Still Filling the Federal Bucket List

In January, we noted that federal bureaucrats will impose the burdens of as many of their wish list items on businesses they can in the final year of the Obama administration. The trend continues.

White collar overtime rule changes coming soon

Car dealers enjoy special exemptions from premium overtime for salesmen, partsmen, and mechanics. However, some dealership white collar employees do not fit into those categories, and many dealers rely on the so-called white collar exemption. The Department of Labor has proposed dramatically changing the rules for the white collar exemption, and those changes are coming soon. The changes could impact your business by making employees you have traditionally viewed as exempt eligible for premium overtime – time and a half.bucket-1419136

The Department of Labor has forwarded its proposed rule changes to the federal Office of Management and Budget for review. This is the final administrative qualification before publishing the regulation in the federal register. The Department of Labor, like other agencies, must vet the proposed regulatory burdens through OMB to determine the impact on the federal budget. OMB received the proposal on March 14, and using a regular clearance time clock, OMB should clear the regulation for publication in late April or early May. After that, a sixty day Congressional review will follow. In that process, Congress can reject the proposed DOL actions, but that rejection is subject to presidential veto. There are serious questions whether Congress can pass the disapproval resolution with sufficient votes to overcome a presidential veto. If the rule survives legislative review or a disapproval resolution cannot survive a veto, the final rule could well be in place and enforceable this summer. This will not leave dealers much time to implement the changes.

What is on the horizon for which dealers should prepare?

  1. The final regulation is likely to more than double the existing salary threshold for the white collar exemption. According to many observers, the rule will increase the threshold to over $50,000 a year. Workers who earn less than that will not be eligible for the white collar exemption, and, unless they fit another exemption, they can be eligible for premium overtime.
  1. It is expected the change will impose an automatic threshold increase annually. This change, especially if it is tied to the consumer price index instead of some employment earnings index, could substantially increase the threshold each year.
  1. The regulation is expected to change the managerial duties test. One suggested change would require that at least half the employees’ duties be management in nature to meet the standard for the white collar exemption. This alone could impact many workers previously considered exempt from premium overtime.

Videos in the workplace

Do you think do not have to worry about the National Labor Relations Board because you do not have a unionized business? Well think again. As we have noted in numerous articles over the years, the National Labor Relations Board has been aggressive in taking action against employers it believes are suppressing concerted employee action that can be a precursor to union organizing. The Board has been active to enforce its views that any policy that can possibly be read to prevent the means of concerted action must be invalidated.  

A major grocery chain ran afoul of the NLRB because it had a policy that employees could not record any “conversations, phone calls, images, or company meetings with any recording device (including but not limited to a cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from management or all parties of the conversation.” The chain believed the policy would encourage the free exchange of ideas for the benefit of the company.

The NLRB struck down the policy. It said it was overly broad in its prohibition of “all workplace recording” which the NLRB felt could sweep up employee conversations about work conditions. Also, the Board viewed the prior management approval requirement as coming under its long-standing policy that employers may not require employees to obtain permission from management before engaging a protected concerted activity during an employee’s free time and in non-work areas. The grocery chain argued there were circumstances under which there was a business justification for the policy where recording was inappropriate. However, the Board rejected that claiming that the policy must be read in light of its broadest possible effect.

Once again, the Board has shown that an employer must be very precise to ensure that its policies do not infringe on protected concerted activity.