Column: A new HR landscape arises
“The challenges faced by small businesses trying to accommodate the needs of employees are ever-changing,” Connecticut Business and Industry Association Assistant Counsel Eric Gjede, who lobbies on labor issues at the state Capitol, said. “Unexpected things happen in HR, and employers are constantly looking for ways to adapt and meet employee needs in a way that works for everyone.”
No matter what your industry or headcount, staying up to date on changes to the HR regulatory and legal landscape is a must, Gjede said.
Employers can pay a steep price for being uninformed or misinformed.
“An employee complaint to the state Department of Labor or Commission on Human Rights and Opportunities can result in fines and legal fees that can get very expensive very quickly, not to mention the cost of your time. The process can last months and months.”
Gjede also cautions even innocent HR mistakes can have repercussions well beyond one company.
“Issues can come out of the woodwork, and employers simply aren”™t prepared or think they”™re doing the right thing when they”™re not,” he said. “What sometimes happens is policymakers pushing for more workplace mandates point the finger and say, ”˜This is a bad employer,”™ when more often than not, the issue was a simple mistake or misunderstanding. So, the next thing you know, an employer who tried to do the right thing is now the reason for an inflexible, new mandate on all employers.”
CBIA HR Counsel Mark Soycher notes the CBIA offers its members a host of opportunities to learn about legal and regulatory developments affecting the workplace, including reports and its monthly magazine.
CBIA members can also take advantage of a free HR hotline, where Soycher and Gjede explain how to handle tricky personnel matters and keep you in business and out of court.
“We feel a strong responsibility to be a resource for our members,” Soycher said. “No matter the problem, we will get the answers, whether it”™s through our own staff or our network of outside experts.”
CBIA”™s HR resources add great value for members, particularly when new laws are passed or policymakers change existing laws or regulations. One such change, announced July 6 by the U.S. Department of Labor, alters the playing field when it comes to overtime and the distinction between exempt and nonexempt workers.
The DOL”™s proposed new rule would guarantee overtime pay to most salaried white-collar workers earning less than $50,544 annually ”” $970 per week ”” a jump of more than twice the current threshold of $23,660, or $455 a week.
Under the proposed rules, employers could not classify an employee as exempt if that employee is making less than $50,544. The DOL estimates this would extend the right to overtime pay to nearly 5 million workers.
What”™s more, the new rules propose increasing the salary threshold annually by indexing it to inflation for urban goods and services or pegging it to the 40th percentile of weekly earnings for full-time salaried workers.
Although the rules are not final, Mike Soltis, office managing shareholder at the law firm of Jackson Lewis P.C. in Stamford, believes they”™re pretty much a done deal.
“One would have to be a wild optimist to think that the proposed salary threshold is going to go down or go down in any significant way before the rules become final,” Soltis said.
As to when that will be, Soltis isn”™t sure, but he predicts it will happen before the end of the current administration. When it does, employers will have several options.
“I”™ve already been counseling employers to look at their exempt employees”™ salaries,” Soltis said. “If they”™re at $50,440 or above, employers may not have to do anything. If they”™re below but close, some employers may want to make a one-time upward adjustment. But if a salary is significantly less, you need to think about whether you allow the position to become nonexempt and pay the overtime or, for example, whether you hire two part-timers to do the job.”
Also in July, the U.S. DOL”™s Wage and Hour Division issued guidance narrowing the definition of “independent contractor.” Many workers previously designated as independent contractors are now considered employees.
“I look at this as the next level of an effort that”™s been going on for many years to address misclassification of employees as independent contractors,” Soltis said. “This is just tightening the screw one more turn. Basically, the new guidance says the default is employee status. It”™s a significant default. Employers will have an uphill battle establishing somebody is an independent contractor.”
Bill DeRosa is editor of CBIA News. He can be reached at bill.derosa@cbia.com.