DOL Raises Exempt Employee Minimum Salary Threshold

Today the Department of Labor issued a final rule, raising the minimum salary threshold for Exempt employee classifications to $35,568 effective January 1, 2020. As of that date, Exempt employees in Administrative, Professional or Executive categories must both meet the duties tests for the category and be paid at least $35,568 annually. Commission payments, non-discretionary bonuses and other incentive payments can be used to satisfy up to 10% of the minimum salary threshold. If an employee does not meet the minimum salary amount, or the duties test then they are entitled to receive overtime pay for all hours worked over 40 in the work week. The final rule also increases the “highly compensated employees” exemption salary requirement to $107,432 per year.

New Oregon Employment Laws 2019 & 2020

The Oregon legislature was busy this year! Here is a summary of recently passed employment related regulations:

  • Anti-Discrimination: Oregon passed the Oregon Workplace Fairness Act this summer, which expands anti-discrimination protections for employees. Here is a brief summary of the new law requirements:

    • Effective October 1, 2019, the law expands the statute of limitations for many unlawful discrimination claims from one year to five years

    • Effective October 1, 2020, Requires a written anti-discrimination policy that includes new, detailed information to be included and provided at time of hire and whenever a covered complaint is made. Pacific HR will have more information about the written policy requirements next year. Effective October 1, 2019 the law will also restrict nondisclosure or no-rehire provisions in many severance and settlement agreements

  • Lactation Breaks: Effective September 29, 2019, all Oregon employers will need to provide a reasonable rest period to express breast milk each time the employee has a need to do so. Employers of 10 or fewer employees may assert an exemption if providing the break would impose an undue hardship. The new law expands previous lactation rules for Oregon employers, which previously only applied to those with 25 or more employees.

  • Pregnancy & Childbirth Accommodations: Effective January 1, 2020, Oregon employers with at least 6 employees now have to provide reasonable accommodations to employees and applicants who have limitations in the workplace related to pregnancy or childbirth (including lactation needs). This law creates a new cause of action for employees who suffer an adverse employment action or who are refused a reasonable accommodation based on pregnancy, childbirth, or a related condition. The new law specifies that acquisition of equipment, more frequent or longer rest breaks, assistance with manual labor, and modification of work schedules are all reasonable accommodations for pregnant women or mothers recovering from childbirth. The law also stipulates that employers need to provide written notification of these rights to employees. BOLI is currently working on posters and notification requirement templates, so hopefully we will have this information in the next few months.

  • Additional rules for Non-Competition Agreements: Effective January 1, 2020, new legislation will mandate that for an already existing Noncompetition Agreement to be enforceable, an employer must – within 30 days after the date of termination of employment – provide the employee with a signed, written copy of the terms of the noncompete agreement.

  • There is a new Equal Pay Act poster published by BOLI. This poster must be placed in a location accessible to all employees. If you have recently purchased a composite poster from BOLI this item is already included. If you have not updated your posters recently, you may want to purchase the composite poster directly from BOLI here. It’s only $15.

  • You might have heard that Oregon has recently passed Paid Family Medical Leave legislation, but this will not go into effect until 2022. There are still many questions about the details of this law, and Pacific HR will send you updates on how this will affect employers as we get closer to the implementation date.

 Washington EPOA Ammendments & Non-Compete Agreements

Earlier this year, Washington passed amendments to the Equal Pay & Opportunities Act, which now prohibits all Washington employers from asking candidates to provide previous salary information.

  • The new EPOA amendments also require Washington employers with 15 or more employees must provide to a job applicant' “the minimum wage or salary” for the position sought, when requested, as part of an offer of employment. These employers must also provide a “wage scale or salary range” or “the minimum wage or salary expectation” to a current employee when an employer offers the employee an internal transfer, a new position, or a promotion, and the employee requests this information.

Also earlier this year, a new Washington State law was signed which will make it more difficult to enforce non-compete agreements effective January 1, 2020.  If you wish to have an enforceable non-compete agreement in place for both employees and contractors, the following conditions must be met:

  • Non-compete agreements may not exceed 18 months after end of employment

  • Employees must be earning $100,000 per year or more, and contractors must earn $250,000 per year or more.  (These figures are tied to inflation and may change annually)

  • Employers must disclose the terms of the non-compete agreement in writing prior to acceptance of employment.

  • If a current employee is required to sign a non-compete agreement, they must be provided some sort of consideration ($$) for entering the agreement.

  • If employees under a non-compete agreement are laid-off, the employer must pay the full base salary throughout the non-compete period (minus compensation earned by the employee through other employment.

  • Employers may not prohibit any employee earning less than twice the minimum wage (equivalent of $27 per hour as of January 1, 2020) from “moonlighting” or having another job, unless the other job raises legitimate concerns regarding safety, scheduling, and/or conflicts of interest.

To ensure your non-compete agreements are enforceable under the new law, please contact your attorney prior to January 1, 2020.   

Oregon Minimum Wage 2019

The fourth of a series of Oregon minimum wage increases will occur on July 1, 2019, with annual increases scheduled annually through 2022.   Here is a list of the scheduled increases going into effect this July 1, 2019 for each region.

  • Portland Metro: $12.50 per hour (All employers located within the Portland urban growth boundary)

  • Standard Counties: $11.25 per hour (Benton, Clackamas, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Wasco, Washington and Yamhill Counties)

  • Non-Urban Counties: $11.00 per hour (Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coos, Curry, Umatilla and Morrow Counties)

A new minimum wage poster is available for free through BOLI.   If you want to ensure that all of your required employment posters are up to date, you can also purchase a “Composite Poster” through BOLI for $15.  Here is a link to available poster offerings through BOLI:  https://www.oregon.gov/boli/TA/Pages/T_Tabooks.aspx.   All Oregon employers need to place required posters in a location accessible to all employees.

Be aware that Exempt employees in Oregon cannot have salary less than the current minimum wage.   The current federal Exempt minimum salary threshold is $23,660 per year.  However, Portland Metro area employers will need to ensure that all Exempt classified employees are receiving at least $26,000 ($12.50 per hour X 2080) per year as of July 1, 2019.   This rate will continue to increase as the minimum wage continues to rise. 

Use this link to see a schedule of all increases through 2022, and to use a look up tool to determine if your business is located within the Portland Urban Growth Boundary:

http://www.oregon.gov/boli/WHD/OMW/Pages/Minimum-Wage-Rate-Summary.aspx

Oregon Equal Pay Act - Update

All aspects of the Oregon Equal Pay Act go into effect on January 1, 2019.  BOLI has now issued a poster on Oregon Equal Pay Law, which needs to be placed in an area accessible to all employees. 

In November 2018, BOLI issued the final administrative rules for the Oregon Equal Pay Act.  The final rules provide more guidance on the factors that may considered when determining “work of comparable character” and also clarifies that employers need to consider all wages, salary, bonuses, benefits offered when determining when compensation is equitable.   

The Oregon Equal Pay Act states that employers will be provided safe harbor against civil penalties for violations of the Act, if the employer has conducted a Pay Equity Analysis in the past 3 years.   However, we still do not have clarification as to how to conduct Pay Equity Analysis or what steps need to be taken to satisfy the safe harbor requirements. 

Employers are encouraged to consult with their attorneys to ensure pay equity practices are in place. 

The Oregon Equal Pay Act of 2017 expands the current law’s protection against wage disparities among employees.  The Act prohibits wage discrimination based on a protected class status, defined as race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.    This includes wages, bonuses, benefits and other forms of compensation.     

The Act does allow business to provide different wages based on bonafide factors defined as:

·         A seniority system

·         A merit system

·         A system that measures earnings by quality or quantity of production;

·         Workplace locations;

·         Travel (if necessary and regular for employee);

·         Education;

·         Training;

·         Experience; or

·         Any combination of these factors but only if that combination accounts for the entire compensation differential.

Most provisions of the Act go into effect on January 1, 2019.  The Act does call for a required posting explaining Act provisions.  BOLI will be providing a template posting at a later date.

Most urgently, the Act prohibits businesses from screening applicants based on salary history or seeking an applicant’s salary history.  Oregon businesses shall not consider an applicant’s previous salary to determine hiring wage, nor request salary history from applicants.   Businesses are allowed to confirm previous salary history, only after an offer of employment is issued and only if the candidate authorizes the request.    The ban on considering or requesting salary history goes into effect on October 9, 2017.   To prepare for this change, businesses should not request salary history in job posting language, or request that this information be provided on applications or as part of applicant screening. 

Washington Minimum Wage & Paid Sick Leave 2019

Minimum wage for the state of Washington will increase to $12.00 per hour, effective January 1, 2019.  An initiative passed in November 2016 will require that the minimum wage increases over the next few years until it reaches $13.50 per hour in 2020.    All Washington employers must post the Your Rights as a Worker poster, to be placed in a location accessible to all employees.  

Washington Paid Family & Medical Leave

Effective January 1, 2019, all businesses with employees in Washington will be required to start making payroll deductions for the Washington Family & Medical Leave program.   Here are important dates for Washington employers to remember:

  • January 1, 2019 – Deduct the employee’s portion of the required premium each pay period.   Employers must collect 63% of .04% of the employees gross pay.  

  • Quarterly, Starting April 2019 – Employers will report wage & hour information and remit payments to the State of Washington.  The website for reporting and remitting payment is still under development, so stay tuned for more information on this once it arrives.  

  • January 1, 2020 – Employees will be eligible to apply for paid leave benefits through the State of Washington.

Effective January 1, 2019, businesses must start deducting the employee’s portion of the Washington Family & Medical Leave premium.  To determine how much to deduct:

  • Calculate .04% of the employee’s gross pay for that pay period, then calculate 63% of that amount.  This is the amount that must be deducted from the employee’s pay (pre-tax).   You will collect and hold on to these payments to remit to the state on a quarterly basis. (Note: an employer can elect to pay all or some of their employees' share of the premium on their behalf)

If you have 50 or more employees in Washington, your business must also contribute to the Washington Family & Medical leave premiums.   Here is how much you will be required to pay:

  • Calculate .04% of the employee’s gross pay for that pay period, then calculate 37% of that amount.  This is the amount the business must pay, remitted quarterly to the State of Washington.

More information about the Paid Washington Family & Medical program can be found here: https://www.paidleave.wa.gov/.   This website includes an employer “toolkit” to assist Washington businesses prepare for the program.

Effective January 1, 2019, businesses must start deducting the employee’s portion of the Washington Family & Medical Leave premium.  To determine how much to deduct:

  • Calculate .04% of the employee’s gross pay for that pay period, then calculate 63% of that amount.  This is the amount that must be deducted from the employee’s pay (pre-tax).   You will collect and hold on to these payments to remit to the state on a quarterly basis.    (Note: an employer can elect to pay all or some of their employees' share of the premium on their behalf)

If you have 50 or more employees in Washington, your business must also contribute to the Washington Family & Medical leave premiums.   Here is how much you will be required to pay:

  • Calculate .04% of the employee’s gross pay for that pay period, then calculate 37% of that amount.  This is the amount the business must pay, remitted quarterly to the State of Washington.

More information about the Paid Washington Family & Medical program can be found here: https://www.paidleave.wa.gov/.   This website includes an employer “toolkit” to assist Washington businesses prepare for the program.

Washington Fair Chance Act

Effective June 7, 2018 Washington will join the growing number of states to enact "ban the box" legislation.  The Washington Fair Chance Act prohibits Washington employers to obtain or request any criminal background information from candidates, until after the employer has determined that the candidate is otherwise qualified for the position.   You can read the recently passed law here

Some employers are exempt from this new requirement, such as law enforcement agencies & employers filling positions where the employee will have unsupervised access to children or vulnerable adults.

What Washington Employers Should Do Now:

  • Review job postings, to ensure they are not discouraging those with criminal records from applying. Terms such as "no felons" or "clean criminal record required" are to be avoided.

  • Do not inquire into or request criminal background information from a candidate, until after you have determined that the person is otherwise qualified for the job.

  • Remove all questions relating to a candidate's criminal background from Employment Applications.

The state wide rule does not legislate the actions an employer makes after it is determined that the candidate is otherwise qualified for the job.   Be aware that the City of Seattle does have more expansive Fair Chance Ordinance, which requires those employers to consider additional information prior to disqualifying a person with a criminal record.  City of Seattle Fair Chance Ordinance language can be found here

OregonSaves

OregonSaves is a new retirement savings plan for workers in Oregon.  The plan allows employees to make retirement savings contributions through workplace payroll deductions into their own personal Roth IRA.     All Oregon businesses will be required to register with OregonSaves (according to the timeline outlined below), and businesses without a current employer-sponsored retirement savings plan will be required to administer retirement contributions through OregonSaves. 

All Oregon Employers will be required to register with OregonSaves, based on this timeline:

  • 100 or more employees: November 15, 2017

  • 50 to 99 employees: May 15, 2018

  • 20 to 49 employees: December 15, 2018

  • 10 to 19 employees: May 15, 2019

  • 5 to 9 employees: November 15, 2019

  • 4 or fewer employees: May 15, 2020

After registering, business will be allowed to request an exemption from the program if they have a current employer-sponsored retirement savings plan, such as a 401(k) or SIMPLE IRA.  

If an employer does not have a qualified retirement savings plan in place, or if they choose to voluntarily participate in the OregonSaves plan, then they are required to administer retirement savings deductions for their employees.  

  • All employees will be automatically enrolled by the employer, unless they officially opt-out of the program.

  • Contributions start at 5% of earnings per pay period, and will automatically increase 1% per year, up to 10%. Employees may choose to elect a different % of earnings contribution.

  • Employers are not allowed to make contributions or “match” funds to the employee’s plan.

How to prepare:

·         Employers should receive registration notification directly from OregonSaves prior to their required registration date.  This notification will include instructions on how to register and program details

Any business with questions regarding the OregonSaves plan are urged to contact OregonSaves directly at clientservices@oregonsaves.com or 844-661-1256.   Here is a link to the OregonSaves website, which includes FAQs on program details:  www.oregonsaves.com

 

WASHINGTON PAID SICK LEAVE

Washington Paid Sick Leave will go into effect on January 1, 2018.  Here are some of the highlights:

  • Most Washington employers are required to provide Paid Sick Leave for all non-exempt Washington employees.

  • This rule applies to ALL non-exempt employees, full time, part time and temporary.

  • Employees are entitled to accrue 1 hour for every 40 hours worked. There is no cap on the amount of paid sick leave an employee may accrue. A typical full-time employee working 40 hours per week would accrue 52 hours of paid sick leave in a year.

  • Employers must allow employees to roll over up to 40 hours of unused Sick Leave from year to year.

  • Employees must be able to use accrued Paid Sick Leave as of the 90th day of employment.

  • Employees may use Paid Sick Leave:

  • To care for themselves or their family members.

  • When the employees’ workplace or their child's school or place of care has been closed by order of a public official for any health-related reason.

  • ·For absences that qualify for leave under the state's Domestic Violence Leave Act.

  • Employers may allow employees to use Paid Sick Leave for additional purposes. PTO plans (time off available for sick or vacation) count towards Washington Paid Sick Leave Time. You do not need to add additional sick time off if your current plan meets the requirements.

  • Sick time does not need to be paid out at time of termination, unless you have a policy in place otherwise.

  • Employees can take Paid Sick Leave in one-hour increments, unless the business meets certain conditions.

WHAT YOU SHOULD DO TO PREPARE:

  • Make sure your policies adhere to Washington Paid Sick Leave requirements, as of January 1, 2018.

  • Provide each employee notice of their current balance at least monthly. You can easily meet this requirement if you can print current time off balances on employee paychecks.

  • Check out the L&I Paid Sick Leave page by clicking here.

  • Stay tuned for more information regarding required notices and other conditions as they are revealed later this year.

 

New I-9 Verification Form - Effective 9/18/17

U.S Citizenship & Immigration Services (USCIS) has issued ANOTHER revised version of Form I-9, Employment Eligibility Verification.  This revised form must be used with all newly hired employees as of September 18, 2017.   Please be sure to replace your old I-9 form with the new version prior to that date.   You do not need to have current employees fill out the new form, as it just needs to be used with new hires going forward. Remember to ensure that all new employees fill out the I-9 form on the first day of employment, and present appropriate verification identification within 3 business days.  

Does it feel like you just replaced your I-9s with an updated version?   Well, yes, you did.   USCIS did issue a revised Form I-9 last year, which all employers needed to have in place by January 22, 2017, but has issued an additional revision which includes some slightly revised language, and a few changes to the List C documents.  To make matters even more confusing, both the January revision and the newest revision have the same “expires by” date of 8/31/19.   The new form can be identified by the notation “Form I-907/17/17  N” in the bottom left corner.  

Click HERE to download the new Form I-9

 

Updated Overtime & Exempt Status Changes - ON HOLD

 

Update

The Department of Labor was to enact new FLSA exempt standards as of December 1, 2016.  The most significant aspect of this change was to be an increase in the minimum salary threshold for exempt employees to $47,476 per year.

On November 22, 2016 a federal judge issued a preliminary injunction essentially blocking the change from going into effect nationwide.  This means that employers DO NOT need to meet the new minimum salary threshold for exempt employees as of December 1, 2016.   

What does this mean for employers?

·         Exempt employees still need to meet the current minimum salary threshold of $23,660 per year, and need to meet the classification standards outlined by the FLSA. 

·         The increased salary threshold may be implemented later.  Or, the new rules may be cancelled altogether.  Or, a new set of FLSA standards may be implemented.  We just don’t know at this point.

·         Remember that you are always able to classify an employee as non-exempt, thus making them eligible for overtime.  If you had converted employees to non-exempt status in anticipation of the rule change you are welcome to keep them in that status.  Or, you could choose to reclassify them as exempt if you feel they meet the current FLSA standards.

Click HERE to read the preliminary injunction and court order

 

City of Portland "Ban-the-Box" Ordinance - Effective July 1, 2016

The City of Portland has passed expanded “Ban-the-Box” legislation, which goes into effect July 1, 2016.  This new Ordinance applies to:

·         Employers with 6 or more employees AND

·         at least one individual working the majority of the time in the City of Portland

The new Ordinance prohibits Portland employers from soliciting or processing criminal background information from applicants before a “conditional offer of employment” is made.  Once the offer is submitted, employers may conduct criminal background checks and must then make an “Individualized Assessment” of the history considering the nature and gravity of the criminal offense, the time that has elapsed since the criminal offense took place, the nature of the employment held or sought.  There are exceptions in place for employees working with sensitive populations and other heightened safety concerns. 

If you are Portland employer conducting criminal background checks, here’s what you need to do: 

·         Make sure you have eliminated “do you have a criminal history” type questions from applications & interview processes

·         Ensure you are using written offer letters, with language specifying conditional offer requirements

·         Address criminal history results on a case by case bases, using the Individualized Assessment guidelines

·         If an offer of employment is rescinded due to criminal history, notify the applicant in writing with specifics regarding the reason for the decision

 

City of Portland Ordinance Memo & FAQs: 

https://www.portlandoregon.gov/mayor/article/555053

 

OREGON PAID SICK LEAVE

Oregon Paid Sick Leave will go into effect on January 1, 2016.  Here are some of the highlights:

  • Employers with 10 or more workers are required to provide paid sick leave for all Oregon employees. (City of Portland employers must still provide paid sick leave if they have 6 or more employees).

  • Employees are entitled to accrue 1 hour for every 30 hours worked (equivalent of 1.33 hours for each 40 hours worked), up to 40 hours per year. Employers can cap use of paid sick leave at 40 hours per year.

  • Employers must allow employees to roll over up to 40 hours of unused sick time from year to year, UNLESS they opt to “front load” 40 hours per year and pay out unused time at the end of each year. Employers are allowed to cap total accrual at 80 hours.

  • Employees can begin accruing sick time at time of hire, and are allowed to start using paid sick time after 90 days of employment.

  • This rule applies to ALL employees, full time, part time and temporary. (The 240 hour rule from Portland Sick Time Off has been eliminated).

  • PTO plans (time off available for sick or vacation) count towards Oregon Paid Sick Leave. You do not need to add additional sick time off if your current plan meets the requirements.

  • Sick time does not need to be paid out at time of termination, unless you have a policy in place otherwise.

  • Employees can take sick time in one hour increments, unless the business meets certain conditions.

  • Businesses with less than 10 employees (or 6 in Portland) must make an equivalent amount of time off available to all employees, but it may be unpaid.

WHAT YOU SHOULD DO TO PREPARE:

  • Make sure your policies adhere to Oregon Paid Sick Leave requirements, as of January 1, 2016.

  • Provide each employee notice of their current balance at least quarterly. You can easily meet this requirement if you can print current time off balances on employee paychecks.

  • Check out the BOLI FAQ page by clicking here.

  • Print and display or distribute the Oregon Sick Time Notification to all Oregon employees to notify them of their rights.