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Opinion: New federal rules and guidelines are issued on employment arena

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Various federal laws and regulations have changed or been clarified recently, impacting Occupational Safety and Health Administration inspections, U.S. Equal Employment Opportunity Commission reporting, whistleblower rewards, independent contractor status, minimum salaries for exempt employees and job transfers, and other employment decisions.

Fair Labor Standards Act salary thresholds
The U.S. Department of Labor issued the final overtime rule, effective July 1, regarding increasing threshold salary levels for white collar and highly compensated associate exemptions.

White collar staff must be paid a minimum weekly salary of $844 to be accurately classified under the executive, administrative or professional exemptions. The amount will increase to $1,128 per week on Jan. 1, 2025. Total annual compensation for highly compensated employees will increase to $132,964 on July 1 and to $151,164 on Jan. 1, 2025.

Independent contactor classification
The DOL released new guidance about ascertaining if an individual is classified as an independent contractor under FLSA.

The new rule utilizes a six-factor test. First, did the person have an opportunity for profit or loss due to managerial skill? Second, are any of the worker’s investments considered capital or entrepreneurial in nature? Third, how indefinite and exclusive is the affiliation between the employer and other party? Fourth, what is the corporation’s level of control over the execution of the work and the working relationship? Fifth, is the individual’s function critical, central or essential to the company? Sixth, does the worker utilize specialized skills and does that expertise influence the enterprise initiatives? Or, was the other party reliant on training from the business to conduct the work?

The rule uses a totality-of-the-circumstances analysis and allows the DOL to review supplementary elements when making a decision during an investigation.

EEO-1
The Equal Employment Opportunity Commission opened the 2023 EEO-1 data collection period on April 30. The EEO-1 Component 1 Instruction Booklet employers use to ensure compliance was updated. In addition, the EEOC released the 2023 EEO-1 Component 1 Data File Upload Specifications that filers of the EEO-1 Component 1 Reports use to navigate the filing process.

Title VII of the Civil Rights Act
The U.S. Supreme Court ruled a plaintiff only needs to show some, and not significant, harm to a term/condition of employment from an employment decision in order to plead and prove discrimination. The decision was limited to team member transfers, but has broader implications for other employment-related decisions.

OSHA inspections
The DOL and OSHA published a final rule clarifying that an associate who files a complaint may choose another staff member or a non-employee, such as a union representative, to accompany the OSHA official and employer during an investigation.

Whistleblowers
The U.S. Department of Justice will start a new whistleblower monetary incentive program later this year in an attempt to motivate companies to invest in internal compliance and reporting systems.

If a whistleblower helps the DOJ discover substantial corporate or financial misconduct unidentified to the DOJ, the individual may qualify to receive part of the ensuing fines and penalties.

Employer action steps
In light of the numerous modifications and clarifications, organizations should review policies and procedures to ensure compliance. Do threshold salary levels for those who are white collar or highly compensated adhere to the new thresholds? Are those currently classified as independent contractors still considered as such? Are EEO-1 reports in compliance? Is the business prepared for OSHA inspections? Does the firm have strong internal compliance and reporting systems in place? By ensuring compliance now, organizations will decrease or avoid compliance issues in the future.

Lynne Haggerman holds a master of science in industrial organizational psychology and is president/owner of Lynne Haggerman & Associates LLC, specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@lynnehaggerman.com.

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