Wyatt Employment Law Report


Payments and Perks: the DOL Announces a Proposal to Clarify What Qualifies as Overtime

By Marianna Michael

On Thursday, March 28, 2019, the U.S. Department of Labor (“DOL”) announced proposed changes to the overtime provisions of section 7(e) of the Fair Labor Standards Act.  In its current form, the statute generally requires employers to pay overtime if workers work more than 40 hours a week.  One exemption to the overtime rule includes the salary basis exemption, where employees generally must be paid at least $455 per week on a salary basis, unless they are outside sales employees, teachers and employees practicing law or medicine.

accounting-blur-budget-128867Overtime pay is equal to one and one half times the regular rate of pay.  In designating what is included under the regular rate of pay, the current provision makes a distinction between payments and perks.  With the proposed provision, the DOL seeks to clarify what qualifies as either a payment or perk in an attempt to discourage employers from offering incentives that are excluded from the calculation of overtime pay.

The proposed changes confirm that the following types of employer-provided benefits may be excluded from the regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes and employee discounts on retail goods and services;
  • payments for unused paid leave, including paid sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • discretionary bonuses;
  • benefit plans, including accident, unemployment and legal services; and
  • tuition programs, such as reimbursement programs or repayment of educational debt.

This proposal is published for public comments and will remain open until May 28, 2019.  Comments may be submitted to the Notice of Proposed Rulemaking at www.regulations.gov. More information is available here.


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Employers Beware! You Can Now Be Sued for What you Say in Unemployment Proceedings

By Mitzi Wyrick

Based on a recent court ruling, what you say in unemployment proceedings can now lead to a lawsuit.  In Hickey v. General Electric Company, 2017-SC-000135-CL, the Kentucky Supreme Court held in a unanimous opinion that employers may be sued for making false statements during unemployment proceedings.  This ruling means that employers may have to face a claim for punitive damages if they are found to have made a false statement during an unemployment proceeding.Employee-Termination

The dispute arose over whether Logan Hickey voluntarily quit his employment or was fired.  Hickey was hired to work the first shift on the production line at General Electric Company (“GE”) in May 2015.  At the time he applied, Hickey stated that he was capable of and available for work on any shift.  In August 2015, Hickey was reassigned to a second-shift position.  After working several days, Hickey claimed Continue reading


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Risk for Nonqualified Deferred Compensation Falls on Employees

By Sherry Porter

The long-running Lehman Brothers bankruptcy case brings to light the risk employees have when participating in an employer sponsored nonqualified deferred compensation plan.  In this case (from the U.S. Bankruptcy Court in Manhattan), more than 300 executives and certain employees participated in a nonqualified deferred compensation plan (the “Plan”).  The Plan provided that payments under the Plan are “unsecured subordinate obligations” of Lehman Brothers (the “Company”) and contained a provision that the Plan benefit payments would be subordinated to Continue reading


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Qualified Small Employer Health Reimbursement Arrangements

By Rachel K. Mulloy

Small employers now have the ability to assist employees with the cost of health care through a qualified small employer health reimbursement arrangement (QSEHRA).  Prior to the Affordable Care Act (ACA), small employers were able to offer stand-alone health reimbursement arrangements (HRAs) to help employees pay for medical care expenses, including health insurance premiums, on a tax-free basis.  This changed with the passage of the ACA, under which stand-alone HRAs were generally considered group health plans that violated the ACA’s annual dollar limit prohibition (some stand-alone HRAs, such as retiree-only HRAs, remained valid).  Consequently, employers who continued to offer such arrangements could face fines of up to $36,500 per employee per year (with a $500,000 total limit).  With the passage of the 21st Century Cures Act, which incorporates key components of the Small Business Healthcare Relief Act, small employers  may again offer this benefit to employees.

Eligible Employers   To be eligible to offer a QSEHRA, an employer (1) cannot be an “applicable large employer” under the ACA, i.e., had fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, and (2) cannot offer a group health plan to any of its employees.  Qualified employers must offer the Continue reading


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Last Call! PPA Plan Restatement Deadline Drawing Near

By Rachel Mulloy

The deadline for employers that use pre-approved retirement plan documents to sign an updated version of their 401(k), profit-sharing, money purchase, or other defined contribution plan, is drawing near.

The IRS requires all pre-approved plans to be updated or “restated” in their entirety every six years to incorporate legislation that was enacted since the last update and to receive the IRS’s approval for another six years.  The latest six-year cycle, generally known as the “PPA restatement cycle,” ends on April 30, 2016 and takes into account such legislation (and related IRS guidance) as the Pension Protection Act (PPA), the final Section 415 regulations, the Heroes Earnings Assistance and Relief Tax Act (HEART), and the Worker, Retiree, and Employer Recovery Act (WRERA).  The cost of restating the plan can Continue reading


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Occupational Safety & Health Administration Seeking Comments on Whistleblower & Anti-Retaliation Guidelines

By Douglas L. McSwain

On November 6, 2015, the Occupational Safety and Health Administration (“OSHA”) issued a news release that it will be accepting comments from the public on a draft document entitled, Best Practices for Protecting Whistleblowers and Preventing and Addressing Retaliation.  Comments will be accepted by OSHA until January 19, 2016.

The guidelines in this draft document are well worth reading for all employers.  They are generalized enough that they provide a good internal prevention program for avoiding litigation, and even if litigation is brought based on an employer’s alleged retaliation, their implementation could supply employers a good litigation defense to defeat an employee’s claim (assuming, of course, the employer has adopted these “best practices”).

The Department of Labor (“DOL”), of which OSHA is a branch, is increasingly becoming the governmental agency before whom employers are brought for retaliation claims arising out of any number of areas of law governing the employment relationship.  Not just complaints regarding workplace health Continue reading


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Walmart Announces Wage Increases

By Colby F. Block

On Thursday, Walmart announced several changes to its compensation and benefits structure—the most noticeable being its hourly wage increase. Walmart states that, by April 2015, its entry-level wage will start at $9 an hour, and it will go up to $10 an hour by early 2016.

Other new measures include additional training and opportunities for internal promotion, which Walmart CEO Doug McMillon states will create clearer paths to better jobs and higher pay.

wage increaseThese changes are significant—Walmart is the largest private employer in the country, and this will increase wages for 500,000 of its employees. The cost to Walmart over the next year is projected at one billion dollars, but this number is actually small considering the company’s almost $500 billion in annual revenue.

Walmart’s announcement has already created quite the media frenzy. And some—noting that it is not altruism behind these changes—are already questioning Walmart’s motives. Walmart is a business, after all, so there is a bottom line. Is the goal to Continue reading