Contractors Beware: New Rules and Regulations Coming Soon

Nearly all contractors will have begun pouring by the time you read this. Although this means that you will be very busy during the season, you still need to watch for certain legal developments that are likely to impact your business.

Every contractor will need to address the new overtime rules which are about to be published by the Department of Labor’s Wage and Hour Division. These new rules probably will not affect your field labor, but will impact your office staff and front-line supervisors. In the past, you have been able to treat as exempt anyone in it administrative or managerial job who was paid a salary of $455 per week. The proposed rule will increase the salary requirement to at least $970 per week for this year. Worse, the minimum salary for exempt status will increase each year as the cost of living increases. In essence, this means that anyone earning less than $51,000 this year will likely not be exempt from overtime. Here are a couple of things that you can do now to prepare for this change.

Identify those workers who will need to be reclassified as nonexempt once the new rules take effect. Once you have identified affected workers, you need to put a plan in place that will pay them properly under the law, but not cause a loss of employee morale. One way to do this is to pay these employees in hourly wage that takes into account how much overtime they now work. It is vital, however, that you watch these newly nonexempt workers’ hours to ensure that they do not work overtime in the future.

Dr. David Michaels, the head of OSHA, recently stated that the silica rule will be slightly delayed but that it is definitely coming soon. In addition, Michaels was quoted as stating that the Walking Working Services and Personal Fall Protection Systems final rule will likely be published before he leaves office at the conclusion of the Obama administration. Finally, Michaels praised OSHA’s new severe injury reporting rule and the congressional approval of increase penalties for OSHA citations.

The Equal Employment Opportunity Commission (EEOC) has become far more aggressive in a number of areas. This past January, the EEOC issued updated guidance that will make it easier for employees to bring retaliation claims that will be harder for employers to defend against. This particular guidance adopted a court’s broad standard, stating that a causal connection between an allegedly retaliatory action and the underlying protected activity can be established by a “convincing mosaic of circumstantial evidence.” Contractors should carefully review all adverse employment actions to ensure that there is no retaliation.

One change that the EEOC has implemented that has yet to be fully appreciated is that the EEOC will now permit a charging party to obtain a copy of, and rebut, the employer’s position statement. The EEOC’s stated policy is to make their investigative process more open, but the impact upon contractors remains to be seen. It is likely that more claims will go to litigation as the agency cannot decide who is telling the truth.

In addition, the EEOC is focusing upon protection for individuals with HIV, protection of Muslims and persons of Middle Eastern descent, and protection of LGBT individuals. The EEOC is pushing very hard to make sexual orientation discrimination equivalent to sex discrimination covered by title VII. In two lawsuits recently filed, EEOC has asserted that a gay man and a lesbian employee for each subject it to hostile work environment discrimination because of their gender.

The National Labor Relations Board (NLRB) is also aggressively seeking to change labor law in favor of unionized workforces. The Board is doing this in some subtle ways, for example by narrowing the definition of who is a supervisor under the law. For most contractors, it is likely that the Board would find that your foreman are not statutory supervisors. Thus, it is important that contractors ensure that form and in fact exercise independent judgment and discretion in directing their employees.

Finally, the Department of Labor (DOL) has proposed a rule requiring federal contractors to offer employees seven days of paid sick leave per year. Many believe that the Obama administration will try to expand this coverage to all employers before the end of this year.

There are other changes at the state and federal level that may impact your business. Therefore you must stay alert and, where possible, prepare in advance for coming changes.