The Executive Forum reviewed the changes in overtime this past year. Here is the information we shared with you regarding the changes.
There are two DOL rule changes that will increase costs to traditional and non-traditional providers in Illinois.
- Exempt status annual salary levels increasing to $50,440 from $23,660
- Companion services no longer exempt and now under minimum wage and overtime regulations
Story from the Chicago Tribune.
Tony
Workers Should Watch for 4 Job-Related Issues
By Aexia Elejalde-RuizContact ReporterChicago Tribune
From overtime to paid sick leave, the coming year could bring major changes on the workplace front. Here are four issues to watch:
Overtime overhaul
The Labor Department is poised to adopt a rule that would guarantee overtime pay to millions more salaried workers, raising questions about the impact it will have on employees’ schedules and paychecks.
The agency in June proposed nearly doubling the salary threshold of an exempt employee, arguing that too many people were working long hours for free, which drew fire from business interest groups that warned the change could hurt workers more than help them.
The agency, which is reviewing comments about the proposal, is “confident we’ll get a final rule out by spring 2016,” Labor Secretary Thomas Perez told Bloomberg BNA last week.[Overtime pay debate pits businesses against Obama]
Overtime pay debate pits businesses against ObamaUnder the proposed rule, most employees earning less than $970 per week, or about $50,440 a year, could not be classified as exempt from overtime pay. That’s a jump from the current threshold of $455 a week, or $23,660 annually — which, the Labor Department notes, is the poverty level for a family of four.
The agency expects the proposed rule to affect nearly 5 million employees, including 200,000 in Illinois. Among them are low-earning managers at retail stores, restaurants and nonprofits who currently fall under “white-collar exemptions” for supervisory staff that exempt them from earning time-and-a-half for hours worked beyond 40 hours a week.
The Labor Department estimates that the change could put up to $1.3 billion in workers’ pockets, but employers say it’s not that simple.
Jeff Risch, an attorney with SmithAmundsen who represents employers, said he is advising clients to identify all employees classified as exempt and making less than $50,440 to determine the best course of action for each position. In some cases, it might make sense to bump employees’ pay up to meet the new salary threshold so that they can maintain their exempt status.
But other employees may be reclassified as hourly and have to start tracking their hours so they don’t exceed 40 a week, or do so only when approved and necessary, Risch said. That’s good or bad depending on whom you ask: it could hurt a worker’s flexibility or managerial status, but it also could mean more free time for overworked employees or more jobs for the un- or underemployed if companies are forced to spread the work around.
Risch, chair of the employment law and litigation committee of the Illinois Chamber of Commerce, which criticized the proposal, said employers in rural areas, where pay and living costs tend to be lower, could feel a big hit to their budgets.
“A lot of employers are saying I’m going to bump (the employee’s pay) up, but I’m going to expect more from them,” Risch said. Jobs could be cut if one employee, earning more, starts doing work previously done by two, he said.
The salary threshold would automatically update based on inflation or other economic measures, according to the proposal. There are exceptions for some professions, such as teachers and outside sales reps.
The proposal doesn’t include changes to the “duties test” that determines what type of positions qualify for white-collar exemptions, but that could change in the final rule.
“I anticipate significant litigation challenging the new rule once it is finalized,” said Staci Ketay Rotman, a partner at Franczek Radelet, a law firm that represents employers.
Paid leave comes to Chicago?
A panel studying paid leave and other family-friendly workplace policies is ready to issue its recommendations to the city, which could revive stalled efforts to mandate that employers offer workers earned sick time.[‘Zero Weeks’ film explores abysmal U.S. family leave laws]
‘Zero Weeks’ film explores abysmal U.S. family leave lawsThe 27-member Working Families Task Force, convened this summer by Mayor Rahm Emanuel to address paid sick leave, fair scheduling and other family support like parental leave, has had its last meeting and expects to release its report mid-January, said Anne Ladky, executive director of the advocacy group Women Employed and co-chair of the task force.
The effort comes as a growing number of states and cities impose paid leave laws while the U.S. maintains its dubious distinction as the only advanced economy to not require that employers give workers any sort of paid time off.
Nearly 40 percent of private-sector employees in the U.S. don’t get any paid sick time, according to the Bureau of Labor Statistics, and the share is far higher for low-wage workers, who often can’t afford a smaller paycheck to stay home with the flu.
The task force, formed shortly after 82 percent of Chicago voters in a nonbinding referendum favored mandating paid sick leave, includes employers, employee advocates, business interest groups, and state and city legislators.
“It was a tremendous diversity of viewpoints in the group, but we concluded all feeling the process was a very positive one where people worked very hard to come up with some common thinking,” Ladky said.
More than 20 cities and four states mandate that employers offer paid sick days, a cause that has gained momentum over the last couple of years. The most recent state to do so is Oregon, whose law goes into effect Jan. 1. It requires employers with at least 10 employees to provide up to 40 hours of earned paid sick time per year, while smaller employers must offer 40 hours of unpaid sick time. Employees earn an hour of sick time for every 30 hours worked, a common guideline among many of the new laws.
In Chicago, a proposed ordinance that would allow employees to earn up to 72 hours of paid sick time at large employers, and 40 hours at smaller employers, has languished. Proponents of the law have estimated it would cost employers about $109 million a year but save them $116 million annually thanks to reduced turnover and “presenteeism,” which is when ill employees come to work and risk infecting their co-workers or customers.
Whether the task force’s recommendations lead to city legislation remains to be seen. The City Council approved a $13 minimum wage after a mayor-convened task force recommended it do so last year.
Parental and family leaves are also growing brighter on legislators’ radar, though the movement is less developed, Ladky said. Three states have laws granting workers a few weeks of time off at partial pay to care for new children or sick family members. At the federal level, a proposed bill would create an insurance program, funded by joint contributions from workers and employers, to provide up to 12 weeks of paid family leave, but given the tenor of Congress its fate is not promising.
The Family Medical Leave Act only provides for 12 weeks of unpaid leave.
New York this week joined about two dozen cities and local jurisdictions that offer paid parental leave to their own employees, announcing six fully paid weeks for 20,000 public employees. Chicago has offered its municipal employees two to six paid weeks of parental leave for several years.
The big headlines on family leave have come from big companies like Microsoft, which this year upped its paid maternity leave to 20 weeks, and Accenture, which increased its paid leave to 16 weeks for new moms and 8 weeks for other primary caregivers. Netflix bested them all by offering unlimited parental leave for a year to its corporate employees, though it received heavy criticism for not extending that benefit to its hourly workers. This month it announced hourly workers at its streaming and DVD distribution centers will get fully paid 16 weeks of maternity leave and 12 weeks of paternity leave.
“I think this is still a large-employer phenomenon, but often that’s where these larger issues start,” Ladky said.
But some small businesses are setting an example too.
Honey Butter Fried Chicken, a restaurant in Avondale, recently launched four months of fully paid parental leave for employees who have been with the company for at least five years, while newer workers get four months of partial paid leave.
“It seems to us the most basic possible thing to do,” said co-owner Josh Kulp, who said pricing and cost-control decisions help him afford it. “We really believe this is a way to run a profitable business in the long term.”
Pregnant workers’ rights[We should do better for pregnant workers]
We should do better for pregnant workersPregnant workers in Illinois gained important new rights this year that give them a strong voice in adjusting their working conditions to accommodate backaches, fatigue and other common pregnancy-related ailments. As awareness of the new law spreads, pregnancy discrimination claims may rise.
“Employers need to be very, very sensitive to their policies and practices,” attorney Risch said. “It is a new dawn, a new age, and the pregnant employee, especially in Illinois, has a certain level of protection that is unparalleled.”
The Illinois Department of Human Rights approved rules this fall that offer clarity on an amendment to the state’s Human Rights Act, which went into effect in January, prohibiting discrimination against pregnant workers and job applicants and requiring employers to provide them reasonable accommodations for medical or common conditions.[The push for unpaid, job-protected bereavement leave after losing a child]
The push for unpaid, job-protected bereavement leave after losing a childThe rules, which go into more detail than general disability law, specify just how employers and employees must collaborate to find reasonable accommodations, which could include more frequent bathroom breaks, light duty, a temporary transfer to a less strenuous position or a chance to sit.
Under the Illinois rules, a pregnant employee can request an accommodation and the employer must provide it unless it can prove it is so prohibitively expensive or disruptive that it is an undue hardship, which is difficult to successfully demonstrate, Risch said. If an employer offers an alternative accommodation, the employee doesn’t have to accept it. And employers can’t require pregnant employees to take leave if another accommodation can be provided.
The rights apply to all workers, regardless of their full- or part-time status or the size of their employer. Employers must post notice of the new rights in a conspicuous area at work and include them in their personnel handbooks.
Right-to-work test[Lincolnshire approves ‘right-to-work’ zone inside village limits]
Lincolnshire approves ‘right-to-work’ zone inside village limitsLincolnshire this month became the first Illinois town to adopt a right-to-work ordinance, spurring the AFL-CIO to announce it will sue in what could be a critical test of Gov. Bruce Rauner’s pro-business agenda.
Rauner has encouraged municipalities to become local right-to-work zones where private employers cannot require workers to join unions or pay dues. But there is debate about whether local governments have the legal authority to pass such measures. The Lincolnshire case may test the question.
Illinois Attorney General Lisa Madigan issued a legal opinion earlier this year saying local right-to-work zones would violate federal labor law and such measures would have to be enacted statewide.
Illinois’ Democrat-controlled legislature makes that unlikely. Twenty-five states, including most of Illinois’ neighbors, have right-to-work laws. Proponents say they spur job growth by decreasing business costs, while opponents say they weaken unions and depress wages.
Jacob Huebert, senior attorney at the Liberty Justice Center, a free-market-oriented litigation firm defending Lincolnshire in the suit, said “we hope and expect that other (municipalities) will be inspired to enact their own right-to-work” measures, though he couldn’t name any that might be doing so.
Meanwhile, the Supreme Court is poised to weigh in on a right-to-work debate over the fate of public unions that has drawn interest from Illinois’ politicians.
In Friedrichs v. California Teachers Association, the justices will examine whether public workers who choose not to join unions may be required to pay “fair share fees” to fund the cost of collective bargaining on their behalf. A ruling in favor of the teachers, who argue that being compelled to pay agency fees violates their First Amendment rights, could deal a major blow to organized labor.
Rauner filed a brief of support of the plaintiffs with the court, spurring Madigan’s office to file a brief saying his brief was unauthorized.
Bob Bruno, professor in the labor education program at the University of Illinois, said he is watching it closely as it “could have a serious effect on public employees.”
In the context of stagnant wages, a widening wealth gap and a pattern of proposed legislation aimed at weakening worker protections and unions, “it’s a really dangerous time to be working,” Bruno said.
Twitter @alexiaerCopyright © 2015, Chicago TribuneBusiness
Tony Paulauski
Executive Director
The Arc of Illinois
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