With summer 2016 almost behind us, employers should begin to plan for the major labor and employment law trends expected to emerge in the final quarter of the year and into 2017. In the first part of this two-part series, we will take a look at some of the principal trends likely to be shaped by federal regulators.
- Wage & Hour Class Actions Will Remain Hot. On December 1, 2016, the U.S. Department of Labor’s (DOL) changes to the salary threshold for exempt employees will increase the number of workers eligible for minimum wage and overtime payments. Specifically, the salary threshold for exempt executive, administrative, and professional employees will increase to $47,476 per year (or $913/week), meaning that salaried employees earning less than this amount, regardless of job duties, must be compensated for overtime work. This will undoubtedly result in an increase in wage and hour class actions in the coming years.
In addition, the DOL and other administrative agencies, as well as the plaintiffs’ bar, remain intently focused on independent contractor misclassification, especially following the DOL’s July 2015 guidance proclaiming that most U.S. workers should be classified as employees. Bring-your-own-device policies will also continue to lead to claims of unpaid overtime work.
- Expansion of the Joint Employer Doctrine. In its first Administrator’s Interpretation of 2016, the DOL concluded that “the scope of . . . joint employment under [the federal wage and hour laws] is as broad as possible,” noting that the statutes’ definitions of “employ” and “joint employment” are broader than the traditional common law concepts. This Interpretation is perhaps most impactful for companies that rely on third-party contractors, such as staffing agencies, to regularly provide services outside of the companies’ core businesses. According to the DOL, such companies are likely no longer shielded from employment-related liability merely by their use of third-party contractors.
The DOL’s guidance follows recent decisions by the National Labor Relations Board and the Occupational Safety & Health Administration (OSHA) to expand the definition of “joint employment.”
- Rise in Whistleblower/Retaliation Claims. As we head into the last quarter of 2016, a slew of federal laws – including the Sarbanes-Oxley Act, the Dodd-Frank Act, and the False Claims Act – and an increased awareness of existing protections, will likely result in increased whistleblower claims. The Securities and Exchange Commission has also made this a point of emphasis, doling out millions of dollars to whistleblowers who provide useful information and assistance to the agency’s probes.
In a related vein, earlier this year, the U.S. Equal Employment Opportunity Commission published proposed guidance that would substantially expand the definition and scope of unlawful retaliation under federal law, an issue at the center of the Commission’s regulatory agenda. Employers should therefore brace for an uptick in retaliation claims.
- Increased Emphasis on Protecting Trade Secrets. Protecting trade secrets through litigation has always been critical, but this area has seen a renewed focus in the past few years, most recently with the enactment of the Defend Trade Secrets Act (DTSA). The DTSA creates a federal cause of action for misappropriation of trade secrets, and requires employers to include new disclosures in any agreement governing the use of trade secrets or other confidential information. The DTSA essentially provides employers with an added weapon, in addition to the patchwork of state laws, to combat trade secret theft.
- OSHA’s Reemergence. In the past several years, OSHA has undergone a makeover of sorts. Long considered a secondary federal agency, OSHA has in the past few years adopted substantial new regulations and overhauled its enforcement guidelines in an effort to bolster the federal workplace safety laws. The new tactics embraced by OSHA include an unprecedented expansion of employers’ illness and injury reporting requirements, increased penalties, expansion of available remedies, and investigation of issues unrelated to the complaint that brought OSHA to the particular workplace in the first place. Employers unfamiliar with OSHA should not sleep on this resurgent federal agency.
- Additional Requirements for Federal Contractors and Subcontractors. Over the past few years, President Obama has issued several executive orders imposing additional workplace obligations on federal contractors. Under these executive orders, and the corresponding administrative regulations, most federal contractors and certain subcontractors must, among other things, pay non-exempt employees a higher minimum wage rate, disclose labor law violations and judgments, permit employees to freely discuss their compensation without fear of retribution, and, soon, provide paid sick leave. Compliance with these comprehensive new requirements is critical, and just a few wrong steps can adversely impact a company’s bid for future federal contracts.
As we head into the last quarter of 2016, the U.S. employment law landscape is as dynamic as ever. Employers therefore can, and indeed should, expect significant changes to their employment relationships in the coming months and year. It is more crucial than ever that employers stay in regular contact with their experienced employment law counsel to prepare.