U.S. Department of Labor Publishes Final Rule on Independent Contractor Status

On January 10, 2024, the U.S. Department of Labor (DOL) released a final rule, effective March 11, 2024, that revises their prior guidance on how employers should analyze whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). 

This analysis includes the following factors: opportunity for profit or loss depending on managerial skill, investments by the worker and the potential employer, the degree of permanence of the work relationship, the nature and degree of control, the extent to which the work performed is an integral part of the potential employer's business, and skill and initiative.

Employers can read more on the final rule and analysis here.  Employers should seek legal counsel if they have any questions regarding their classification of workers.

Department of Labor Proposes Salary Posting Requirements for Federal Contractors

On December 4, 2023, the Federal Acquisition Regulatory Counsel (FAR) submitted a “Pay Equity and Transparency in Federal Contracting” proposal to the Office of Management and Budget (OMB) for approval. 

On January 11, 2024, the OMB approved this proposal and the FAR subsequently released the Notice of Proposed Rulemaking (NPRM).

The proposed rule would generally prohibit contractors and subcontractors from inquiring about salary history for job applicants working on or in connection with a government contract. It would also require contractors and subcontractors to disclose the compensation and benefits in job postings involving work on or in connection with a government contract.

Employers should remain close to updates as the proposed rule goes through the final review process.

Minimum Pay Updates: 2024

The new year will bring changes to minimum wage and exempt employee salary requirements in many jurisdictions. Employers are encouraged to review employee compensation to ensure compliance with these annual changes.

2022 EEO-1 Component 1 Data Collection

On October 31, 2023, the Equal Employment Opportunity Commission (EEOC) announced that the 2022 EEO-1 Component 1 data collection opens for mandatory filing for private sector companies with 100 or more employees and federal contractors with 50 or more employees meeting certain criteria. The deadline to file is December 5, 2023. 

For Multi-Establishment Employers: An employer with more than one establishment will need to file a Consolidated Report, a Headquarters Report, and Establishment-Level Report(s). The Establishment-Level Reports replace the Type 4, and Type 8 reports. Justworks will continue to reach out to customers who may be impacted to provide resources to help with report submission.

Updated Form I-9

As previously covered, effective August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 to verify identity and employment authorization. 

The new version of Form I-9 will be available for Justworks customers to use by October 31, 2023. All employers must use the new form to verify employment authorization beginning November 1, 2023.

U.S. Department of Labor Proposes Raising Minimum Salary Level for “White Collar” and Highly Compensated Employee Overtime Exemptions

On August 30, 2023, the U.S. Department of Labor (DOL) proposed a rule that would increase the federal minimum salary level for those eligible under the “white collar” and highly compensated employees (HCEs) overtime exemption regulations. Under the proposal, the minimum salary level is anticipated to change from $684 per week ($35,568 annualized) to at least $1,059 per week ($55,068 annualized) for “white collar” exempt employees and from $107,432 to at least $143,988 for HCEs. The DOL, however, has indicated that the salary floor may ultimately be even higher than $55,068 to meet the “white collar” exemption.

Additionally, the DOL is calling for the minimum salary thresholds of both “white collar” exempt and highly compensated employees to be adjusted every three (3) years. It is important to understand that the proposal released by the DOL is not yet law. Comments on the proposal are due by November 7, 2023, and the DOL will consider all comments received before publishing a final rule. However, at this time, employers should consider reviewing their employees’ exemption status and salary levels to assess the impact of these potential changes.

USCIS Releases Updated Form I-9 and Remote Verification for Eligible Employers

On August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 to verify identity and employment authorization. Employers may use the previous version of Form I-9 until October 31, 2023. Starting November 1, 2023, the new Form I-9, which is designed to be more user-friendly, must be used to verify employment authorization.

Additionally, the Department of Homeland Security (DHS) announced an alternative procedure for Form I-9 supporting document examination, which allows qualified E-Verify employers to utilize remote inspection of documents, if certain qualifications are met.

Temporary Form I-9 Remote Flexibility Policy Ending

The Department of Homeland Security’s temporary policy, which allowed employers to remotely verify Form I-9 supporting documents for employment eligibility, will be ending on July 31, 2023. All Form I-9 supporting documents that were verified virtually since March 2020 under the temporary policy will have to be physically inspected before August 30, 2023.

Additionally, all Form I-9 supporting document inspection after July 31 must occur in-person. As was the case before March 2020, employers will have to either plan for remote employees to begin work in person or utilize a service as the employer’s authorized representative, so that documents can be physically inspected.

HHS COVID-19 Public Health Emergency Ends

The Public Health Emergency (PHE) issued by the US Department of Health and Human Services (HHS) due to the COVID-19 pandemic has ended as of May 11, 2023. HHS noted that even with the PHE, individuals will still be able to access COVID-19 vaccines at no cost.

The Equal Employment Opportunity Commission (EEOC) has updated their COVID-19 technical assistance to address considerations for employers’ continued obligation to provide accommodations for some “high risk” employees with disabilities.

Employers should be aware that health insurance providers may no longer be required to waive costs for COVID-19 tests. We encourage employers to have employees utilize Health Advocate to help them navigate medical coverage and benefits due to the ending of the PHE.

Employers should be aware that certain COVID-19 requirements, like those related to sick leave, vaccination leave, infectious disease safety policies, may remain in effect in some states and localities, and are encouraged to review their current policies and procedures to see if they need to be revised to meet state or local compliance requirements.

Federal DOL Releases Updated Labor Posters

The US Department of Labor (DOL) published updated posters covering the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA). Among other updates, the FLSA poster updates cover new lactation accommodation obligations and the FMLA poster has been redesigned to include language about how a qualified covered employer is defined under the law.

Customers who subscribe to Justworks’ poster service will receive a copy of this posting for all office locations and an electronic version will be made available to their remote workers.

EEOC Guidance on Artificial Intelligence and Employment Selection

The Equal Employment Opportunity Commission (EEOC) issued a technical assistance document on employers’ use of artificial intelligence (AI)-driven tools in recruiting and selecting applicants and employees. Employers are encouraged to review this document and conduct ongoing evaluations to determine whether their use of AI tools is being used in a way that could result in unintentional discrimination. Employers should also modify their process and procedures, as appropriate, to meet compliance requirements.