Showing posts with label labor department. Show all posts
Showing posts with label labor department. Show all posts

Wednesday, November 23, 2016

Update: Federal court rules against Georgia but issues injunction barring implementation of Labor Department’s overtime rule

In September, I wrote that Georgia’s decision to join a 21-state lawsuit opposing the U.S. Department of Labor’s proposed overtime rule was based on its concern that making more state employees eligible for overtime would have a significant effect on Georgia’s budget.

On November 22, 2016, Federal Judge Amos Mazzant issued an injunction preventing the December 1, 2016, implementation of the rule.

Interestingly, Judge Mazzant ruled against the argument put forward by Georgia that “FLSA’s overtime requirements violate the Constitution by regulating the States and coercing them to adopt wage policy choices that adversely affect the States’ priorities, budgets, and services.”

Instead he found that the Fair Labor Standards Act did apply to states.

The judge issued the nationwide injunction after finding that the “Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”

Under FLSA, employees who may be exempt from the overtime provisions of the FLSA must meet both a “duties test” to determine whether they perform duties of an executive, administrative, or professional manner, and a salary test.

In his decision, Judge Mazzant writes: “it is clear Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level.”

It is now up to the Labor Department to decide whether they wish to appeal the District Court’s ruling to the Fifth Circuit Court of Appeals located in New Orleans.

Complicating this matter is the upcoming change in administrations. Given the time constraints, any appeal to the Circuit Court of Appeals, and perhaps later to the Supreme Court, would have to be handled by the incoming administration; and it is unclear whether the new administration would be willing to undertake such an appeal.

In the meantime, Georgia is no longer required to reclassify state employees who would have become nonexempt under the proposed rule, and they do not have to raise their budget to cover the additional costs that might have been incurred with the rule change.




Wednesday, September 21, 2016

New overtime rule will have significant impact on Georgia’s budget


Georgia’s decision to join a 21-state lawsuit to stave off the U.S. Department of Labor’s new overtime rule is more than a matter of political philosophy.

If the new rule goes into effect as planned on December 1, a significant number of the current 137,000 state employees will become eligible for overtime as the threshold for exemption from overtime pay moves up from the current $455 to $913 per week.

In a study conducted in the first quarter of 2016, the average weekly wage for a state employee in Georgia stood at $868. Even with the 3 percent pay raise granted effective July 1 raising the average wage to $894, the average state employee's weekly wage would still fall $19 below the planned new weekly wage threshold meaning that thousands of state employees would become newly eligible for overtime pay.

Taking the data from the first quarter and adding 3 percent to the average rates, only eight counties – Carroll, Chatham, Clarke, Fulton, Heard, Lamar, Peach, and Richmond – show average wages for state employees exceeding the new exemption threshold of $913.

In contrast, in 135 counties the average state employee’s salary fell below the exemption threshold. Sixteen counties did not report wages for state employees separately.

Impact on state budget

The level of impact on Georgia’s budget depends on how the state reacts to the new rule.

In the statement announcing the lawsuit, Georgia Attorney General Sam Olens stated that

“The rule will force many state and local governments to substantially increase their employment costs. Some governments may be forced to eliminate some services and even lay off employees.”

The state could minimize impact by tightening up rules on overtime but this might impact state services, especially in times of emergencies such as ice storms or other natural disasters where state workers are expected to put in extra hours.

Georgia could also raise its personnel budget to cover increased overtime costs, but with other costs rising, such as Medicaid, this will make balancing the 2018 budget more difficult.

Georgia state employees relatively low paid compared to other industries

Part of the reason the state is so impacted by the new rule is that state employment is a relatively low paid form of work compared to a number of other important industries in Georgia.

For example, while state employees averaged $868 per week in the first quarter of 2016, the average weekly wages for construction workers was $1,009. Workers employed in the insurance industry in the state averaged $1,694 and those employed in the real estate industry averaged $1,110 per week.

Among the industries paying on average less than state employment were arts and entertainment ($602), retail ($565), hotels ($473), and food and drinking establishments ($313). Average pay excludes tips, which explains the relatively low pay in the food and drinking industry where many workers’ pay is subsidized by customer tipping.

Averaging $739 per week, local government workers in the state make slightly less than state employees.

If Georgia does not win the lawsuit and the new rule goes into effect December 1, the state will have to reconsider its current approach to human resources and make changes to ensure that personnel costs do not go up substantially to avoid a budget problem next year.

You can read the actual lawsuit that was filed in the U.S. District Court here.


New overtime rule will have significant impact on Georgia’s budget


Georgia’s decision to join a lawsuit brought by 21 states to stave off the U.S. Department of Labor’s new overtime rule is more than a matter of political philosophy.

If the new rule goes into effect as planned on December 1, a significant number of the current 137,000 state employees will become eligible for overtime as the threshold for exemption from overtime pay moves up from the current $455 to $913 per week.

In a study conducted in the first quarter of 2016, the average weekly wage for a state employee in Georgia stood at $868. Even with the 3 percent pay raise granted effective July 1 raising the average wage to $894, the average state employee's weekly wage would still fall $19 below the planned new weekly wage threshold meaning that thousands of state employees would become newly eligible for overtime pay.

Taking the data from the first quarter and adding 3 percent to the average rates, only eight counties – Carroll, Chatham, Clarke, Fulton, Heard, Lamar, Peach, and Richmond – show average wages for state employees exceeding the new exemption threshold of $913.

In contrast, in 135 counties the average state employee’s salary fell below the exemption threshold. Sixteen counties did not report wages for state employees separately.

Impact on state budget

The level of impact on Georgia’s budget depends on how the state reacts to the new rule.

In the statement announcing the lawsuit, Georgia Attorney General Sam Olens stated that

“The rule will force many state and local governments to substantially increase their employment costs. Some governments may be forced to eliminate some services and even lay off employees.”

The state could minimize impact by tightening up rules on overtime but this might impact state services, especially in times of emergencies such as ice storms or other natural disasters where state workers are expected to put in extra hours.

Georgia could also raise its personnel budget to cover increased overtime costs, but with other costs rising, such as Medicaid, this will make balancing the 2018 budget more difficult.

Georgia state employees relatively low paid compared to other industries

Part of the reason the state is so impacted by the new rule is that state employment is a relatively low paid form of work compared to a number of other important industries in Georgia.

For example, while state employees averaged $868 per week in the first quarter of 2016, the average weekly wages for construction workers was $1,009. Workers employed in the insurance industry in the state averaged $1,694 and those employed in the real estate industry averaged $1,110 per week.

Among the industries paying on average less than state employment were arts and entertainment ($602), retail ($565), hotels ($473), and food and drinking establishments ($313). Average pay excludes tips, which explains the relatively low pay in the food and drinking industry where many workers’ pay is subsidized by customer tipping.

Averaging $739 per week, local government workers in the state make slightly less than state employees.

If Georgia does not win the lawsuit and the new rule goes into effect December 1, the state will have to reconsider its current approach to human resources and make changes to ensure that personnel costs do not go up substantially to avoid a budget problem next year.

You can read the actual lawsuit that was filed in the U.S. District Court here.


Thursday, August 11, 2016

See you in court: New overtime rule means more litigation for Georgia employers


With the new overtime rule effective December 1, 2016, more Georgia employers can expect to be facing their employees and former employees in court.

The new rule raises the minimum salary threshold for exemption from overtime pay from the current $455/week to $913/week ($47,476 per year) and automatically increases the threshold every three years based on wage growth over time.

In Georgia, overtime rules are enforced by the Wage and Hour Division of the U.S. Department of Labor. The agency has the authority to order back wage payments and impose fines for employers who violate the law, but the agency is already dealing with a backlog of complaints and the new rule will only add to their burden of cases.

As a result, more employees and former employees will be turning to private employment attorneys to defend their rights in court.

For companies, this will mean spending substantial amount of time in court defending their job classification systems.

As Atlanta television station WXIA-TV recently discovered when reporting on a story involving a local restaurant, the agency is already struggling to enforce the existing law, and the new rule will simply add to their current backlog.

The television station found that since 2000 Georgia companies did not pay 89,766 employees more than $62 million.

While WHD can impose fines, it is highly unusual, as the television reporter found that of the 6,582 Georgia companies cited by USDOL for wage theft, only 8 percent were required to pay a fine.

The new rule will especially impact employees currently classified as first-level supervisors in low-wage industries such as restaurants and retailing where supervisory duties are mixed with directly dealing with customers.

Filing a lawsuit has always been an option under the Fair Labor Standards Act (FLSA), but with the Wage and Hour Division’s failure to keep up with complaints, it is increasingly likely that civil lawsuits will become preferable to waiting months for an investigation.

A successful lawsuit for back wages can run into $100,000's or more, as employers who lose in court will have to immediately pay both back wages and attorney fees for both sides, not to mention any appeals process.

In comparison, normally the Labor Department is satisfied to see back wages paid, sometimes setting up a payment plan where employers can pay in installments until their obligations are met.

With a potential avalanche of lawsuits facing Georgia companies, many of which are small and medium size employers without in-house legal staff, companies may learn that an administrative investigation by the U.S. Department of Labor is preferable to spending hundreds of hours in court and spending thousands of dollars defending their positions.

If you are one of the 89,766 employees or former employees who thinks you may be owed back wages collected by the U.S. Department of Labor's Wage and Hour Division, you can search their database at http://webapps.dol.gov/wow/ by the employer's name and submit a claim.

Thursday, July 21, 2016

Workers protest outside of Federal Labor Department offices in Atlanta

The Southeast regional offices of the U.S. Department of Labor's Bureau of Labor Statistics were picketed on Wednesday by 81 employees who work for Office Resources Inc. (ORI), a contractor at the Atlanta offices of BLS.

The group was joined by Charlie Flemming, president of the Georgia AFL-CIO.




An online video of the protest is available here.

The ORI workers are fighting for their first union contract after joining the International Association of Machinists last year.

BLS contracts out part of its collection activities including telephone collection for their Job Openings and Labor Turnover Survey (JOLTS) and the Current Employment Statistics (CES) survey that produces national employment information.

The BLS Southeast Region handles data collection for a number of statistical surveys, including the Consumer Price Index, most of which are collected by federal employees led by long-time Regional Commissioner Janet Rankin.

While BLS is an agency of the U.S. Department of Labor, it has traditionally kept its distance from other USDOL agencies and tried to avoid controversial and political issues.

The agency describes itself as “the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics.”

The BLS mission “is to collect, analyze, and disseminate essential economic information to support public and private decision-making. As an independent statistical agency, BLS serves its diverse user communities by providing products and services that are objective, timely, accurate, and relevant.”

The BLS Director for Public Affairs was unavailable for comment.


Monday, August 24, 2015

Georgia loses court decision on overtime and minimum wage protection for home care workers

The Associated Press is reporting that a federal appeals court on Friday ruled in favor of Obama administration regulations that guarantee overtime and minimum wage protection to nearly 2 million home care workers.

Nine states, including Georgia, had opposed the rules. Samuel Olens, Attorney General, Office of the Attorney General for the State of Georgia, had filed a brief arguing that the changes would increase state Medicaid costs and expose states to an unfunded liability.

The ruling was a victory for worker advocacy groups, labor unions, and the White House. The Labor Department had proposed the regulations after the Obama White House had been unable to persuade Congress to change the law that exempts home care workers from full coverage under the Fair Labor Standards Act (FLSA).

The Labor Department issued a statement saying “Today's decision from the U.S. Court of Appeals for the District of Columbia is vital to nearly two million home care workers, who will now qualify for minimum wage and overtime protections. The decision confirms this rule is legally sound. And just as important, the rule is the right thing to do — both for employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce allowing them to remain in their homes and communities.”

A unanimous three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed a lower court decision in the case and said the Labor Department has the power to interpret the law to change that exemption.

The AP story cites Judge Sri Srinivasan as saying that a "dramatic transformation" of the home care industry over the past four decades as a valid reason for the change. While most caregivers used to be directly employed by individual households, the vast majority of workers now work for staffing companies that service hundreds or thousands of customers, Srinivasan said.

He also noted a massive shift to providing care for the elderly in their own homes rather than in nursing homes, which requires workers to offer more advanced medical care and assistance to clients than the mere "companionship" services envisioned in 1974.

Implementation of the regulations will be delayed, as there is a 45-day window to allow the home care associations to seek a rehearing before the full court.

You can read the full decision here.

Thursday, August 20, 2015

U.S. job creation catches up with Georgia in July

12-month job growth falls below 100,000 for first time in 17 months

Georgia saw the creation of 6,400 net new jobs in July 2015, according to preliminary seasonally adjusted data released today by the Georgia Department of Labor.

The new information also included a revision that wiped out all the jobs reported in the prior month. 

In June, the labor department announced that 2,300 jobs were added. With the revision, it is now reporting that the state actually lost 4,100 jobs in June.

Among industries in the state in July, retailing (+2,800), professional and business services (+3,100), and local government (+4,300) were significant contributors to the state’s job growth.


Losses occurred mainly in private educational services (-2,100) and state government (-2,400).

Annual job creation slows

For the 12 months ending in July, the state saw 89,400 jobs created, an increase of 2.1 %.

As a result of slower employment growth, 12-month job growth fell below 100,000 for the first time in 17 months. July marked the first time since the beginning of 2013 that state job growth did not exceed the national average.

In some states, like North Dakota, their jobs slowdown can be partially attributed to falling oil prices that have resulted in layoffs in oil and gas production. Since Georgia has little oil and gas, its employment is unaffected by reductions in oil and gas production, and the state’s economy should be benefiting from lower energy costs. Instead, it is recording a marked slowdown.
Metro Areas are key

The Atlanta metro area created 13,200 jobs in July, and the Savannah area saw another 2,000 jobs added. Other metro areas with positive job growth included Albany (+400), Athens (+100), Brunswick (+100), Columbus (+600), Dalton (+200), and Rome (+100).

Metro areas reporting seasonally adjusted declines in July included Augusta (-500), Gainesville (-1,000), Hinesville (-300), Macon (-1,000), and Valdosta (-700).

While the Atlanta metro area is home to approximately 61 % of jobs in Georgia, it has been responsible for almost 85 % of the state’s job growth over the past 12 months.

Unemployment rate

The state’s unemployment rate stood at 6.0 % in July compared to 7.3 % in July 2014 as the state’s labor force continues to shrink.

While many see a lower unemployment rate as a positive sign for the economy, when drops occur due to people leaving the labor market, it can be a negative indicator.


Monday, August 10, 2015

Atlanta Journal-Constitution a danger to workers? OSHA says Yes!

The U.S Department of Labor’s Occupational Safety and Health Administration says that The Atlanta Journal-Constitution needs to change conditions that threaten the safety of its workers. 

OSHA says the serious violations involve failing to develop and utilize procedures to prevent machinery from starting up during maintenance and servicing and exposing workers to live electrical wiring. The newspaper company was previously cited for a similar violation in 2011.

“A lack of safety mechanisms continues to be one of the most frequently cited violations and that is unacceptable,” said William Fulcher, OSHA’s director of the Atlanta-East Area Office. “Management needs to take immediate action to remove these hazards from the workplace.”

Cox Enterprises Inc. (doing business as The Atlanta Journal-Constitution) was cited for 1 repeat and 5 serious safety violations. OSHA is proposing penalties of $65,550 in addition to requiring the company to correct the violations.

The proposed penalties follow an inspection of their plant located at 6455 Best Friend Road, Norcross, Georgia 30071. The citations did not indicate that any deaths or injuries were caused by the violations found during the inspection.

Cox Enterprises prints, processes and distributes The Atlanta Journal Constitution.

The company has 15 business days from receipt of its citations and proposed penalties to comply, request a conference with OSHA’s area director, or contest the findings before the independent Occupational Safety and Health Review Commission.