The Bottom Line No. 4

Posted on by emh56@cornell.edu

The Bottom Line No. 4, May 8, 2024. (link to full issue)

News

DOL increases the minimum salary for ‘Exempt’ employees, effective July 1, 2024

On Tuesday, April 23, 2024, the US Department of Labor issued the Final Rule on the Fair Labor Standards Act, raising the salary requirements for overtime exemption. Effective July 1, 2024, the minimum weekly salary for employees with exempt status will increase to $844 per week ($43,888 per year). The threshold will increase again on January 1, 2025 to $1,128 weekly ($58,656 per year). If you have employees classified as exempt who earn below these thresholds, your choice will be to convert them to hourly positions, subject to overtime pay, or to increase their salary to meet the new thresholds.

New Final Rule for H2A labor protections

On April 26th the US Department of Labor also issued the final rule “Improving Protections for Workers in Temporary Agricultural Employment in the United States.” This final rule is intended to strengthen protections for temporary agricultural workers (H2A) and to enhance the Department of Labor’s capability to monitor program compliance and take enforcement actions against program violators.

The rule is effective June 28, 2024, but H-2A applications filed before Aug. 28, 2024, will be processed according to applicable federal regulations as is in effect as of June 27, 2024. Applications submitted on or after Aug. 29, 2024, will be processed in accordance with the provisions of the Farmworker Protection Rule.

The new rule has the following major provisions (based on a quick review of the Federal Register notice) but there is a lot there that needs more consideration:

  • The final rule requires employers to provide assurances that they will not intimidate, threaten, or otherwise discriminate against certain workers or others for engaging in “activities related to self-organization,” including “concerted activities for the purpose of mutual aid or protection relating to wages or working conditions,” or refusing to engage in such activities.
  • The final rule clarifies that an employer only terminates a worker for cause when the worker either fails to comply with employer policies or fails to perform job duties satisfactorily after, in most cases, the transparent application of a system of progressive discipline. The rule establishes that for a worker to be terminated for cause, five conditions must be met, including a requirement that workers are either informed about or reasonably should have known the policy, rule or performance expectation unless the worker has engaged in egregious misconduct.
  • The final rule designates the effective date of updated adverse effect wage rates (AEWR) as of the date of publication of the AEWR in the Federal Register.
  • The rule would also require employers who fail to provide adequate notice to workers of a delay in their start date to pay workers the applicable rate for each day that work is delayed for up to 14 days.
  • Employers are required to disclose any minimum productivity standards they will impose as a condition of job retention, regardless of whether the employer pays on a piece rate or hourly basis.
  • If a vehicle is required by Department of Transportation regulations to be manufactured with seat belts, the final rule prohibits the operation of these vehicles to transport workers under the H-2A program unless each occupant is wearing a seat belt.
  • Employers are prohibited from holding or confiscating a worker’s passport, visa or other identification documents, which is a tactic used to exploit workers.
  • The final rule updates procedures for discontinuing employment services for employers that have failed to meet the Department of Labor’s requirements. Relatedly, the rule requires states to discontinue services to debarred employers. It also streamlines the procedures for applying debarment to a successor who carries forward a debarred company.
  • In addition, the rule codifies how the department determines whether separate entities are acting as one employer for purposes of assessing seasonal or temporary need and how these entities are treated for enforcement purposes.