a high-profile technology company to proceed, in part based on allegations that the company had a business-wide policy of considering new hires’ previous salaries when determining starting salary and job level.  Additionally, in a case that’s grabbing attention from lawyers and non-lawyers alike, Rizo v. Yovino, the Ninth Circuit Court of Appeals reversed course from an earlier decision and held that the employer could not use a female employee’s prior salary alone as the basis for her current salary.

Outside the courts, this year saw even greater attention paid to Equal Pay Day, celebrated in 2018 on April 10 – a date which symbolized how far into the year women must work to earn what men earned in the previous calendar year.

On the heels of these court cases and increased attention, several states have taken it one step further by proposing, and enacting, new or enhanced legislation centered around pay equity.  California was among the earliest to adopt a state pay equity law, but the trend has continued to gain momentum with other states, such as Massachusetts, Delaware, Oregon, and, recently, Washington and New Jersey, following suit.

For example, last month New Jersey enacted what some consider to be one of the strongest pay equity measures in the country.  The law, which will go into effect on July 1, 2018, bans unequal pay for “substantially similar work” and allows victims of discrimination to sue for up to six years of back pay.  Successful employee claimants will have the opportunity to seek monetary damages of triple the amount lost.  New Jersey’s law is considered comparatively strong because it prohibits pay disparities based upon any characteristic protected by the New Jersey Law Against Discrimination—so it is not limited to gender alone.

Likewise, in March, Washington state enacted an updated Equal Pay Opportunity Act.  The law, effective June 7, 2018, prohibits discrimination in compensation based on gender (although pay differentials based on a job-related factor or factors that are consistent with business necessity are not prohibited).  Employers also may not limit or deprive career advancement opportunities based on gender and may not require nondisclosure of wages (or “wage secrecy”) as a condition of employment.

These are just two examples of new laws targeting unequal pay; other states may enact similar laws (or even laws providing broader protections) moving forward—and you can be sure your employees will be paying attention.  Prudent employers will review their pay structures now and regularly to avoid potential problems later.  If you would like assistance reviewing your pay structure, please reach out to your favorite Troutman Sanders employment attorney and we’d be more than happy to assist.

 

We wrote recently about the Trump Administration’s efforts to roll back the Obama-era NLRB’s workplace handbook and rule restrictions. It’s time to update you further on where that effort stands.

As a reminder, the Obama NLRB held in December 2017 in The Boeing Company case that facially-neutral employment policies and rules will now be classified into one of three categories:

  • Category 1 includes policies that are legal in all cases since they can’t reasonably be interpreted as interfering with workers’ rights or because any interference is outweighed by business interests.
  • Category 2 includes policies that are legal in some cases, depending on their application.
  • Category 3 includes policies which are generally always unlawful.

The fact that legitimate business justifications associated with workplace rules would be given more weight when being evaluated by the NLRB was positive news for employers. What was still to be seen was how these categories would be applied to real cases.

A decision issued by an Administrative Law Judge last month gives us more insight on how the Board will apply these categories going forward. The case is Lowe’s Home Centers, LLC, Case No. 19-CA-191665 (NLRB 2018). The case involved a challenge to a provision of the company’s Code of Business Conduct and Ethics which included a section on “Confidential Information,” that stated:

Employees must maintain the confidentiality of information entrusted to them by Lowe’s or its suppliers or customers, except when disclosure is authorized by Lowe’s General Counsel and Chief Compliance Officer or disclosure is required by law, applicable governmental regulations or legal proceedings. Whenever feasible, Employees should consult with the company’s General Counsel and Chief Compliance Officer before disclosing confidential information if they believe they have a legal obligation to do so. Confidential information includes all non-public information that might be of use to competitors of the company, or harmful to Lowe’s, its suppliers or customers, if disclosed. It includes all proprietary information relating to Lowe’s business such as customer, budget, financial, credit, marketing, pricing, supply cost, personnel, medical records and salary information.

The provision’s reference to “salary information,” caused the challenge, but the company argued that its rule did not prevent employees from discussing salary information with each other (which is protected by Section 7 of the National Labor Relations Act), but referred instead to situations involving a person entrusted with non-public information relating to the company, and also that its business justifications for the rule outweighed employees’ Section 7 rights.

The ALJ did not look favorably on this Code provision or the company’s arguments. Her ruling held that the “provision may be read to preclude employees from discussing their salary information with one another, as well as non-employees such as union representatives and Board agents, which the Board has found to infringe on employees’ Section 7 rights to discuss terms and conditions of their employment with others.” Further, the ALJ emphasized that “[e]mployee discussions regarding wages, the core of Section 7 rights, are ‘the grist on which concerted activity feeds,’” and that “the Board has consistently held that rules or provisions which prohibit employees from discussing wages are unlawful.”

The ALJ explained that rules prohibiting employees from discussing salary information are per se unlawful (falling in Category 3), obviating the need to even conduct a balancing test (as would relevant with Category 1 or 2). Even if a balancing test were used, the ALJ found that the adverse impact on the employees’ Section 7 rights outweighed the company’s asserted business justifications. So, the company was ordered to rescind the unlawful policy and to notify employees of the change.

The lesson for employers here is that existing policies need to be carefully reviewed and new policies scrutinized even considering the Board’s current, more employer-friendly analysis. This case shows us that something as seemingly innocuous as the definitions section of an employee policy can still cause an employer significant problems.

Many employers require employees and applicants to take personality testing (think Myers-Briggs). Others are seriously considering adding this as a component of their hiring and employee engagement efforts. Companies want to get a sense of an individual’s opinions, attitudes, feelings, motivations, preferences, interests, emotional makeup, and style of interacting with others. This information, some believe, can help employers make predictions regarding job performance and success. At the very least, it allows employers to get to know an applicant through more than just the traditional interview process. These tests, however, raise many legal issues, particularly in the areas of potential discrimination claims and privacy concerns.

As an initial recognition, personality is not a protected class. Indeed, courts have routinely held that someone’s personality is a legitimate, nondiscriminatory reason to not hire an applicant or take adverse employment action against an employee. Yet personality testing still has the potential of violating the Americans with Disabilities Act (“ADA”), Title VII of the Civil Rights Act of 1964 (“Title VII”), and the Age Discrimination in Employment Act (“ADEA”). For example, if an applicant can show that the personality trait for which the employer screened was really a mask for discrimination of a protected class, the employer could be found to violate federal discrimination laws. So, if the employer is screening for a personality trait it connects with a protected class and makes its decisions based on that trait (possibly as a proxy or substitute for that class), that can constitute discrimination.

Furthermore, Title VII, the ADA, and the ADEA all have requirements for all employee testing that employers must adhere to when giving a personality test. For example, Title VII permits employers to administer professionally developed ability tests and take action based on the result. But, such tests must be implemented in a way that does not discriminate against protected classes, and ideally validated in advance as not having a discriminatory effect. Furthermore, employers are prohibited from adjusting the test scores based on an individual’s protected characteristics; using different cut-off scores for different protected classes; or otherwise altering the results of the test in any way. Lastly, the test must be job-related for the position at issue and consistent with a business necessity.

Testing clearly presents risks – of claims of discrimination, in addition to actual proof of such behavior. There have been numerous lawsuits related to personality testing under the ADA, Title VII, and the ADEA, with topics litigated including:

  • allegations of bias in determining traits important for the job
  • an employer purportedly asking questions that implicate protected characteristics
  • claims of bias in administration and scoring
  • whether the testing is a prohibited pre-offer medical examination
  • whether the test suggests a disability or a perceived disability based on the results, and
  • allegations of administering the test to discriminate based on age.

So, before you implement, add or change tests for employees or applicants, you will want to consider the risks they pose and balance that against the expected benefits of the testing.

Personality tests also raise potential privacy issues. While personality tests do not appear to violate the federal Employee Polygraph Protection Act, they may violate more restrictive state laws. For example, a Massachusetts law prohibits testing that renders an opinion on a job applicant’s honesty. Employers may also face claims based on the intrusiveness of the questioning (i.e., the questions are highly personal and/or offensive), or a failure to protect the privacy of the results. These state-law claims have thus far been brought have not seen notable success, but they have also not been tested nationwide, and new state and local privacy laws are enacted every year.

As personality testing becomes more and more popular among employers, interpretations of existing laws will inevitably become clearer and more settled. But new laws will likely join them, creating regular confusion and doubt. The best bet is to work your favorite employment counsel to help review and craft a personality testing policy that both conforms with existing law and is flexible enough to evolve as the issue changes over time.

When President Trump fired then-Secretary of State Rex Tillerson earlier this month, he did it in one of the most public ways possible: on Twitter.  The kicker? He had not told Tillerson, who was traveling in Africa at the time, about the decision in person before tweeting it.  (Although White House officials have stated that Tillerson was given the news in advance on a phone call with White House Chief of Staff John Kelly, Tillerson was not told face-to-face before the rest of the world found out). Tillerson’s “termination by tweet” offers a timely reminder to all employers about the right (and wrong) ways to handle the firing of employees.

Separating an employee can be a stressful process for everyone involved.  Prudent employers will keep in mind the following tips to handle the situation in an appropriate way:

Handle an employee termination in person.

Firing an employee by email or letter (or tweet!) might seem like the easy way out. But, even if the employment relationship ultimately is not working out, you owe it to your former employee to discuss the decision in person.

On that note: make sure this in-person meeting occurs in the office, in a private setting.  There is more possibility of confusion when someone is fired in a more informal setting, such as at a company event or offsite meeting.  Additionally, there is more possibility of embarrassment or even public displays of emotion by the employee when someone is fired in front of other people.

While there are some very rare circumstances that may require separating an employee in a way other than through a face-to-face meeting, those should truly be exceptional, and discussed with key HR leaders and legal counsel before they occur to make sure there is not a better way to handle things.

When possible, make sure you’ve given clear signs prior to termination that the employee’s performance is not meeting expectations.

It is important to have a truthful, business-related, and non-discriminatory reason to fire an employee.  When possible, back this up with a clear record of the employee’s behavior, whether it’s poor performance, a bad attitude, or something else, over time, and maintain those records. Make sure you share your thoughts with the employee in formal and informal reviews and evaluations before you fire them.  This gives them the opportunity to improve, and, if they do not, will help minimize the chances for surprise, anger and confusion as the employee will not be able to (legitimately) say they didn’t see (or at least couldn’t have seen) the termination coming.

Also, when firing the employee, make sure that your truthful, business-related reason for the termination is clearly communicated to him or her at the time of the termination.  This will become critical in the event the parties wind up in court.

Keep emotions in check.

Make sure that you never fire someone in the middle of a disagreement or other emotionally charged situation—you do not want a decision about someone’s employment to come out of the heat of the moment.  Take a moment (or longer) to cool down first and make a sound decision.

On the other hand, do not let your personal sympathies for the employee keep you from being clear (and standing your ground) once you have made the decision to fire them. Although you might feel better “letting them down easy,” such behavior will only lead them on, ultimately making the termination more painful and drawn out for everyone involved. Let them respond and ask questions, if they wish, and respond honestly and with courtesy, but avoid getting caught in an argument regarding the decision.

In sum, take a “what not to do” lesson from the President and make sure you keep the above tips in mind the next time you find yourself handling an employee termination.  If you need assistance in managing the process or have questions, reach out to your favorite lawyer – before you fire that problem employee.

For the past several years, folks in the HR space have had to pay special attention to the language in their handbooks and employment policies out of fear of violating rules established by a series of decisions from the National Labor Relations Board (NLRB). Those decisions established a tough standard for evaluating facially neutral employment policies that complied with their interpretations of labor law. Combined with an aggressive NLRB enforcement strategy, employers have understandably been on edge with respect to their workplace rules and policies.

Under that standard, the NLRB found that employers violated the National Labor Relations Act (NLRA) by maintaining workplace rules that did not explicitly prohibit protected activities, were not adopted in response to such activities, and were not applied to restrict such activities, if the rules would be “reasonably construed” by an employee to prohibit the exercise of his or her NLRA right to engage in “protected, concerted activity.”

On December 14, 2017, however, the NLRB replaced that standard with a new one. In The Boeing Company, 365 NLRB No. 154 (2017), the NLRB established a new test for workplace rules and policies:  when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the NLRB will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.

This standard is much more favorable to employers. Many policies which would have violated the previous standard will now be considered appropriate and lawful.

Additionally, the NLRB also announced three categories of rules will be delineated to provide greater clarity and certainty to employees, employers, and unions:

  • Category 1: This will include rules that the NLRB designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. (An example of a Category 1 rules is the no-camera requirement maintained by Boeing in the case.)
  • Category 2: This will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
  • Category 3: This will include rules that the NLRB will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.

In the Boeing case, the NLRB concluded that Boeing lawfully maintained a no-camera rule that prohibited employees from using camera-enabled devices to capture images or video without a valid business need and an approved camera permit.  The NLRB explained that the rule potentially affected the exercise of NLRA rights, but that the impact was comparatively slight and outweighed by important justifications, including national security concerns.

Overall, while employer policies and rules must still be evaluated to ensure compliance with the NLRA, such policies and rules will now be judged under much less stringent standards than they have been for the past several years, which is very good news indeed for employers.

Believe it or not, there’s a growing trend among some employers to offer a new benefit: “pawternity leave,” or leave for new pet owners.  Offerings range from a few days of leave up to a week or more, and might come in addition to other pet-related benefits, such as pet insurance, pet adoption consulting, bereavement leave—and even bring-your-pet-to-work policies.  So, should you join the trend?

Admittedly, while “pawternity leave” is certainly unique, this type of benefit might not work for many businesses.  However, its growing popularity offers a good reminder for all employers:  you should be thinking about the types of benefits your workforce might want—even if those benefits are a little untraditional. In doing so, the following tips can help.

First, know your workforce.  What are their values, what matters most to them, what do they enjoy?  Employers offering pet-related benefits know that the type of employees they hope to attract and retain value the presence of a furry companion in their lives—so much so that they consider their pet part of the family.  This might not be true for your workforce.  But if that’s the case, then what does top your employees’ list? If you don’t know, it’s worth finding out. Consider going straight to the source: conduct surveys to ask your workforce what benefits they’d like to see most. Not all suggestions may be viable, but they’ll provide valuable insight on your employees’ priorities either way.  Or, perform market research regarding similar companies to try and find out what matters most to employees in your industry.

Second, think outside the box.  Once you’ve got a handle on what your workforce wants, how can you best offer it to them?  Think creatively, and don’t be afraid to see what your competitors are offering.  “Pawternity leave” has been a popular benefit offering among employers who tend to attract a younger workforce and are in urban areas, likely because such employees tend to own pets in higher percentages.  But other employers might find that their workforce prefers different benefits.  Perhaps purchasing season tickets to a popular area sports team for employee rewards and use, stocking healthy prepackaged meals at the office, or providing college counseling assistance for employees with high-school aged children, might be better fits.

Third, recognize that a benefits offering doesn’t have to cost a lot of money to make a big impact.  Even a small change can really make a difference if it’s targeted at your workforce’s biggest priorities.  Regardless, employee satisfaction will often pay for itself in spades.  Plus, it’s certainly more cost-effective (and more beneficial) than paying for benefits that your workforce won’t use, or doesn’t appreciate.  Study after study has shown that happiness is key to productivity.  Happy employees are productive employees (who are also less likely to jump ship for a competitor).  Your employees are one of your most valuable resources, so consider what you can offer to ensure that they remain that way.  And heck, who wouldn’t want time off to play with a new puppy?

Part I of this post offered predictions related to DOL Opinion Letters and a likely rule increasing the minimum exempt salary level under the FLSA.  This Part II offers three more predictions involving legal issues quite different from wage and hour concerns.

Prediction 3: Continuing and Increasing Focus on Harassment in the Workplace.

2017’s #MeToo movement empowered and emboldened individuals to bring forward stories of sexual harassment and assault in and out of the workplace. Allegations of sexual harassment continue to dominate headlines and this trend shows no signs of slowing down. 2018 will likely see these claims leveled against managers and executives at companies of all sizes and types, not just celebrities or very high-profile figures. It seems that the #MeToo movement has greatly reduced the negative stigma associated with raising these allegations, so the overall volume will likely increase as the year continues.

If you have not already done so, your Company should implement appropriate written policies and training at all levels of the organization to actively try to change or better the culture at work. The two-part process of training employees and holding them strictly accountable is the only proven way to create the major paradigm shifts that some employers need to end and prevent this type of behavior from happening in the workplace.

Prediction 4: Retaliation Claims Will Continue to Dominate.

The EEOC’s data shows that the number of retaliation claims continue to outpace other claims in charges of discrimination filed with that agency. One reason for this is because retaliation claims are often included with other claims as “tag-along” claims. While there are certainly instances where a retaliation claim is filed alone, most frequently retaliation claims (often flimsy ones) are tacked on to more substantive discrimination allegations.

There are two primary reasons behind this. First and foremost, the more claims there are in a charge or lawsuit, typically the more it will cost the employer to defend the case. Charging parties (and their attorneys) try to use the greater defense costs of additional claims as leverage for a more favorable settlement. Second, retaliation claims are often easier to pursue than other claims, since all an employee must do in many instances to survive summary judgment and get their case in front of a jury is complain verbally about discrimination or harassment to someone in management relatively close in time prior to the employee’s termination or other adverse employment action. Sometimes that’s all they need to show to get in front of a jury.

So, it’s no huge surprise at all that retaliation claims continue to surge, and there’s no reason to think this trend will slow in 2018. Employers should consider any complaints from employees (either in writing or verbally) prior to taking any action against employees to help prevent retaliation claims arising (and to reduce the risk they might have any merit).

Prediction 5: Marijuana in the Workplace Will Get Renewed Focus.

Medical and recreational marijuana is now legal in 8 states. More than half of all states allow for limited use of medical marijuana under certain circumstances. For instance, Louisiana, West Virginia, and a few other states allow only cannabis-infused products, such as oils or pills, for medical uses. Other states have passed narrow laws allowing residents to possess cannabis only if they suffer from select medical illnesses. There are 21 states with broader medical marijuana laws.

Marijuana is, however—whether for medicinal or recreational purposes—still illegal as a Schedule I controlled substance under federal law. So, the question remains: If an employee in a state where medical marijuana is legal has been prescribed the medication by a physician, can the employee be fired for testing positive for marijuana on a drug test?

The answer remains unclear. One case from Colorado held that while marijuana is illegal under federal law as a Schedule I drug (which means it officially has no medicinal uses under federal law), an employee is not protected for discipline or discharge for a positive test. Another case from Rhode Island held that an employer could not refuse to hire a medical marijuana cardholder when the prospective employee said that she would fail a pre-employment drug screening. A third case from Massachusetts held that an employee’s off-duty use of medical marijuana was not a “facially unreasonable accommodation” under state law.

Amid this backdrop of uncertainty, employers with operations in states with legalized medical marijuana should evaluate their current drug testing policies (if they haven’t done so recently), consider their legitimate reasons for testing their employees (such as safety or business-related reasons), and be sure to engage in the interactive process when dealing with employees who establish their marijuana use is prescribed for medical purposes.

Conclusion

2018 is sure to be full of exciting and even surprising developments in the world of labor and employment law. We will continue to update you on these topics, re-visit our “predictions” and address any unexpected changes throughout the year.

With the holidays now over and everyone settling back into our regular work routines, some predictions on labor and employment law developments for 2018 might be helpful. Overall, federal agencies are expected to continue last year’s trend of taking more employer-friendly positions under the current Administration. In addition to that general theme, however, here are five specific “predictions” for what employers will likely see in 2018.  

Prediction 1: We’ll Get (A Lot of) New Opinion Letters from the Department of Labor.

For years the U.S. Department of Labor’s (DOL) Opinion Letters were a helpful source of information for employers as they answered questions received from members of the community (primarily on wage and hour issues). For example, if an employer or other entity had a question about how a particular wage and hour regulation applied to its employees and an answer wasn’t clear from the case law or administrative decisions, the employer could send in its question and DOL officials would issue an Opinion Letter offering guidance.

While the Opinion Letters functioned as the DOL’s official, written opinion on how a specific law applied to a given situation, they weren’t binding authority on the DOL or any courts. But they were certainly helpful for employers when there was no other guidance (or differing opinions) available on a sticky issue. Courts also found the letters helpful and they were (and still are) cited to support reasoning offered in judicial decisions.

In 2010, however, the DOL stopped issuing Opinion Letters. Instead it started issuing more general “Administrator Interpretations” which were intended to provide general interpretations of certain laws applied to a specific type of employee or industry. Notably, the DOL only issued 11 Administrator Interpretations between 2010 and 2016. Opinion Letters were issued with much greater frequency, sometimes with dozens being issued in a single year.

Now, however, the DOL has reinstated the issuance of Opinion Letters. “Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” said Labor Secretary Alexander Acosta. The DOL “is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

So, it seems probable that the DOL will issue many Opinion Letters in 2018 on a variety of topics.  To date, the DOL has already issued 17 Opinion Letters in 2018 on the FLSA. The Department’s Opinion Letters can be found at https://www.dol.gov/whd/opinion/flsa.htm. Keep an eye on the site for plenty more this year.

Prediction 2: We’ll See A(nother) New Overtime Rule.  

According to the DOL’s regulatory agenda (which you can see here), a new overtime rule will likely be issued this coming October. Based on comments from Labor Secretary Acosta, it seems like a good bet that the new rule will raise the exempt salary threshold for white-collar workers above the current $23,660 minimum annual salary threshold, though almost certainly not as high as was proposed under the Obama Administration’s ill-fated 2016 rule (which more than doubled the annual minimum to $47,476).

In addition to raising the minimum exempt annual salary level, the new rule may again contain a provision allowing for automatic adjustments so that the numbers keep pace with inflation (as the 2016 rule did as well). Inclusion of such a provision is far from certain, however, because there is some debate as to whether the DOL has the authority to implement such a feature under the language of the FLSA. Assuming such a provision is included, this could cause some problems for employers as it may require them to implement pay raises at times that do not coincide with employers’ fiscal years or follow performance evaluations.

Employers should begin planning now for a possible increase to the minimum exempt salary level. Speculation is that the new threshold will be in the $30,000 to $35,000 range. Planning and considering options and impacts now could be smart business strategy.