Driving Transactions
Sunday, April 21, 2024

BY AMY COOLEY

HR Coach Amy Cooley

It is always challenging to predict legislative outcomes, and especially so in an election year. While we can’t yet know how they will play out, there are several proposed changes to rules and compliance guidance that are worth keeping on your radar in 2024. Some of these changes are not yet final as of the writing of this article. At least two have been finalized, with dates confirmed for adoption: one in February and one in March.

Let’s take a closer look.

1. National Labor Relations Board (NLRB) Joint Employer Standard
The NLRB’s new Joint Employer rule takes effect on February 26, 2024, adjusting the definition of a “joint employer” for the purposes of claims related worker rights guaranteed in the National Labor Relations Act. Those rights include the right to collective bargaining and other concerted efforts to improve working terms and conditions:

❱ Wages, benefits, and other compensation;
❱ Hours of work and scheduling;
❱ The assignment of duties to be performed;
❱ The supervision of the performance of duties;
❱ Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
❱ The tenure of employment, including hiring and discharge; and
❱ Working conditions related to the safety and health of employees.

What is the new rule? The NLRB will now consider a company to be a joint employer if each entity has an employment relationship with the employees and they “share or codetermine one or more of the employees’ essential terms and conditions of employment, which are defined exclusively as [the seven items bulleted above].” What has changed? The previous rule said the company (usually the larger company: franchisor, outsourcer, etc.) needed to possess and exercise substantial oversight or influence in these matters. The new rule says they only need to have this power, not that they exercise it directly. So moving forward, it’s going to be more difficult for large companies to avoid unionization or collective bargaining because the joint employer relationship will be more broadly defined.

Find the details here: bit.ly/4b0AMdw

Note that this new NLRB rule does not affect the Department of Labor’s definition of “joint employer” used in enforcement of the Fair Labor Standards Act (which addresses items like minimum wage and overtime rules). We’ll address proposed DOL changes a little later in this article.

2. Equal Employment Opportunity Commission (EEOC) Enforcement Guidance on Harassment
It has been about 25 years since the EEOC issued an update to its enforcement guidance on harassment in the workplace, so this one will bear watching and require a close read of the final guidance once it is adopted. The proposed update was posted this past October, with comments and responses currently under review. The EEOC guidance explains the legal standards for harassment and employer liability regarding harassment claims. Once finalized, the new guidance will take precedence over previous long-standing documents. Workplace harassment is a complex issue, and the changes in the proposed new guidance are more complex and more nuanced than can be briefly summarized in a paragraph or two. Public comments are now closed, but I encourage you to review the proposed updates if you have not already done so: bit.ly/3HrXAFE

3. Occupational Safety & Health Administration (OSHA) Representatives of Employers and Employees Regulation
With public comments closed this past November, this is another new rule we can anticipate being finalized in 2024. The proposed update clarifies the “Worker Walkaround Representative Designation Process,” specifically that during an OSHA Inspection, an employee’s designated representative may be an employee or a non-employee third party. The updated rule will also detail the knowledge, skills, and experience required of a third-party representative, as well as the circumstances that make such a representative “reasonably necessary” to the inspection.

Details can be found here: bit.ly/3u5OwTK

4. Department of Labor (DOL) Independent ­Contractor Classification under the Fair Labor Standards Act (FLSA)
The DOL’s updated independent contractor standards are essentially a return to pre-2021 guidelines where six factors are weighed equally, rather than the first two being the primary determinants:

❱ The degree to which the employer controls how the work is done.
❱ The worker’s opportunity for profit or loss.
❱ The amount of skill and initiative required for the work.
❱ The degree of permanence of the working relationship.
❱ The worker’s investment in equipment or materials required for the task.
❱ The extent to which the service rendered is an integral part of the employer’s business.

For the last few years, the independent contractor standard has been focused on the first two bullet points, and the standard has been fairly easy to prove. The update will bring all six factors back into equal play, meaning we can anticipate closer scrutiny on assignment of independent contractor status, with the intention of avoiding misclassifications. The new rule was finalized in January and is set to take effect on March 11.

The new rule can be found here: bit.ly/3SwOM7P

5. DOL Minimum Salary Threshold for Overtime Exemptions
The DOL is poised to increase the minimum salary threshold for exempt employees (specifically those exempt from overtime pay). As a reminder, in order to be exempt from overtime pay there are standards both for the employee’s role and for their compensation level and type. The proposed updates would maintain the requirement for salary type pay, and increase the minimum amount:

❱ Exempt executive, administrative, and professional employees: minimum weekly salary would increase from $684 to $1,059;
❱ Highly Compensated Employees compensation threshold: minimum total annual compensation would increase from $107,432 to $143,988.

Additionally, the new rules would incorporate automatic updates, with salary thresholds being reviewed and updated every three years. The goal overall is to provide protections for overtime pay to a greater part of the workforce, as to reflect current earnings data. Expect the final rule sooner than later. Further information: bit.ly/3Ud49U3

As always, these updates and proposed updates reflect a fluid landscape in HR compliance. You don’t have to go it alone; partner with an HR expert or attorney to stay ahead of the game.   [CD0224]


Amy Cooley is HR Leader for The LMC Groups. She can be reached at amy@lmcpeople.com.