Keeping You Compliant: Spring Edition

May 20th, 2016

In a world of ever changing rules and regulations, it is important to keep up-to-date with the latest legislations impacting the Human Resource industry, but don’t worry, we’ve got you covered! This month, two major changes were put in to play that could ultimately impact you and your workplace. We’ve spent the time summarizing what you need to know:

New FLSA Overtime Regulations Have Been Issued

The US Department of Labor has finally released the much awaited Final Rule on the white-collar exemptions under the FLSA. Here is a brief snap-shot of the changes:

• The minimum salary threshold for a job to be classified as exempt will be increased from $455/week ($23,660) to $913/week ($47,476/year). This means that all employees earning less than $47,476 per year must be paid overtime.
• This salary threshold will increase every 3 years according to the 40^th percentile of wage earners. The DOL estimates the minimum salary threshold to increase to $51,168 when this adjustment begins on January 1, 2020.
• The “highly compensated employee” (HCE) exemption which enables employers to meet a simpler “duties” test as long as this higher minimum guaranteed compensation threshold is met, will increase from $100,000 to $134,004. It is important to note that PA does not recognize the HCE exemption so for any of your employees in PA you cannot use this in place of the exemptions test.
• The DOL did NOT make any changes to the “primary duty” test or any aspects of the test for classifying jobs as exempt vs. non-exempt.
• Employers will now be permitted to include non-discretionary bonuses, incentive payments, or commissions as part of the minimum guaranteed salary to satisfy up to 10% of the standard weekly salary for non-highly compensated employees, as long as the payments are made at lease quarterly.

The final rule is effective starting December 1, 2016 allowing employers a little more than 6 months to prepare for compliance.

Pennsylvania Legalizes Medical Marijuana

Pennsylvania’s Medical Marijuana Act took effect on May 17, 2016. What does this mean for employers? The current law is unclear in certain respects including how the law even defines individuals “certified to use medical marijuana”. No one will be “certified” until after the temporary regulations are published in the next 6-12 months; the final regulations will then be issued within the next 18 months. In the meantime, here is what you should do to prepare.

1. Become familiar with the requirements of the law. The law will include the following provisions – most of which still need to be more clearly clarified:
   • Employers may not discharge, threaten, refuse to hire, or otherwise discriminate or retaliate against any employee solely on the basis of the employee’s status of being “certified to use medical marijuana.”
   • Employers do not need to allow employees to use medical marijuana in the work place or to be under the influence of medical marijuana while working. Employers are allowed to discipline employees for this but, again, the definition of who is “certified to use medical marijuana” and the definition of what constitutes “working under the influence” still need to be clarified.
   • The law includes provisions for safety-sensitive positions prohibiting even “certified users” from performing certain “safety sensitive jobs” while under the influence of medical marijuana. These positions will be clarified under the regulations.
2. Review your Drug-Free Workplace policies including those related to drug testing procedures. There is certain information that you should and should not include in your policies. These include:
   • Not having a categorical prohibition on the use of “controlled substances” since some of these are lawfully prescribed.
   • Ensuring that you have an appropriate definition of prohibited drugs (e.g. “drugs” or “illegal drugs”) which includes not only illegal substances, but also includes a statement about lawfully prescribed substances which are not used as prescribed.
   • How to address multi-state policies when some employees work in states where the medical and/or recreational use of marijuana is legal and others do not.
   • Having a policy which gives you as the employer the right to search desks, cabinets, and personal property (purses, wallets, etc) and that employees should have no expectation of privacy in these places.

The O’Connor Group can help you to prepare for and comply with these new regulations. We can help to review your policies and procedures, job descriptions, compensation plans, and individual employee salaries to ensure you are ready for when both the Medical Marijuana and FLSA regulations take effect.