6/20/16
Chris Schulte
June 23, 2016
TheNewOvertimeRuleand
OtherFederalLaborTopics
Disclaimer
—  This information is intended for general educational
purposes. It does not and cannot replace legal
advice tailored to your specific facts and situation.
These are evolving areas of law, and we strongly
recommend that you obtain professional counsel
with expertise in these areas to provide you specific
advice and direction.
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Introduction
—  May 18, 2016 –DOL issues final rule changing
overtime requirements for salaried employees
—  4.2 million U.S. workers affected – 600k in Northeast
—  More than ½ of affected workers = retail/restaurants
—  $1.1 billion increase in worker pay each year
—  What was changed?
—  Who will be affected?
—  What does it mean for agricultural employers?
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Wage Laws and
Regulations
—  Must meet highest applicable wage rate
—  Fair Labor Standards Act of 1938
—  Federal minimum wage ($7.25/hour)
—  Overtime (time-and-a-half) for hours >40/week
—  State laws
—  Minimum wage (none in NH; $8.38 NJ; $9 in NY; $9.60
in CT/RI; $10 MA; increases coming in 2017 and 2018)
—  H-2A – Adverse Effect Wage Rate (AEWR)
—  $11.66 in NJ; $11.74 everywhere in New England/NY
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FLSA Overtime
Exemptions
—  Agricultural
—  “Primary” ag
—  “Secondary” ag
—  Executive/Administrative/Professional (EAP)
—  Computer Professionals
—  Commissioned Sales Employees
—  Tipped wait staff
—  Truck drivers
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Applying the Exemptions
—  More than one exemption may apply
—  For example: agricultural supervisor = Ag + EAP
—  If one exemption is lost, the other may still apply
—  The exemptions are specific to the work performed
at that time and may not last forever
—  Generally, if an exemption is lost for part of a pay
period, it is lost for the entire pay period
—  However, it could apply for the next pay period
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EAP Exemption (Current)
—  Executive, Administrative or Professional
—  Salary basis test – employee is paid a fixed amount
regardless of hours worked;
—  Duties test – not tied to job title, “primary duty”
involves white collar EAP duties (e.g., supervising
2+ full-time employees etc.) (Fact Sheet 17A); and
—  Salary level test – paid at least $455/week ($23,660),
last changed in 2004; not including nondiscretionary
bonuses/commissions
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DOL’s May 2016 Rule
—  Effective December 1, 2016, changes salary threshold for
EAP overtime exemption
—  Goes from $23,660 to $47,476, but allows up to 10% to be
nondiscretionary bonuses/commissions
—  Updates salary level every 3 years based on wage growth
in lowest-income Census region (i.e., South), beginning
on January 1, 2020
—  No changes in “duties test”
—  Congress discussing bills to block the rule change
—  Possibility of litigation to block rule change
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How Employers Might
Respond to Rule Change
—  Have a plan. Be ready well before December 2016.
—  For EAP employees earning $23,660-$47,476/year
—  For employees close to $47,476, the employer might
increase pay to meet new level and keep EAP
exemption (including through bonuses)
—  For employees earning well below $47,476:
—  Change to hourly status and track all hours worked
—  Be careful of “after-hours” work – emails, calls, etc.
—  Pay OT for all hours in excess of 40/week or
—  Limit hours worked to keep below 40/week
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Ag OT Exemption
—  “Primary” ag:
—  “Farming in all its branches” – “cultivation, growing
and harvesting of any agricultural or horticultural
commodities” as well as “preparation for market,
delivery to storage or to market or to carriers for
transportation to market”; cider house rule
—  “Secondary” ag:
—  “Any practices, whether or not they are themselves
farming practices, which are performed either by a
farmer or on a farm as an incident to or in conjunction
with ‘such’ farming operations.”
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Other Ag Exemptions
—  Wage & Hour Division - Fact Sheet #12
—  Some minimum wage exemptions, as well as OT:
—  Farm with <500 “man days” (any day with 1+ hr of ag
work) of ag labor in any calendar quarter in the
preceding calendar year
—  Immediate family members of employer
—  Local hand-harvest workers on piece rate <13wks/yr
—  Children under 16 working with parents on piece-rate
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Scope of Ag OT Exemption
Exempt
—  Handling of crop in “unfinished state” before it is stored
or loaded onto third-party’s truck
—  Kitchen staff; on-farm transportation; mechanics
Not Exempt
—  “Processing” crops – except cider
—  Handling other growers’ crops
—  Small exceptions – contract fulfillment/de minimis rule
—  Not all “essential” work = exempt: off-site irrigation, etc.
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Effect of Rule Change on
Agricultural Workers’ OT
—  If an employee is OT-exempt because they are
performing “primary”/”secondary” ag – then the
May 2016 DOL rule will not affect them.
—  If the employee is not consistently OT-exempt for
agricultural work, but also relies on the EAP salary
exemption, employer might need to track hours.
—  Additional exemption as “reserve parachute”
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6/23/16
H-2A Visa Program
—  Visa program for employing foreign agricultural
workers on a temporary/seasonal basis
—  Up to 10 months; single employer; specific location;
clearly-defined set of job activities
—  Recruitment of U.S. workers
—  Corresponding employment
—  Transportation/housing/three-fourths guarantee
—  Notify DOL and USCIS if a worker terminates early
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Current H-2A Topics
—  Pressure on experience requirement
—  Expanded reading of “corresponding employment”
—  First pay period “Arriaga” issues – travel & visa expenses
—  Processing delays throughout the process as use of
program doubles and soon triples:
—  DOL
—  USCIS
—  State Dept./Consulates
—  Non-productive time payments under state law
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Other Federal Laws
—  Patient Protection and Affordable Care Act
—  “Obamacare”
—  H-2A workers are “lawfully present” and must be
treated just like U.S. workers
—  Definitions of “seasonal” workers – 120 vs 180 days
—  Give exchange notice at beginning of each season
—  Reporting requirements
—  Immigration Reform and Control Act of 1986
—  I-9 audits and compliance
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OSHA
—  Occupational Safety & Health Administration
—  May 12, 2016 – final rule
—  “Improve Tracking of Workplace Injuries and Illnesses”
—  Electronic reporting / searchable OSHA database
—  Phased in over next several years
—  250+ employees
—  2016 summary report filed by 7/1/17
—  2017 log, summary, and reports filed by 7/1/18
—  Beginning 2019, filed annually March 2
—  20-249 employees in “high-risk industry” (includes ag)
—  Summary reports only, 7/1/17 and 7/1/18, then 3/2/19-
—  Anti-retaliation provisions take effect 8/10/16 (poster)
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General Compliance
Advice for Employers
—  Have a plan and be prepared
—  Start the process months before you get ready to plant
—  Housing can be the hardest to arrange
—  H-2A timeline
—  These statutes and regulations are extremely
complicated and you will not comply with them by
accident.
—  Record-keeping / document-retention requirements
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Questions?
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Follow-up Questions
Christopher J. Schulte
CJ Lake, LLC
(202) 465-3000
[email protected]
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