Legal developments to consider ahead of 2020
The holiday season is a time to reflect on the past and plan for the future. However, making resolutions for your business can be overwhelming, especially with the ever-evolv- ing legal landscape of employment law. To make the process a bit easier, below is a count- down of a few developments to keep in mind as 2020 approaches.
1. Minimum Wage Increase
Effective Jan. 1, 2020, Michigan’s minimum wage will increase to $9.65/hour (up from the current $9.45/hour). Under Michigan’s Improved Workforce Opportunity Wage Act, incremental increases will take effect each year, reaching $12.05/hour by January 2030.
2. New DOT Drug and Alcohol Testing Database
Effective Jan. 6, 2020, the new Department of Transportation's Clearinghouse Database must be used by employers who are subject to DOT's drug and alcohol testing regulations via the rules of the Federal Motor Carrier Safety Administration (FMCSA). These regulations apply to employers who employ drivers who hold commercial driver’s licenses and drive commercial motor vehicles (CMV).
A CMV includes, but is not limited to, a vehicle with a gross weight rating of at least 26,001 pounds, one designed to transport 16 or more passengers, including the driver, or one that is used in the transportation of hazardous materials.
Under current rules, covered employers must make pre-employment requests to previous and current employers regarding each driver’s accident and drug and alcohol testing history. The new database must be used to supplement these information requests until Jan. 6, 2023, at which time the database will replace almost all such requests.
Additionally, covered employers must use the database to conduct annual queries on all covered drivers, and to report specific violations and return-to-duty/follow-up testing within three business days of the occurrences.
Covered employers should register with the database at https://clearinghouse.fmcsa.dot.gov and work with legal counsel to create or update their FMCSA Drug and Alcohol Testing Policy to ensure compliance.
3. FLSA Salary Threshold Increase
Effective Jan. 1, 2020, the federal Fair Labor Standards Act (FLSA) salary threshold for white-collar exemptions will increase from $455/week to $684/week, or an increase from $23,660/year to $35,568/year. Additionally, the salary threshold for highly compensated employees will increase from $100,000/year to $107,432/year. Certain non-discretionary bonuses and incentive payments, including commissions, are allowed to satisfy up to 10% of the threshold.
When workers are paid a salary at or above the salary threshold and meet certain duties tests, the employees are exempt from receiving overtime compensation for hours worked beyond 40 in a workweek. However, as of the New Year, if those employees are not being paid at the new salary threshold level, they will lose their exemption and become entitled to overtime compensation.
Employers still have time to work with legal counsel and evaluate their workforce to determine what changes, if any, are necessary. For those affected employees, employers should weigh the costs of increasing their salaries to preserve an exemption or reclassifying them as non-exempt and paying overtime. Position descriptions and budgets may need to be revised, and any reclassified employees will need to be trained on timekeeping policies and procedures.
In late October, Governor Gretchen Whitmer indicated that she did not believe the salary level set by the new federal rule was “good enough.” Thus, she directed the state labor department to consider an appropriate level and draft a proposal. Finalizing such a rule could take up to a year. However, if Michigan’s final rule increases the threshold beyond the FLSA threshold, employers would need to be ready to comply with the higher amount.
4. Employee Handbook Updates
Whether your employee handbook was updated 20 years ago or this past January, several developments in employment law in the last year would most likely impact current policies and procedures, including, but not limited to:
– Paid Medical Leave Act (PMLA): The PMLA applies to employers with 50 or more employees, and gives eligible employees up to 40 hours of paid leave for specified purposes. Subject to certain exceptions, generally non-exempt employees working an average of at least 25 hours per week each year are eligible for paid leave. The PMLA was effective in March this year, but many employers have not yet fully updated their policies to account for this change. Some common oversights include the requirement that eligible employees begin accruing paid leave on the first day of employment, that the waiting period for the use of such leave cannot be longer than 90 days, and that employees who accrue the leave (as opposed to being awarded it in one lump sum) must be able to carry over up to 40 hours of unused leave into the following year. Policies should be thoroughly reviewed for compliance.
– Legalization of marijuana:
In December 2018, the private recreational use and possession of limited amounts of marijuana and marijuana plants was legalized for persons at least 21 years of age. With a year under their belts, employers should consider the impact this legalization has had on their workforce and recruiting efforts, if any, and work with legal counsel to revise and/or refine their drug and alcohol policies to address any pressing needs, including, but not limited to, testing requirements and disciplinary actions, if not already mandated by other law.
By keeping these developments in mind and taking proactive steps to prepare, your business’ New Year will be looking merry and bright.
Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or firstname.lastname@example.org.
This article was featured in the December 2019 issues of the Traverse City Business News.