Falling Into Compliance: Updates You Need Before Sweater Weather

We couldn't let Summer go without sending you one more newsletter. And so, as the air gets a little crisper and the leaves a little browner, cozy up in a nice shacket, let those PSL aromatics fill the nostrils, and catch up on the latest and not-so-greatest developments in the world of employment law. We're serving up hot takes on New York criminalizing certain wage and hour violations and potentially game-changing revisions to the Fair Labor Standards Act. But first, let's check in on our friends over at the National Labor Relations Board and see what they've been up to since dismantling severance agreements and non-competes. Surely after such massive changes, they decided to kick up their heels, enjoy the start of football season, and stop upending how the private sector handles things, right???

NLRB Continues to Upend How the Private Sector Handles Things

Ha! OF COURSE the NLRB has continued to shake things up. As you'll recall (recap for those playing catch-up), the NLRB made headlines by cracking down on confidentiality and non-disparagement clauses in severance agreements and then declaring war on non-competes. Now, they've got their eyes set on your employee handbook like it's a quarterback's blindside (seriously, Daniel Jones, you're supposed to run away from the defenders . . .).

In a recent case, the NLRB issued a decision adopting a "new" legal standard for evaluating company policies, overturning a Trump-era decision (... which, in turn, overturned an Obama-era decision – but we digress). Under this "new" standard, a workplace rule is presumptively unlawful if it "has a reasonable tendency to chill employees from exercising their rights." OK . . . so, what does that mean? TLDR: you'll probably need to update your handbook policies because of this. Here, we'll give you some examples:

• A policy prohibiting employees from "[d]isclosing . . . details about [the Employer]" would be considered unlawful because it does not make clear that communications to discuss the terms and conditions of their employment are exempted.
• A policy stating that "if something is not public information, you must not share it" would be considered unlawful because such a policy could lead employees to the misunderstanding that information such as wages, benefits, or other terms or conditions of employment are prohibited from being shared.
• Policies that prohibit employees from engaging in "disrespectful", "negative", "inappropriate", or "rude" conduct while at work will also likely be found unlawful absent further clarification.

And so on! And remember, just because you're not a unionized workplace that does not mean the National Labor Relations Act ("NLRA") doesn't apply. The NLRB is incredibly aggressive with these initiatives and headlines are being made, which means people (*cough* plaintiffs' attorneys *cough*) are starting to take notice. So, unless you're prepared to handle the question from Timmy in accounting as to why the handbook violates this "NLRA thing" he heard about over the weekend, you'd be well-served in taking some time to review those policies.

*The DOL Has Entered the Chat*

Seeing the NLRB hog the limelight, the Department of Labor apparently felt FOMO and decided to crash the party. A few weeks ago, the DOL introduced a proposal to significantly raise the exempt salary threshold under the FLSA from $684 per week to $1,059. If you read that and thought to yourself, "what do these weirdos have against round numbers?" "cool, W+K – what does that mean?", then allow us to explain!

Hopefully, most of you are familiar with the terms "exempt" and "non-exempt" (if not, crash course: exempt = not entitled to overtime; non-exempt = entitled to overtime). Whether an employee is exempt or not depends on things like salary and job duties, with a requirement that salary typically be above a certain threshold. Said differently, if the DOL's proposal becomes law, most employees would need to earn just over $55k per year to be exempt from overtime – which is about $20k per year more than the current threshold. Practical implication: you may have to start paying people more (either in overtime or additional salary).

This is just a proposal right now, but it certainly seems like this has a plausible chance at becoming law in the near future. To that end, you should be reviewing your pay practices and taking note of any potential changes you'd need to make. If you have folks currently classified as exempt that are under the proposed threshold, consider making some increases.

They're Really Taking Wage Theft Literally

The term "wage theft" has been used to describe various unlawful practices where employers do not pay their workers properly, violating minimum wage, overtime, or other labor laws. In late 2010, the New York Wage Theft Prevention Act (WTPA) greatly enhanced worker protections primarily by increasing civil penalties for employer violations. And while the New York Labor Law technically provides for criminal penalties for wage theft, such measures are exceedingly rare, to the point where we can almost always provide some modicum of assurance by saying "you won't go to jail for this" . . . I guess, until now?

WOW. OK, effective immediately, the Penal Law will be amended to include "wage theft" in the definition of "larceny." Accordingly, failure to properly comply with the Empire State's labor laws now carries even harsher outcomes than what's already on the books. While we're hopeful civil penalties alone are enough of a deterrent to review your policies, do not let green become the new orange and make sure to speak with employment counsel and get your books in order . . . otherwise you might actually get booked.

Have a great weekend everyone and enjoy this last day of Summer!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.