Employee Handbook Revisions for 2016: Wage and Hour Policies

Employment class action litigation is at an all time high and the stakes keep getting higher. The top 10 employment class action settlements totaled nearly $2.5 billion last year. Plus, 2016 promises expanded employer liability for claims of unpaid wages, discrimination, and anti-union policies. It is time to think about revising the old employee handbook.

Wage and hour practices deserve first consideration given the sheer volume of unpaid wage claims and this year’s expected dramatic changes. From class actions to bread and butter claims, wage and hour litigation is expected to rise. The biggest hurdle for employers who want to avoid being swept up in this tide of litigation will be compliance with the Department of Labor’s impending final regulations. These regulations, expected July 2016, will increase the minimum wage for salaried employees (those not entitled to overtime) and substantially expand the number of employees entitled to overtime. As the first update to the “white collar” exemptions since 2004, the new regulations will require companies to change longstanding pay practices.

Under the new regulations, workers making less than $50,400 per year or $970 a week must be paid overtime for hours worked over 40 per week. To be exempt from overtime, those making over the threshold must also pass a “duties” test. The salary for “highly compensated employees” who are exempt from overtime will be increased from $100,000 to $122,148.

Another wage and hour issue employers must grapple with is what is overtime and how to track it given changes in technology that allow some employees work from home and work after hours by logging or using employer or employee owned electronic devices. Increases in technology also continue to create questions and litigation over whether a worker is a an employee or independent contractor when interacting through an app, like Uber.

Other timely issues to consider are whether the employer is subject to expanded liability as a joint employer and how multi-state companies should deal with state wage and hours laws, which vary dramatically.

For more information about federal wage and hour regulations, enforcement, and compliance, the United States Department of Labor Wage and Hour Division website at www.dol.gov/whd/ is very helpful.