On September 22, 2020, the U.S. Department of Labor (the “DOL”) released a proposed regulation addressing when a service provider should be classified as an independent contractor rather than an employee. The change is important to both employers and service providers as each may find it advantageous to characterize service providers as independent contractors rather than part-time, full time or temporary employees. DOL welcomes public comments to the proposed new rules for a thirty (30) day period following publication in the Federal Register or by October 26, 2020.

As PLDO Partner William F. Miller explains in his essay, U.S. Department of Labor Proposes New Rule on Independent Contractors, the putative employer’s perspective and potential benefits of an “independent contractor” status include not having to withhold payroll taxes, pay for workers compensation insurance or include the individual in health insurance, 401(k) or other employee benefit plans. From the service provider’s perspective, he or she receives the gross amount charged for services rendered, without reduction for payroll withholding taxes and some expense that do not qualify as employee business expenses may become tax deductible on the service provider’s Form 1040, Schedule C.

To learn about the DOL’s current approach to classification determination, which is based on the “economic reality” test and a detailed overview of the proposed new rules, download his advisory here or click on the title above. If you would like more information, please contact Attorney Miller at 508- 420-7159 or email wmiller@pldolaw.com.

Two new final rules have been released by the Department of Labor (“DOL”) which update the Fair Labor Standards Act (“FLSA”). These rules will impact how an employer calculates paying an employee overtime under the FLSA.

1. The DOL released a final rule on September 24, 2019, which makes adjustments to overtime exemption rules under the FLSA. The final rule became effective January 1, 2020, and as of now, employers must be in compliance with this overtime change.The new rule raises the minimum salary threshold, making more employees eligible for overtime. Under the new rule, for an employee to be exempt from FLSA overtime requirements, an employee’s salary must be $684 per week or $35,568 per year. The new rule further raises the minimum salary necessary for an employee to be exempt from overtime as a highly-compensated employee to $107,432 annually.

2. On December 12, 2019, the DOL announced a final rule which clarifies and provides guidelines on how to calculate the regular rate of pay. The final rule will be effective January 15, 2020, and it focuses on clarifying if certain benefits and perks must be included in a regular rate of pay calculation.

The regular rate of pay requirements are used to define what an employer includes in a time and a half calculation for paying overtime to employees under the FLSA guidelines. The final rule clarifies that an employer may exclude the following from an employee’s regular rate of pay:

  • parking benefits, wellness programs, onsite specialist treatments, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits, and adoption assistance;
  • unused paid leave;
  • payments of certain penalties employers must pay under state and local scheduling laws;
  • reimbursed expenses such as cellphone plans, credentialing exam fees, organization membership dues and travel expenses that don’t exceed the maximum travel reimbursement under certain regulations;
  • sign-on and longevity bonuses;
  • employer provided coffee and snacks;
  • discretionary bonuses (the DOL further clarified that the label given to a bonus doesn’t determine whether it is discretionary); and
  • contributions to benefit plans for accidents, unemployment, legal services and other events that could cause a financial hardship or expense in the future.

It is critical that employers review these final rules to determine if their overtime payment structure is in compliance with the FLSA. For more information on these final rules or other legal issues, contact PLDO Attorney Katherine D. Bishop at 401-824-5100 or email kbishop@pldolaw.com.

 

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

Fake news. Fake videos. Deep fakes. We have all heard stories of people photoshopping or faking photos to make others look bad or create a scandal. However, an equally disturbing trend is emerging: fake text messages. There are numerous sites and apps available to create fake (but very real-looking) text messages. These tools allow you to customize the carrier name, battery percentage, wi-fi, timestamp, and other aspects of the message to make it look as real.

To paraphrase a familiar saying, a fake text message can go halfway around the world before the truth gets its boots on. Therefore, employers should understand that, given the ease with which text messages can be faked, they must proceed cautiously and thoughtfully when dealing with workplace issues that involve text messages. For example, if someone is accused of harassing another employee via text message, an employer should keep in mind that the text message might have been faked, so further questioning and follow-up of the sender and recipient will be needed to ensure that an adequate investigation takes place. Another issue that could arise is someone seeks revenge on another employee and circulates a fake text message to get the other employee disciplined or fired. This new technology creates an additional hurdle that employers must overcome when managing their workplaces and investigating employee misconduct. For more information on social and digital media issues in the workplace or other employment and business law matters, please contact PLDO Partner Brian J. Lamoureux at 401-824-5100 or email bjl@pldolaw.com.

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

Rhode Island recently joined a growing list of states with laws limiting the ability of employers to use non-compete agreements in the workplace. Employers often insist that employees sign non-compete agreements which would restrict an employee’s ability to work in the same field and geographic area as the employer for a limited period of time, such as six months to a year after the employment relationship ends. Although courts have always required such agreements to be limited in scope and reasonable in their effect, many employers continued to insist that their employees sign such agreements anyway, even if the terms were overly onerous on the employee.

This summer, the Rhode Island General Assembly passed the “Rhode Island Noncompetition Agreement Act” (Act). The Act is primarily aimed at protecting so-called “non-exempt” employees, graduate students, underage workers, and workers earning less than 250% of the poverty level (i.e., $31,225 for 2019). A non-exempt employee is generally one who is eligible for overtime, is paid hourly (not salary), and earns less than $455 per week. Clearly, the Act is intended to relieve lower-paid and younger workers from the effects of non-compete agreements and to permit non-compete agreements only where they are truly and reasonably necessary to protect an employer’s legitimate business interests, such as in connection with the sale of a business or where the employee is highly compensated.

However, the Act is not all bad news for employers. The new law does not apply to independent contractors. Also, it allows employers to insist that a former employee not solicit other employees, customers or clients or use the employer’s trade secrets. Employers should familiarize themselves with the Act and take a look at how they are using non-compete agreements to ensure compliance with the Act when it becomes effective in mid-January, 2020. For further information on this new law or other business or employment matters, please contact PLDO Partner Brian J. Lamoureux at 401-824-5100 or email bjl@pldolaw.com.

 

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

With the latest pronouncement by the Department of Labor (“DOL”) regarding the Family Medical Leave Act (“FMLA”), employers are wise to review and revise leave policies to ensure that they do not run afoul of the agency’s most recent interpretation of the law.

On March 14, 2019, the DOL’s Wage and Hour Division (“WHD”) issued its first opinion letter (FMLA2019-1-A) of the year concerning the FMLA, specifically prohibiting an employee’s ability to expand the 12-week benefit period of protected leave provided under the FMLA, in two ways:

Employees May NOT Delay the Designation of FMLA-Qualifying Leave

Employers are prohibited from delaying designation of FMLA-qualifying leave once an employee has communicated the need to take leave for an FMLA-qualifying reason. Some employers permit employees to use accrued paid leave prior to designating leave as FMLA-qualifying. Such policies ultimately result in an employee receiving an extended benefit period beyond the 12 weeks provided under the FMLA. See WHD Opinion Letter FMLA2003-5, 2003 WL 25739623, at *2 (Dec. 17, 2003) (“Failure to designate a portion of FMLA-qualifying leave as FMLA would not preempt … FMLA protections). Accordingly, the recent DOL opinion letter clarifies that, “once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave … As such, employers may not delay designating leave as FMLA-qualifying, even if the employee would prefer that the employer delay the designation.” (emphasis added).

Employees May NOT Substitute Accrued Paid Leave for Unpaid FMLA Leave to Extend the Benefit Period
Employers may not permit employees to substitute accrued paid leave for unpaid FMLA leave, such that it expands the employee’s 12-week entitlement. According to the opinion letter, “[i]f an employee substitutes paid leave for unpaid FMLA leave, the employee’s paid leave counts toward his or her 12-week (or 26-week) FMLA entitlement and does not expand that entitlement.”

Employers that currently allow employees to either 1) delay the designation of FMLA-qualifying leave, or 2) decide whether to use accrued paid leave during otherwise unpaid FMLA leave, should reconsider such policies to be in compliance with the law. For further information, please contact Attorney Meagan L. Thomson at 401-824-5100 or email mthomson@pldolaw.com.

 

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

For over forty years, public-sector unions could impose what were known as “agency fees” on non-members. The logic was that a union serving as the exclusive representative of a unit of employees is required to represent the interests of all employees, union member or not. So the imposition of agency fees made a certain kind of sense: non-members benefited from a union’s duty to represent them, and in turn, a union could impose an agency fee on non-members, who don’t pay union dues.

The Supreme Court’s recent decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31, No. 16–1466 (June 27, 2018) changed all that. Relying heavily on the concept that the government cannot compel speech, the Supreme Court held that extracting fees from non-member public-sector employees to fund union activities violated the employees’ First Amendment rights.

Earlier decisions had drawn a line between those fees for activities related to collective bargaining, known as “chargeable” expenditures, and funding for a union’s political and ideological activities, known as “nonchargeable” union expenditures. In overturning that precedent, the Janus majority found the line “impossible to draw with precision.”

Post-Janus, public sector unions will need to convince employees to become and stay members in order to generate funding. Absent a voluntary agreement on the part of employees to pay dues, public sector unions could experience a significant decline in revenue. This possibility is referred to as the “free-rider problem.” Essentially, this issue involves employees that the union has a legal obligation to service but that decide not to pay dues.

The Janus dissent highlighted this issue in the public-sector union context: unions must fairly represent all employees in a unit, whether or not they are members. Now that they are no longer required to pay agency fees, why would non-member employees want to fork over union dues if they could receive the same benefit without paying? That’s the challenge facing organized labor in the government context in the wake of this decision.

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

Rhode Island’s new “hands-free” driving law goes into effect on June 1, 2018. This law prohibits you from holding your phone up to your ear while driving. The law permits the use of “hands-free” devices, such as the phone’s built-in speakerphone, a Bluetooth earpiece or similar hands-free features. Violators face a $100 fine, but there is a one-free-pass provision, which suspends the fine for first-time offenders so long as they show proof that they bought a hands-free device after they received the ticket.

Employers should ensure that their employees are aware of the law and remind them that they are expected to follow all laws when driving a company vehicle or on company-related business. This would also be a good time to revisit your employee handbook to ensure that it informs employees that they must refrain from texting while driving as well as holding their phone to their ear while driving a company car or on company business. You may also want to consider buying or making hands-free devices available for employees who are often on the road. Finally, employers should check their insurance policies to confirm they have coverage for any accidents caused by their employees while driving on duty. You do not want to discover after the fact that there is no coverage for an accident caused by your employee because at the time of the accident the employee was talking on the phone and operating a company vehicle in violation of the law.

Disclaimer: All blog posts are for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.