Human Resources for 2016 – Changes to be aware of

What should you be watching for this year:

.  Remember that these changes in some cases will need to be reflected in your employee manual:

Overtime exemptions. The Department of Labor, pushed by the administration, issued a proposed rule that would raise the required minimum salary for most FLSA exemptions from $455 to $970 per week ($23,660 to $50,440 annually). The final ruling is not likely to release the rule until late in 2016, probably after the presidential election.

Minimum wage increases. The trend towards increased state and city minimum wage laws continues in  2016. In addition, on all contracts entered into on or after Jan. 1, 2016, federal contractors must pay workers a minimum wage of $10.15 per hour. Certainly, employers should ensure that these new minimum wage rates are correctly paid.

Continued challenges to mandatory arbitration agreements.  Earlier this month, in DirecTV, Inc. v. Imburgia, the U.S. Supreme Court ruled that the Federal Arbitration Act (FAA) allows federal courts to police state rulings to ensure that they uphold the federal policy favoring arbitration. While not an employment case, the Court looked at whether an arbitration clause was scrutinized “on equal footing” with other agreements. Accordingly, it is likely that claimants will challenge agreements to arbitrate employment disputes with their employer.

However, the decision makes it clear that the FAA preempts state-law rules barring enforcement of an arbitration agreement if the agreement does not permit the parties to utilize class procedures in arbitration or in court. Additionally, the National Labor Relations Board (NLRB) continues to take the position that mandatory arbitration agreements containing class action waivers violate employees’ rights under the National Labor Relations Act, despite multiple federal court decisions rejecting this position.

Joint employer liability. The NLRB issued a decision that could significantly affect employers utilizing alternative workforce arrangements, such as staffing firms and professional employer organizations (PEOs). In Browning-Ferris Industries of California, Inc., v. Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, the NLRB deviated from established precedent to hold that a staffing firm may be considered a joint employer of its client even where it did not actually exercise any direction and control over the workers — the right to do so is now sufficient.

Accordingly, two or more entities would be deemed joint employers of the same employee if they “share or codetermine those matters governing the essential terms and conditions of employment.”  It remains to be seen whether the NLRB’s test will be adopted in other contexts, such as under Title VII of the Civil Rights Act of 1964 (Title VII), the Family and Medical Leave Act (FMLA) or other employment laws outside of the NLRB’s jurisdiction.

Ban-the-box legislation. States and local jurisdictions have been adopting ban-the-box legislation designed to prevent employers from initially using arrest or conviction records to deny job applicants employment. Instead these laws require the employer to consider the applicant’s skill and experience first and delay criminal background checks until later in the hiring process. Over the past few years, more states have been banning employers from asking questions about prior criminal convictions on job applications.  At last count 19 had passed ban-the-box legislation. In addition, several of these states have also removed the conviction history question on job applications for private employers only. Expect more states to pass similar legislation.