New Overtime Rule Finalized Today

Craig Carter

As has been widely reported, the Department of Labor issued its final overtime rule today raising the salary level requirement for most “white collar” exemptions, as well as for the “highly compensated employee” exemption.  Here is the link to the DOL Factsheet on the new rule: https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm  This has been in the works a long time and should be no surprise to anyone.  A few of the items that we did learn today are that the new rule will not go into effect until December 1, 2016 and the new standard salary level is confirmed to be $913 per week/$47,476 annually ($134,004 for the highly compensated employee exception).  This means that, beginning December 1, 2016, employees earning a salary of less than $47,476 per year will not be exempt for overtime purposes.  These new salary levels will now be updated every three years. 

Although the new rule will allow employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the new standard salary level, “salary” for the purposes of the overtime rule does not include discretionary bonuses, payments for medical, disability, or life insurance, or contributions to retirement plans or other fringe benefits.  Thus, these common employee benefits cannot be used to satisfy the $47,476 per year salary requirement.  One other very basic but important point to remember is, regardless of an employee’s salary level, if the employee never works over 40 hours in a week, the employee is not owed overtime pay.

Don’t Make Your Employment Application Too Accommodating

Craig Carter

I have recently seen some employment applications that include a request for the applicant to provide information in some form regarding the need for reasonable accommodations to perform the functions of the job being applied for.  Although employers are always allowed to ask applicants about their ability to perform the job, according to the EEOC, employers are not allowed to ask all applicants whether they will need reasonable accommodation to perform the functions of the job, and doing so violates the Americans with Disabilities Act.  If the job application used by your business requests such information, you should remove that language from the application form.  Employers are allowed, however, to ask applicants whether they need accommodations for the hiring process.  Additionally, if an employer knows that an applicant has a disability, either because the disability is obvious or because the applicant volunteered the information to the employer, the employer can then ask that particular applicant about the need for accommodation.  Further, once a conditional offer of employment is made to an applicant, an employer may ask that applicant about the need for accommodation, as well as other disability and medical related questions.

EEOC Issues Resource Document on Leave as a Reasonable Accommodation that is… somewhat helpful

Craig Carter       

On Monday of this week, the EEOC issued what it calls a “Resource Document” related to employer-provided leave as a reasonable accommodation under the ADA.  The document can be found here: https://www.eeoc.gov/eeoc/publications/ada-leave.cfm.  This document confirms that the EEOC is serious about enforcing its position that unpaid leave is a form of reasonable accommodation for an employee with a disability under the ADA.  It also contains some helpful guidance regarding the EEOC’s positions on this matter.  The document points out that disabled employees who request leave provided under employer policies cannot be subjected to stricter requirements than are applied to non-disabled employees.  For example, the EEOC’s position is that an employer that routinely allows employees to take a few days of annual leave without any explanation of how the leave will be used should not deny annual leave to a disabled employee who specifically states the leave is needed for purposes related to the disability.  The document also confirms that an employer should not penalize a disabled employee for use of leave as an accommodation, such as on performance evaluations or under employer absence policies.  The document further reminds employers that they must consider granting reasonable accommodations to allow a disabled employee to return to work after taking leave, such as modification of the employee’s work space or schedule, or reassignment to a vacant position, and EEOC takes the position that the employer must allow the employee to return to his or her original position after taking leave unless doing so would be an undue hardship.

Although the above guidance is somewhat helpful, what stands out the most to me is what the document does not say: how much leave an employer is required to grant a disabled employee as a reasonable accommodation.  While the FMLA provides for a fairly clear cut 12 weeks of leave within a 12 month period, the EEOC does not place any such limitations on how much leave is required under the ADA.  The EEOC’s document makes a point of instructing employers that additional leave beyond the 12 weeks granted under the FMLA can be a required accommodation, but does not give any clear guidance as to how much additional leave must be granted.  What that says to me is, any time an employer denies an employee’s request for additional unpaid leave as an accommodation under the ADA, the employer must be able to articulate how the additional leave would create an undue hardship on the employer’s business.  It is some consolation, however, that the federal Fifth Circuit Court of Appeals, which decides federal employment cases coming out of Texas, appears to take a more restrictive view than the EEOC of when and how much leave is required to be granted as a reasonable accommodation.