Compliance Corner

Compliance Corner: Overtime exemptions under the Fair Labor Standards Act (FLSA)

The FLSA overtime rule decides whether employees qualify or do not qualify for overtime pay. Employees who are exempt do not get overtime pay for hours worked over 40 in a workweek because of their type of work and how much they are paid. Employees who are nonexempt must be paid one-and-a-half times their regular rate for any hours worked above 40 in a workweek.

On April 23, 2024, the Department of Labor issued a final rule that raised the salary-level threshold for white-collar exemptions from $684 a week to $844 a week, starting from July 1, 2024, and then to $1,128 a week, starting from Jan. 1, 2025. The final rule is expected to give overtime protections to about 4 million workers who are not currently covered under federal law.

An employee’s salary level alone does not determine their exemption from overtime pay; their main job responsibilities must also fall under the executive, administrative or professional categories outlined by the rules.

Under the April 2024 final rule:

The overtime rule increases the standard salary threshold levels in two stages. Workers who make less than $43,888 annually ($844 a week) by July 1, 2024, would qualify for overtime pay, regardless of their manager or professional status. The salary-level threshold goes up to $58,656 a year ($1,128 a week) by Jan. 1, 2025. The salary threshold adjusts automatically every three years.
Up to 10% of the standard salary level can be met by nondiscretionary bonuses and incentive payments (including commissions) that are paid yearly or more often.
To qualify as highly compensated employees under the special rule, workers would need to make a total annual pay of at least $151,164 (with a minimum of $1,128 paid every week on a salary or fee basis).
The final rule is effective in phases, with one effective date of July 1, 2024, and a second effective Jan. 1, 2025.

The information provided here is intended for informational purposes only and should not be construed as legal advice. While every effort has been made to ensure the accuracy of the information, it is not guaranteed to be correct, complete or up to date. Legal matters often have specific individual circumstances that affect the appropriate course of action. As such, we strongly recommend consulting with a qualified legal professional for any legal advice pertaining to your situation.

Compliance Corner: Understanding the Pregnant Workers Fairness Act

The Pregnant Workers Fairness Act (PWFA) is a U.S. law designed to eliminate discrimination and ensure workplace accommodations for workers with known limitations related to pregnancy, childbirth or related medical conditions. Here are some key points about the PWFA:

The PWFA requires a covered employer to provide a “reasonable accommodation” to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth or related medical conditions unless the accommodation causes the employer an “undue hardship.”
This act applies only to accommodations. Other laws that the Equal Employment Opportunity Commission (EEOC) enforces make it illegal to fire or otherwise discriminate against employees or applicants based on pregnancy, childbirth or related medical conditions.
The PWFA does not replace federal, state or local laws that are more protective of workers (used here to mean job applicants and employees) affected by pregnancy, childbirth or related medical conditions.
This act applies to private and public sector employers (state and local governments) with 15 or more employees. It also applies to Congress and federal agencies, as well as to employment agencies and labor organizations.
The PWFA went into effect on June 27, 2023. On April 15, 2024, the EEOC issued its final regulation to carry out the law. The regulation goes into effect on June 18, 2024. You can find a summary of the regulation here.
On April 25, 2024, 17 states jointly filed suit in federal court to halt implementation of the rule. Litigation is ongoing, and the status of the rule is uncertain, pending its outcome.

Find additional information in the HR Resource Center under Pregnant Workers Fairness Act – Final Regulations Published.

Compliance Corner: Utah, Florida and Indiana amend child labor laws

Utah, Florida and Indiana have enacted amendments to their child labor laws, adjusting the regulations concerning hours and times that minors are permitted to work.

Understanding the laws

Utah
- Effective May 1, 2024, Utah has amended its child labor laws for minors under 16 years of age.
- Under the amendment, minors under 16 years of age are not permitted to work:
  - More than three hours in one school day
  - More than 18 hours in one school week
  - More than eight hours in one calendar day
  - More than 40 hours in one calendar week
  - Before 7 a.m. or after 7 p.m.
- Minors under 16 years old may work until 9 p.m. beginning on June 1 and ending on Labor Day.
Florida
- Effective July 1, 2024, Florida has amended its child labor laws for some minors.
- Under the amendment, minors 16 and 17 years of age are permitted to work:
  - More than 30 hours per week during the school year with a signed consent form from a parent, custodian or superintendent
  - More than eight hours a day on holidays and Sundays during the school year
  - Before 6:30 a.m. and after 11 p.m. when there’s no school the following day
  - Seven days a week but restricted to eight-hour days
- Minors 16 and 17 years of age must receive a 30-minute meal period for every four hours of work if they work eight or more hours.
- Minors under 15 years of age can work longer than 15 hours a week (up to 40) when school isn’t in session.
Indiana
- Effective Jan. 1, 2025, Indiana has amended its child labor law requirements for some minors.
- 14- and 15-year-olds can work until 9 p.m. on days preceding school between June 1 and Labor Day.
- Previous restrictions regarding time and hour restrictions for minors 16 years and older have been removed.

Remember to make HR personnel and supervisors aware of these amendments. In the event of a conflict between federal and state child labor laws, employers should adhere to the law that offers the greatest level of protection for minors.

Compliance Corner: California increases health care minimum wage

An increase to the statutory minimum wage for health care workers in California will go into effect June 1, 2024. Simultaneously the definition of “health-care” positions subject to the increase will be greatly expanded. The intended goal of the changes is to help solve the shortage of health-care workers in the state, but the law does increase the financial burden on employers in the field.

What employers are subject to the increase?

A facility or other work site that is part of an integrated health-care delivery system
Licensed general acute-care hospitals
Licensed acute psychiatric hospitals
Special hospitals
Licensed skilled nursing facilities, if owned, operated or controlled by a hospital or integrated health-care delivery system or health-care system
Patients’ homes when health-care services are delivered by an entity owned or operated by a general acute-care hospital or acute psychiatric hospital
Licensed home health agencies
Clinics, including specialty-care clinics, dialysis clinics, psychology clinics, outpatient clinics, clinics operated or affiliated with any institution teaching a recognized healing art, and/or nonprofit clinics that conduct medical research and health education and provide health care to its patients through a group of 40 or more physicians and surgeons, who are independent contractors representing not less than 10 board-certified specialties, and not less than two-thirds of whom practice on a full-time basis at the clinic
Licensed residential-care facilities for the elderly, if affiliated with an acute-care provider or owned, operated or controlled by a general acute-care hospital, acute psychiatric hospital or the parent entity of a general acute-care hospital or acute psychiatric hospital
Psychiatric health facilities
Mental-health rehabilitation centers
Community clinics, intermittent clinics or publicly operated clinics
Rural health clinics
Urgent care clinics
Ambulatory surgical centers
Physician groups
County correctional facilities that provide health-care services
County mental-health facilities

What employees are subject to the increase?

An employee of a health-care facility employer who provides patient care, health-care services, or services supporting the provision of health care, which includes, but is not limited to, employees performing work in the occupation of a nurse, physician, caregiver, medical resident, intern or fellow, patient-care technician, janitor, housekeeping staff person, groundskeeper, guard, clerical worker, nonmanagerial administrative worker, food service worker, gift shop worker, technical and ancillary services worker, medical coding and medical billing personnel, scheduler, call center and warehouse worker, and laundry worker, regardless of formal job title.
It could also include a contracted or subcontracted employee when:
The employee’s employer contracts with the health-care facility employer, or with a contractor or subcontractor to the health-care facility employer, to provide health-care services or services supporting the provision of health care, and
The health-care facility employer, directly or indirectly, or through an agent or any other person, exercises control over the employee’s wages, hours or working conditions. However, “covered health-care employee” includes all employees performing contracted or subcontracted work primarily on the premises of a health-care facility to provide health-care services or services supporting the provision of health care.

How does the law change nonexempt status?

The law also increases the salary threshold for health-care workers to be deemed exempt from minimum wage and overtime requirements. Health-care workers must now earn a monthly salary of no less than 150% of the health-care worker minimum wage or 200% of the state minimum wage for all workers, whichever is greater, in order to be considered exempt.

When does the law take effect, and for whom?

Increases to both the minimum wage and the exempt salary base are done incrementally according to the size of the health-care employer.
The following are the four tiers of employers subject to different timing requirements:

Large employers and integrated health systems	Defined as covered health-care facilities that: (1) have 10,000 or more full-time equivalent employees; (2) are part of an integrated health-care delivery system or health-care system with 10,000 or more full-time equivalent employees; (3) dialysis clinics; (4) or facilities owned, affiliated or operated by a county with a population of more than 5,000,000 as of Jan. 1, 2023
Step-up period	Hourly minimum
June 1, 2024 to May 31, 2025	$23/hr
June 1, 2025 to May 31, 2026	$24/hr
June 1, 2026 and after	$25/hr

Hospitals	Defined as any hospital that (1) has a high governmental payor mix; (2) is an independent hospital with an elevated governmental payor mix; (3) is a rural independent covered health-care facility; or (4) is a covered health-care facility that is owned, affiliated or operated by a county with a population of less than 250,000 as of Jan. 1, 2023
Step-up period	Hourly minimum
June 1, 2024 to May 31, 2033	$18/hr with 3.5% increases annually
June 1, 2033 and after	$25/hr

Clinics	Defined as clinics, including: (1) primary care clinics, (2) non-governmental free clinics; (3) community clinics and any associated intermittent clinic; (4) rural clinics; and (5) urgent- care clinics owned and/or affiliated with community or rural- care clinics
Step-up period	Hourly minimum
June 1, 2024 to May 31, 2026	$21/hr
June 1, 2026 to May 31, 2027	$22/hr
June 1, 2027 and after	$25/hr

All other health-care facilities	Defined as any covered health-care facility not listed above
Step-up period	Hourly minimum
June 1, 2024 to May 31, 2026	$21/hr
June 1, 2026 to May 31, 2028	$23/hr
June 1, 2028 and after	$25/hr

The information provided in this document does not, and is not intended to, constitute legal advice. Instead, all information, content and materials available here are for general informational purposes only. If you require legal advice, we strongly recommend that you consult with a qualified attorney. Only your individual attorney can provide personalized advice tailored to your specific situation and jurisdiction. This document should not be relied upon as a substitute for professional legal counsel.

Compliance Corner: California updates pay data reporting guidance

In February, the California Civil Rights Department updated its guidance for employers subject to the state’s pay data reporting requirements. The process is largely the same with a few notable exceptions, including (1) a new template required for uploading to the portal, (2) a new data field requiring reporting of remote-worker headcount, (3) the requirement to assign all employees a race/ethnicity and gender and (4) additional guidance on which employees should be counted for the report.

Reporting is due May 8, 2024. If you believe you are subject to California pay data reporting requirements, please visit the Insperity® Help Center for assistance in isolved and additional information about the legislative and regulatory requirements. You may also find information about reporting requirements in the Insperity HR Support Center here.

Compliance Corner: Getting ready for the EEO-1 data collection deadline

The EEOC announced that the submission of EEO-1 data for 2023 opened on April 30, 2024, and closes on June 4, 2024.

Who needs to file EEO-1 reports each year?

Companies with 100 or more employees
Companies with fewer than 100 employees or if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees
Federal government prime contractors or first-tier subcontractors subject to Executive Order 11246 with 50 or more employees and a prime contractor first-tier subcontract amounting to $50,000 or more

What information will be needed to file?

Company ID and unique PIN
Company EIN and NAICS code and company DUNS number (if a federal contractor)
Establishment address, EIN and NAICS code for each establishment or establishment DUNS number (if a federal contractor)
Count of all full- and part-time employees on the effective date selected by the employer
Gender and race/ethnicity of all employees
EEO-1 job categories of all employees

Get your data ready

Requirement one: All Jobs must have an EEO Category assigned

Navigate to Client Management > Job > Jobs and ensure the EEO Category is populated for all your jobs in isolved. Don’t forget to check any jobs that may be inactive as well. If the job was active in the prior calendar year, it will need to have an EEO Category assigned.

Requirements two and three: All employees must have a gender and ethnic origin assigned

An easy way to identify where updates are needed is to run the EEO-1 report. Navigate to Reporting > Client Reports and select a Report Category of HR – Compliance to filter your report list. Select the EEO1 Report – As Of Date and enter the following report criteria:

As Of Date: Enter the period end date for the payroll you select to use for EEO reporting. This pay period must fall between Oct. 1 and Dec. 31 of the 2023 reporting year.
Date Type: Select Period Ending Date
Employees To Include: Keep the default ALL Active and Inactive employees
Select the Employee Audit Report (Excel format)

When viewing the report, page down and you will see a list of errors that need correction:

All employees must be assigned an EEO job category
All employees must have a gender and ethnic origin

Update your data

Ask your employees to add missing gender or ethnic origin data through employee self-service.

For clients using the modern Adaptive Employee Experience (AEE), employees will navigate to Personal > Personal Information > Federal Reporting > EEO to update their gender and race/ethnicity identification selections. They will be able to see their current self-reported status and make updates on any device: phones, tablets or computers.

For clients using Employee Self-Service in Classic View, employees will navigate to Employee Self-Service > Federal Reporting Data > EEO Self-Identification to update their gender and race/ethnicity identification selections.

Please note: If an employee is uncomfortable answering the questions, they can select the option “I do not wish to disclose,” but the field cannot be left blank.

If your employees do not have access to make these updates, contact your payroll specialist and they will enable the appropriate security roles.

Ensure all work locations are tied to an establishment

Establishments screen links work locations to EEO-1 reporting establishments.

Navigate to Client Management > Client Maintenance > Establishments and ensure all your work locations are tied to an establishment in isolved. If you already have an establishment created, verify all your work locations are associated with the establishment. If you need to create an establishment, click the Add New button to create your establishment and then select the work locations that you want to tie to your establishment.

To use the isolved EEO1 Report or EEO1 Export, you need to link your work locations to EEO establishments and assign your company headquarters on the Establishments screen for accurate reporting.

If you are a multi-establishment employer, make sure you designate one of your establishments as your headquarters to enable the Type 3 Headquarters report.

Run your EEO-1 Audit Report

Run your EEO1 Employee Audit Report again to verify all your data has been updated. Look good? Now you are ready to run your EEO1 Export Report. Navigate to Reporting > Client Reports and select the Report Category HR – Compliance to easily access the EEO-1 reports in isolved and submit your data through the EEO-1 Data Collection Portal.

For companies tracking ethnic origin, gender and EEO classifications in isolved, the EEO1 Export is formatted as a comma-delimited (CSV) file for upload to the EEO-1 Component 1 Online Filing System. This report is available on the Reports > Client Reports menu in the HR Compliance Reports category.

Compliance corner: Delaware final rule on paid leave regulations

Enacted: 03/01/2024
Effective: 03/11/2024

Delaware adopted final rules implementing the Healthy Delaware Families Act (HDFA) on June 30, 2023. The regulations have been amended to address the coordination of benefits and notice requirements for the HDFA and its Paid Family and Medical Leave (PFML) program. Here are some takeaways:

The amended definitions include “family and medical leave benefits” for family caregiving, medical or parental leave and clarifying the definition of “employee” and “willful” for the HDFA and PFML program.
A “covered individual” is defined as an individual employed for at least 1,250 hours of service within Delaware with the employer during the previous 12-month period.
The regulation also includes requirements regarding the coordination of other benefits offered by employers, including paid time off (PTO) and the use of PTO to supplement wages. Employers must provide employees with notice of their coordination policy for PTO and PFML benefits, including whether unused PTO is required before accessing PFML benefits, how much PTO is required, and whether accrued PTO counts toward the total length of leave provided under the HDFA.

The Department of Labor’s Division of Paid Leave (DPL) has amended regulations to require employers to provide PFML notices to all employees at least 30 days before payroll contributions begin on Jan. 1, 2025. If an employer provides a disability or paid leave policy as primary coverage, the PFML benefit payments must be reduced to what the employer-provided policy pays so that the covered individual receives no more than 100% of their average weekly wage. If the PFML is primary, then the employer-provided leave policy supplements the PFML benefit up to no more than 100% of a covered individual’s average weekly wages.

The final rule emphasizes that covered individuals cannot receive more than 100% of their average weekly wage during their PFML benefit period. Employers and covered individuals are both responsible to review benefit information to avoid any overpayment. The amended rule also requires employees to provide at least 30 days’ notice prior to filing a claim for leave under the PFML program. If the leave is foreseeable at least 30 days in advance and the employee fails to give advance notice, the employer may delay coverage until 30 days after the date the employee does provide notice.

POTENTIAL ACTION ITEMS:

Employers must obtain the PFML notice from the DPL website when it is published and provide the notice to employees within the time limits provided.
Employers should review and revise, if necessary, any coordination of benefits policies to comply with the final rule.
Employers should revise written leave policies related to procedures for employees to notify the employer of the need to take leave.

References for additional information:

272675_466707.pdf (statescape.com)
Delaware.gov – Official Website of the State of Delaware

The information provided in this document does not, and is not intended to, constitute legal advice. Instead, all information, content, and materials available here are for general informational purposes only. If you require legal advice, we strongly recommend that you consult with a qualified attorney. Only your individual attorney can provide personalized advice tailored to your specific situation and jurisdiction. This document should not be relied upon as a substitute for professional legal counsel.

Compliance corner: Oregon final rule for OFLA and sick leave

Enacted: 03/01/2024
Effective: 03/02/2024

Oregon has updated its regulations regarding the Oregon Family Leave Act (OFLA), which mandates employers to provide up to 12 weeks of leave to employees or qualifying family members within a year. Here are some takeaways:

The final rules clarify definitions, uses for leave and when medical verification can be requested.
They also add “by affinity” to the list of qualifying family members for whom an employee may use OFLA leave.
The rules also clarify that for an employee to take parental or sick child leave under the OFLA, the child receiving care must be under 18 or an adult dependent child substantially limited by a physical or mental impairment.
The definition of “serious health condition” has been amended to include pregnancy termination, fertility or infertility treatments, and pregnancy disability leave.

The “leave year” to designate OFLA leave is a one-year period, beginning the Sunday immediately preceding the date on which the leave commences. Employers must provide 30 days notice of their need for foreseeable OFLA leave and must provide as much notice as possible when advance notice is not practicable. The rules also remove certain limitations on the number of weeks an employee can take in OFLA leave to deal with the death of a family member and concurrent use of OFLA leave for the deaths of multiple family members.

The final rules of OFLA have clarified that employers may not require medical verification for parental leave, sick-child leave due to public health emergencies, or bereavement. Employers may provisionally designate an absence as OFLA leave until sufficient information is received, and nonmedical verification must be requested within five days of the leave request or when the employer learns that the leave may be OFLA-qualifying. If an employee has taken sick-child leave for three consecutive days in one leave year, medical verification from a health care provider may be required on the fourth or subsequent day. Medical verification of OFLA leave is binding, and employers cannot require a second opinion. The final rules also amend the process for verifying an employee’s return to work after leave taken for their own serious health condition.

POTENTIAL ACTION ITEMS

Review and revise, if necessary, leave policies, handbooks, forms and leave administration procedures relating to OFLA leave and sick leave to conform to the final rules’ requirements.

References for additional information:

BLI_9-2024TrackedChanges-PAO.pdf (oregon.gov)