News from Ollis/Akers/Arney Human Resources Consulting

DOL Issues Opinion Letter About Tip-Pools

On Jan. 14, 2025, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued opinion letter FLSA2025-1, addressing whether a manager or supervisor can receive tips from a tip pool when working in a nonsupervisory capacity under the Fair Labor Standards Act (FLSA). The WHD advises that employers may not allow managers or supervisors to keep any portion of other employees’ tips, including from a tip pool.

Managers Receiving Tips From the Employer’s Tip Pool

According to the WHD, an employee who meets the executive employee duties test qualifies as a manager or supervisor for purposes of Section 3(m)(2)(B) and must not receive any tips from an employer-mandated tip pool even if they spend a shift performing non-managerial duties. This is because an employee’s primary duty is determined on at least a workweek basis and does not vary from shift to shift. However, if an employee does not meet the executive duties test, even if they are the most senior employee during a particular shift, they may receive tips from an employer-mandated tip pool.

Read the entire article HERE

Wider Range of

Benefit Plans

The Internal Revenue Service (IRS) has taken the position that employers may incorporate health savings accounts (HSAs) and student loan payments among the allocation options for employer contributions offered outside of cafeteria plans.

Quick Hits

Employers may include HSAs and student loan payments among their employees’ allocation choices for employer contributions to benefit plans.
Some employers provide flexibility with regard to the allocation of their employer contributions among benefit plans as a way to enhance recruiting and retention.
New contribution limits will kick in for HSAs and health reimbursement arrangements (HRAs) for 2025.

Many employers and HR professionals have finished the open enrollment period for the 2025 plan year and are beginning to make the next strategic decisions about their benefit plans for the future. A recent clarification in IRS policy permits employers to offer a broader range of options for allocations of employer contributions among benefit plans.

Ogletree Deakins article HERE

EEOC Annual

Performance Report

On Jan. 17, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) announced

the release of its Annual Performance Report (APR) and Office of General Counsel Report (OGCR) for fiscal year (FY) 2024, which covers Oct. 1, 2023, through Sept. 30, 2024.

Increased Demand and Penalties

The reports reflect increases from FY 2023 in demand for services from the public and the amount of monetary awards the EEOC obtained for workers who experienced discrimination in FY 2024. This includes approximately:

88,000 new discrimination charges, an increase of more than 9%;
248,000 inquiries in field offices, an increase of more than 6%;
553,000 calls to the agency contact center, an increase of almost 6%;
90,000 emails received, an increase of almost 5%; and
$700 million recovered on behalf of victims of discrimination, an increase of 5%.

However, the EEOC ended FY 2024 with over 52,000 charges pending, an increase from the 51,100 charges pending at the close of FY 2023.

ACA Compliance Updates

The Paperwork Burden Reduction Act (H.R. 3797) amends the ACA by eliminating the mandate for employers and health insurance providers to automatically distribute tax forms to individuals covered under their health plans. Previously, employers and insurers were required to issue Forms 1095-B and 1095-C to verify minimum essential coverage.

Under the revised provisions, these forms are now required to be issued only if a covered individual/employee specifically requests them. Once a request is made, the applicable form must be provided by the later of either January 31 of the year following the calendar year to which the form relates or thirty days after the date of the request. Furthermore, employers and insurance providers are now obligated to notify covered individuals of their right to request these statements, ensuring transparency and compliance. This change applies to reporting for calendar years beginning after 2023.

Supreme Court Rejects Higher Standard of Proof in Overtime Exception Cases

On Jan. 15, 2025, the U.S. Supreme Court issued a decision in E.M.D. Sales Inc. v. Carrera, which decided what evidence an employer needs to show to prove it correctly classified employees as exempt from minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). The Supreme Court held that the higher “clear and convincing” evidence standard does not apply to federal wage law and, instead, an employer only needs to meet the “preponderance of evidence” standard. The Court’s ruling addressed a disagreement among federal appeals courts on the issue.

Supreme Court Ruling

The Supreme Court held that the “preponderance of evidence” standard applies when an employer is attempting to prove that it properly classified an employee as exempt under the FLSA’s minimum wage and overtime pay provisions. The Court noted that this was the default standard in civil litigation when the FLSA was enacted in 1938, and the higher standard of proof only applies in limited situations (e.g., when mandated by the U.S. Constitution, when a statute calls for a heightened standard and in situations involving coercive government action). The Court reversed the decision and remanded it to the Court of Appeals to apply the preponderance of evidence standard to decide whether the employees were properly classified as outside sales personnel.

Impact on Employers

The holding in E.M.D. Sales Inc. establishes a consistent standard for FLSA exemption cases. By adopting the preponderance of evidence standard, the Court has eased the burden on employers to establish an FLSA exemption. However, although the Court’s decision makes it easier for employers to prove FLSA exemptions, proper employee classification will remain a compliance burden for employers. Improper classification can result in significant penalties and costly litigation. To mitigate the risk of employee misclassification, covered employers should consider reviewing the FLSA’s duties tests for all exemptions to ensure employees are properly classified, promptly correct any errors and update job descriptions to reflect employees' roles and responsibilities accurately.

Read the entire article HERE

Missouri Minimum Wage Increased January 1

Some of the statutes and regulations enforced by the Wage and Hour Division (WHD) require that posters or notices be posted in the workplace. Please note that posting requirements vary by statute; that is, not all employers are covered by each of the statutes administered by the WHD and thus may not be required to post a specific notice. For example, some small businesses may not be covered by the Family and Medical Leave Act and thus would not be subject to the Act's posting requirements.

Contact Victoria Ramsey to order your

2025 Labor Law Posters today.