Federal Employment Law Update – May 2016

Federal

DOL Releases Final Rule on FLSA White Collar Exemptions

On May 18, 2016, the U.S. Department of Labor (DOL) announced the publication of a final rule updating regulations under the Fair Labor Standards Act (FLSA) which exempt executive, administrative, and professional employees from its minimum wage and overtime requirements (often referred to as the white collar exemptions). The final rule will be published in the Federal Register on May 23, 2016 and go into effect on December 1, 2016.

The final rule focuses primarily on updating the salary and compensation levels needed for executive, administrative, and professional workers to be exempt. Specifically, the final rule:

  • Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
  • Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
  • Establishes a mechanism for automatically updating the salary and compensation levels every three years.

Additionally, the final rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

View the DOL Webpage on the Final Rule

EEOC Issues Final Rules on Employer Wellness Programs

On May 17, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued final rules that describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The two rules provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).

The ADA and GINA generally prohibit employers from obtaining and using information about employees’ own health conditions or about the health conditions of their family members, including spouses. Both laws, however, allow employers to ask health-related questions and conduct medical examinations, such as biometric screenings to determine risk factors, if the employer is providing health or genetic services as part of a voluntary wellness program. The final ADA rule provides that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage. The final GINA rule provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, the same incentive allowed for the employee. No incentives are allowed in exchange for the current or past health status information of employees’ children or in exchange for specified genetic information (such as family medical history or the results of genetic tests) of an employee, an employee’s spouse, and an employee’s children.

Both rules also seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. The ADA and GINA rules require wellness programs to be reasonably designed to promote health and prevent disease.

The two rules also make clear that the ADA and GINA provide important protections for safeguarding health information. The ADA and GINA rules state that information from wellness programs may be disclosed to employers only in aggregate terms.

The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.

Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information to participate in a wellness program or to receive an incentive.

The final rules, which will go into effect on January 1, 2017, apply to all workplace wellness programs, including those in which employees or their family members may participate without also enrolling in a particular health plan.

Read the ADA Final Rule
Read the GINA Final Rule
View the Q&As on the ADA Final Rule
View the Q&As on the GINA Final Rule
View the Small Business Fact Sheet on the ADA Final Rule
View the Small Business Fact Sheet on the GINA Final Rule

OSHA Issues Final Rule to Improve Tracking of Workplace Injuries and Illnesses

On May 12, 2016, the Department of Labor’s Occupational Safety and Health Administration (OSHA) issued a final rule (Improve Tracking of Workplace Injuries and Illnesses) revising its regulation on Recording and Reporting Occupational Injuries and Illnesses (29 CFR 1904). The final rule requires employers in certain industries to electronically submit injury and illness data that they are already required to keep under existing OSHA regulations. The amount of data submitted will vary depending on the size of company and type of industry.

Analysis of this data will enable OSHA to use its enforcement and compliance assistance resources more efficiently. OSHA also intends to post some of this information on its website. OSHA believes that public disclosure (public shaming) will encourage employers to improve workplace safety and provide valuable information to workers, job seekers, customers, researchers and the general public.

The new reporting requirements will be phased in as follows:

  • Establishments with 250 or more employees in industries covered by the recordkeeping regulation must submit information from their 2016 Form 300A by July 1, 2017. These same employers will be required to submit information from all 2017 forms (300A, 300, and 301) by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.
  • Establishments with 20 – 249 employees in certain high-risk industries must submit information from their 2016 Form 300A by July 1, 2017, and their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

With regards to the 27 states that operate their own safety and health plans, those states will have to adopt requirements that are substantially identical to the requirements in the final rule within six months after publication of the final rule.

In addition to the new reporting requirements, the final rule also amends OSHA’s recordkeeping regulation to update requirements on how employers inform employees to report work-related injuries and illnesses to the employer. The final rule:

  • Requires employers to inform employees of their right to report work-related injuries and illnesses free from retaliation. This obligation may be met by posting the OSHA Job Safety and Health: It’s the Law poster from April 2015 or later.
  • Clarifies the existing implicit requirement that an employer’s procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting.
  • Incorporates the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses.

The final rule goes into effect on August 10, 2016.

View the Final Rule

President Signs Defend Trade Secrets Act

On May 11, 2016, President Barack Obama signed the Defend Trade Secrets Act (DFTA) into law. The DFTA creates a new federal civil cause of action for trade secrets owners to pursue claims of trade secret misappropriation. Remedies under the DTSA include: injunctive relief, compensatory damages, exemplary damages, and attorneys’ fees. The law also provides protections for whistleblowers who disclose trade secrets under certain circumstances.

Read more about the Defend Trade Secrets Act