Tag: Department of Labor (DOL)

DOL | Employee vs Independent Contractor

From Seyfarth on September 22, 2020

DOL Proposes Its First-Ever Interpretation on Independent Contractor vs. Employee

By: Noah A. Finkel, Camille A. Olson, Louisa J. Johnson, and John R. Skelton

For decades, companies have wrestled with whether certain workers must be treated as employees subject to various employment laws and company rules or whether they are appropriately classified as independent contractors with different terms of engagement, work, and pay and tax consequences. Amid a changing economy and evolving business models, companies continue to consider the application of an alphabet soup of federal employment statutes plus the laws of the states in which they do business, many of which contain different definitions of “employee” and conversely “independent contractor,” few of which provide clear guidance on how to meet the definition of independent contractor status.

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DOL: Guidance for Respiratory Protection During N95 Shortage

U.S. Department of Labor  |  April 3, 2020

U.S. Department of Labor Issues Guidance for Respiratory Protection During N95 Shortage Due to COVID-19 Pandemic

WASHINGTON, DC – The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has issued interim enforcement guidance to help combat supply shortages of disposable N95 filtering face piece respirators (N95 FFRs). The action marks the department’s latest step to ensure the availability of respirators and follows President Donald J. Trump’s Memorandum on Making General Use Respirators Available.

Due to the impact on workplace conditions caused by limited supplies of N95 FFRs, employers should reassess their engineering controls, work practices and administrative controls to identify any changes they can make to decrease the need for N95 respirators.

If respiratory protection must be used, employers may consider use of alternative classes of respirators that provide equal or greater protection compared to an N95 FFR, such as National Institute for Occupational Safety and Health (NIOSH)-approved, non-disposable, elastomeric respirators or powered, air-purifying respirators. 

When these alternatives are not available, or where their use creates additional safety or health hazards, employers may consider the extended use or reuse of N95 FFRs, or use of N95 FFRs that were approved but have since passed the manufacturer’s recommended shelf life, under specified conditions.

This interim guidance will take effect immediately and remain in effect until further notice. This guidance is intended to be time-limited to the current public health crisis. Visit OSHA’s Coronavirus webpage regularly for updates.

For further information about COVID-19, please visit the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to help ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit www.osha.gov.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

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Media Contacts:

Emily Weeks, 202-693-4676, weeks.emily.c@dol.gov

Release Number:  20-572-NAT

FFCRA Emergency Paid Leave Posting

Families First Coronavirus Response Act (FFCRA) Emergency Paid Leave Posting

As many of you are aware, the Families First Coronavirus Response Act (FFCRA) Emergency Paid Family & Medical Leave Act and Emergency Paid Sick Leave provisions become effective tomorrow, April 1st.  I had hoped that the U.S. DOL would have published draft Regulations by the close of business today and prior to April 1st to give employers an indication as to how these provisions will be administered by the U.S. DOL.  As of the time of this email, the U.S. DOL has not published anything aside from the Frequently Asked Question (FAQs).  The U.S. DOL published FIELD ASSISTANCE BULLETIN No. 2020-1 that states that they will not bring enforcement actions against any employer who is out of compliance provided they can demonstrate that they have made a reasonable good faith effort to comply with the law.  We will make sure that we notify you as soon as the draft Regulations are published to ensure your organization is compliant.

In the meantime, covered employers are required to post the Federal Employee Notice or the Non-Federal Employee Notice  in the same locations that they post similar notices by April 1, 2020.  Additionally, you can email it to your employees.   I will tell you that there is an error on the notice that I had hoped the U.S. DOL would have provided an updated notice, but none has been published thus far.  The error is in the third bullet under the section titled Paid Leave Entitlements.  The maximum total amount is $10,000 and not $12,000 as printed.  I have confirmed from the actual text in the FFCRA.  The U.S. DOL also has published FAQs relative to the posting.

If members have questions about the FFCRA or other provisions, please contact the AAA.

Updated U.S. DOL Definition of Health Care Provider & Emergency Responders

The United States Department of Labor (U.S. DOL) has recently published an updated version of the Families First Coronavirus Response Act (FFCRA) Frequently Asked Questions (FAQ) that provide further insight into which employees are included in the definition of “health care provider” and “emergency responder”.

After the final language of the FFCRA was released, there were numerous questions about which EMS agency employees were considered “emergency responders” and potentially subject to being excluded from the group of employees eligible for Emergency Paid Family and Medical Leave and Emergency Paid Sick Leave.  The U.S. DOL has provided clarification in FAQ numbers, 55-57 respectively.

55. Who is a “health care provider” for purposes of determining individuals whose advice to self-quarantine due to concerns related to COVID-19 can be relied on as a qualifying reason for paid sick leave?

The term “health care provider,” as used to determine individuals whose advice to self-quarantine due to concerns related to COVID-19 can be relied on as a qualifying reason for paid sick leave, means a licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue a certification for purposes of the FMLA.

56. Who is a “health care provider” who may be excluded by their employer from paid sick leave and/or expanded family and medical leave?

For the purposes of employees who may be exempted from paid sick leave or expanded family and medical leave by their employer under the FFCRA, a health care provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.

This definition includes any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.

To minimize the spread of the virus associated with COVID-19, the Department encourages employers to be judicious when using this definition to exempt health care providers from the provisions of the FFCRA.

57. Who is an emergency responder?

For the purposes of employees who may be excluded from paid sick leave or expanded family and medical leave by their employer under the FFCRA, an emergency responder is an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of such patients, or whose services are otherwise needed to limit the spread of COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is an emergency responder necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.

To minimize the spread of the virus associated with COVID-19, the Department encourages employers to be judicious when using this definition to exempt emergency responders from the provisions of the FFCRA.

Proposed Rule Impacts Employer Sponsored Health Plans

proposed rule published on November 27th by the IRS, U.S. DOL, and HHS would place new requirements on group health plans and health insurance providers. The rule would require providers to disclose cost-sharing information to participants, beneficiaries, and other covered individuals which would outline their liability to pay certain cost-sharing amounts and out-of-pocket expenses. This rule is part of a Trump Administration effort to foster competition among insurers and healthcare providers in the marketplace. An article published by the Society for Human Resources Management (SHRM) outlines the concerns many employers have regarding the costs associated with implementing the requirements of the proposed rule. These requirements include providing plan enrollees with an online self-service portal where they can see these cost-sharing amounts, as well as require greater collaboration between third party plan administrators, pharmacy benefit managers, and other specialty providers to ensure the accurate disclosure of enrollee financial obligations. Comments on the proposed rule are due by January 14, 2020.

DOL Issues Long-Awaited Proposed Overtime Rule

On March 7, 2019, the United States Department of Labor (USDOL) issued the long-awaited Notice of Proposed Rule Making (NPRM) which proposes changes to the Fair Labor Standards Act (FLSA) overtime provisions.  These proposed changes, which are detail in the 219-page document, follow nearly three years of legal actions challenging the USDOL’s 2016 proposed FLSA overtime changes.

A quick history on these proposed changes.  On May 23, 2016, the USDOL issued the 2016 FLSA proposed overtime rule changes that would have more than doubled the minimum salary thresholds for the so called “white collar” overtime exemptions.  Under the 2016 proposed rule, the minimum salary threshold would have increased from $455 per week ($23,660 per year) to $913 per week ($47, 476 per year) and the Highly Compensated Employee (HCE) salary level from $100,000 to $134,000 annually.  Just before the changes were about to become effective, the United States District Court for the Eastern District of Texas invalidated the proposed rule stating that the USDOL lacked the authority to propose these changes.  Shortly thereafter, the proposed changes were put on hold.

This latest proposed rule formally rescinds the 2016 proposed rule and would provide for updates to the standard salary level for each exemption.  Under this proposal, the minimum salary threshold would increase from $455 per week ($23,660 per year) to $679 per week ($35,308 per year).  The minimum threshold is based upon the 40th percentile of earnings for full time employees in the lowest wage Census Region.  In addition, the Highly Compensated Employee (HCE) salary level is increasing from $100,000 to $147,413 annually.  Which is based upon the 90th percentile of full-time earnings nationally.  These new salary thresholds utilize the same methodology that was utilized in establishing the 2004 FLSA overtime salary thresholds.  In the proposed rule, the USDOL reasoned that these methodologies must be reasonable as they have sustained since 2004 without any legal challenges.

The proposed rule also permits incentive pay and bonuses to count towards up to 10% of the standard salary level provided it is paid at least annually.  This expands the requirement under the 2016 proposed rule which would have required payment quarterly.  In addition, the USDOL states that they intend to propose additional rules that would provide for an adjustment to the standard salary thresholds every four years.  The NPRM states that any regular adjustments to the standard salary thresholds would be subject to the Notice of Proposed Rule Making process each time any change is proposed.  This is a change from the 2016 proposed rule which provided for automatic adjustments to the salary thresholds every three years to prevent the standard salary threshold from becoming outdated.

Currently, there are three major exemptions from the FLSA overtime Regulations, Executive, Administrative, and Professional.  Each utilize a two-prong test to determine if the employee meets the exemption from overtime protection.  The US Department of Labor has existing resources and tools to assist employers with complying with the FLSA.  These resources can be found on a webpage for employers.  While we recognize that most EMS agencies workforce is paid on an hourly basis and are subject to overtime pay provisions.  However, it is still important to agencies to conduct an FLSA analysis of all positions to ensure compliance with the FLSA.

It does not appear that the Department has issued compliance assistance for employers that specifically addresses the latest proposed rules.  The American Ambulance Association has resources available to assist our members with evaluating how these changes might impact your operation.  We will be sure to provide our members with further information and guidance, as it becomes available, regarding this or any other Human Resource or employment related issue that will impact the ambulance industry.

OSHA Injury Tracking Update

Earlier this week the AAA reminded its members of their obligation to post their 2018 injury data represented on the OSHA Form 300A in all work sites from February 1st through April 30th.  In addition, all EMS employers are required to report all injury data on the OSHA Injury Tracking Application (ITA).  Historically, all EMS employers were to electronically report the data represented on Form 300A.  However, larger employers (250 or more) also had to electronically submit the injury specific information from the Form 300 and Form 301 to the ITA.  OSHA announced yesterday that employers that larger employers will no longer be required to submit the information from Forms 300 and 301.  Citing privacy concerns, OSHA announced that employers of all sizes will only be required to submit the workplace injury summary information from Form 300A.

OSHA Reminder 2019

OSHA Injury Posting & Reporting of 2018 Injury Data

It is important that employers remember that they must post a copy of their OSHA Form 300A which is a summary of workplace injuries starting February 1, 2018 through April 30, 2018.  The OSHA Form 300A is a summary of all job-related injuries and illnesses that occurred in an employer’s workplace during 2018.  If a company recorded no injuries or illnesses in 2018, the employer must enter “zero” on the total line. The form must be signed and certified by a company executive. The OSHA Form 300A Injury Summary must be displayed in a common area where notices to employees are usually posted.  In addition to posting these reports in the workplace, covered employers should be electronically submitting their 2018 workplace injury data to OSHA via the Injury Tracking Application (ITA).  If members need assistance with the workplace posting or electronic injury reporting submission, contact the AAA.

2019 OSHA Penalty Adjustment

Also, a reminder to employers who are subject to OSHA or to those who operate in a state with an OSHA approved state level plan, the penalty amounts for OSHA violations are increasing effective the publication of the new rates in the Federal Register.  In accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Department of Labor is required to adjust penalties for inflation each year. New penalties for willful and repeat violations are $132,598 per violation; serious, other-than-serious, and posting requirements are $13,260 per violation; and failure to correct violations is $13,260 for each day the condition continues.  The new penalty details can be found in the OSHA Enforcement Section of their website.

Opioid Bill Heads to President Trump’s Desk

The AAA is pleased to report that language we supported on grant funding for opioid protection training for first responders has passed both the House of Representatives and the Senate and is now headed to the President’s desk.

On Wednesday, the Senate passed the Opioid Crisis Response Act with a bipartisan vote of 98-1 in the last necessary needed action before being signed into law by the President. The impact of this legislation on the ambulance industry includes providing resources and training so that first responders and other key community sectors, including emergency medical services agencies, can appropriately protect themselves from exposure to drugs such as fentanyl, carfentanil and other dangerous licit and illicit drugs. $36,000,000 will be given annually for each fiscal year from 2019 through 2023. The bill also gives $10,000,000 in supplemental competitive grants to areas that have a record of high seizure of fentanyl to be used toward training of law enforcement and other first responders on how best to handle fentanyl as well as to purchase protective equipment, including overdose reversal drugs.

Lastly, the legislation allows the Department of Labor to award grants to states that have been heavily impacted by the opioid crisis in order to assist local workforce boards and local partnerships in closing the gaps in the workforce for mental health care and substance use disorder. Based on an analysis by counsel, we believe all ambulance service agencies would be eligible to apply for the described grants. It is encouraging to see both parties and chambers come together to pass legislation that takes steps to better our country as a whole and finally help address this growing public health emergency. The President is expected to sign the legislation into law.

Update on Opioid Legislation & Rural EMS Grant Program

The AAA continues to push on policy issues important to our members we are happy to provide an update on two pieces of legislation that we have been actively monitoring. Congress is proceeding with consideration of several legislative vehicles as they address key topics prior to the November elections.

First Responder Opioid Grant Program

The AAA is pleased to report that language we supported on grant funding for opioid protection training for first responders has passed the Senate. Based on an analysis by counsel, we believe all ambulance service agencies would be eligible to apply for the grants.

In 2017, the Administration officially labeled the Opioid Crisis as a public health emergency, and in response Congress has finally taken action. On Monday, the Senate overwhelmingly passed the Opioid Crisis Response Act with a bipartisan vote of 99-1. The impact of this legislation on the ambulance industry includes providing resources and training so that first responders and other key community sectors, including emergency medical services agencies, can appropriately protect themselves from exposure to drugs such as fentanyl, carfentanil and other dangerous licit and illicit drugs. $36,000,000 will be given annually for each fiscal year from 2019 through 2023. The bill also gives $10,000,000 in supplemental competitive grants to areas that have a record of high seizure of fentanyl to be used toward training of law enforcement and other first responders on how best to handle fentanyl as well as to purchase protective equipment, including overdose reversal drugs.

Lastly, the legislation allows the Department of Labor to award grants to states that have been heavily impacted by the opioid crisis in order to assist local workforce boards and local partnerships in closing the gaps in the workforce for mental health care and substance use disorder. Counsel has provided us with an analysis that all types of ambulance service organizations would be eligible for the described grants. While this legislation is not a solution to every aspect of the opioid crisis our country is currently experiencing, it is an important first step in providing resources to the ambulance industry and others to help combat this public health emergency.

Rural EMS Grant Program

The AAA is diligently working on amending the SIREN Act (S. 2830H.R. 5429) which would reauthorize the Rural EMS Grant program. In an effort to ensure the funding would go to the most needy, small, and rural EMS providers, the language of the SIREN Act would change the eligibility to just governmental and non-profit EMS agencies. Therefore, small rural for-profit ambulance service providers would no longer be eligible to apply for grants. The AAA will continue to work to ensure that all provider types will be able to apply for these grants.

Language similar to the SIREN Act has been included in the Farm Bill (S. 3042/ H.R. 2) that passed both the House and Senate. The Farm Bill is now in Conference Committee between the House and Senate to reconcile differences before final passage. Over the past weeks, the AAA has been pressing Senator Durbin as well as other co-sponsors and Farm Bill conferees to revise the language to ensure small rural for-profit providers would still be able to apply for grants. Our team has met with all co-sponsors of the House and Senate SIREN Act Bills as well as members of the Farm Bill Conference Committee to ensure that they are well informed of the impact this legislation will have on their local providers.

The AAA team has also been conducting targeted outreach to AAA members asking them to get involved by contacting their Members of Congress, especially those on the Conference Committee. It is important for Congress to hear that grants like this one, should be open to all provider types. We thank those members who have already sent letters to their representatives. With Congress trying to wrap up the Farm Bill by the end of September – although looking unlikley, the AAA is pushing hard to change the current language and make sure that all providers might have access to these grants once they are reauthorized.

The AAA will continue to keep you updated on any new developments.

Executive Order on Association Health Plans (AHP)

Yesterday, the White House announced that President Trump has signed an Executive Order that directs the Secretary of Labor to consider expanding access to Association Health Plans (AHP) would give employers the right to form groups in multiple states for the purposes of negotiating health care benefits.  A change would require an change to the interpretation of Employee Retirement Security Act (ERISA).  In addition, the Executive Order directed the Departments of the TreasuryLabor, and Health and Human Services to consider changing several ACA restrictions, including low-cost short term limited duration insurance (STDLI) and Health Reimbursement Accounts (HRAs).  This Executive Order may impact the ACA insurance markets because it may attract the younger and healthier away from current plan groups causing those coverage costs to increase substantially.

Electronic Injury and Illness Rules Delayed

As reported to members in late May, the United States Department of Labor (DOL) announced that Occupational Safety & Health Administration (OSHA) will further delay the implementation of the new Electronic Injury and Illness Rules that were scheduled to go into effect on July 1, 2017. The DOL announced today that they were further delaying the implementation until December 1, 2017. The DOL has stated that the delay is intended to give the agency “further review and consider the rule.”  We will continue to keep members posted of any pending changes to this or any DOL change.

Overtime for PTO Bill Passes the House

Yesterday a bill that would possible amend the overtime provisions of the Fair Labor Standards Act passed the House. H.R. 1180, titled the Working Families Flexibility Act of 2017 was introduced by Alabama Representative Martha Roby this past February.

The proposed change would permit private employers who currently pay employees overtime for hours worked over 40 during a given week to substitute that overtime pay for compensatory paid time off in the amount of 1.5 hours for each hour of overtime worked. In order to do so, the employee would have to agree in writing with the substitution of PTO for overtime pay prior to working the overtime hours. The agreement must provide that the employee knowingly and voluntarily agrees to the substitution of PTO for overtime pay. In the case of unionized companies, the substitution can only be made if provided under the collective bargaining agreement.
To be eligible to substitute PTO for overtime pay, the employee must have worked for the employer for at least 1000 hours during the preceding uninterrupted 12 month period before the agreement is made or the receipt of the compensatory PTO. The Bill provides for limitations to the number of hours that can be accrued and the length of time it can be carried.

An employee may accrue not more than 160 hours of compensatory time. Any unused compensatory time accrued under this provision by the end of a calendar year would have to be paid to the employee no later than January 31st of the following year. An employer may designate and communicate to the employees a 12-month period other than the calendar year. However, any unused compensatory time must be paid not later than 31 days after the end of such 12-month period.

When employers are paying the unused compensatory PTO, the pay shall be paid at a rate of not less than the regular rate earned by such employee when the compensatory time was accrued or the regular rate earned by such employee at the time such employee received payment of such compensation, whichever is higher. This could mean that the employee is receiving pay at a rate higher than it would have been had the employer simply paid the overtime at the time it was incurred.

The Bill provides for some flexibility with when it pays the compensatory PTO. An employer may pay monetary compensation to the employee for accrued hours in excess of 80 hours provided it gives the employee 30 day notice. In this case, the wages would need to be paid consistent with the manner described above. However, if an employee voluntarily or involuntarily terminates employment, the employer must pay all accrued compensatory PTO to the employee.

Under the Bill, an employer who has adopted the policy of paying compensatory time instead of paying overtime wages may discontinue the practice upon 30 days written notice to the employees. Conversely, an employee may rescind their agreement to be paid compensatory PTO at any time. In such instances, the employer must pay all unused PTO accrued under the agreement within 30 days.

The Bill language contains significant provisions to protect the employee from employer threats or coercion to agree or not agree to the adoptions of compensatory PTO or to the use or failure to use such compensatory time. The Bill requires that the employee enter the agreement voluntarily and that they can essentially use the compensatory PTO or the corresponding pay in any manner that they choose. If passed, the Department of Labor will have to issue regulations that more specifically guide this practice.

While this Bill still may not get the votes it needs in the Senate (S. 801), employers should consider how adopting such a policy may impact their organizations. From a cash flow perspective, this could provide some flexibility during the year. However, the monies must be paid to the employee at the end of the 12 month period. Often employers who already have a practice of paying out unused PTO or vacation time at the end of a year struggle with the significant expense coming due. This is particularly difficult if it occurs at the end or beginning of the calendar year as there are usually additional expenses during the holidays and reductions in cash receipts during January and February for many ambulance providers.

For employees, this Bill could be a mechanism for accruing time in excess of any existing vacation, sick, or paid time of benefits that could be used for unexpected absences or for significant illnesses. Often, our employee are not financially prepared for the wages lost when they are sick or injured and do not have enough sick time to cover the absences. However, many have come to rely on the weekly payment of regularly worked overtime to cover their life expenses. Either way, it may give our employees something that they always love, the ability to choose.
We will continue to monitor the progress of this bill over the next few months and will keep members up to date. If our members have questions about this or any other Human Resource or Operational practices or issues, utilize the resources available to you as part of your AAA membership.

U.S. DOL Increasing Civil Penalties

The Department Of Labor published two interim final rules that will adjust the penalties for enforcement actions by its several of its agencies.  The penalties are increasing because Congress passed the Federal Civil Penalties Inflation Adjustment Act in 2015 last November with the intent of improving the effectiveness of civil monetary penalties and hopes of maintaining their deterring effect.  Under the law, agencies are required to publish interim final rules by July 1, 2016 and allow public comment for 45 days.  Many of different agency penalties have not been adjusted since 1990.

The new penalties will only be applicable to penalties assessed after August 1, 2016 for violation that occurred after November 2, 2015.  To learn more, read the Fact Sheet, Interim Final Rule, and the Frequently Asked Questions on the Department of Labor’s website.

The Art of Persuasion

The United State Department of Labor (USDOL) Office of Labor-Management Standards (OLMS) has released its revised interpretation of the rule that seeks to level the playing field between unions and employers. The new interpretation of the rule, which will take effect on April 25, 2016, will require that employers who hire consultants or labor attorneys to counsel them during union organizing campaigns report if they will undertake “persuader” activities and the cost of those services. These “persuader” activities are defined as “actions, conduct, or communications that are undertaken with an object, explicitly or implicitly, directly or indirectly, to affect an employee’s decisions regarding his or her representation or collective bargaining rights.”

The intent is to make sure that employees can know the source of some of the information provided directly or indirectly to them during the organizing campaign. Read a summary of the impact of this rule.

Upcoming Changes to the FLSA

Updated October 7, 2015 | By Scott Moore, JD, of EMS Resource Advisors

On March 13, 2014 President Obama sent a memorandum to the Secretary of Labor to update and modernize the Overtime Regulations found in the Fair Labor Standards Act (FLSA).  The FLSA provides basic rights and wage protections to American workers, including Federal minimum wage and overtime requirements.  Specifically, the memorandum stated that “regulations regarding exemptions from the Act’s overtime requirement, particularly for executive, administrative, and professional employees (often referred to as “white collar” exemptions) have not kept up with our modern economy. Because these regulations are outdated, millions of Americans lack the protections of overtime and even the right to the minimum wage.”[i]

On July 6, 2015 the Department of Labor (DOL) posted a Notice of Proposed Rule Making (NPRM) outlining their proposed changes to the Overtime Regulations.  The NPRM gave lawyers, employers, and interest groups 60 days (until September 4, 2015) to comment on these proposed changes.  The NPRM makes it clear that many employers will need to begin preparing now for likely changes to who receives overtime pay expected sometime in 2016.

The changes proposed by the Department of Labor to the FLSA are expected to impact 4.6 million workers in the U.S. who are currently exempt from overtime pay but will transition to non-exempt under the new rules.  While most of the employees in the ambulance industry are paid hourly, many non-field personnel may be impacted by this change. Ambulance providers should conduct an analysis of the proposed changes to assess the impact it may have on their organization.

Currently, there are four major exemptions from the FLSA overtime regulations: Executive, Administrative, Professional, and Computer Professional.  Each category utilizes a two prong test to determine if an employee meets one of these exemptions.  The current regulatory test criteria are:

Executive Exemption:

Duties test for the Executive Exemption is if the employee earns at least $455 per week ($23,660 per year) and:

  • The employee’s primary duty must be managing the enterprise, or managing a department or subdivision of the enterprise
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent
  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemption:

To qualify for the Administrative Exemption the employee must earn at least $455 per week ($23,660 per year) and:

  • The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption:

To qualify for the Professional Exemption the employee must earn at least $455 per week ($23,660 per year) and:

  • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment
    • The advanced knowledge must be in a field of science or learning
    • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual

Computer Exemption:

The employee must be compensated either on a salary or fee basis at a rate no less than $455 per week or, if compensated on an hourly basis, at a rate no less than $27.63 an hour. Additionally:

  • The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below
  • The employee’s primary duty must consist of:
  • The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional specifications
  • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications
  • The design, documentation, testing, creation or modification of computer programs related to machine operating systems
  • A combination of the aforementioned duties, the performance of which requires the same level of skills.

Proposed Changes to the Regulations

The major change to the Regulations is the salary thresholds which have only been updated only once since 1970.[ii]  Currently, the salary threshold is $23,660 ($455 per week), which is below the poverty threshold for a family of four. In fact, only 8 percent of full-time salaried workers fall below the poverty line.[iii]  The proposed changes would more than double the minimum salary threshold for exempt workers, requiring compensation of $50,440 per year ($970 per week).  This new salary threshold is based on the 40th percentile of weekly earnings for full-time salaried workers nationally.  Also, the proposed changes would identify a mechanism for adjusting that figure annually.

In addition to that change, there is also a proposal to adjust the threshold for “Highly Compensated Employees” from $100,000 to $122,148 annually. This new salary threshold is based on the 90th percentile of weekly earnings for full time salaried workers nationally.  While this does not impact the majority of individuals working in the ambulance industry, there may still be an impact on senior management or executive teams.

In the NPRM, the Department of Labor requested input on whether the Duties test should also be changed and if so, what those changes should be. Currently, it does not appear that there will be any changes to that prong of the exemption test.  It is suggested however, that services examine positions deemed exempt within their organization to determine the extent or percentage to which those positions perform “executive” or “administrative” functions.  If that percentage is 50% or less, an assessment of whether that position ought to be moved to a non-exempt status should be performed.

There is no indication from the DOL as to when any changes to the Overtime Regulations will occur.  The DOL will be reviewing comments from the NPRM and it is not anticipated that they will issue a final ruling prior to the end of the year.  Once the Final Rule is published, it generally cannot go into effect sooner than 30 days after its publication.  In the interim, organizations should be conducting an analysis of their job descriptions and duties to determine if they might be impacted.  The AAA will continue to provide further updates as they become available.


 

[i] The White House, Office of the Press Secretary, Presidential Memorandum-Updating and Modernizing Overtime Regulations,  March 13, 2015.  https://www.whitehouse.gov/the-press-office/2014/03/13/presidential-memorandum-updating-and-modernizing-overtime-regulations

[ii]The White House, Office of the Press Secretary, FACT SHEET: Middle Class Economics Rewarding Hard Work by Restoring Overtime Pay, June 30, 2015.  https://www.whitehouse.gov/the-press-office/2015/06/30/fact-sheet-middle-class-economics-rewarding-hard-work-restoring-overtime

[iii] The White House, Office of the Press Secretary, FACT SHEET: Middle Class Economics Rewarding Hard Work by Restoring Overtime Pay, June 30, 2015.  https://www.whitehouse.gov/the-press-office/2015/06/30/fact-sheet-middle-class-economics-rewarding-hard-work-restoring-overtime


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