Employers may look forward to 2018 as a year for business growth for many reasons, not the least of which is agency decisions and legislation that alleviate burdens placed on the employer and employee relationship.
Here are a few highlights:
<The past several years, confusing and burdensome decisions of the National Labor Relations Board created barriers to business growth. Much to employers’ delight, in the final days of 2017, the NLRB issued decisions that provide some relief from uncertainty and overregulation.
<Perhaps the most significant decision of the NLRB lightened the burden on the many businesses that use outside labor or have a franchise. The value of using third-party labor providers and expanding by franchise is supposed to include relief from employment obligations, including union organization and other concerted activity. However, in 2015, the NLRB decided that a joint employer relationship may be created where a business even reserves the right to control outside employees or exercises minimal routine supervision.
Days before 2017 ended, however, the NLRB overruled this standard in favor of a more business-friendly approach that gives much-needed certainty for business and labor. Under the new standard, businesses will only be considered “joint employers” when exercising substantial control, such as hiring, firing, assignments and discipline.
<In addition, the NLRB relaxed rules governing workplace policies. Under prior NLRB decisions, both unionized and nonunionized employers may be in violation of the National Labor Relations Act, where neutral rules, policies or handbook provisions may be understood by a reasonable employee to restrict his exercise of NLRA rights, including the right to discuss the terms and conditions of employment.
In its recent decision, however, the NLRB decided the legitimacy of the employer’s business reason must be considered before invalidating a work rule. Under the NLRB’s new standard, employers’ policies will be upheld where the rights of the employee are outweighed by important business justifications.
<Labor is not the only area of progress.
This year, employers also may look forward to the adoption of a more reasonable “overtime final rule” to amend the Fair Labor Standards Act. While the rule is stayed from implementation, the Department of Labor has not repealed or replaced the increased salary threshold for exempt white-collar employees, which caused the minimum threshold to skyrocket from $455/week ($23,660/year) to $913/week ($47,476/year). Until the rule is repealed or replaced, employers cannot have complete certainty as to the fate of employee pay laws.
Last summer, a request for information was sent out by the DOL asking employers for more information about the impact of the overtime rule. Based on that, the DOL seems to be focusing more on the duties of an exempt employee rather than on just the threshold pay.
Based on the statement of Secretary of Labor Alexander Acosta, employers can expect that the salary threshold will get a cost of living increase to around $33,000 annually, as opposed to the $47,476 figure.
Having the salary amount settled and decided will ease the burden of uncertainty on employers, even though some level of increase is inevitable.
<Also in the area of employee pay, last month the DOL sought comments on a proposed rule that would that give employers such as casinos, restaurants and pubs more discretion to connect merit with pay by using tip revenue to compensate behind-the-scenes employees who do not normally receive tips.
As regulations stand, tipped employees include servers, bellhops, counter personnel (who serve customers) busers and bartenders. Tips are considered the property of the tipped employee, except if there are legally valid tip pools. The law expressly excludes behind-the-scenes employees, including dishwashers, cooks, chefs and janitors, from joining the tip pool.
Under the proposed rule, for employers who pay full minimum wage and do not take the tip credit, tips received by workers may be collected and pooled among traditionally tipped employees and those who serve customers and clients in the back of the house.
<Relating to the NLRA and FLSA, the Save Local Business Act is legislation to watch this year. The bill proposes to address the confusion caused by past NLRB decisions by legislation that eases the joint employer standard. With the supporting testimony of numerous witnesses, explaining that the existing joint employer standard stifles business growth, the Save Local Business Act was heard before the U.S. House Education Committee on Education and the Workforce and is now before the Senate.
There was a clear trend in pushing business growth leading into 2018 by, among other things, easing restraints on the employee and employer relationship.
While businesses certainly are not out of the woods on the confusing and stark decisions and laws of the past, there has been some relief, indicating that perhaps more improvements are around the corner.
Keely Jac Collins is a partner and employment attorney with the KingSpry law firm in Bethlehem who represents organizations of all sizes and in all sectors. She frequently writes and presents on topics related to her legal practice. She can be reached at email@example.com.