Yesterday a Federal judge in Texas struck down the U.S. Department of Labor's overtime rule that was set to increase the Federal minimum salary to be exempt from overtime from $23,660 to $47,476.
The Obama-era overtime rule, which was set to take effect December1, 2016, was stayed from enforcement by the same judge shortly before it was set to take effect.
The judge, in his ruling yesterday, said that the Department of Labor improperly considered salary in drafting its rule instead of considering job descriptions. The judge also ruled, "the salary level was set so high that it could sweep in some management workers who are supposed to be exempt from overtime protections." The National Association of Home Builders estimated that nearly 100,000 construction supervisors were affected by the rule.
Read more about the ruling at Fortune and The Hill.
The Trump Administration recently announced that it has directed the Department of Labor to review the overtime rule and the thresholds for exemption from overtime.
S.C. Attorney General Alan Wilson was one of 21 states Attorneys Generals who challenged the Obama Administration's overtime rule. The National Association of Home Builders weighed in with briefs making the home building industry's case on the rule.
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Showing posts with label U.S. Department of Labor. Show all posts
Showing posts with label U.S. Department of Labor. Show all posts
Friday, September 1, 2017
Thursday, August 3, 2017
Department of Labor considering revising the contested overtime rule
On December 6, 2016, the U.S. Department of Labor issued a new rule changing the salary threshold for exemption from overtime pay from $23,660 to $47,476. The rule was promptly stayed by the courts. The National Association of Home Builders took a very active role in challenging the rule in court.
President Trump's Secretary of Labor, Alexander Acosta, testified at his Senate confirmation hearing that he would prefer a more modest salary threshold than previously proposed, one that is potentially tied to the rate of inflation.
Last month the Department of Labor issued a request for information on the overtime rule. The National Association of Home Builders will submit comments on the rule, as it did last year when the Obama Administration was considering changing the rule.
President Trump's Secretary of Labor, Alexander Acosta, testified at his Senate confirmation hearing that he would prefer a more modest salary threshold than previously proposed, one that is potentially tied to the rate of inflation.
Last month the Department of Labor issued a request for information on the overtime rule. The National Association of Home Builders will submit comments on the rule, as it did last year when the Obama Administration was considering changing the rule.
Thursday, September 29, 2016
NAHB, Business Groups Sue to Block Overtime Rule
National Association of Home Builders and a coalition of more than 55 Texas and national business groups have filed a lawsuit against the U.S. Department of Labor seeking to halt its federal overtime rule set to take effect December 1.
Earlier this year, the Department of Labor issued the rule, which will double the current overtime salary limit of $23,660 to $47,476. It also allows the minimum salary requirements to be raised every three years.
National Association of Home Builders and many groups not in favor of the rule have warned that such a huge jump in such a short period of time could actually hurt a significant number of the workers the rule was meant to help. Many small business owners would be forced to scale back on pay and benefits, as well as cut workers’ hours.
The lawsuit filed on Sept. 20 in the U.S. District Court for the Eastern District of Texas asserts that the Department of Labor exceeded its statutory authority in issuing the regulation and violated the Administrative Procedure Act, which governs the way federal agencies can establish regulations. The legal action seeks to bar the Department of Labor from implementing the rule. A coalition of 21 states this week also filed a separate challenge to the rule in the same court district.
National Association of Home Builders has also been leading the charge to seek a legislative solution and worked closely with Rep. Kurt Schrader (D-Ore.), who recently introduced bipartisan legislation to help small businesses and their workers by mitigating the effects of the overtime rule.
The Overtime Reform and Enhancement Act (H.R. 5813) would allow small businesses operating on tight budgets sufficient time to adjust to the overtime rule by gradually raising the $47,476 threshold under the following timetable.
Moreover, the legislation would eliminate a provision in the rule that requires automatic increases to the overtime salary threshold moving forward. National Association of Home Builders is strongly urging Congress to swiftly pass this legislation.
Earlier this year, the Department of Labor issued the rule, which will double the current overtime salary limit of $23,660 to $47,476. It also allows the minimum salary requirements to be raised every three years.
National Association of Home Builders and many groups not in favor of the rule have warned that such a huge jump in such a short period of time could actually hurt a significant number of the workers the rule was meant to help. Many small business owners would be forced to scale back on pay and benefits, as well as cut workers’ hours.
The lawsuit filed on Sept. 20 in the U.S. District Court for the Eastern District of Texas asserts that the Department of Labor exceeded its statutory authority in issuing the regulation and violated the Administrative Procedure Act, which governs the way federal agencies can establish regulations. The legal action seeks to bar the Department of Labor from implementing the rule. A coalition of 21 states this week also filed a separate challenge to the rule in the same court district.
National Association of Home Builders has also been leading the charge to seek a legislative solution and worked closely with Rep. Kurt Schrader (D-Ore.), who recently introduced bipartisan legislation to help small businesses and their workers by mitigating the effects of the overtime rule.
The Overtime Reform and Enhancement Act (H.R. 5813) would allow small businesses operating on tight budgets sufficient time to adjust to the overtime rule by gradually raising the $47,476 threshold under the following timetable.
- Dec. 1, 2016 – $35,984
- Dec. 1, 2017 – $39,814
- Dec. 1, 2018 – $43,645
- Dec. 1, 2019 – $47,476
Moreover, the legislation would eliminate a provision in the rule that requires automatic increases to the overtime salary threshold moving forward. National Association of Home Builders is strongly urging Congress to swiftly pass this legislation.
TAKING IT LOCAL
National Association of Home Builders Chief Legal Officer Jim Rizzo and Home Builders Association of Greenville CEO Michael Dey will meet with Attorney General Alan Wilson in October. The lawsuit will be among the items discussed.Monday, April 4, 2016
National Association of Home Builders, National Federation of Independent Business File Law Suit Against New Union Persuader Rule
The National Association of Home Builders and the National Federation of Independent Business filed a lawsuit yesterday against the U.S. Department of Labor asserting that the agency’s new union persuader rule violates business owners’ First Amendment rights, making it nearly impossible to consult with legal counsel when facing union organizing.
The rule is fundamentally unfair because it requires employers to report to the Department of Labor whether and when they consult with a lawyer to discuss union organizing. The unions, on the other hand, aren’t encumbered by any such requirement.
“The Department of Labors’s final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms,” said National Association of Home Builders Chairman Ed Brady in a joint press release with National Federation of Independent Business. “This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”
The Texas Association of Builders, Texas Association of Business and the Lubbock Chamber of Commerce joined the National Association of Home Builders and National Federation of Independent Business in filing a lawsuit against the Department of Labor in the United States District Court, Northern District of Texas, Lubbock Division.
The business groups maintain that the rule violates the First Amendment’s guarantee of freedom of speech and right of association. Also, according to the plaintiffs, the rule violates the Due Process Clause of the Fourteenth Amendment and the Regulatory Flexibility Act.
Previously, business owners were only required to report when outside counsel directly communicated with employees. Under the new rule, business owners will have to report any communication with legal counsel even if the matter ends there.
The rule is fundamentally unfair because it requires employers to report to the Department of Labor whether and when they consult with a lawyer to discuss union organizing. The unions, on the other hand, aren’t encumbered by any such requirement.
“The Department of Labors’s final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms,” said National Association of Home Builders Chairman Ed Brady in a joint press release with National Federation of Independent Business. “This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”
The Texas Association of Builders, Texas Association of Business and the Lubbock Chamber of Commerce joined the National Association of Home Builders and National Federation of Independent Business in filing a lawsuit against the Department of Labor in the United States District Court, Northern District of Texas, Lubbock Division.
The business groups maintain that the rule violates the First Amendment’s guarantee of freedom of speech and right of association. Also, according to the plaintiffs, the rule violates the Due Process Clause of the Fourteenth Amendment and the Regulatory Flexibility Act.
Previously, business owners were only required to report when outside counsel directly communicated with employees. Under the new rule, business owners will have to report any communication with legal counsel even if the matter ends there.
Thursday, July 16, 2015
Department of Labor Issues Guidance on Independent Contractors
by Tom Woods, Chairman, National Association of Home Builders
The U.S. Department of Labor (DOL) on July 15 issued guidance regarding application of the criteria used to assess whether a worker is properly classified as an independent contractor under the Fair Labor Standards Act, which determines overtime, unemployment insurance and other obligations. Independent contractors are not covered under the act.
The test used under the FLSA is one of several used at the federal level to determine worker classification. The Internal Revenue Service, the National Labor Relations Act, and Employee Retirement Income Security ACT (ERISA), each use a different test to distinguish independent contractors from employees.
The DOL document does not appear to signal a shift or change in the law as it relates to how workers are classified as either employees or independent contractors. Rather, it clarifies the factors to be considered in making such a determination.
On its face, this "interpretation" does not appear to place any new or additional burdens on the industry. However, given the emphasis on the construction industry to date, and in the guidance document, NAHB will have to be vigilant in monitoring enforcement to determine how DOL is applying the "economic realities" test in the field. Arguably, the factors leave a lot of room for interpretation, and the document confirms there is clearly a bias towards worker status as employees.
We are also concerned that the Administration is too focused on enforcement and providing less individualized assistance to employers who are in need of compliance information. NAHB plans to urge Congress to use its oversight authority to ensure DOL hasn't overstepped its boundaries.
NAHB has provided analysis on the DOL guidance to help you determine whether a worker is an independent contractor or employee.
We will continue to monitor this situation closely.
The U.S. Department of Labor (DOL) on July 15 issued guidance regarding application of the criteria used to assess whether a worker is properly classified as an independent contractor under the Fair Labor Standards Act, which determines overtime, unemployment insurance and other obligations. Independent contractors are not covered under the act.
The test used under the FLSA is one of several used at the federal level to determine worker classification. The Internal Revenue Service, the National Labor Relations Act, and Employee Retirement Income Security ACT (ERISA), each use a different test to distinguish independent contractors from employees.
The DOL document does not appear to signal a shift or change in the law as it relates to how workers are classified as either employees or independent contractors. Rather, it clarifies the factors to be considered in making such a determination.
On its face, this "interpretation" does not appear to place any new or additional burdens on the industry. However, given the emphasis on the construction industry to date, and in the guidance document, NAHB will have to be vigilant in monitoring enforcement to determine how DOL is applying the "economic realities" test in the field. Arguably, the factors leave a lot of room for interpretation, and the document confirms there is clearly a bias towards worker status as employees.
We are also concerned that the Administration is too focused on enforcement and providing less individualized assistance to employers who are in need of compliance information. NAHB plans to urge Congress to use its oversight authority to ensure DOL hasn't overstepped its boundaries.
NAHB has provided analysis on the DOL guidance to help you determine whether a worker is an independent contractor or employee.
We will continue to monitor this situation closely.
Tuesday, July 14, 2015
Overtime Pay – It is About to Cost More to Build a House
General Counsel, Home Builders Association of Greenville
Shareholder, Gallivan, White & Boyd, PA
Changes are coming to an employer’s requirement to pay overtime to employees, and it is going to have a significant effect on many employers, including home builders. As employers know, under the Fair Labor Standards Act (FLSA), employees are generally entitled to overtime pay for hours worked in excess of 40 hours in a work week. Unless exempt, this rule applies to all employees, including craftsmen, construction workers, carpenters, electricians, plumbers, and other laborers on a construction site.
There are certain exemptions, however, including for employees who hold positions with supervisory, managerial, administrative, and professional responsibilities and who earn more than $23,660 per year ($455 per week). Under the current rules, if these employees are compensated above that threshold amount, they are considered exempt from overtime pay under the FLSA, and are not entitled to overtime pay regardless of the number of hours they work.
The Department of Labor (DOL), however, is in the process of changing the threshold amount. Specifically, on July 6, the DOL issued a Notice of Proposed Rulemaking in the Federal Register at 80 FR 38515, which, if finalized, will increase the threshold amount for exempt employees to more than double the current amount: $50,440.00. The basis for the proposal is to set the threshold amount to the top 40 percent of wage earners. The proposal also calls for indexing the threshold to inflation.
There is a comment period for this rule, which ends on September 4, 2015, and a final rule will be issued sometime thereafter. The rule, if finalized, will take effect 30-90 days after it is finalized.
The new regulation increasing the threshold to $50,440 is likely to increase the number of employees in the home building industry who are entitled to overtime pay. Specifically, many full-time supervisory construction employees have been exempted and not entitled to overtime as a result of the $23,660 threshold. But many of these employees do not make more than $50,000 per year.
According to the Bureau of Labor Statistics, the mean salary for first-line construction supervisors in South Carolina in 2014 was $55,680. The National Association of Home Builders estimates that 47 percent of the supervisors involved in residential construction in South Carolina will be affected by this change. With the new regulation, these employees will be entitled to time-and-one-half for all hours worked over 40 hours in a work week. This can potentially wreak havoc on cost projections and planning.
As we know, construction jobs occasionally require 60-hour (or more) work weeks when there is a push to complete a project, when there is bad weather in the forecast, or when an emergency arises. In those situations, nonexempt supervisory employees will be entitled to overtime pay for all hours over 40.
The predicament for home builders is that these employees are critical for providing customers a good product. These employees perform critical functions that might include managing labor forces, updating and managing schedules, keeping the accounting records, or insuring quality control. Furthermore, unlike many other laborers, these employees might be involved in every aspect of construction. They play a valuable role in the quality of the product being built.
If the new rule is approved, home builders may need to take action to avoid unplanned expenses. Possible actions include scheduling work to avoid overtime, raising the salaries of supervisory employees to the new threshold, or to hire additional supervisory employees to spread the work out so that each can work less than 40 hours per week and avoid overtime. Of course, none of these are very attractive or workable solutions. Reducing hours might lead to project delays; adding other supervisory employees would further increase costs and will cause inefficiency. Thus, while overtime pay can potentially be avoided, the solutions might involve even greater costs. Any way you slice it, for many home builders, it may get more expensive to build a house.
Friday, June 26, 2015
Funding Stripped for Worker Misclassification Program
In a victory for your Home Builders Association and small business employers across the nation, both the House and Senate Labor, Health and Human Services Appropriations Committees have rejected additional funding for the U.S. Department of Labor (DOL) to address initiatives regarding misclassification of workers.
The National Association of Home Builders (NAHB) spearheaded this effort, along with its business partners in the Coalition to Promote Independent Entrepreneurs, to urge House and Senate lawmakers to deny a White House funding request for an additional $10 million in the fiscal 2016 budget for DOL to implement worker misclassification enforcement and detection activities.
Last year, DOL granted $10.2 million to 19 states to implement or improve worker misclassification programs. The funds were designated to help states identify instances where employers improperly classify employees as independent contractors or fail to report the wages paid to workers at all.
While several states have existing programs designed to reduce worker misclassification, this was the first year that DOL awarded grants dedicated to this effort.
Moreover, the grant included a “high-performance bonus” to four states (Maryland, New Jersey, Texas and Utah) totaling $2 million for their improved efforts in detecting incidents of worker misclassification.
This could create an incentive for a state workforce agency, when making a worker-status determination, to find misclassification where none exists, the coalition told lawmakers.
Further, NAHB and its business allies said that any attempt that undermines the legitimate uses of independent contractors in the marketplace will have a detrimental impact on companies that do business with independent contractors.
House and Senate lawmakers agreed with us that state workforce agencies should focus on educating their employees about the laws regarding independent contractors rather than appropriating money incentivizing a worker misclassification finding.
The National Association of Home Builders (NAHB) spearheaded this effort, along with its business partners in the Coalition to Promote Independent Entrepreneurs, to urge House and Senate lawmakers to deny a White House funding request for an additional $10 million in the fiscal 2016 budget for DOL to implement worker misclassification enforcement and detection activities.
Last year, DOL granted $10.2 million to 19 states to implement or improve worker misclassification programs. The funds were designated to help states identify instances where employers improperly classify employees as independent contractors or fail to report the wages paid to workers at all.
While several states have existing programs designed to reduce worker misclassification, this was the first year that DOL awarded grants dedicated to this effort.
Moreover, the grant included a “high-performance bonus” to four states (Maryland, New Jersey, Texas and Utah) totaling $2 million for their improved efforts in detecting incidents of worker misclassification.
This could create an incentive for a state workforce agency, when making a worker-status determination, to find misclassification where none exists, the coalition told lawmakers.
Further, NAHB and its business allies said that any attempt that undermines the legitimate uses of independent contractors in the marketplace will have a detrimental impact on companies that do business with independent contractors.
House and Senate lawmakers agreed with us that state workforce agencies should focus on educating their employees about the laws regarding independent contractors rather than appropriating money incentivizing a worker misclassification finding.
Tuesday, June 12, 2012
Independent Contractors- Is the IRS Looking at YOU?
If you are an Independent Contractor, or you hire independent contractors, you may want to analyze your records and methods of operation because the IRS and Department of Labor have recently teamed up and are now on the lookout for appropriate use of Independent Contractor Status.
According to the IRS website an Independent Contractor is someone who is self- employed and not controlled by an employer (dictating how a job will be done and what will be done). If this description is not cut and dry for you there are several scenarios and categories to look into. Visit the IRS website by clicking here to review ways to determine which category applies to you.
Based on which type of Independent Contractor scenario you fall into you will want to take a look at the employment tax obligations that may help you avoid future issues. These can also be found at the IRS website mentioned above.
Review these common tax issues to help ensure that an auditor isn’t standing in your office.
- Proper documentation of time worked. Track overtime and not have back pay due to an employee
- Taxes due for both the company and the employee on income from cash payments.
Monday, September 12, 2011
Labor Department targeting large home builders
According to the Associate Press, the Labor Department is investigating large U.S. homebuilders to see if they failed to pay workers the minimum wage or overtime. A spokesman says the agency is investigating compliance with wage-and-hour laws in the homebuilding industry as part of a crackdown targeting several industries. Click here to read the entire story at AP.
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