5 Key Takeaways from My Long List of Regulatory Changes Shared at ECVC2016

by NAVEX Global

NAVEX Global

[author: Scott Nelson, Partner, Baker & McKenzie LLP]

As 2016 draws to a close with a major political transition underway in Washington, D.C., organizations already dealing with a rapidly evolving regulatory environment now face uncertainty regarding whether some of the new regulations will remain in place.  

I had a chance to address at least some of the regulatory points of uncertainty at NAVEX Global’s 2016 Ethics & Compliance Virtual Conference.  My session, which could have easily been titled something like “Regulators Gone Wild,” ran the gamut, from the U.S. Department of Labor’s (DOL) new heightened salary requirements for exempt status, to the Equal Employment Opportunity Commission’s (EEOC) new EEO-1 reporting requirements, to the growing state and city “ban-the-box” laws.

Out of the several changes I shared at the conference, these are the five I think you should really be paying attention to.

1. The DOL’s New Overtime Exemption Requirements

These are huge changes, and they’re going to affect companies’ bottom lines, unless they are blocked.

On May 18, 2016, the DOL published a final rule that will increase the salary threshold for employees to qualify for the executive, administrative, and professional exemptions under the Fair Labor Standards Act (FLSA).  The salary threshold will increase from $455 a week (or $23,660 a year) to $913 per week (or $47,476 a year).  The DOL estimates five million workers will be affected by the change, which is set to take effect on December 1, 2016.  The DOL also raised the threshold for workers to qualify for the highly compensated employee exemption, from $100,000 to $134,004.

These are huge changes, and they’re going to affect companies’ bottom lines, unless they are blocked.  After my presentation, news came out that a federal judge in Texas is expected to rule by November 22, on whether to enter an injunction stopping them from taking effect.  Given the short time until December 1, however, employers still need be prepared for the change in the event the court does not stop the new regulations from taking effect.  For steps employers should be taking to prepare, review my recent webinar with Ingrid Fredeen highlighting three focus areas for compliance with the FLSA requirements.

View Webinar: Three Focus Areas for Compliance with the FLSA Requirements

2. The EEOC and Pay Equity

Equal pay has been a hot topic for decades.  But looming pay-reporting changes are causing employers consternation that they will face additional administrative burdens to produce information on broad categories of employees.  With the first new EEO-1 report due in early 2018, the EEOC is set to require that organizations list pay for employees by race, ethnicity, and gender across 12 pay bands and 10 job categories.

Pay equity issues are getting a lot of attention, and they are going to continue to be a big deal, regardless of the administration change.

There are concerns that the new report’s categories are overly broad, so broad that the information may not even be very useful in correctly determining pay equity issues; however, this additional information is where the EEOC currently wants to start.  Given the concerns expressed about the new reporting requirement and the length of time before the new report is required, the new administration may work to change the requirement before it takes effect.

States are also passing laws in an effort to address pay equity issues.  A new Massachusetts law forbids employers from asking prospective hires about their salary histories until after making a job offer that includes the compensation information for the position.  Pay equity is also getting more traction around the world, with other countries either adopting or considering laws designed to advance gender pay equity.

Pay equity issues are getting a lot of attention, and they are going to continue to be a big deal, regardless of the administration change.  Accordingly, businesses will want to conduct privileged (as in you have a lawyer coordinate this) audits of their pay practices so they may get ahead of this issue before facing potential liability.

3. Labor Laws and Social Media

At first blush, few people would think to connect old traditional labor laws, which most people think are only about unions, to modern employee postings on social media.  The National Labor Relations Board (NLRB) takes a different view.  It has been ruling against employers that discharge or discipline employees for certain types of social media posts that the NLRB views reflect protected concerted activity under the National Labor Relations Act (NLRA).

Accordingly, employers should review current social media policies to make sure their prohibitions do not violate the NLRA.  They also should use caution in making hiring decisions based on social media posts and consult with labor lawyers before taking disciplinary action against employees because of social media posts.

Micro Learning Course: Employment Law: Equal Employment Opportunity (EEO) for Managers

4. Defend Trade Secrets Act

In other words, now is the time to consult with your trusted employment counsel to make sure your agreements contain the necessary disclosure language.

The new Defend Trade Secrets Act (DTSA), effective since May 11, 2016, creates a federal private cause of action for misappropriation of trade secrets.  It will be an important new tool for companies to protect their trade secrets.  The DTSA also provides immunity for people who disclose trade secrets to a government entity for the purpose of reporting or investigating a suspected legal violation.

For companies to take full advantage of the DTSA’s new protections, however, they must notify employees and contractors of the above-mentioned immunity in any confidentiality agreements they sign, regardless of whether the confidentiality agreements are in employment agreements, severance agreements, independent contractor agreements, stand-alone confidentiality agreements, invention assignment agreements, or any other types of agreements containing a confidentiality clause.  It is very important that companies make this notification, otherwise they lose the ability to recover punitive damages, exemplary damages, or attorneys’ fees.  In other words, now is the time to consult with your trusted employment counsel to make sure your agreements contain the necessary disclosure language.

5. Ban-the-box Laws

A growing number of state and local governments are passing ban-the-box laws that restrict employers’ ability to inquire about applicants’ criminal backgrounds.  But the lack of uniformity in these laws presents challenges for multi-state employers.  The main thing is you don’t want to get in trouble for something that’s on an employment application that you may not even need or think is a big deal, so now is a good time for employers, especially multi-state employers, to review their applications for compliance.

What's on your list of regulatory changes?

View original article at Ethics & Compliance MattersTM.

Written by:

NAVEX Global

NAVEX Global on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.