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HPSS Construction Law News
GET FIRST-HAND LEGAL INSIGHT ON THE CONSTRUCTION INDUSTRY
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Department of Labor Proposes Changes to Salary Level Test
Under the Fair Labor Standards Act, only non-exempt employees are entitled to overtime pay during those workweeks in which they work more than 40 hours. In order to avoid paying overtime pay to employees, the employees must fit within one of the law’s exemptions from overtime pay. The exemptions most often used in the construction industry are commonly referred to as the “white collar” exemptions. Those exemptions include the executive exemption, the administrative exemption, the professional exemption, and the highly compensated employee exemption.
In order to fit an employee within one of the “white collar” exemptions, the employer must past the salary basis test, the salary level test, and a job duties test. Currently, the salary level test under the executive, administrative, and professional exemptions is met when the employee is paid a salary of at least $684 per week ($35,568 per year). The current salary level test under the highly compensated employee exemption is $107,432. Importantly, on August 30, the Department of Labor released its Notice of Proposed Rulemaking, which seeks to increase the minimum salary threshold to $1,059 per week ($55,068 per year) for the executive, administrative, and professional exemptions. The Department of Labor proposes changing the minimum salary level for the highly compensated employee exemption to $143,988.
Notably, the proposed rule from the Department of Labor also includes automatic updates to the earnings thresholds every three years. The weekly standard salary level for the executive, administrative, and professional exemptions would be aligned to the 35th percentile of full-time salaried workers in the lowest-wage census region, and the highly compensated employee total annual compensation requirement would be aligned to remain at the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally.
Interested parties have until November 7 to submit comments in response to the proposed rule.
If you have any questions about proper classification of exempt and non-exemption workers or how to properly computer overtime due your non-exempt employees, please contact Scott Calhoun or Philip Siegel. You can e-mail Scott by clicking here, and you can e-mail Philip by clicking here.
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New Rule Takes Effect: Prevailing Wages and the Davis-Bacon and Related Acts
On October 23, 2023, the U.S. Department of Labor’s (“DOL”) new rule went into effect, updating the regulations issued under the Davis-Bacon and Related Acts (“DBRA”). The DBRA governs wage payment for contractors and subcontractors working on federal and federal assisted construction projects. It does this primarily through setting the “prevailing wages” that contractors must pay workers on federal projects.
The new rule changes the way DOL calculates and sets prevailing wages. Previously, it set the applicable prevailing wages at either the majority rate or the weighted average rate if no majority rate existed. Now, it will use the “30-percent rule” previously in effect from 1935 to 1983 to set prevailing wages. This means that in the absence of a wage rate paid to a majority of workers in a particular classification, a wage rate will be considered prevailing if it is paid to at least 30-percent of such workers. If no rate is paid to at least 30-percent, then it utilizes a weighted average rate.
Importantly, current wage determinations still apply for the life of ongoing contracts. However, the new rule will now apply if a contract is modified or an option exercised to include additional substantial construction, alteration, and/or repair work not within the scope of work of the original contract or order, or if such requires the contractor to perform work for an additional time period not originally obligated. Overall, the most likely impact of the new prevailing wage rule will be an increase in labor rates for some contractors on future federal projects.
While the prevailing wage calculation is the most significant change, the total rule contains many other regulatory changes as well. It exceeds 800 pages in total length. DOL’s website contains a number of helpful resources for navigating the new rule, including: a chart comparing the new rule with the old, a FAQ page, a small entity compliance guide, a video guide, a webinar, and an overview memorandum.
If you have any questions regarding the new DBRA rule or related employment questions, please call or email either Philip Siegel or Jason Kamp. Philip’s email is pjs@hpsslaw.com and he can be reached directly at (404) 469-9197. Jason’s email is jak@hpsslaw.com and he can be reached directly at (404) 469-9193.
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EEOC Issues Proposed Workplace Harassment Guidance | |
On October 2, the EEOC published its notice of “Proposed Enforcement Guidance on Harassment in the Workplace.” Although the guidance is not final (the public comment period lasts through November 1), much of the substance of the guidance is expected to be finalized, setting forth standards to which the EEOC will hold employers accountable. The entire proposed guidance can be found here.
One significant focus of the lengthy proposed guidance is providing broad protections for LGBTQ+ workers. EEOC is taking the position that harassment based on sexual orientation and gender, including how identity is expressed, constitutes sex-based discrimination. Examples of such harassment as detailed in the guidance include: epithets regarding sexual orientation or gender identity; intentional and repeated misgendering (using pronouns inconsistent with the person’s gender identity); and denial of access to bathrooms or other sex-segregated facilities consistent with the person’s gender identity.
Under the draft guidance, employers are also required to address workplace effects of an employee’s social media activity. EEOC notes that even though conduct does not occur in a work-related context, it can affect the terms and conditions of employment. Such conduct includes phone, computers and social media accounts. Sexist, racist or other discriminatory speech in this context could be considered harassment. Some commentators have already noted that the new guidance could create conflicts with recent decisions from the NLRB with respect to not restricting employee speech, including social media speech outside work.
The new guidance also addresses potential harassment in the context of pregnancy and related medical conditions and personal decisions (including lactation, contraceptive choices, and abortion). Employers will be required to provide protection for their employees on these matters. And although employers are required to accommodate employees’ sincerely held religious beliefs, employers also need to protect employees against religiously motivated harassment, and so are not required to accommodate religious expression that creates “or reasonably threatens to create a hostile work environment."
We encourage all employers to review the proposed guidance and participate in the comment process if possible. Communicating with trade associations who may submit comments on the part of industry members may be the most efficient way to participate. In any event, when the guidance is finalized, employers should review their employment policies to ensure that appropriate policies are in place to address workplace harassment issues. The new guidance does contain resources to assist in this process.
Further Questions? If you have any other questions about this article, please contact Philip Siegel or Scott Calhoun. You can e-mail Philip by clicking here, and you can e-mail Scott by clicking here.
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OSHA Update
In our last e-blast, we informed that you OSHA was committed to publishing a workplace rule to address heat-related illnesses. OSHA has since completed the process of gathering input from diverse stakeholders and experts, including finishing its Small Business Regulatory Enforcement Fairness Act panel reviews. Now, OSHA has re-opened the comment period for interested stakeholders to submit comments before a proposed standard is published. Comments may be submitted through this link through December 23. While we wait for a rule to be published, contractors are reminded to provide sufficient training and to develop and implement a written Heat Illness Prevention Plan, in accordance with OSHA’s published guidance. If you need assistance preparing a Heat Illness Prevention Plan consistent with OSHA’s published guidance, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.
OSHA is also seeking public input on its proposed rule, published on August 30, which would allow employees to choose third party representatives to accompany an OSHA inspector into nonunion facilities. Under the proposed rule, employees can request that a third party, non-employee representative participate in an OSHA inspection on the basis that they have "relevant knowledge, skills, or experience" that may be reasonably necessary to conduct an effective and thorough physical inspection of the workplace. Comments on the proposed rule can be submitted through this link through November 13, 2023.
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Firm News
We are proud to announce that Philip Siegel, Stephen Phillips, and Martin Salzman were selected by their peers for inclusion in the 30th edition of The Best Lawyers in America for their expertise in construction law!
On September 27, Philip Siegel presented a webinar to the Virginia Roofing Professionals Association. In the webinar, Philip discussed medical marijuana in the workplace.
Philip also spoke in Houston, Texas at the annual conference of the Roofing Contractors Association of Texas on October 5. Philip spoke about the essential policies for any employee handbook.
Philip, Stephen Phillips, and Leanne Prybylski were all presenters at this year’s LegalCon in Chicago for the National Roofing Contractors Association.
J.T. Gallagher presented a session at the National Electrical Contractors Association's annual conference in Philadelphia titled "Dealing with Delay and Impact: From Contract Negotiations to Claims".
Ben Lowenthal's article titled "Protecting the Right to Payment" was published in The Contractor's Compass, the monthly educational journal of the American Subcontractors Association.
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