As fall begins in many parts of the country and cooler temperatures move in, so do a range of new employment laws and proposed regulations. Some of these changes include a new employer work rules standard recently adopted by the National Labor Relations Board (“NLRB”), a long‑awaited guidance update on workplace harassment from the Equal Employment Opportunity Commission (“EEOC”) and a proposed increase to the minimum salary threshold for exempt employees and proposed regulations for the Pregnant Workers Fairness Act (“PWFA”).
The health care industry will be deeply impacted by these new employment regulations. With so many current and pending changes, employers should stay informed and remain compliant.
NLRB Adopts New Employer Work Rules Standard
On August 2, 2023, through its decision in Stericycle, Inc., the NLRB adopted a strict new standard for evaluating whether workplace rules infringe on employees’ rights under Section 7 of the National Labor Relations Act (“NLRA”). Section 7 of the NLRA protects employees’ rights to unionize and engage in “other concerted activities for the purpose of collective bargaining.” The Board’s decision in Stericycle, Inc., which overruled Boeing Co. (2017), will have a significant impact on employee policies.
The NLRB determined that the standard previously set in Boeing Co. was not sufficient because it “permit(ted) employers to adopt overbroad work rules that chill(ed) employees’ exercise of their rights under Section 7.” Under the new standard adopted in Stericycle, Inc., the Board will evaluate the validity of a work rule from the perspective of an employee who is economically dependent on the employer and who contemplates engaging in protected concerted activity. If an employee “could reasonably interpret the rule to have a coercive meaning, even if a contrary, noncoercive interpretation of the rule is also reasonable,” then the rule is presumptively unlawful. However, employers may rebut this presumption by demonstrating that the rule advances a legitimate and substantial business interest and that there is not a more narrowly tailored rule that would advance that interest.
Overall, this new standard creates a higher burden for employers. To ensure compliance with the standard and avoid costly litigation, employers should seek the advice of legal counsel and work to rewrite or restructure company policies and employee handbook provisions.
EEOC Issues Updates to Workplace Harassment Guidance
On October 2, 2023, the EEOC published its proposed Enforcement Guidance on Harassment in the Workplace. The lengthy guidance proposes protections for LGBTQIA+ employees in the workplace and discusses harassment based on a woman’s reproductive decisions. The guidance also addresses the “virtual workplace,” and how employers must prevent, correct and monitor harassment. The public comment period for the proposed guidance is open through November 1, 2023. Although the guidance will not have the effect of binding law, it will serve as a resource for the EEOC and employers.
The guidance incorporates recent case law, such as the landmark Supreme Court case, Bostock v. Clayton, which extended protected characteristics under anti-discrimination laws to gender identity and sexual orientation. For example, the EEOC states that repeated intentional misuse of a name or pronoun inconsistent with an employee’s gender identity constitutes a form of workplace harassment. The EEOC also incorporates recent case law regarding women’s reproductive rights by concluding that harassment can be based on a woman’s reproductive decisions, such as contraception or abortion.
In light of the COVID-19 pandemic and the rise in the use of virtual workplaces, the EEOC’s guidance addresses scenarios of online harassment. Such virtual harassment examples include sexist comments by a colleague or racist imagery that is visible from a colleague’s workplace during a video meeting. The guidance also discusses the use of social media platforms outside the workplace. While acknowledging that employers are usually not liable for occurrences outside the workplace, the EEOC warns that an employee’s social media posts can contribute to a hostile work environment.
The EEOC also warns that employers must exercise reasonable care to prevent and correct harassment in the workplace. The draft guidance outlines the factors that determine the reasonableness of an employer’s policy, complaint process and training, and advises employers to adequately monitor the workplace by training supervisors on how to recognize, report and address potential harassment.
Department of Labor Proposes Increase to Salary Threshold for Exempt Employees
On August 30, 2023, the Department of Labor (“DOL”) published a Notice of Proposed Rulemaking introducing a new rule that would drastically increase the minimum salary threshold for employees exempt from overtime pay under the Fair Labor Standards Act (“FLSA”).
The FLSA requires overtime pay for most employees but provides exemptions for executive, administrative and professional employees, as well as highly compensated employees (“HCE”). The DOL’s proposed rule would raise the minimum salary threshold from $684 per week (or $35,568 per year) to $1,059 per week (or $55,068 per year) for those employees who may qualify under the executive, administrative and professional exemptions. This is based on the annualized weekly earnings of the 35th percentile of full-time salaried workers in the lowest-wage Census Region (the South). The rule would also increase the HCE exemption total annual compensation requirement from $107,432 to $143,988, based on the annualized weekly earnings of the 85th percentile of full-time salaried workers in the United States. Additionally, the proposed rule would implement automatic updates to the earnings thresholds every three years.
Although this proposed rule is not yet in effect, it has the potential to significantly impact how employees are paid and who is or is not entitled to overtime pay. The DOL estimates that more than 3.4 million currently exempt employees would be impacted by the rule in its first year.
We do not know when the final rule may be published, or if it will go into effect. Further, should the rule become final, it may be the subject of a legal challenge. Nevertheless, as employers plan for the future with respect to labor costs and structure, they may want to consider projections that take into account these potential increases to the salary thresholds and prepare for the possibility that some previously exempt employees may become non-exempt and entitled to overtime.
Proposed Regulations for the Pregnant Workers Fairness Act Under Review
In our previous article, we reported on recent proposed regulations under the Pregnant Workers Fairness Act (“PWFA”). As previously reported, the EEOC published its proposed regulations for the PWFA on August 11, 2023. The regulations include guidance on how the PWFA should be interpreted and detailed examples aimed at furthering employers’ understanding of how to comply with the new law.
Although these proposed regulations are still pending, the PWFA has been in effect since June 27, 2023. The PWFA itself requires covered employers to provide reasonable accommodations for a worker’s known limitations related to pregnancy, childbirth or related medical conditions unless the accommodation will cause the employer an undue hardship.
The proposed regulations attempt to clarify the application of the PWFA by providing a list of conditions that will be covered, examples of reasonable accommodations and definitions of important terms. In addition to pregnancy and childbirth, the PWFA covers “related medical conditions.” Related medical conditions is a term used in Title VII, that previously has been defined by the EEOC, and can include “conditions that existed before pregnancy or childbirth (and for which an individual was perhaps receiving reasonable accommodation under the Americans with Disabilities Act) but that may be or have been exacerbated by pregnancy or childbirth, such that additional or different accommodations are needed.”
The proposed rule also provides specific examples of possible reasonable accommodations under the PWFA, including:
- Frequent breaks;
- Sitting/Standing;
- Schedule changes, part-time work and paid and unpaid leave;
- Telework;
- Parking;
- Light duty;
- Making existing facilities accessible or modifying the work environment;
- Job restructuring;
- Temporarily suspending one or more essential functions;
- Acquiring or modifying equipment, uniforms or devices; and
- Adjusting or modifying examinations or policies.
Practical Takeaways
In light of these recent regulations and proposed rules, employers are encouraged to:
- Review, revise and update their employee handbook;
- Seek the advice of legal counsel to ensure compliance with Section 7 of the NLRA and the new standard for employee policies;
- Consider updating policies and procedures to ensure they are up-to-date with EEOC guidance as well as federal, state and local laws;
- Address how best to handle currently exempt employees that may no longer be exempt under the proposed minimum threshold should the DOL’s proposed changes to the FLSA become final and go into effect;
- Identify the conflicts between federal, state and local laws concerning pregnant and nursing mothers and determine which aspects of the laws are most beneficial to those employees/applicants;
- Update their reasonable accommodation policy; and
- Train supervisors and managers on the application and interaction of these policies.
If you have questions about the new work rules standard, the proposed changes to the minimum salary threshold or the PWFA proposed regulations, please contact:
- Kevin Stella at (317) 977-1426 or kstella@hallrender.com;
- Claire Bailey at (317) 429-3608 or cbailey@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
