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Wage and Hour (W&H) Rules Are In and Claims Are Up: What You Need to Know

THE CHANGES

Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way. But first let’s define W&H and take a quick look at its history.

WHAT IS W&H?

It is commonly – and incorrectly assumed that W&H claims are restricted to either misclassification of exempt/nonexempt employment status or failure to pay overtime. However, W&H liability also includes allegations such as:

  • underpayment of overtime
  • not paying overtime
  • miscalculating wages
  • refusing breaks
  • expecting employees to work off the clock
  • not paying employees regularly
  • refusing to pay exempt employees for absences
  • following federal minimum wage guidelines when state guidelines warrant higher pay 

A BRIEF HISTORY

In 1938, the Department of Labor’s passed the Fair Labor Standards Act (FLSA) giving birth to wage and hour claims. The law defined which employees were to receive overtime pay (nonexempt) and which were not (exempt). Since that time, W&H claims have risen steadily, with sharp increases starting in 1993 and additional increases every year.

THE NEWS

Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way.

New federal overtime rules taking effect in December 2016 will extend overtime pay protection to 4.2 million workers who are currently exempt. That, as well as proposed rules that would require companies to provide a breakdown of pay by race, gender and ethnicity will likely bring more allegations of W&H violations.

THE RULES

Federal Legislation and Regulation

  • Overtime Pay

On December 1, 2016, the new federal overtime rule took effect. The biggest changes are the redefining of what it means to be an exempt and nonexempt worker. Thus, overtime pay protection will extend to 4.2 million workers who currently earn less than $47,476 annually. Also, there is a mechanism for automatic updates every three years, beginning on January 1, 2020 expanding the number of employees falling under W& H guidelines.

Franchisors: In the August 2015 Browning-Ferris Industries decision, the National Labor Relations Board refined its standard for determining joint-employer status. The decision held that two or more entities could be considered employers of a single workforce if:

  • they are both employers within the meaning of the common law; and
  • they share or codetermine those matters governing the essential terms and conditions of

This decision impacts staffing firms, subcontractors, and franchisees.

  • Equal Pay

In January of 2016 , the Obama Administration proposed new rules that would require companies to report what their employees are paid, broken down by race, gender, and ethnicity. Meant to close the gender pay gap, the new rules would apply to employers with 100 or more employees. Of course, in light of the new administration, this proposal remains up in the air. But it’s definitely something to keep in mind.

  • Coverage Limitations

Unfortunately, W&H violations are rarely covered by employment practices liability insurance (EPL). Many U.S. carriers are willing to endorse their standard EPL forms, on a case-by-case basis, to grant defense costs only W&H coverage, up to a specified sublimit.

THE SOLUTION

As new legislation and changes to employment rules come into effect, it’s critical that you are informed and well prepared with proper coverage and both short and long term strategies. Keeping our clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.

 

 

 

 

OSHA’s Big Change: What Does It Mean For You?

The United States Department of Labor Occupational Safety and Health Administration (OSHA) has significantly changed the way that workplace injuries are reported and accounted for. Essentially, workplace injuries and illnesses are now required to be submitted by employers for online publication to a public website. In the past, this information was only revealed to OSHA during the process of inspections or surveys, and now reporting and the unlimited access to that reporting are sure to have a dramatic effect on employers.

WHAT DOES IT MEAN?

From OSHA’s perspective, David Michaels, Assistant Secretary of Labor for OSHA says, “Our new rule will nudge employers to prevent work injuries, to show investors, job seekers, customers and the public they operate safe and well-managed facilities.” Michaels goes on to say. “Access to injury data will also help OSHA better target compliance assistance and enforcement resources, and enable ‘big data’ researchers to apply their skills to making workplaces safer”.

RETALIATION PENALTIES

In addition to the new reporting, the rule also invokes penalties for employers that take actions deemed retaliatory against employees who report accidents. This particular policy went into effect August 1, 2016 but OSHA began enforcing on November 1, 2016.  The retaliation penalties could mostly effect employers that have safety incentive programs or require drug testing after an accident. Requiring drug testing for those with job related injuries also could be seen as pressure to NOT report an accident. Drug Testing has previously been an invaluable tool when it comes to post accident claims, and a tool to keep companies safe.

THE CHANGES: WHEN AND HOW

The new regulations take place on January 1, 2017 and require employers (based upon size of company) to submit injury and illness data electronically to OSHA.

Employers with more than 20 employees in specified “high-risk” industries, which includes Scheduled Air Transportation and Support Activities for Air Transportation, must submit their FORM 300A by July 1 in 2017 and 2018, and by March 2 every year thereafter.

Employers with more than 250 employees, OSHA is requiring submissions from 2016 and injury recordkeeping Form 300A by July 1, 2017. Then the following year these employers are required to submit information from all 2017 forms (300A, 300 and 301) by July 1, 2018. Beginning in 2019, and for future years, the information must be submitted by March 2nd.

Click here http://bit.ly/2ePzE4y for more information about all industries effected.

GETTING PREPARED

Of course we can help prepare you and your company for the challenges that come with the new OSHA Rules, but in the meantime, the following details the first, four steps that are essential.

  1. Update injury and illness reporting procedures.
  2. If you do not currently have injury and illness reporting procedures in place, then create them.
  3. Eliminate automatic post injury drug testing and replace it with a policy that requires an individual assessment of each employee and accident.
  4. Train staff on identifying impaired employees and how to document any incidents that may trigger OSHA reporting.

Marking a complete departure from the current practices, OSHA is requiring much of employers, and we are here to help.

Keeping our Clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.

Aircraft Fleet Managers and Their Critical Role in Procuring and Maintaining Aviation Insurance

An Aircraft Fleet Manager is directly responsible for all items relevant to the administration and quality control of the fleet. They must supervise and manage the day-to-day activities including aircraft maintenance, flight crews, training, scheduling, dispatch and compliance with regulations.

In addition, and equally important to the above, is that Aircraft Fleet Managers need to procure and maintain the insurance on all aircraft under management. Insurance industry best practices recommend that the Aircraft Manager, or FAR Part 135 Air Carrier Certificate holder, be the point person on this critical component. Very simply, it’s not a sound risk management practice to rely on a third party’s insurance policy to protect the aircraft management company.

For instance, if the aircraft owner obtains the aircraft insurance, then the Aircraft Manager’s appointed insurance agent or broker will not have any authority to manage the critical function of claims. Claims by their very nature are problematic and aircraft owner and underwriter expectations need to be managed carefully to have a satisfactory result that leave both relationships intact for the Aircraft Manager.

In most cases, the Aircraft Manager has valuable experience negotiating fleet insurance programs. They work with commercial aviation insurance brokers. They know their underwriters and have relationships that, in many cases, span several years. Most importantly, they understand the claim handling process from experience.

The Aircraft Manager can have Peace of Mind that every time an aircraft is dispatched he has insurance coverage with standardized pilot warranties/training requirements, territories, limits of liability and purpose of use.

The Advantages Are Clear

Aircraft Managers who are given this task are empowered to more effectively manage and perform their task. This arrangement ensures the elimination of the following:

  • Eliminates the need to “chase” each aircraft owner for adequate proof of insurance. This includes very precise additional insured and waiver of subrogation language that have to be tracked and reviewed for compliance.
  • Eliminates duplication of certificates of insurance for interested parties, which can be literally hundreds with all the charter brokers, customers and other interested parties.

Potential Objections & Obstacles

Aircraft owner resistance to insuring their aircraft under the Aircraft Managers Fleet Policy generally fall into these areas:

  • They want control over the insurance.
  • They already have an existing insurance policy and broker relationship.
  • Perception that the Aircraft Manager may be over charging for the cost of the insurance.
  • Some feel they can get a cheaper price – and they may, depending on a number of individual factors.
  • Concern over not being covered in the event the Aircraft Manager voids the coverage.

 

Air-Sur Expertise

At Air-Sur, our knowledgeable and highly experienced team can provide you with key insights that can address any of the above “objections” and help you make informed decisions that are best for you and your business. Please contact us today and let’s get started.