FLSA Final Rule Changes Salary Threshold

FLSA Final Rule Changes Salary Threshold

In April 2024, The Department of Labor (DOL) announced a Final Rule increasing the threshold level salary minimum for the “salary test”.  (See the DOL document entitled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees).

Generally, under the FLSA, employees are exempt from minimum wage and overtime protections if they are employed in an executive, administrative, or professional capacity (EAP) and meet three tests set out by the department which include payment of a specified weekly salary level and performing executive, administrative, or professional duties.

The new rule takes effect on July 1, 2024. On that date, the new salary amount threshold for a nonteaching, salaried supervisor or administrator increases to $844 week/$43,888 annual salary (up from $684 week/$35,568/annual salary.)

Then, in January 2025, the method used to calculate the salary will change again- and the amounts will increase a second time to $1,128week/ $58,656 annual salary.  After that, the salary threshold will be raised every three years after July 1, 2027. 

Whether an employee can be exempted from the payment of overtime by meeting the EAP exception depends upon meeting the “salary and duties tests” set out by the Department of Labor in the law. 

To be eligible for the exemption, the employee 1.) must earn a fixed salary, 2.) that salary is at least equal to the amount in the Final Rule, and 3.) that the employee performs functions that meet the executive, administrative, or professional duties as defined by the DOL. 

The salary amount will increase twice- on July 1, 2024, and then again in January 2025.  Due to that increase, some nonteaching administrative employees’ salaries may likely be lower than the new salary threshold amount. 

The “duties” part of the test must then be applied to the employee’s job duties to determine whether a nonteaching administrator/supervisor is exempt from overtime requirements.

Administrative employees will meet the duties test if they primarily perform office or non-manual work directly related to the operations of the school district.  Their duties must involve the exercise of discretion and independent judgment on matters of significance.

Executive employees are also eligible for the exemption. To meet the “duties test” for these employees means that their primary duty must be managing a particular department or division of school operations.  They must regularly direct the work of at least two full-time (or their equivalent) employees and must have the authority to hire and fire, or have their recommendations for promotion, termination, hiring, or other actions given particular weight.

Teachers are specifically exempt from the FLSA overtime rules as professionals, so this rule change will not affect certificated administrators. 

For highly compensated employees subject to the FLSA, the salary threshold is going up to $132,964 on July 1, 2024, and then up to $151.164.  It is likely some employees formerly covered by this exception may no longer meet the salary threshold.   Even if those employees still meet the requirements for exemption under the highly compensated employee test, the salary threshold to be eligible for the exemption must be met.  If this is no longer the case due to the increases planned to the salary threshold, it is well possible these employees could qualify using the EAP exception. 

Actions to take now:

Survey the salaries of nonteaching administrative employees to determine if any might fall below the new salary thresholds.  Employees that may be affected by this change include supervisors and directors such as technology directors, transportation and cafeteria supervisors, facilities managers, and other similar positions.

If the new salary threshold exceeds a nonteaching administrative employee’s current annual salary, school districts may need to adjust upwards or recognize these employees are eligible for overtime pay.  This means the employees would need to keep track of their time.  Consult with Ennis Britton to review specific situations. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Court Clarifies When SERB has Exclusive Jurisdiction

Court Clarifies When SERB has Exclusive Jurisdiction

Tipp City Edn. Assn. v. Tipp City Exempted Village School Dist. Bd. of Edn., 2023-Ohio-4000

 After a district issued an unpaid suspension to a teacher following several parental complaints, the Tipp City Education Association (TCEA) filed a grievance alleging that the district violated the collective bargaining agreement. The TCEA alleged that the district violated the agreement when it failed to encourage the parents to first discuss their complaints with the teacher, disciplining the teacher without good and just cause, and then failing to discipline in a progressive manner. The district and the TCEA proceeded through the grievance process, however they were unable to resolve the issue. Unlike the typical collective bargaining agreement that concludes the grievance process with binding arbitration, the agreement in this case provided that a grievant “may seek resolution through legal options.” As a result, the TCEA filed their complaint in the trial court. The school district argued that the complaint was improper because the court lacked jurisdiction, and that these claims fall exclusively under SERB’s jurisdiction.

 The 2nd Appellate District noted that there are two general areas in which SERB has exclusive jurisdiction to resolve unfair labor practice charges: 1. Where the parties file charges with SERB alleging an unfair labor practice; and 2. Where a complaint brought before the common pleas court alleges conduct that constitutes an unfair labor practice. Otherwise, under the Ohio Revised Code Section 4117.09(b)(1) a party may bring a suit for violation of a CBA in the court of common pleas. The 2nd District specifically noted that “nowhere in the Revised Code does the general assembly assign SERB exclusive jurisdiction over all issues touching on that chapter’s provisions.” Moreover, the Supreme Court of Ohio has expressly acknowledged that a plaintiff may bring a claim in common pleas court when that claim exists independently of the revised code, even if the claim may touch on the collective bargaining relationship.

 The court concluded by stating that in determining whether SERB has exclusive jurisdiction over a claim, the test is whether the claim is arising from or depends on the collective bargaining rights created by RC 4117, rather than the collective bargaining agreement.

 What does this mean for your district? If a party advances claims to a common pleas court and that claim arises from or depends on CBA rights created by the Revised Code, SERB has exclusive, original jurisdiction. However, if the party advances claims that are independent of the Revised Code and your collective bargaining agreement does not mandate binding arbitration, the case may proceed in common pleas court.

Court Clarifies When SERB has Exclusive Jurisdiction

Ohio Supreme Court Upholds Appellate Decision Overturning Industrial Commission

State ex rel. Quest Diagnostics, Inc. v. Indus. Comm., Slip Opinion No. 2023-Ohio-2213

In this appeal, the employer won at the Staff Level Hearing Officer level and was overturned by the Workers’ Compensation Review Commission, a rare occurrence. The employer appealed to Court and was successful before both the 10th District Court of Appeals and The Ohio Supreme Court.

Stone, a phlebotomist (draws samples of blood), began her employment with the employer in 1991. In 2018, Stone notified her supervisor that she would be moving to California with her husband, who was taking a new position there. Stone expressed her desire to transfer her employment within the company and, according to her affidavit, was told that she would be permitted to transfer.

Stone submitted multiple transfer requests with the employer in California, which were signed and dated by her supervisor.

Three days later, Stone was injured at work when she fell from a stepladder. Her workers’ compensation claim was allowed for various shoulder injuries. She was released to work with temporary restrictions. For the next few days, Stone’s responsibilities consisted of greeting patients as they entered the office.

Stone informed her supervisor that she was moving to California. Stone had not received any response to her transfer requests. Stone and her supervisor called the employer’s recruiting office, which informed them that Stone could not transfer her employment because she was not certified as a phlebotomist in California.

This new information did not change Stone’s plans to relocate, and Stone’s supervisor asked for a resignation letter. Stone sent her supervisor an email saying, “I am putting in my resignation with Quest Diagnostics due to moving to California this Saturday,” and she moved shortly thereafter. In an affidavit, Stone refers to the resignation letter as a “transfer document” because she intended to become certified and continue to work for the employer.

Stone became certified as a phlebotomy technician in California the following spring. She was not reemployed by the employer. That summer, she applied for temporary total disability (TTD) benefits. She was denied at the District and Staff hearing officer levels. The hearing officers found that she had abandoned the job by resigning with no indication that there was further work for her when she did so.

Stone appealed to the Review Commission for reconsideration. It determined that in denying compensation, the SHO had misapplied the law of voluntary abandonment. The Commission concluded that Stone was entitled to TTD compensation because she did not intend to abandon the workforce and did not voluntarily remove herself from her former position of employment.

The Supreme Court noted that the “question is whether [the] circumstances demonstrate a voluntary abandonment of the workforce—permanent or temporary—such that the injured worker’s wage loss is not the result of the work injury. In other words, do the circumstances indicate that the injured worker would be working—somewhere—but for the injury?” Hence, an injury-induced departure from the workforce (involuntary abandonment) and a departure based on the claimant’s intentional conduct (voluntary abandonment) are mutually exclusive. The former is compensable; the latter is not.

Had Stone not been injured, she would have experienced the same wage loss upon relocating to California without the proper certification. Had Stone remained employed by Quest in Ohio, she would not have experienced any wage loss. Accordingly, Stone’s industrial injury was not the “but for” cause of her lost earnings. Albeit understandable, Stone’s reasons for abandoning the workforce and experiencing lost wages lack the necessary causal relationship to her industrial injury.

What this means for your District
We must always carefully analyze the circumstances of an employee’s departure in the context of a workers’ compensation claim to determine the true cause of the employee’s lost wages. If the loss is due to something other than the injury itself, we may have a defense against liability for TTD payments. Eligibility for TTD compensation has always depended on whether the separation from employment was injury-induced.

FLSA Final Rule Changes Salary Threshold

Appeals Court Upholds Denial Of Benefits for Employee who Resigned Without Just Cause.

Gbortoe v. Dir., Ohio Dept. of Job & Family Servs., 2023-Ohio-4844

The Tenth Circuit Court of Appeals (Franklin County) upheld a denial of benefits to an employee who quit work after receiving only a written disciplinary letter.

According to the employee, he resigned his position after “an incident regarding another individual’s gender preferences.” In his telling, he had a phone conversation in which he welcomed a newly promoted member of the team. The employee testified there was no discussion of gender preferences during that call, and it was not until the following week that a different coworker informed the employee about the newly promoted employee’s gender pronouns. The employee responded to this coworker’s comment, expressing he was “not interested” in that topic and he “[does not] believe in that.” That comment led to corrective action meetings with company leadership. In one of the meetings, the employer informed the employee he would receive a disciplinary warning for his conduct.

The manager testified that the employer received a complaint about the employee after he audibly opined the newly promoted employee was not capable of succeeding in their new role. The employer accused the employee of violating the code of conduct by vocalizing his opinion loudly enough to be audible around the office. The manager explained that the employee was issued a written warning, but his job was not in jeopardy at the time of his resignation. In part, the written warning admonished the employee as follows: “You must demonstrate consistently appropriate behavior in the workplace going forward in accordance with [employer’s] Code of Conduct. Failure to do so may result in further corrective action, up to and including termination of employment.”

The employee lost at all levels before the Unemployment Compensation Review Commission and then filed an appeal to the Court of Common Pleas. To no one’s surprise, except perhaps the employee, the Court upheld the Commission’s denial. The employee appealed.

The Court of Appeals held that the employee failed to prove he was entitled to unemployment benefits. “Although he contends his employer created a hostile work environment and threatened to fire him, the record shows employer merely issued [employee] a written warning admonishing him for his behavior. Although the warning noted the employer could impose future sanctions up to and including firing for continued inappropriate workplace behavior, it did not threaten [employee’s] employment status.

What this means for your District
From time to time to time, employees quit and then claim they were threatened with termination or were “constructively discharged,” essentially leaving them with no choice but to resign.

An employee who resigns from employment with good case to do so can obtain unemployment benefits. Such good cause might be the existence of work conditions that are a danger to health and safety when the employer refuses to fix the conditions after being notified (constructive discharge), or the employee was given the option to resign or be fired, and resigned under circumstances where the employer had no cause to terminate employment, If an employee resigns in lieu of being terminated, the Unemployment Commission will analyze whether the employer had just cause to terminate in the first place.

Where here, the employer is not threatening to terminate the employee unless he resigns, and did not refuse to mitigate unsafe working conditions, the employer will be able to defend against the claim for benefits. Make sure you are always documenting the circumstances of an employee’s separation so that you will have evidence to establish what the truth is.

FTC Proposes Strengthening COPPA to Further Limit Companies’ Ability to Monetize Children’s Data

FTC Proposes Strengthening COPPA to Further Limit Companies’ Ability to Monetize Children’s Data

The Federal Trade Commission (FTC) has proposed changes to the Children’s Online Privacy Protection Rule (COPPA Rule) that would place restrictions on the use and disclosure of children’s personal information and limit the ability of companies to condition access to services on monetizing children’s data. This would be accomplished by actions such as a requirement that targeted advertising be off by default, limiting push notifications, restricting surveillance in schools, and strengthening data security. The FTC’s Press Release stated that the purpose of these proposals are to “shift the burden from parents to providers to ensure that digital services are safe and secure for children.”

The COPPA Rule first went into effect in 2000, when it required certain websites and online services that collect personal information from children under 13 to obtain parental consent before collecting, using, or disclosing that personal information. In 2013, the FTC made changes that reflected the increased use of mobile devices, to protect children’s online activity, as well as photos, videos, and audio recordings. The FTC stated that this most recent proposed change comes at a time when “online tools are essential for navigating daily life.” Implementing such tools will not only allow children to be online without being “endlessly tracked” by companies, but also places the obligation on service providers, rather than allowing such providers to outsource their responsibilities to parents.

In order to achieve those goals, the FTC has stated that the proposed changes will include:
● Requiring separate opt-in for targeted advertising
● Prohibition against conditioning a child’s participation on collection of personal information
● Limits on the support for the internal operations exception
● Limits on nudging kids to stay online
● Changes related to Ed Tech
● Increasing accountability for Safe Harbor programs
● Strengthening data security requirements
● Limits on data retention

Once the proposed changes are published in the Federal Register, the public will have 60 days to submit a comment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Career Tech Corner: CTC Options for Acquiring Sites for Instruction

Career Tech Corner: CTC Options for Acquiring Sites for Instruction

As Career Technical Centers (CTC) offer ever-expanding curricula and training in more advanced and technical fields, there may be a need for new space for hands-on learning and training. Perhaps your district is interested in erecting a lab for manufacturing education, or agricultural space for education in farming technology. 

Under the law, school districts are “bodies politic and corporate” “capable of…acquiring, holding, possessing, and disposing of real and personal property.” Just like any city, local, or exempted village school district, vocational districts can purchase and lease land for the erection of education facilities.  CTCs may also purchase or lease existing buildings and, as needed, renovate such existing spaces for their purposes.  Lease-purchase agreements are also permissible for this purpose. CTCs may also acquire ownership of real property by donation or an exchange agreement. (By law, CTCs have all the authority and powers as city school districts with the exception of certain matters specifically address in the Revised Code pertaining to Chapters 124 (civil service), 3317 (School Foundation Program), 3323 (special education), and 3331 (age and schooling certificates)).  There are other means by which a CTC could acquire property that occur less frequently, are less desired, and are entirely context based. These are adverse possession and appropriation (condemnation). 

There may be instances where a CTC desires to acquire property not to erect a building for use as classroom space but to facilitate the programming of the CTC.  In some instances, this may involve students performing work that is within the scope of their particular program but that also contributes to a private venture.

The applicable statutes refer to a board of education using its powers to acquire property for its own purposes, i.e., for the operations of the district in carrying out its educational mission.  There is not any express authority in those statutes for a board to acquire property for non-school purposes or to effectuate a purely private development.

However, there are some attorney general opinions, addressing CTCs in particular, that have allowed a CTC to engage in a private venture so long as there is some connection to the curriculum.  See 1976 Op. Atty. Gen. No. 76-065 (A CTC may construct and sell single-family residences on school land.  Students erected the homes under supervision as part of the curriculum, and not for pay); 1971 Op. Atty. Gen. No. 71-068 (A school may engage and compete in private enterprise, even at a profit, so long as the program is reasonably necessary to the vocational education curriculum); 1971 Op. Atty. Gen. No. 71-026 (Use of school facilities for serving meals and banquets to community organizations is justified as part of the vocational education curriculum).

1981 Op. Atty. Gen. No. 81-093 opines that a CTC may, pursuant to R.C. 3313.90, enter into an agreement with a nonprofit corporation whereby students of the district would construct a house on property owned by the corporation with materials and equipment furnished at the expense of the corporation, provided that such an agreement is reasonably necessary to fulfill the requirements of the vocational education curriculum.  Additionally, that opinion holds that a board of education of a CTC may, as part of a vocational education program, purchase land, construct residential dwellings thereon, and thereafter sell such realty.

What does this mean for your district?

Your board is vested with broad powers to acquire property using several different means.  The options available should be carefully considered to ensure which is the best approach for any given project or plan. Attorneys at Ennis Britton stand ready to assist you with achieving your goals in this regard.