Tag Archives: Department of Labor

Department of Labor Weighs In on New Age of Salary Servitude for ‘Executives’

Today’s post comes from guest author Roger Moore, from Rehm, Bennett & Moore.

Most of the U.S. workforce has the right, provided by the Fair Labor Standards Act, to be paid overtime for working more than 40 hours in a week. Before the federal government set rules for overtime, most employees worked longer hours, and millions of Americans worked six or seven days a week, as Chinese factory workers do today. Salaried workers also have the right to be paid a premium for overtime work, unless they fall into an exempt category as a professional, an administrator, or an executive. Exempt employees must be skilled and exercise independent judgment, or be a boss with employees to supervise. However, many companies have worked to get around these overtime rules by classifying employees like cooks, convenience store employees or restaurant workers as “managers,” “supervisors,” or “assistant managers or supervisors,” so that their employer can deny them overtime under this exception. 

In May 2016, the Department of Labor issued its final rule establishing a new minimum salary threshold for the white-collar exemptions (executive, administrative and professional) under the Fair Labor Standards Act. This new threshold of $913 per week ($47,476 annualized) more than doubles the current minimum weekly salary threshold of $455 per week ($23,660 annualized).  While that may seem like a huge increase, the old threshold level is only $2 a week above the poverty level for a family of four. Twenty-one states have filed suit to challenge this rule, citing the rule will force many businesses, including state and local governments, to unfairly and substantially increase their employment costs. 

The old rule allowed companies to put employees on “salary” at a low rate and require them to work sometimes significant overtime. The fact that so many government entities are concerned about this new rule substantially increasing their employment costs underscores the extent to which even government entities have taken advantage of employees in this fashion. Can you imagine earning $25,000/year and having to work 50, 60 or 70 hours a week? Even at 50 hours a week, that equates to an hourly wage of only $8.01!

In the first year, the department estimates that the new rule may affect, in some manner, over 10 million workers who earn between $455/week and the new $913/week threshold.  

The median worker has seen a wage increase of just 5 percent between 1979 and 2012, despite overall productivity growth of 74.5 percent (Mishel and Shierholz, 2013), according to the Economic Policy Institute. One reason Americans’ paychecks are not keeping pace with their productivity is that millions of middle-class and even lower-middle-class workers are working overtime and not getting paid for it. Before this rule change, the federal wage and hour law was out of date. This change purports to correct this modern day servitude that the law – for the last 30 years – has carved out a huge exception, allowing workers to be taken advantage of simply by assigning them a title and paying them a salary.  

 

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Post-Injury Drug Test? OSHA Says Not So Fast

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Workers who report an on-the-job injury may not be subject to mandatory drug testing if a new rule from the Occupational Safety and Health Administration that prohibits blanket post-injury drug tests withstands a court challenge from employers.

In May, OSHA published a rule prohibiting employers from having policies that force employees hurt on the job to take drug tests because of concerns about retaliation. This blog has long recognized the potential for retaliation that mandatory drug tests pose and supports the proposed rule by OSHA. OSHA’s new rule was drafted at roughly the same time as the release of the U.S. Department of Labor report that was critical of the shortcomings in state workers’ compensation systems.

Though OSHA implemented the limits on drug testing to limit retaliation, the rules limiting drug testing also help preserve employee doctor choice, which is an integral part of workers’ compensation law in Nebraska and other states. Many employers will inform employees that they must get drug tested at an occupational medicine clinic if they have a work injury even if workers have a right to see their own doctor. This can lead to employees being forced back to work too soon and or not receiving sufficient treatment for their work injuries. Both the fear of retaliation and the circumvention of doctor choice rules lead the costs of work injuries to be borne by employees, which is a major concern of the Department of Labor.

Due to push back from employers, the rule’s enforcement will be postponed until Nov. 1 and will likely be delayed longer due to a court challenge to the rule. A challenge to a Labor Department rule deeming that home health aides were employees for the purposes of the Fair Labor Standards Act took over a year to work its way through the federal courts, until it was upheld by a federal circuit court in June.

Even if the rule is implemented, post-injury drug testing will not disappear from the workplace. Employers can still test if they have a reasonable suspicion of intoxication or drug use. Most federal and defense contractors will be exempt from the OSHA rule, as well as truckers and railroad employees. Furthermore, in states with drug-free workplace laws, mandatory post-injury testing may still be permitted, depending on the language of the statute. Nebraska allows employers to fire an employee who refuses a lawful request for a drug test. If the new OSHA rule is ultimately upheld by the federal courts, I would expect a push by employers to amend drug-free workplace laws.