On August 31, 2017, a U.S. District Court in Texas granted a summary judgment against the Department of Labor (DOL) in the consolidated cases challenging the increase in the salary threshold to $47,476 for classifying certain positions as exempt from overtime. The court held that the DOL exceeded its authority and concluded that the final rule is invalid. This same court had issued a temporary injunction in November of 2016 that blocked the increase from taking effect on December 1, 2016.

What’s next? As reported in our last month’s newsletter, the DOL is currently accepting comments on its Request for Information (RFI) through September 25, 2017. At this point, DOL has received over 124,000 comments. The purpose of the RFI is to ask the public for information that will help DOL in formulating a proposal to revise the FLSA regulations. The RFI asks for feedback on questions pertaining to the minimum salary threshold as well as to the duties test, verifying cost-of-living in different parts of the U.S., inclusion of non-discretionary bonuses and incentive payments for satisfying part of the minimum salary threshold, the salary test for highly compensated employees, and automatic updating of the minimum salary threshold. DOL Secretary Acosta has said that the salary threshold should be increased, but not to the $47,476 level. During confirmation hearings, DOL Secretary Acosta discussed the low $30,000’s as a possibility.

The PS&A team will keep you informed as developments on this important topic occur.

The Office of Management and Budget (OMB) informed the Equal Employment Opportunity Commission (EEOC) on August 29th that it was “initiating a review and immediate stay of the effectiveness of the pay data collection aspects” of the previously approved EEO-1 form requiring pay data be reported.

For many years, employers with 100 or more employees and certain other employers have been required to file EEO-1 reports annually that show their number of employees by job category and then for each category, the number of employees by gender, ethnicity, and race. Starting with the 2017 EEO-1 report, the report would have required summary pay data by gender, ethnicity, and race within each job category. The pay data requirement was highly controversial. Many questioned the validity of the data that would have been provided for purposes of identifying pay discrimination. In addition, many expressed concerns about the significant administrative challenges the new form created. Because of the new pay data requirement, EEOC also moved the filing deadline from September 30, 2017, to March 31, 2018.

Given the suspension, EEOC says that employers should use the previously approved EEO-1 form to report the data on race, ethnicity, and gender by job category (i.e., the data reporting requirements that will remain in effect). In addition, employers should file their reports by the previously set filing deadline of March 31, 2018.

On August 1, 2017, Gov. Baker signed into law $200 million in new fees and fines on Massachusetts employers to help pay for employees who receive health insurance coverage through MassHealth or subsidized coverage through the Massachusetts Health Connector.

The new law, effective for a two-year period starting January 1, 2018, applies to employers with more than five employees. For every employee who has coverage through MassHealth or subsidized coverage through the Massachusetts Health Connector instead of coverage through the employer’s plan, the employer must pay a fine equal to five percent of the employee’s “wages” up to $750. Wages are defined as the “unemployment insurance taxable wage base,” which is $15,000 for 2017. Thus, the maximum fine is $750 ($15,000 times five percent equals $750).

The Department of Unemployment Insurance (DUI), in consultation with the Division of Medical Assistance and Health Insurance Connector Authority, is responsible for providing regulations for implementing the new law and once provided, employers must pay the fines in accordance with the regulations. Among many details the regulations will address are the number of days an individual must have MassHealth or subsidized coverage to trigger a fine.

The DUI will notify employers of any fines they must pay. Once notified, an employer may request a hearing provided the request is made within 10 days of receiving the notice.

Unfortunately, there is not much time between now and January 2018 for employers to plan for the new law and its potential impact on their budgets. Employers such as retail, hospitality, human services, and other industries employing a significant number of lower wage workers are likely to be most impacted.

The PS&A team will inform you when the regulations are published. Also, feel free to contact us with any questions or help needed.