Overtime Changes, Hiring Claims and Joint Employer Liability Concern Employers, Per Littler Survey
Author: Marta Moakley, XpertHR Legal Editor
July 22, 2015
Overtime reform, discrimination in hiring claims and joint employer liability proved top concerns for employers, according to law firm Littler's 4th Annual Executive Employer Survey Report. With respect to the Affordable Care Act (ACA), employer concerns have ebbed with increased court rulings.
More than 500 respondents participated in the survey, and included in-house counsel, HR professionals and high-level executives.
Last month, the US Department of Labor (DOL) proposed new regulations under the Fair Labor Standards Act that would double the minimum salary for overtime-exempt employees to $50,440. This change could result in increased costs to employers. According to Tammy McCutchen, a Littler principal, the proposed regulations "could cost employers billions of dollars. The employer community should take action now to shape the final rule." In fact, the public has until September 4, 2015, to comment on the proposed rule.
About seven out of 10 respondents expressed concern about liability risks based on changing interpretations of the definition of joint employer, which is a main concern for franchisors or entities using staffing agencies. In addition, courts across the country continue to adopt different standards regarding joint employer status. Just last week, the 4th Circuit Court of Appeals adopted the nine-part "hybrid test" regarding joint employer status.
The National Labor Relations Board (NLRB) has been particularly active in this legal area by allowing claims to move forward against franchisors as "joint employers." The added regulation may become a source of stress for employers because of a lack of control over employees of third parties. About six in 10 of those responding expressed concern regarding the difficulty of monitoring practices of potential fellow joint employers.
More than half of respondents expected a rise in discrimination claims regarding the consideration of criminal or credit history in the hiring process. Uncertainty regarding compliance requirements in this area is compounded by regulation at the state and local levels. Other Equal Employment Opportunity Commission (EEOC) initiatives that concern respondents included:
- Equal pay claims; and
- Accommodations for workers with disabilities.
With the Supreme Court's King v. Burwell decision, employers have been assured that the ACA will continue to be implemented. In fact, employer concerns have ebbed with respect to uncertainty in this regulatory area. However, Ilyse Schuman, Co-Chair of Littler's Workplace Policy Institute, stresses that "employers need to stay abreast of any changes that could impact the ACA ... to remain compliant with the law."