This year, a variety of important revisions were made to employment laws at both the Federal and State of Maryland levels. It is critical that employers take notice of these changes to ensure that they are in compliance with the applicable requirements.
- Revisions to the Fair Labor Standards Act
The U.S. Department of Labor recently updated regulations governing the ‘minimum wage and overtime’ and ‘regular rate’ requirements under the Fair Labor Standards Act (“FLSA”).
The FLSA generally requires that employees be classified as either “exempt” or “nonexempt” for the purposes of receiving minimum wage and overtime pay. All employees who do not satisfy certain minimum salary and job responsibility requirements are ‘nonexempt,’ and must be compensated hourly (as opposed to fixed salary) and receive overtime pay for all hours worked over 40 hours per week. The FLSA requires overtime pay of at least one and one-half times an employee’s “regular rate of pay.”
As of January 1, 2020, the minimum salary level to determine if an employee may be categorized as exempt from minimum wage and overtime requirements increased from $455 per week to $684 per week. If an employee is paid less than that amount ($35,568 per year), the employee is nonexempt and must be compensated accordingly. Note that employers may use nondiscretionary bonuses and certain incentive payments (including commissions) to satisfy up to 10% of the minimum salary level amount. Additionally, the law provides that highly compensated employees (over $107,432 annually) may also qualify for an exemption.
Moreover, the revised regulations make clear that as of January 15, 2020, certain benefits, perks, and other forms of payment may be excluded from an employee’s ‘regular rate of pay’ for the purpose of calculating overtime. For a complete list of payments and benefits employers may exclude from an employee’s regular rate of pay, see https://www.dol.gov/agencies/whd/overtime/2019-regular-rate.
- Tracking Teleworkers’ Compensable Hours
Employers have largely expanded the availability of employee teleworking arrangements in response to the Coronavirus pandemic. As a result, it is important that employers have the information they need to effectively manage remote workers.
On August 24, 2020, the U.S. Department of Labor issued new guidance clarifying employers’ obligations to track teleworkers’ compensable hours. Generally, employees must be compensated for all hours worked, including for work performed at home, even though the work was unscheduled or not requested by the employer. As a result, employers who know or have reason to believe that work was performed must count that time toward employees’ compensable hours.
The Department’s guidance explains that an employer may be deemed to have “constructive knowledge” of the compensable hours worked by its employees if the employer, through reasonable diligence, could have obtained actual knowledge of such hours worked. It is, therefore, important that employers exercise reasonable diligence to ensure that they properly track their employees’ work hours. Employers can exercise reasonable diligence by, for example, providing reasonable reporting procedures for unscheduled work hours and then compensating employees for all work hours that were reported. For more information about the Department’s guidance, see https://www.dol.gov/.
- The Coronavirus and the ADA
On September 8, 2020, the Equal Employment Opportunity Commission (“Commission”) updated its Coronavirus guidance to address concerns regarding the legality of employer-mandated Coronavirus testing under the Americans with Disabilities Act (“ADA”).
Pursuant to the ADA, employers can establish mandatory testing and screening procedures so long as the procedures are “job related and consistent with business necessity.” The Commission explained that employer-mandated Coronavirus testing does not run afoul of the ADA because such testing is necessary to determine whether an employee’s presence in the workplace poses a threat to the safety of others. As such, employers may administer periodic Coronavirus testing and they can require testing before allowing employees to enter the workplace.
Employers can also ask their employees whether they have had the Coronavirus or Coronavirus symptoms, or whether they have ever been tested for the Coronavirus. As a caveat, however, employers should note that such questions must be directed to all employees, and not specific employees. Under the ADA, an employer can ask a particular employee such questions only if the employer has a “reasonable belief based on objective evidence” that the employee might have the Coronavirus.
Likewise, employers may not ask their employees whether they have family members diagnosed with the Coronavirus. Employers can, however, ask their employees whether they have had contact with anyone diagnosed with the disease.
- The Maryland CROWN Act
Employers who maintain grooming or personal appearance standards in their workplaces should take particular note of the protections afforded employees under the Maryland CROWN Act. Effective on October 1, 2020, the CROWN Act prohibits employers from discriminating against individuals on the basis of “certain traits associated with race, including hair texture and certain hairstyles.” The statute specifically includes protection for “braids, twists, and locks,” as well as “hair texture, afro hairstyles, and protective hairstyles.”
- Revisions to Maryland’s Equal Pay for Equal Work Law
Maryland recently revised its Equal Pay for Equal Work law in an effort to promote pay transparency and equal pay standards. As of October 1, 2020, Maryland law prohibits employers from retaliating against employees who inquire about their own wages. Specifically, employers may not prevent employees from discussing their wages with other employees, nor can employers “take any adverse employment action” against employees who do so.
The revised law also bars employers from inquiring about job applicants’ wage histories in making decisions about employment or initial pay. Rather, employers must provide “wage range” information to job applicants upon their request. Accordingly, employers should ensure that they do not request wage histories from job applicants or their current or former employers, and that wage range information is available to job applicants who request it.
- Changes to Maryland’s Mini-WARN Act
On October 1, 2020, the Maryland legislature made substantial changes to its Worker Adjustment and Retraining Notification Act (“mini-WARN Act”). Previously, employers did not have to provide advance notice of employee layoffs. The revised mini-WARN Act, however, imposes mandatory notice requirements on certain employers. Specifically, employers with at least 50 employees and who operate an industrial, commercial, or business enterprise must provide 60 days’ written notice before implementing a “reduction in operations.” A reduction in operations occurs when an employer relocates part of its operations from one workplace to another or shuts down a portion of its operations, which reduces the number of employees by the greater of at least 25% or at least 15 employees, over any three-month period. Employers should note, however, that the law’s mandatory notice requirements do not apply to certain reductions in operations, such as those that occur at construction sites or other temporary workplaces.