Long Awaited Rule Issued by DOL Raising Minimum Salary Required for Exempt Status

Long Awaited Rule Issued by DOL Raising Minimum Salary Required for Exempt Status

Employees who make less than $35,568 are now eligible for overtime pay under a final rule issued by the U.S. Department of Labor (DOL). The new rate will take effect Jan. 1, 2020. The new rule will raise the salary threshold to $684 a week ($35,568 annualized) from $455 a week ($23,660 annualized). Thus, the rule will require businesses to pay overtime wages to a much larger group of employees if they work more than 40 hours a week. Employers will still have to demonstrate that exempt employees meet applicable duties tests, which have not been changed.

The rule also provides that employers may include non-discretionary bonuses, incentive payments and commissions to satisfy up to ten percent of the higher salary threshold. Under this rule, an employer would be required to compensate exempt employees at a “standard salary level” of 90% of the threshold of $684 per week. If an employee’s compensation falls short, employers would be required to make a final “catch-up” payment within one pay period after the end of a 52-week period to bring an employee’s compensation up to the required salary threshold level of $684 per week.

The final rule will also raise the annual compensation requirement for an employee to be considered a “highly compensated employee” and exempt from overtime from the current $100,000 per year to $107,432 per year.

NLRB Strengthens Rights of Property Owners to Exclude Union Organizers in Three Commonsense Decisions

This summer the NLRB released three employer-friendly decisions regarding union access to employer property. The first decision, UPMC, 368 NLRB No. 2, was issued in June. There, the Board analyzed when an employer may lawfully exclude union organizers from its privately-owned public spaces. Under existing  Board caselaw, an employer which had invited the public to enter or use space on its private property  could not lawfully exclude union organizers from entering and using that same “public space” because that exclusion was considered to be unlawful discrimination in violation of Section 8(a)(1) of the National Labor Relations Act (NLRA or Act). UMPC rejects this well-established rule, redefines what is and is not unlawful discrimination for the purposes of determining a union’s right of access to an employer’s public spaces and, broadens employers’ legal options under the NLRA.

Practically speaking, after UPMC, employers should have greater flexibility in restricting a union’s use of public spaces. In order to retain the right to prohibit union organizers from the public spaces, employers must maintain a policy or practice of prohibiting distribution or solicitation on their property and enforce the policy or practice non-discriminatorily. For example, if employers allow baked good sales in their cafeterias, they might have to allow unions to engage in similar conduct. For that reason, employers should have a carefully crafted non-solicitation and distribution policy, and make sure they properly and consistently enforce it.

Union organizers or representatives often seek to use public spaces to meet employees or distribute union literature. Under UPMC, employers can restrict unions from soliciting or organizing there, or perhaps even accessing the areas altogether. Notably, UPMC expressly overruled its prior North Memorial decision to the extent it granted non-employees a presumptive right to access employer property.

The second Board decision, Bexar County Performing Arts Ctr. Found. d/b/a Tobin Ctr. for the Performing Arts, 368 NLRB No. 46, issued in August, continued the trend of protecting employer property rights. In this case, the Board overruled its previous precedent and held that a property owner may prohibit Section 7 activity by off-duty employees of a licensee or contractor (i.e. non-employees) performing work on the property owner’s premises. The Board found that its previous decisions regarding non-employees’ Section 7 rights had ignored what the United States Supreme Court held to be a “critical distinction of substance between employees and nonemployees in the context of Section 7 access rights to a property owner’s property.” The Board noted that in order to accommodate the Section 7 rights of employees hired by a property owner, the owner necessarily relinquishes certain property rights.

But a property owner does not make this same hiring decision when it comes to employees of a contractor. The Board noted, “[t]he owner may not have the same confidence in the integrity and self-discipline of contractor employees that it has in its own employees.” Further, “it may reasonably be concerned about the security of its property and the safety of persons rightfully thereon when contractor employees are off duty and not being supervised by the onsite contractor. Indeed, the property owner may have little, if any, idea who the contractor employees are.” Because of this important distinction between employees of the property owner and employees of a contractor/licensee, the Board concluded that contractor/licensee employees’ “diminished contact with the owner and its property should reasonably correspond to lesser rights of access to the property when off duty than the property owner’s own employees enjoy.” Thus, the Board articulated a new standard and held that  if the contractor/licensee off duty employees do not work both regularly and exclusively on the owner’s property, and if they have another reasonable nontrespassory means to communicate their message, the owner may bar them from his property.

Finally, on September 6, the Board issued its opinion in Kroger Mid-Atlantic, 368 NLRB No. 64. The decision holds that an employer can bar nonemployees from protesting the employer on the employer’s property while still allowing nonprotest activities such as solicitations for charitable donations or civic groups. In doing so, the Board overturned a twenty-year-old decision that greatly expanded nonemployee access to employer property. Specifically, the Board overruled Sandusky Mall and its progeny, finding that it “improperly stretched the concept of discrimination well beyond its accepted meaning in a manner that finds no support in Supreme Court precedent or the policies of the Act.” In Sandusky Mall, the Board held that an employer discriminates against non-employee union representatives if it bars them from its property while permitting access to charitable and civic organizations.

Now, under Kroger Mid-Atlantic, the NLRB will only find that an employer has discriminated in its denial of access to union representatives if it permits access to other organizations for similar types of activities.  The Board no longer considers charitable, civic, and commercial activities to be equivalent to nonemployee union organizational activities.  In applying its new rule to the case at hand, the NLRB found that Kroger did NOT discriminate when it barred non-employees urging a boycott of Kroger while permitting various charitable and civic entities on its property, such as by the Girl Scouts or Salvation Army. The Board emphasized, however, that they reviewed charitable contribution activity as being different from organizational activity, so employers should be careful not to allow the latter type of activity by other non-union entities. In the Board’s view, discrimination exists only when like or similarly situated cases are treated in a dissimilar manner.