Overtime proposal remains a top concern among management

Overtime proposal remains a top concern among management

A proposed overtime rule is a top concern among management when it comes to labor and employment issues.

Littler Mendelson’s fourth annual Executive Employer Survey revealed that overtime reform was a key concern among employers, with 25 percent of respondents noting how the Department of Labor plans to raise the minimum salary for exempt employees above the $23,600 threshold. The new estimated level will be $50,440 for 2016.

In fact, the proposed overtime rule could make close to 5 million white-collar employees now eligible for overtime, according to the Pew Research Center.



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Similarly, 37 percent of those taking the survey were concerned the Labor Department could eliminate the executive, administrative and professional exemptions for workers who spend more than 50 percent of their work time engaged in duties that are non-exempt.

Now is the time to plan. From the point of view of general counsel, Michael J. Lotito, co-chair of the Littler Mendelson’s Workplace Policy Institute, told InsideCounsel that “they should be advising the C-Suite … [the overtime rule] could very well be finalized and go into effect.”

“This will have an impact,” he said, on “who’s being treated as exempt.” It could be a “huge, big deal” for some companies, Lotito adds.

There are clear cost implications for employers and Lotito said that the changes need to be “budgeted for.” It is particularly an issue for those companies that use multi-year budgeting.

Another concern relates to the duties test and how it applies to managers. Related issues are how it could hurt employee morale and impact workplace flexibility.

Employers will have to make a decision on whether to increase employee salary or make employees overtime eligible, Lotito said. He advises that employers “may not have the same answer for everyone.”

There is another concern among employers when it comes to "blacklisting" and government contracts. Under a proposed rule, companies bidding on federal contracts for goods and services worth more than $500,000 will need to disclose violations of 14 federal labor laws and their state law equivalents that occurred in the past three years.

The survey also showed that 55 percent of the respondents said they had engaged or planned to use employee benefits attorneys or consultants in response to the Affordable Care Act.

Another concern is the awards given to employees for whistleblowing. Some 22 percent of respondents were concerned how compliance programs will be less effective because compliance officers will take lapses straight to the government. Some 22 percent said compliance programs would be less effective because individuals will report to government agencies rather than fulfilling job duties.

In addition, 47 percent of respondents said their companies put in place policies that address issues faced by LGBT employees.

Following the Obergefell v. Hodges ruling by the Supreme Court on same gender marriage, employers need to review benefits plans, leave policies, domestic partnership policies and non-discrimination policies to ensure all employees are treated equally, Littler Mendelson advises.

Employers are also concerned about possible changes to the current joint employer standard by the National Labor Relations Board (NLRB). There is concern there could be increased legal liability and difficulty in monitoring the employment practices of subcontractors. Thirty-four percent of respondents are concerned that a change from the NLRB could lead to increased costs.

And there is concern over Equal Employment Opportunity Commission investigations and charges. Some 57 percent of respondents predict an increase in the number of workplace discrimination claims during the next year that relate to employers’ own hiring barriers, the survey said. Claims over equal pay were highlighted by 34 percent of those responding and accommodation for disabled workers was highlighted by 37 percent of those responding.

Those taking part in the survey included in-house counsel, human resources staff and C-Suite executives.

Contributing Author

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Ed Silverstein

Ed Silverstein (emsilverstein@gmail.com) is a veteran freelance writer and and editor for magazines, websites and newspapers. He writes frequently for ALM Media's

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