Lynn Jackson Alert: U.S. Department of Labor Proposes Raise to Exempt Employee Minimum Salary

On March 7, 2019, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking to raise the minimum salary threshold for exempt employees to $35,308 annually ($679 per week), which is up from the 2004 standard currently in place of $23,660 annually ($455 per week). Exempt categories such as administrative, executive, professional, and outside sales and computer employees are often referred to as “white collar” exemptions. Employees in exempt categories must meet not only the minimum salary requirement, but must also be paid on a salary basis and meet the standard duties test of the applicable exemption. There have been no changes under the proposed rule to the “standard duties” test under the exemptions.

The DOL’s proposed rule will be subject to a 60-day public comment period before it eventually could make its way into a final form. It is expected that the final rule would become effective some time in early 2020.

The proposed rule raises the highly-compensated employee (HCE) exemption from $100,000 under the current rule to $147,414 per year, of which $679 must be paid weekly on a salary or fee basis. Under the proposed rule, employers would not be able to count non-discretionary bonuses in order to meet the required weekly salary requirement for HCEs.

In addition, the proposed rule would allow employers to count certain bonuses, incentive payments, and commissions paid on an annual or more frequent basis to be used to satisfy up to 10 percent (10%) of the employee’s overall salary to meet the new salary threshold of $35,308.

Employer Takeaway: While this proposed rule is not yet final, employers should begin taking steps in anticipation of the rule becoming effective at some point in the next year. For example, employers should review the salary ranges for exempt employees currently in place at their businesses, and consider adjusting salaries upwards if necessary to meet the new standard, or re-classify the worker as non-exempt and paid on an hourly basis if that becomes necessary. With careful planning, employers will be well-prepared for compliance should the change in the overtime rule become effective.

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#MeToo Still Going Strong: EEOC Releases FY 2018 Sexual Harassment Data

By now, everyone is aware of the #MeToo movement, which began in October 2017 as a backlash against sexual harassment and sexual assault in Hollywood and the entertainment industry. The Equal Employment Opportunity Commission (EEOC), created as part of the Civil Rights Act of 1964, is the federal agency responsible for interpreting and enforcing federal laws prohibiting employment discrimination. In the last 50 years, the EEOC has undertaken substantial efforts to bring attention to, and remediate, workplace discrimination and harassment. In addition to handling administrative charges of discrimination, the EEOC offers a host of resources to employers and small businesses, including workplace training through its Training Institute and low-cost (or no-cost) education and outreach programs.

In June of 2016, after an 18-month study, the EEOC Select Task Force on Sexual Harassment in the Workplace reported that workplace harassment “remains a persistent problem” and frequently goes unreported. The Task Force recommended a change in training, noting that “even effective training cannot occur in a vacuum – it must be part of a holistic culture of non-harassment that starts at the top.” In response to this report, the EEOC “ramped up its efforts” related to workplace harassment, which culminated in the release of an innovative new training program in the fall of 2017, just as #MeToo was gaining ground. The new program, “Respectful Workplaces,” teaches skills for employees and supervisors to promote and contribute to respect in the workplace.

A few months ago, the EEOC released preliminary FY 2018 sexual harassment data, which showed an increase in charges and in EEOC activity. The following are just a few examples of the increased activity:
Charges filed with the EEOC alleging sexual harassment increased by more than 12% from FY 2017 – this is the highest level of sexual harassment claims since FY 2012;
The EEOC filed 66 harassment lawsuits, 41 of which included allegations of sexual harassment. This shows a 50% increase in suits alleging sexual harassment over FY 2017;
Overall, the EEOC recovered almost $70 million for the victims of sexual harassment through litigation and enforcement, up from $47.5 million in FY 2017; and
Hits on the EEOC’s sexual harassment page of the Agency’s website more than doubled in the past year.

Practitioners representing employers have the opportunity to help organizations ensure compliance through well-drafted policies, improve workplace culture, and promote awareness of potentially problematic circumstances or behaviors. This can be done through proactive training, ongoing advice and counsel at early stages of an emerging problem, advising the client to provide multiple reporting procedures in the case of a complaint, and having an open-door policy where all employees feel supported in bringing their concerns forward. Employers who take proactive steps with the assistance of counsel are much less likely to have the EEOC knocking at their proverbial door.

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SD New Annual Increase On Minimum Wage Has Been Announced

Just announced, the new South Dakota Minimum Wage for 2019 is increasing 25 cents per hour. The new rate of $9.10 per hour is up from $8.85 in 2018. The new rate becomes effective on January 1, 2019.

South Dakota’s minimum wage is adjusted on an annual basis, increasing at the same rate as the cost of living as measured in the Consumer Price Index published by the United States Department of Labor. The amount of the increase will be rounded to the nearest five cents. The state minimum wage cannot decrease.

There is no state statute that requires a poster to be displayed regarding minimum wage. However, South Dakota’s State Department of Labor provides one as a courtesy to employers, and many employers do post this in their workplace at a location where employees can see it and other postings are made. See the link below.

South Dakota Minimum Wage Poster

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