Tim Resch, Author at Samuels Yoelin Kantor LLP

Your Employees’ Workday May Begin Sooner Than You Think

November 7, 2022 by Tim Resch

When a workday begins can depend on the type of work performed and necessary steps to start the work each day. But with the ever-growing presence of computer software use in the workforce, can starting up and shutting down a work computer add some extra time to a paycheck? The U.S. Ninth Circuit Court of Appeals says that it is possible.

While many may be quick to compare starting up computers to waiting in line to punch a timecard, the Ninth Circuit ruled that for the call service employees at Connexx, the two are entirely different. In Cadena v. Customer Connexx LLC., decided October 24, 2022, call service employees claimed they should be compensated under the Fair Labor Standards Act (“FLSA”) for the additional 18.9 minutes it takes for their computers to turn on and off each day. Relying on the FLSA and the Portal-to-Portal Act, the Ninth Circuit found that booting up work computers could be compensable time, but shutting the computers down should not.

In specific situations, turning on computers each day can now be likened to the donning and doffing of protective gear. Without the use of functioning computers, the Ninth Circuit concluded that Connexx employees could not access any of the programs necessary to answer customer calls and perform scheduling tasks, the employees’ principal duties. Thus, the time spent starting up their work computers is integral and indispensable to the employees’ principal duties and should be compensated.

This case is a good reminder to all employers that under the FLSA, you are required to pay employees starting at the time of the first principal activity of the day. However, time that passes while the employee is waiting to begin their first activity of the day is not always compensable. For activities to be principal, and thus compensable, they must be integral and indispensable to the employee’s work. In today’s world, it isn’t as easy to determine when compensable time begins as it once used to be. With the days of punching in a timecard and walking straight to a workstation mostly behind us, employers should be aware of what tasks are integral and indispensable to their employees’ job performance and ensure they are compensating them appropriately.

Important Changes to Oregon’s Safe Employment Act

July 23, 2021 by Tim Resch

On June 15, 2021, Governor Kate Brown signed and enacted Senate Bill 483 into law, amending the Oregon Safe Employment Act (OSEA) to include a significant new protection for employees alleging claims for employment discrimination and retaliation under the Act. Previously, if an employee brought an action alleging discrimination or retaliation under the Act, the burden ultimately rested on the employee to prove that the action taken by the employer was discriminatory or retaliatory. However, the amended law now shifts that burden of proof on the employer—that is, depending on the timing of the employer’s alleged adverse actions.

Effective immediately, ORS 654.062(7)(a) provides that in any action brought for discrimination or retaliation under the Act, there is now a rebuttable presumption that a violation has occurred “if a person bars or discharges an employee or prospective employee from employment or otherwise discriminates against an employee or prospective employee within 60 days after the employee or prospective employee has engaged in . . . protected activities[.]” ORS 654.062(7)(a) (emphasis added). Protected activities include expressing opposition to unsafe workplace practices, filing complaints, initiating proceedings, and reporting assaults that take place on the premises. As noted above, under this new provision the person accused of violating the Act bears the burden of persuasion and may rebut the presumption that a violation has occurred only by demonstrating, by a preponderance of the evidence, that the alleged adverse employment action was not discriminatory or retaliatory.

In addition, Senate Bill 483 included an emergency clause and a provision that the rebuttable presumption applies retroactively to complaints that have not been issued a final decision by BOLI as of June 15, 2021. Thus, on July 19, 2021, BOLI announced that it would be implementing new rules to respond to complaints made under the new measure, and “complaints that meet the criteria of the measure must now be investigated based on the rebuttable presumption, thus shifting the burden of proof and the investigatory process of the Civil Rights Division (CRD).” By enacting temporary rules, BOLI now has the ability to immediately respond and investigate complaints brought in accordance with Senate Bill 483.

Still, the new legislation does not modify existing law with respect to adverse actions occurring more than 60 days after an employee has engaged in a protected activity. ORS 654.062(b) (stating “[i]f a person bars or discharges an employee or prospective employee from employment or otherwise discriminates against the employee or prospective employee more than 60 days after the employee or prospective employee has engaged in any of the protected activities . . . such action does not create a presumption in favor of or against finding that a violation . . . has occurred.”) (emphasis added). In those circumstances, the burden remains on the employee or prospective employee to establish a causal link between an employer or prospective employer’s adverse action and the protected activity.

Notably, prior to the enactment of this legislation, employees could frequently create a triable question of fact regarding an employer’s alleged retaliatory intent by establishing a proximate temporal link between an employee engaging in a protected activity and an employer’s adverse employment action. However, this new law will have a significant impact on litigation moving forward. in that the burden is now presumptively on employers to show that adverse actions were based on legitimate, nonretaliatory reasons when taken within two months of the employee engaging in a protected activity. Thus, moving forward, employers may want to consider carefully evaluating the timing of any disciplinary actions for employees, and maintaining detailed documentation in support of any disciplinary action taken after an individual has engaged in a protected activity under the Act.

Changes Coming to Oregon Noncompete Agreements

June 11, 2021 by Tim Resch

Changes Coming to Oregon Noncompete Agreements

On May 21, 2021, Oregon Governor Kate Brown signed Senate Bill 169, amending Oregon’s statute governing employee noncompete agreements, ORS 653.295. Effective January 1, 2022, employee noncompete agreements entered on or after that date will need to comply with four notable changes under the modified statute.

Unlawful Noncompetition Agreements are Void Instead of Voidable

Under the current version of ORS 653.295, a noncompete agreement that fails to satisfy the requirements of the statute is voidable rather than void—meaning that an employee bears the burden of taking some affirmative step to demonstrate their intent to void an unlawful noncompete agreement. Under the new iteration of the statute, noncompete agreements that fail to comply with all of the requirements of ORS 653.295 will be rendered “void and unenforceable,” regardless of what steps an employee does or does not take to void the unlawful agreement.

Revised Minimum Salary Requirements

Currently, for a noncompete agreement to be valid, employees must earn a salary that exceeds the median income for a four-person family, as determined by the U.S. Census Bureau. Moving forward under the amended statute, an employee’s annual gross salary must exceed $100,533 at the time of the employee’s termination, and this compensation amount will be adjusted annually for inflation.

Reduced Limit on Post-Employment Restriction Period

The current maximum period for post-employment restrictions in a noncompete agreement is 18 months, and any restricted period that exceeds 18 months is voidable rather than void. With the amendments to the statute, the period for post-employment restrictions is limited to 12 months, and any post-employment restriction period that exceeds 12 months is rendered void and unenforceable.

“Garden Leave” Option for Non-Qualifying Employees

Under the current statute, an employer can impose a noncompete agreement on an otherwise non-qualifying employee—that is, an employee that is not paid on an exempt, salary basis, or an employee who is not paid the statutory minimum compensation mentioned above—by use of the statute’s “garden leave” option. Using this option, an employer can unilaterally enforce a noncompete agreement on a non-qualifying employee by paying the employee during the restricted period: (1) a minimum of 50% of the employee’s gross annual salary at the time of the employee’s termination; or (2) 50% of the median income for a four-person family, as determined by the U.S. Census Bureau.

The option to enforce noncompete agreements against non-qualifying employees remains available to employers under the amended statute. To exercise this option an employer will need to confirm, in writing, payment to the employee that is the greater rate of either: (1) 50% of the employee’s gross annual salary at the time of the employee’s termination; or (2) 50% of $100,533, as adjusted for inflation.

Outside of the amendments, several existing limitations on noncompete agreements will remain unchanged under the new version of ORS 653.295. These continuing limitations include—among others—a requirement to notify employees in writing two weeks before the first day of employment that a noncompetition agreement is required as a condition of employment, and providing the employee with “a signed, written copy of the terms of the noncompetition agreement” within 30 days of termination of employment.

Finally, the limitations set out by ORS 653.295 do not apply to all types of restrictive employment agreements. Most notably, under the current and amended statute, the law only applies to employee noncompete agreements and does not apply to confidentiality agreements or agreements not to solicit an employer’s customers or employees.

Workplace Vaccination Requirements

March 8, 2021January 6, 2021 by Tim Resch

What You Need to Know About Workplace Vaccination Requirements

Now that the first round of COVID-19 vaccines is being distributed, many of people are wondering how to ensure that their employees are vaccinated as soon as possible. Below are answers to some of the most common questions employers have about workplace vaccine requirements. If you would like specific advice about instituting a vaccine requirement for your employees, please contact an employment lawyer.

Can I require that my employees take the vaccine when it becomes available?

Yes. In general, you can have a requirement that your employees take a publicly available vaccine. However, employers with 15 or more employees are subject to federal laws prohibiting certain employment practices, including requirements that screen out individuals with disabilities and denying requests for reasonable accommodations based on religious beliefs. Many states have equivalent laws that cover smaller employers. Most employers must try to make reasonable accommodations for employees whose disability or religious beliefs prevent them from meeting workplace requirements.

How can I respond if an employee claims to be unable to take the vaccine because of a disability or sincerely held religious belief?

You must determine whether you are required to make a reasonable accommodation for the employee. Unless an employer can demonstrate that a reasonable accommodation is not possible without undue hardship and that an unvaccinated employee poses a direct threat to the health of others, the employer must make a reasonable accommodation for an employee’s disability. An employer also must make a reasonable accommodation for an employee’s religious belief if the accommodation is possible without undue hardship.

In either case, an employer may exclude from the workplace an unvaccinated employee for whom the employer is not required to make reasonable accommodation.

What does reasonable accommodation mean for workplace vaccination requirements?

Whether you can make a reasonable accommodation without undue hardship will depend on the nature of the workforce and the employee’s position. In determining whether an exemption causes undue hardship, you should consider whether the employee’s duties require frequent contact with the public or other individuals whose vaccination rates are unknown and the cost to the business of reducing such contact. Employers may also rely on CDC and OSHA guidance to determine whether an accommodation is possible without undue hardship.

Federal regulations direct employers to determine whether a direct threat exists based on the likelihood and extent of the risk. Like undue hardship, whether your employee constitutes a “direct threat” will depend on the employee’s duties and the progress of the pandemic. As infection rates fall, the likelihood that an unvaccinated employee will constitute a direct threat to others in the workplace may fall.

Employment protections based on religious belief are narrower than protections based on disability. An employer still must provide a reasonable accommodation upon request. However, undue hardship in the religious belief context means that the accommodation would have a more than trivial burden on the employer, such as forcing the employer to treat employees unequally. Employers may not be required to make an accommodation for religious belief if the accommodation is unfair to other employees or forces you to incur significant costs.

As the COVID-19 vaccines become more available, employers will certainly face more pressing questions about requiring employees get the vaccine.

Naturally, many of these questions are novel, and there are complex legal issues employers need to consider. There are also practical considerations – what will the impact be on morale of requiring (or not requiring) employees to provide proof of vaccination. Employers with specific questions should seek guidance from an attorney with experience in employment matters.

Oregon Health Authority Orders New Statewide Face Covering Guidance

March 8, 2021August 20, 2020 by Tim Resch

As COVID-19 continues to impact our daily lives, Governor Kate Brown has authorized the Oregon Health Authority (OHA) to create new guidance on masks, face coverings and face shields (collectively referred to as “face coverings”). On August 13, 2020, masks, face shields, and face coverings became required statewide for offices and indoor public spaces and in outdoor public spaces when physical distancing is not possible.

All patrons (employees, contractors, volunteers, customers and visitors) of a business, indoor public space or outdoor public space are now required to wear a mask, face shield or face covering at all times, with the following exceptions:

For employees, contractors and volunteers, face coverings are not required when at or in a location where the employee, contractor or volunteer does not have a job that requires interacting with the public and at least six feet of distance can be maintained between individuals. In areas where six feet of distance cannot be maintained, face coverings are still required.
Face coverings are not required while eating or drinking.
Face coverings are not required when engaged in an activity that makes wearing one not feasible. The example provided by the Oregon Health Authority is swimming.

Additionally, businesses are required to provide masks, face shields or face coverings for employees and to accommodate employees, contractors, customers and visitors when accommodations are required by the ADA, labor laws at the state or federal level, public accommodations laws at the state or federal level and applicable OHA public health guidance. Businesses are also required to post clear signs about the face covering requirements.

The OHA also recommends but does not require that such entities provide face coverings for customers and visitors who do not have one at no cost to the customers and visitors, to post signs about the requirements in languages commonly spoken by customers and visitors, and to educate employees on how to safely work and communicate with people who need to read lips or facial expressions to communicate through the use of transparent face coverings.

Face coverings are required at all times for employees in hallways, bathrooms, elevators, lobbies, break rooms, and other common spaces in both public and private office spaces. If an individual workspace or meeting room allows for the maintenance of a consistent six feet of distance between people, individuals can remove their face covering in those areas.

All individuals who visit a business or a public space are required to wear a mask, face shield or face covering unless they are under five years of age with the following exceptions:

Face coverings are not required while eating or drinking
Face coverings are not required when engaged in an activity that makes wearing a mask not feasible, such as when swimming.
Face coverings can be briefly removed where an individual needs to confirm their identity by visual comparison, such as at a bank or when interacting with law enforcement.

If an individual has a medical condition or disability that makes it hard to breathe or wear a mask, they can request an accommodation from a business or public space operator to enable full and equal access to the services, transportation and facilities open to the public.

As these unprecedented times continue to unfold, we must all do our part to follow state guidance and reduce the spread of COVID-19. More information and OHA Guidance can be found here.

A civil litigator with an impressive local and international history, Timothy Resch helps employers and small businesses find success in federal and state court litigation matters.

Family First Law & What It Means

March 8, 2021March 23, 2020 by Tim Resch

I. Federal Legislative Actions

On Friday, March 13, 2020, the House announced that they reached a deal with President Trump’s administration in response to the COVID-19 outbreak.

At 1:00am early Saturday morning, the House passed HR 6201 with a 363 – 40 vote. The emergency bill is cited as “Families First Coronavirus Response Act.”

On March 18, 2020, the Senate passed the bill with a 90 – 8 vote. On March 18, 2020, the President signed the bill into law.

The law provides temporary paid sick and family medical leave, increases funding for health, food security and unemployment insurance programs, and provides free coronavirus testing.

Below is an outline of the highlights of the law.

II. Emergency Family Medical Leave Expansion Act

Division C | p. 12

Term

Begins on the date the Act takes effect, and ends December 31, 2020.

Eligible Employees

Eligible employees are employees who have been employed at least 30 calendar days by the employer with respect to whom leave is requested.

Employer Threshold

The Act creates a threshold for qualifying employers. Accordingly, Employers who employ 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year are subject to the Emergency Medical Leave Expansion Act.

Employers with fewer than 50 employees

The Secretary of Labor has the authority to issue regulations for good cause to exempt small businesses with fewer than 50 employees from the paid leave requirement.

Qualifying Need Related to a Public Health Emergency

The Act protects employees with a “qualifying need related to a public health emergency.” The term “qualifying need related to a public health emergency,” with respect to leave, means that the employee is unable to work due to a need for leave to care for the son or daughter under 18 years old of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.

Unpaid Leave – Initial 10 Days

The first 10 days that an employee takes leave may be unpaid. The employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid leave under this section; however, the employer may not require the election to substitute.

Paid Leave – After Initial 10 Days

The employer shall provide paid leave for each day of leave that the employee takes after taking the initial 10 days’ leave. The pay shall be calculated based on:

An amount that is not less than 2/3 of an employee’s regular rate of pay; and
The number of hours that the employee would otherwise be normally scheduled to work.

In no event shall paid leave exceed $200 per day, or $10,000 in the aggregate.

Employees with Varying Schedules

For those employees whose schedules vary week-to-week, the employer should calculate hours by determining the average number of hours that employee is scheduled for per day over the 6-month period ending on the date that the employee’s leave begins. If the employee has not worked for 6-months prior, the employer should consider the reasonable expectation of hours that the employee would normally be scheduled.

Notice

Where practicable, the employee shall give notice to the employer where the necessity for leave is foreseeable.

III. Emergency Unemployment Insurance Stabilization and Access Act of 2020

Division D | p. 15

Notification

The State shall notify an employee at the time of their separation from employment of the availability of unemployment compensation.

Notice of Received/Processed Application

The State must then notify the applicant when the application is received and is being processed.

Non-Charge for COVID-19

The State may not charge employers directly impacted by COVID-19 due to an illness in the workplace, or direction from a public health official to isolate or quarantine workers. (p. 41).

IV. Emergency Paid Sick Leave Act

Division E | p. 18

Covered Employers

The Emergency Paid Sick Leave Act applies to private employers that employ fewer than 500 employees, and public agencies that employ one or more employees.

Employers Must Provide

An employer shall provide to each employee employed by the employer paid sick time for any of the following uses:

The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
The employee has been advised by a health care professional to self-quarantine due to concerns related to COVID-19.
The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis.
The employee is caring for an individual who is subject to an order described in (i), or has been advised as described in (ii).
The employee is caring for the son or daughter of such employee if the school or place of care for the son or daughter has been closed or the childcare provider is unavailable due to COVID-19 precautions.
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Amount of Paid Time

For full time employees, the employee is entitled to 80 hours of paid sick time.

For part time employees, the employee is entitled to the number of hours equal to the number of hours that employee works on average, over a 2-week period.

No Carryover

Paid sick time under this Act shall not carry over from one year to the next.

Termination

Paid sick leave under this Act terminates beginning with the employee’s next scheduled work shift immediately following termination of the need for paid sick time, as described in (b) above.

Immediate Use

Paid sick time under this Act shall be available for immediate use by the employee for purposes described in section (b) above, to cover the hours during which the employee is using paid sick time.

Employer with Existing Paid Sick Time Policy

The employee may first use the paid sick time under the Act. The employer may not require the employee to use the paid leave provided by the employer before using paid sick leave under the Act.

Cover Employee

The employer may not require the employee seek a replacement employee to cover in their absence.

Notice

The employer shall post, and keep posted, in a conspicuous place on the premises, the requirements described in the Act.

Model Notice

Seven days after the enactment of this Act, the Secretary of Labor shall make publicly available a model of a notice that meets the requirements of the Act.

Discrimination, Discipline, Discharge

It is unlawful for an employer to discriminate against, discharge, or discipline an employee who takes leave in accordance with the Act and has filed any complaint or proceeding under this Act.

Violation

An employer who fails to provide paid sick leave will be considered to have failed to pay minimum wages in violation of section 6 of the Fair Labor Standards Act of 1938 (29 USC 206), and shall be subject to the penalties described in sections 16 and 17 therefrom.

Effective Date

This Act and the requirements of this Act shall take effect not later than 15 days after the date of enactment for the Emergency Paid Sick Leave Act. The Act shall expire on December 31, 2020.

Payroll Tax Credits for Paid Sick and Paid Family and Medical Leave

Division G | p. 33

The Act makes several changes to Federal Insurance Contributions Act (FICA), which is at IRC 3111. The FICA taxes are Social Security, Medicare, and Medicaid. We anticipate larger changes to the income and excise tax rules as part of the $1 trillion economic stimulus package currently working its way through Congress.

Paid Sick Leave.

1. 100% Tax Credit. The employer shall be allowed as a credit against the tax imposed under Section 3111(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100% of the qualified sick leave wages paid by the employer with respect to such calendar quarter.
2. $200 Daily Limit per Employee. The amount of qualified sick leave wages taken into account with respect to any individual shall not exceed $200 for any day for which the individual is paid qualified sick leave wages.
3. Overall Limit on Number of Days Taken into Account. The aggregate number of days taken into account under this section for any calendar quarter shall not exceed the excess of:
  1. 10, over
  2. The aggregate number of days so taken into account for all preceding calendar quarters.
4. Election of Applicability. This section shall not apply with respect to any employer for any calendar quarter if such employer elects not to have this section apply.

Self-Employed Individuals.

1. 1. Eligibility. Must be someone who regularly carries on a trade or business under Section 1402 of the IRC, and would be entitled to paid leave during the taxable year under the Emergency Paid Sick Leave Act (see section (2) of Division E highlights above).
  2. Coverage. There shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 for any taxable year an amount equal to 100% of the qualified sick leave equivalent amount with respect to the individual.

(There are more details in the self-employment provisions that I can dig into should our clients prefer. I am not sure is this section is particularly relevant to our clients.)

Paid Family Leave.

1. 100% Tax Credit. The employer shall be allowed as a credit against the tax imposed under Section 3111(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100% of the qualified family leave wages paid by the employer with respect to such calendar quarter.
2. Wages Limit. The amount of qualified family leave wages taken into account with respect to any individual shall not exceed:
  1. $200 for any day for which the individual is paid qualified family leave wages; and
  2. In the aggregate with respect to all calendar quarters, $10,000.

Credit Limit. The credit allowed under this subsection with respect to any calendar quarter, shall not exceed the tax imposed under Section 3111(a) of the Internal Revenue Code of 1986 for each calendar quarter on the wages paid with respect to the employment of all employees of the employer.

Election of Applicability. This section shall not apply with respect to any employer for any calendar quarter if such employer elects not to have this section apply.

Tax on Employers.

Not Wages. Any wages required to be paid by reason of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act shall not be considered wages for the purposes of Section 3111(a) of the Internal Revenue Code of 1986.

A more sweeping tax bill is still pending at this time related to income tax and insurance tax implications. For more specifics on the current law, as well as pending legislation, we encourage you to consult one of the experienced tax lawyers at Samuels Yoelin Kantor LLP.

A Letter to our Clients: COVID-19

March 8, 2021March 16, 2020 by Tim Resch

To our clients,

As we all continue to closely monitor the Coronavirus (COVID-19) situation, we wanted to share the proactive steps we, as a firm, are taking to ensure the health and safety of our clients, professionals, staff, families, and community. While we are following the rapidly changing health related guidelines and recommendations to help mitigate the Coronavirus’ impact, we are committed to offering the best legal representation to our clients, in the most health conscious way possible.

The health and safety of our firm and our office environment will always be a top priority. However, as the situation continues to develop in North America, we have taken additional steps to ensure we are here to serve you in the safest way possible.

These enhanced measures include:

Hourly disinfecting all high-touch areas, including office doors, lobby furniture and conference room surfaces with a high grade disinfecting cleaner.
Increased accessibility of hand sanitizer for our clients and our employees.
Encouraging digital conferences or teleconferences, in lieu of face to face meetings.
Increased flexibility to meet clients where they are most comfortable, whether it be at one of our offices (downtown, Lake Oswego, Hood River, or our new Vancouver office), their homes or other appropriate locations.
Increased use of DocuSign and the digital transmission of documents.
Ensuring our employees have the information and resources they need to stay healthy, and the ability to stay home if they feel unwell.

We are prepared to address these challenging circumstances with everyone’s safety in mind. If you have any questions, concerns, or suggestions, we would love to hear from you.

Sincerely,

Timothy J. Resch
Managing Partner

No Questions Asked: Oregon’s Equal Pay Act

March 8, 2021June 8, 2017 by Tim Resch

Oregon’s Equal Pay Act Prohibits Questions About Salary

On May 22, 2017, the House unanimously re-passed House Bill 2005. The legislation, which is more commonly known as the Equal Pay Act of 2017, was amended by the Senate last week, and is now headed to Governor Brown for her signature.

While the majority of the media attention has been on the provisions in the bill that will prohibit discrimination against women in the payment of wages, there are other provisions affecting employment practices that employers should be aware of.

Under the new legislation, it will be a prohibited practice for an employer to screen a job applicant based on the applicant’s current or past compensation. Other than for internal hires, it will also be a prohibited practice to determine compensation for a position based on current or past compensation of a prospective employee. Additionally, a prospective employer may not seek an applicant’s salary history information from the applicant or from the applicant’s current or former employer, unless the prospective employer has made an offer of employment, with an amount of compensation included, to the prospective employee.

If an employer were to screen a job applicant, determine compensation, or seek out salary information in violation of the Act, they could face a lawsuit to recover up to two years of back pay, court costs, attorney fees, and other damages.

If Governor Brown signs the bill into law, as she is expected to do, the screening and compensation provisions will become effective January 1, 2019. The prohibition on seeking information on an applicant’s salary history will become effective 91 days after the Legislature adjourns.

“Not So Fast” – Federal Judge Grants Injunction Against Overtime Regulation

March 8, 2021November 23, 2016 by Tim Resch

Rule Expanding Overtime Halted by Federal Judge

On Tuesday, November 22, a Federal District Court Judge in Texas granted a nationwide preliminary injunction against an Obama administration regulation, which sought to expand the eligibility of millions of workers for overtime pay.

The regulation was ruled by Judge Mazzat to have likely exceeded the authority of the Obama administration because it nearly doubled the overtime salary threshold. The regulation would raise the minimum annual salary amount from $23,660 to $47,476. It would automatically qualify workers for overtime pay, so long as their annual salary was below the new $47,476 threshold.

Twenty-one states and over fifty business organizations have backed the request for an injunction to delay the regulation’s effective date of December 1, 2016, until the judge could make a final ruling based on the merits.

Small business owners and business organizations applauded the decision, arguing that the regulation would substantially burden business owners with increased labor costs. The Labor Department and worker advocacy groups argue that by blocking the regulation, workers who already put in 40 hours a week will continue to work longer hours for unfair pay.

Many employers have been making plans for the effective date of the new regulations, which is now just eight days away. Employers may have already notified employees about their new pay arrangements. Should employers reverse those salary decisions and postpone their implementation? There are many unknowns at play, not the least of which is that the Trump administration will take over responsibility for this litigation in January 2017. Might a Trump administration concede this case, and let an injunction remain in place? That is a possibility. Might the new administration have the Department of Labor issue new regulations extending the date for implementation of the new salary/overtime rules? That’s also possible. One other possibility is an appeal and a higher court vacating the injunction. In that case, could the December 1, 2016 effective date be made enforceable retroactively?

Each employer must make a business decision about what is appropriate for their workforce, and determine how much risk (given the uncertainty) they are willing to accept. One important point for employers – adjustments to compensation terms can be made prospectively, but it is dangerous for an employer to retroactively modify an employee’s compensation, particularly if the modification is to reduce pay. An employer and employee have a contractual relationship, with many applicable state and federal regulations. Employers should be cautious about any course of action that could be seen as a breach of the employment contract, or a violation of state or federal laws.

For more information, read this article from Bloomberg.

What You Need to Know About Workplace Vaccination Requirements

Can I require that my employees take the vaccine when it becomes available?

How can I respond if an employee claims to be unable to take the vaccine because of a disability or sincerely held religious belief?

What does reasonable accommodation mean for workplace vaccination requirements?

Oregon’s Equal Pay Act Prohibits Questions About Salary

Rule Expanding Overtime Halted by Federal Judge

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