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Employers & Employees — Overtime & Pay Disclosure

Posted By Administration, Tuesday, March 12, 2019

Last week the federal government talked employers and employees. The U.S. Department of Labor has — at long last — issued the new overtime rules. As it stands today, salaried workers automatically get overtime pay only when they earn less than $23,660 a year. That dollar amount was set 15-years ago in 2004.

Last week the department raised the threshold to $35,308.

The new department proposal is far different from the requirements set by the Obama administration and ultimately rejected by a federal judge. The former president’s labor department nearly doubled the current figure to $47,000 in 2016.

That extended mandatory overtime to close to four million Americans. Obama also wanted that figure upped every three years. Business groups and Republicans from 21 states were appalled and said it put some managers considered exempt into overtime. 

They appealed and won.

Labor Secretary Alexander Acosta said this will “bring common sense, consistency, and higher wages to working Americans.” The proposal is now open to the public for comment.

Another rule involving employers and employees issued by the Equal Employment Opportunity Commission (EEOC) got some attention last week. It says companies with 100 or more employees will now have to report how much they pay their workers.

That data must contain how much workers are paid by:

  Sex

  Race

  Ethnicity

Those disclosures were supposed to go into effect in the summer of 2016 but when President Trump took office, the Office of Management and Budget (OMB) ordered the requirements frozen.

Lawsuits followed and last week Judge Tanya Chutkan said the government did not have justification for the decision. The deadline for compliance is May 31st of this year. That is — unless — the OMB appeals.

It’s unclear how companies will feel about the decision since many are attempting to show how their pay is totally fair and income is based on the job and nothing else. 

One of the groups that filed suit was the National Women’s Law Center. Its VP for education and workplace justice Emily Martin said, “This is part of a real cultural shift we’re seeing around transparency in pay. In order to have equal and fair pay, employees need more information about their employers’ pay policies. So this is one step, but it’s not the last step.”

The submission of demographic data is already and EEOC requirement. The new requirements will be much more detailed and contain how people are paid in 12 different pay ranges and who — exactly — is being paid within those ranges.

The current reporting tool is one page. The new form is 10 and that — says Michael Eastman of the Center for Workplace Compliance — is where the rub comes into play. “It’s kind of in the weeds, really technical detailed stuff, and that’s where the burden comes in,” he said.

The U.S. Chamber of Commerce estimates the expanded reporting will cost business somewhere close to $400 million each year. The EEOC disagrees and says it’s actually something like $53 million.

Martin said the Chamber’s complaint doesn’t have much of a foundation. “This is not some radical new calculation that they are being asked to do,” she said. “They are being asked to submit the data they already collect.”

Source links: Reuters, Insurance Journal

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