Snell & Wilmer labor and employment attorney Ashley Kasarjian’s No. 1 piece of advice for business owners and HR professionals preparing to implement the U.S. Labor Department’s new overtime laws and remain compliant with ADA and FMLA is simple: Be proactive.
The Dec. 1 required compliance date for the new overtime laws is fast approaching and companies that have adequately prepared will be best suited to avoid potential costly legal action from employees who feel they aren’t being compensated properly.
“It is way easier to fix this on the front end,” Kasarjian said during her Phoenix in the Know: New Salary and Overtime Laws presentation on Oct. 18. “On the back end you are going to pay multiple attorneys’ fees and pay your employees who file a lawsuit. It’s hard to spend money on the front end, but it’s worth it.”
Compliance begins with taking an in-depth look at a company’s workforce to determine that employees are classified correctly as exempt from overtime. The new regulations make this determination based on employees’ salaries. Previously, employees earning more than $23,660 annually were exempt from overtime. Starting Dec. 1, that figure jumps to $47,476 annually.
Kasarjian, the 2015 ATHENA Young Professional Award recipient, recommends that employers conduct HR and FLSA (Fair Labor Standards Act) audits in-house or with outside counsel to make these determinations. This will help employers decide whether to raise some employees’ salaries and whether reclassifying employees is necessary.
“I love HR audits because I get to learn a lot about organizations and employers should love them too because they get to learn a lot about their organizations,” Kasarjian said. “One of the biggest benefits is that it forces employers to look at things and ask questions they may have never considered before.”
Kasarjian concluded that while there have been challenges to the new overtime laws filed by some states and the U.S. Chamber of Commerce, it would be a poor choice for employers to not prepare.
“Employers absolutely should not depend on [an injunction] happening. I was reading an article that said it would be ‘reckless’ for a company to assume this law will be put on hold and not prepare,” she said.
Quick tips for ADA & FMLA compliance
Kasarjian moved on to discussing Americans with Disabilities Act (ADA) and Family Medical Leave Act (FMLA) compliance, an area of law she enjoys because it is challenging.
“These are some of my favorite areas to talk about because they are so gray,” Kasarjian said. “There is no black-and-white with these.”
She advises employers to ask themselves the following three questions when determining ADA compliance, which applies to companies with 15 or more employees.
1. Does the employee have a covered disability?
2. Is a reasonable accommodation required?
3. If a company needs more information, what questions can management or HR ask?
In general, Kasarjian says that most types of disabilities are covered under ADA guidelines. To be sure companies are in compliance, they should keep communication open and use a form that asks what types of accommodations the employee is seeking, since employees rarely directly ask for a reasonable accommodation.
Kasarjian provided two questions for determining FMLA compliance, which applies to businesses with 50 or more employees.
1. Is the employee eligible for FMLA leave?
2. Does the employee have a qualifying reason for taking leave?
Kasarjian cautioned that in FMLA violation cases, courts are taking a close look at the timing of the termination of an employee in relation to a request for or use of an FMLA absence. FMLA lawsuits in federal court spiked by 300 percent from 2012-2013 and went up another 26 percent from 2013-2014.
Considering the spike in FMLA lawsuits and potential ADA non-compliance, Kasarjian provided the following guidelines for employers:
• Reassess obligations as conditions change.
• Accommodations don’t have to be indefinite.
• Maintain up-to-date job descriptions.
• Promptly and thoroughly investigate all reports of retaliation and discrimination.
In conclusion, Kasarjian says the best route for employers is to plan a specific time to review their policies, procedures, job descriptions, employee classifications, written documents and even required employment posters because the cost of not preparing far exceeds the effort required for a review.
“Employee handbooks tend to gather a lot of dust and no one cares about them,” she said. “Until everything goes up in flames.”
– Written by Josh Coddington, marketing and communications manager, Greater Phoenix Chamber of Commerce.