Opinion: Pro-business regulatory changes on deck for 2020

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The National Labor Relations Board has overturned an Obama-era determination and enabled union and nonunion businesses to utilize confidentiality procedures during employee misconduct investigations. The Department of Labor historically changed the Joint Employer Test and modified the perks and benefits to omit from the regular rate of pay when computing overtime compensation.

The change in the definition of joint employer now ensures those companies clearly comprehend liability regarding paying at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek.

Investigation confidentiality rules
The NLRB reversed President Barack Obama’s 2015 decision that upended precedent for personnel investigations, including the internal practices of the NLRB, Equal Employment Opportunity Commission and the Occupational Safety and Health Administration.

Employers are now allowed to implement and enforce confidentiality rules during investigations of workplace misconduct. Associates may be forbidden to discuss details of an investigation or interview in order to preserve the veracity of workplace investigations. A company requiring confidentiality once an investigation concludes must be able to prove, on a case-by-case basis, the organization has a legitimate and considerable business justification outweighing the right of workers to discuss terms and conditions of employment.

Joint Employer Test
The Labor Department implemented historic modifications to the Fair Labor Standards Act Joint Employer Test, which had been unchanged for 60 years.

Effective March 16, the new rule streamlines the FLSA joint employer evaluation with a four-factor test to decide if a laborer is jointly employed by an associated enterprise: Is the team member hired or terminated by the potential joint employer? Is the schedule or conditions of employment considerably supervised or controlled? Is the pay rate and method of payment decided? Is the personnel file maintained? The significance given to each factor by the Labor Wage and Hour Division will fluctuate on a case-by-case basis.

Under the revised regulation, the prospective joint employer must truly exert control instead of simply having the right to do so.

In addition, corporations desiring to execute guidelines to maintain brand standards, ensure legal compliance or implement solid business practices will not have those actions considered as evidence of joint employment.

Calculating overtime compensation
For the first time in 50 years, Labor officials significantly updated the company-provided perks and benefits excluded from the employee regular rate of pay when calculating overtime compensation.

Effective Jan. 1 this year, organizations may offer the following without risk of additional overtime liability: gym memberships; parking benefits; adoption assistance; callback pay; wellness programs; reimbursed expenses; certain tuition benefits; unemployment or legal services; restroom and locker facilities; office coffee and snacks; financial wellness programs or counseling; discounts on retail goods and services; pay for time not considered hours worked; premium pay for hours exceeding regular hours of work; enterprise contributions to benefit plans for some accident, unemployment or legal services; payments for unused paid leave, including paid sick leave, holiday pay and paid time off; premium pay levied as a penalty on a corporation under relevant state and local scheduling laws; and premium pay for hours worked over eight per day or some other pertinent maximum hours criterion based upon a contract, agreement, handbook policy or practice.

A discretionary bonus is still excluded from the regular rate of pay. However, the revised regulation states the bonus may not have been previously promised and must have the amount decided at the exclusive discretion of the company, close to the end of the period for which the bonus is paid, such as a surprise holiday bonus. Enterprises are encouraged to offer additional novel benefits without experiencing overtime liability.

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