Tag: Department of Labor

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Making sense of substituting employer-provided leave for EPSL and EFMLA under the FFCRA

employment law, labor law, overtime records

One of the more confounding sets of rules under the Families First Coronavirus Response Act is when employers can require employees to substitute an employer’s own provided leave (which, for the sake of convenience I’ll refer to throughout as “PTO”) for paid leave — the 80 hours of paid sick leave (“EPSL”) or the 12 weeks of expanded family and medical leave (“EFMLA”) — mandated by the Families First Coronavirus Response Act.

I am going to make an attempt to explain these rules, but I’ll fully admit that it’s still not 100 percent clear to me. The text of the FFCRA seems to suggest that an employer can never require the substitution of PTO.

Also read: The DOL’s Families First Coronavirus Response Act regulations contain some big changes

The DOL’s proposed regulations, however, muddy the waters, which were muddied even further by an amendment to those proposed regulations published last Friday, which deleted language from the regulations’ explanatory discussion relating to the substitution of PTO for EFMLA.

So let’s try to sort it all out.

1. An employer can never require an employee to substitute PTO for EPSL. The employee can elect that substitution, but it can never be forced by the employer.

2. If an employee is taking leave to care for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, the employee qualifies for both EPSL and EFMLA. It is the employee’s sole choice whether to use EPSL during the initial two unpaid weeks of EFMLA (for which both types of leave will run concurrently), or save the EPSL for later use for another qualifying reason (or, I suppose, tack it on after the expiration of the FMLA leave). An employer cannot force an employee to use EPSL during those initial two unpaid weeks of EFMLA.

3. Here’s where it gets tricky. When can an employer require an employee to use PTO during EFMLA? Section 826.23(c) of the regulations is the key provision.

Section 2612(d)(2)(A) of the FMLA shall be applied, provided however, that the Eligible Employee may elect, and the Employer may require the Eligible Employee, to use only leave that would be available to the Eligible Employee for the purpose set forth in § 826.20(b) under the Employer’s existing policies, such as personal leave or paid time off. Any leave that an Eligible Employee elects to use or that an Employer requires the Eligible Employee to use would run concurrently with Expanded Family and Medical Leave taken under this section.

(Section 2612(d)(2)(A) of the FMLA permits an employer to require the substitution of PTO for FMLA leave.)

Also read: Coronavirus update: The mechanics of the tax credit for paid family and sick leave under FFCRA

What does this all mean? It means that an employer can require an employee to use available PTO during the unpaid portion of an EFMLA school closure of loss-of-child care coronavirus-related leave. If an employer so requires, the PTO runs concurrently with the EFMLA allotment.

4. An employer and employee can agree to “top-off” EPSL or EFMLA (that is, true up the employee’s pay through the substitution of PTO so that the employee earns his or her full pay). But the employer cannot require it.

All clear, correct? Or clear as mud?

Disagree with my interpretation? Drop a comment below and let’s try to figure it out together.

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Coronavirus Update: More answers from the DOL on the FFCRA, and another Zoominar

employee compensation

On March 26, the DOL published a second round of FAQs (numbers 15-37) answering more questions on the operation of paid family and sick leave under the Families First Coronavirus Response Act.

Here’s what the DOL has to say:

    1. Employers are entitled to require documentation from employees in support of their need for paid family leave or paid sick leave under the Act. This documentation includes a copy of the Federal, State or local quarantine or isolation order, written documentation by a health care provider advising you to self-quarantine, or a notice of closure or unavailability from a child’s school, place of care, or child care provider. Employers are also required to retain this documentation. Note, however, that the requirement of medical documentation is contrary to the CDC’s recommended best practices, for fear of overburdening our already stressed medical system and providers.
    2. Intermittent paid family leave and paid sick leave are allowed under the Act in any increment, but only if the employer agrees and if the employee is unable to telework their normal schedule of hours because of one of the qualifying reasons for leave under the Act. Note that the DOL is encouraging “employers and employees to collaborate to achieve flexibility and meet mutual needs,” and that it “is supportive of such voluntary arrangements that combine telework and intermittent leave.’
    3. An inability to telework means a complete inability to perform the job remotely. If an employer and employee agree, for example, that the employee will work the normal number of hours, but outside of normally scheduled hours (for instance early in the morning or late at night), then the employee is able to work and leave is not necessary.
    4. If an employer closes prior to April 1, its employees are not eligible for paid family or sick leave. Employers that close after April 1 are only required to pay employees for family or sick leave taken under the Act through the date of closure.
    5. Employees on furlough or temporary layoff are not eligible for paid family leave or paid sick leave under the Act. Further, employees cannot use paid family or sick leave for hours not working because of a reduced work schedule.
    6. Employees may not use their employer’s available paid time off to make them whole during a paid leave provided by the Act unless the employer expressly agrees. In other words, because FFCRA leave is capped, and may result in an employee receiving less than full pay, the Act does not permit employees to substitute other paid leave during FFCRA leave to make them whole.
    7. Employers cannot require that employees use available paid time off to make them whole during a paid leave provided by the Act.
    8. Employers are always free to provide employees more paid leave than the Act requires, but cannot claim any tax credit for the excess leave.

As for questions still left unanswered, my friend Jeff Nowak at FMLA Insights fills us in.

  • It’s still not clear from yesterday’s guidance who gets to make the ultimate call on whether the employee can telework and what happens if/when the employee objects to telework. We could use more guidance there.
  • What rules will DOL apply to exempt small businesses with fewer than 50 employees when the law’s requirements would jeopardize the viability of the business? [Me: this is a biggie]
  • Will DOL give guidance to employers with fewer than 25 employees as to how they comply when they cannot return an employee to an equivalent position.

I’ll be discussing these FAQs, along with answering all of your coronavirus-related employment law questions live on Zoom, Monday from 1-2 ET: https://zoom.us/j/856368874.

There will be plenty of room for everyone, as I’ve bumped the capacity to 500. And don’t forget, Norah promised she’ll drop by to share a song with everyone. Come for the info, stay for the music.

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Coronavirus Update 3-26-2020: A Q&A and the DOL’s FFCRA notice

employment law, labor law, overtime records

Yesterday I held my first Zoominar. (Is this an actual word, or did I just make it up?) I opened up my Zoom room for the first 100 people to join and ask any coronavirus-related employment law questions they wanted. I shared #MyQuarantineHaiku (see below), saw some familiar faces, met some new old friends, and answered dozens of questions.

If you weren’t able to join or couldn’t get in, you can watch it here:

Also yesterday, during my Zoominar, the DOL published its required Employee Rights poster for the Families First Coronavirus Response Act. You must post it alongside your other employment law posters no later than April 1, and email it to those employees that are currently working remotely. But you might want to brush up on your PDF editing skills before you do so, because the DOL’s model poster has a big ol’ typo. In describing the paid leave entitlement for employees taking time off to care for children, the DOL lists the maximum dollar cap as $12,000 instead of $10,000. A big mistake, and one we will assume the DOL will fix soon. (Thanks to Eric Meyer for pointing this out to me.) You can also bring it to the DOL’s attention on one of its FFCRA twitter chats, or on the online forum it is hosting.

Two more things. First, I will be hosting another Zoominar this coming Monday, March 30, from 1 – 2 pm. And this time I won’t be caught off guard by the questions about how my daughter’s band, Fake ID, is weathering the coronavirus storm. In fact, she’s promised to join and perform a song for everyone. You’ll be able to access the Zoominar here.

Finally, #MyQuarantineHaiku.

Day-time pajamas
I don’t have hair to pull out
Night-time pajamas

Be well and stay safe. I’ll see everyone tomorrow.

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Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for businesses

employee compensation

COVID-19 is rapidly changing how businesses operate. We recognize that organizations need an extra helping hand right now. So we’re offering our GPS clock in tool for free to new sign-ups over the coming months. Sign up today and our Workforce Success team will provide a personal, online walkthrough of our platform to help you get started. It can be fully deployed in 1-2 days.

The Department of Treasury, the Department of Labor, and the IRS announced impending regulations that will help covered businesses navigate the paid family and sick leave provisions of the Families First Coronavirus Response Act, including available tax credits, the small employer exemption, and a 30-day non-enforcement grace period.

Refresher: What Leave Does the Act Provide?

employee compensationThe Act provides that eligible employees of covered employees can receive:

1. Up to 80 hours of paid sick leave at 100 percent of the employee’s regular rate pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis, capped per employee at $511 per day and $5,110 in total;

2. Up to 80 hours of paid sick leave at two-thirds of the employee’s regular rate of pay where the employee is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services, capped per employee at $200 per day and $2,000 in total; and

3. Up to an additional ten weeks of expanded paid family and medical leave at two-thirds of the employee’s regular rate of pay when the employee is unable to work because of a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, capped per employee at $200 per day and $2,000 in total.

Paid Leave Tax Credits
The Act makes available the following tax credits to help employers pay for this paid sick and family leave:
1. For an employee who is unable to work because of Coronavirus quarantine or self-quarantine, or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a tax credit up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

2. For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a tax credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days.

3. In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular rate of pay, capped at $200 per day or $10,000 in the aggregate, for up to 10 weeks.

4. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for eligible employees during the leave period.

Eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes equal to the amount of qualifying sick and child care leave that they paid, instead of depositing them with the IRS.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request with the IRS for an accelerated payment. The IRS expects to process these requests in two weeks or less, with further guidance on this issue coming in the next two weeks.

Examples
1. An eligible employer pays $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including employee withholdings. The employer is entitled to use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required to deposit the remaining $3,000 with the IRS on its next regular deposit date.
2. An eligible employer pays $10,000 in sick leave and is required to deposit $8,000 in payroll taxes. The employer could use the entire $8,000 of taxes to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Small Business Exemption

Businesses with less than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability, provided that the employer can show that compliance would jeopardize the ability of the business to continue. The DOL will be providing emergency guidance establishing simple and clear criteria defining the circumstances that will meet the criteria of jeopardy to the viability of an employer’s business as a going concern.

Non-Enforcement Period

The DOL will be issuing a temporary non-enforcement policy. Under the policy, the DOL will not enforce the Act until May 2, 2020 (30 days after its effective date), against employers that have acted reasonably and in good faith to comply.

I continue to monitor these issues in real-time and will be posting updates here as warranted. If you have any questions, feel free to contact me directly.

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How do I compensate hourly workers during the coronavirus pandemic?

pay compensation

No doubt there are lots of questions regarding compensation for hourly employees during the COVID-19 pandemic.pay compensation

Many employers want to do right by their hourly workers and offer them fair compensation while they temporarily shutter their workplace or curtail operations. Meanwhile, there are uncertainties regarding who gets paid and who doesn’t.

One valuable resource that offers clarity for employers regarding hourly employees is on the Department of Labor website. The comprehensive “U.S. Department of Labor Issues Workplace Guidelines for Coronavirus Outbreak, Including Specific Guidance on FMLA, FLSA and FECA” provides detailed information valuable for remaining in compliance as well as offering insight to compensating employees.

Under the Fair Labor Standards Act direction is this guidance:

Pay to Non-Exempt Employees During Business Closures. Under the FLSA, employers are obligated to pay non-exempt employees only for the hours worked, not hours the employee otherwise would have worked if the employer’s business had not closed. If telecommuting or working from home is provided as a reasonable accommodation, the employer must pay non-exempt workers the minimum wage, and at least time and one half the regular rate of pay for overtime hours, for hours telecommuting or working from home. For more information on this topic, please see our previous post on employers’ considerations in response to coronavirus (available here).

Kate Bischoff, a Minneapolis-based employment attorney and HR consultant, suggested that employers first must decide what positions are crucial to maintaining operations. 

“Then, there’s really no good way to go about it,” Bischoff said. “Fairness would dictate that you furlough/lay off the part-timers first, then the least senior, but there’s no good way.”

Also read: Solving the concern over clean time clocks with a mobile solution

Other considerations include what to do about volunteers, she added, and those who may be in the high-risk groups (over 60 or with pre-existing conditions).

“But make sure there isn’t a disparate impact on any protected group more than others, like married people, minorities and women. We’re in uncharted waters,” Bischoff said.

According to a spokeswoman for Portland, Oregon-based Think HR, employers and managers may offer paid time off to those employees who are unable to work due to a decrease in business, and they may select whom to offer this PTO to based on seniority, full-time status, employee classification, or job type.

“There are no hard and fast rules for deciding what groups to include or where to draw the line on tenure,” she said. “Employers, however, should take care not to violate (or appear to violate) anti-discrimination law, and they may want to consider how their decision will affect employee morale presently and in the future. Employers should also keep in mind that pay requirements may change as new laws are passed in response to the pandemic.”

Insurance and risk-management consultancy Gallagher just released its guidance on Coronavirus Pandemic Preparedness that includes five steps to minimize business disruption and safeguard employees.

“As pandemics spread it is important now, more than ever, to have an actionable business plan in place to help guide your employees and your business through the uncertainty of pandemics,” the report states.  

Cleanliness is a given.

If employees must clock in at the workplace,keep the keyboard or time clock as clean as possible. 

Employers working with Chicago-based employment law attorney William R. Pokorny are taking a variety of different approaches.

“Those that have some amount of paid time off or paid sick leave, either employer-based or as required by state and local paid sick leave laws, are for now having people use their available leave,” Pokorny said. “Some are extending additional leave — for example, 14 days — specific to the coronavirus situation. The leave is generally paid out based on the employee’s regularly scheduled work hours, so someone who usually works 20 hours in a week would get 20 hours of sick leave for a week. It varies widely by employer.”

Bischoff added that even employers trying to do the right thing for their hourly workers may not be doing enough.

“Trying to do the right thing is hard at this point,” she said. “Employers need to do what they can for their people.”

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Court Drills Company Over Bonus Pay

wage and hour law compliance, wages

Bristol Excavating entered into an agreement with Talisman Energy. Talisman paid all workers on its drilling sites bonuses for safety, efficiency and completion of work.

At some point, Talisman and Bristol agreed that Bristol’s workers were eligible to receive the bonuses; however, this arrangement was never codified. The Labor Department found Bristol should have included the bonuses in workers’ regular rate of pay for purposes of overtime compensation. In rejecting this, the Third Circuit emphasized an employee’s regular rate of pay is between the employer and employee.

Then it assessed the employer’s involvement in the bonus program: (1) whether the specific requirements for receiving the payment are known by the employees in advance of their performing relevant work; (2) whether the payment is for a reasonably specific amount; (3) whether the employer’s facilitation of the payment is significantly more than serving as a pass through vehicle. In applying the test, the Third Circuit found there was not enough clarity about the requirements or amounts of the efficiency or completion of work bonuses to require Bristol to include these bonuses in overtime compensation.

However, the terms of the safety bonus were sufficiently clear. Bristol employees knew the criteria for earning the bonus and how much they would receive, and Bristol invoiced Talisman for payment of the safety bonuses on behalf of its employees.

Bristol should have included the bonuses in its employees’ regular rate of pay. Sec’y United States Dep’t of Labor v. Bristol Excavating Inc., No. 17-3663, 2019 WL 3926937 (3d Cir. Aug. 20, 2019).

IMPACT: Employers with leased employees in the Third Circuit (New Jersey, Delaware and Pennsylvania) should audit their compensation practices in light of the new test announced in this case.

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Beware the ‘Religious Exemption’ Plan

Jon Hyman The Practical Employer

Warning: This month’s column is not for everyone. If, however, you are offended by what I am about to say, then this is specifically for you.

In August, the Department of Labor’s Office of Federal Contract Compliance Programs, the federal agency that regulates and governs federal contractors and subcontractors, proposed regulations to clarify the scope and application of the religious exemption contained in section 204(c) of Executive Order 11246.

By way of background, Executive Order 11246, signed by President Lyndon B. Johnson in September 1965, “prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin.” It’s been amended over the years, including its 2014 addition of LGBTQ protections to the list of prohibited discrimination.

Section 204(c) specifically exempts from coverage any “government contractor or subcontractor that is a religious corporation, association, educational institution, or society.”

The Trump administration seeks to expand section 204(c) to permit religious organizations with federal contracts to “make employment decisions consistent with their sincerely held religious tenets and beliefs without fear of sanction by the federal government.”

It makes clear that religious organizations can discriminate because of religion, and that religious organizations can require employees’ behavior to meet the organization’s religious rules.

What has people, including me, up in arms about this rule is its proposed change to what qualifies as a “religious organization.” The EEOC has long taken the position that for-profit companies cannot qualify as “religious organizations.” This proposal deviates from that long-standing rule for purposes of the OFCCP. Indeed, according to two senior Labor Department officials, the exemption would apply to “closely held companies acting in accordance with an owner’s religious beliefs.”

In other words, if someone organizes a closely held business for a religious “purpose” and holds itself out to the public as such, it would be exempt from the OFCCP’s anti-discrimination provisions if it operates its business consistent with its religious purpose.

What would this change mean practically? As the American Civil Liberties Union tweeted, “The Department of Labor just proposed a rule that aims to let government contractors fire workers who are LGBTQ, or who are pregnant and unmarried, based on the employers’ religious views.”

This is not “religious freedom.” It’s government-sanctioned discrimination. And it’s just plain wrong.

Private businesses can’t hold religious beliefs. Extending to them these protections based on their owners’ religious beliefs is dangerous. And scary. And abhorrent. We should all be troubled by a rule that permits an employer to opt out of an employment law because of a religious belief.

Religious freedom as an opt-out from the law is a dangerous construct. Our Constitution guarantees freedom of religion. We irreparably damage this important principle when we permit a private business, under the guise of religious freedom, to opt-out, without penalty, from an employment law with which it disagrees or finds offensive.

If you stand with me, and against government-sanctioned discrimination of any kind and in any form, write or call your senator and congressperson and tell them that this proposed rule cannot stand. That as a nation we are better than this. That all private businesses should be held to the same non-discriminatory obligations, regardless of the religious beliefs of their owners.

And, don’t forget about the comment period required by the rule-making process for any proposed regulations. The public gets to chime in, and everyone who opposes this rule should do so.

To conclude, I’ll make this as clear as possible.

Racism is wrong.

Sexism is wrong.

Homophobia is wrong.

If you disagree, you’re a bigot, period.

And, if you hide behind your religion to protect your views, then you’re a hypocritical bigot. There is nothing religious about bigotry, no matter what some might want you to believe.

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Labor Department Proposes Updates to ‘Regular Rate’ and ‘Joint Employer’

Jon Hyman The Practical Employer

Over the past week, the Department of Labor’s announced proposals for significant (and much needed) regulatory updates to the definitions of “regular rate” and “joint employer.”

The DOL proposed an update to the definition of “regular rate” under the Fair Labor Standards Act.
The proposal would permit employers to exclude the following from an employee’s regular rate of pay:

  • The cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services.
  • Payments for unused paid leave, including paid sick leave.
  • Reimbursed expenses, even if not incurred “solely” for the employer’s benefit.
  • Reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements.
  • Discretionary bonuses.
  • Benefit plans, including accident, unemployment, and legal services.
  • Tuition programs, such as reimbursement programs or repayment of educational debt.

This change, if finalized, would be significant, as it would exclude these items of compensations from non-exempt employees’ overtime pay. According to the DOL, this change is needed to encourage employers to offer more financial perks to their employees, as, under the current rules, employers don’t offer these perks out of a fear that it will lead to increased overtime pay. You can read the full proposed rule change here.

Second, the DOL proposed a new four-factor test to determine whether two entities are joint employers over the same employees. Under this proposed new test, to qualify as a joint employer, the entity would have to “actually exercise the power” to:

  • Hire or fire employees.
  • Supervise and control employees’ work schedules or conditions of employment.
  • Determine employees’ rate and method of payment.
  • Maintain employees’ employment records.

This change, if finalized, would also be significant, as it would limit a potential joint employer’s exposure for wage and hour liabilities of the primary employer. You can read the full proposed rule here.

Both of these rules are open for public comment for 60 days. Stay tuned, as if these become final, they represent key changes to employers’ wage and hour responsibilities.

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H-1B Visa Challenges: Utilizing AI to Close Your Talent Gap

Immigration reform and H1B visa programs

The H-1B visa approval rate dropped nearly 30 percent from 2016 to 2017, challenging employers and recruiters to find the right talent. Advanced technology, like artificial intelligence, can help.

Immigration reform and H1B visa programs

Many organizations, especially those in technology, higher education and health-related industries increasingly depend on highly skilled non-U.S. candidates to fill positions left vacant due to a lack of experienced or interested domestic workers. A survey by Envoy Global, an immigration services firm, found 59 percent of companies planned to hire more foreign employees at their U.S. offices in 2018, which is up from 50 percent in 2017 and considerably higher than the 34 percent in 2016.

The reason firms are looking abroad: The U.S. is facing a significant skills gap, especially in STEM-related fields. Generational and technological shifts have created new roles, like mobile developers and programmers, that require significantly higher levels of technical or digital knowledge. Other countries tend to have higher quality math and science programs, and this rigorous education produces attractive candidates to fill the hundreds of thousands of new jobs across the United States.

The proposed federal changes to H-1B visa issuance, which include tightening qualification requirements, such as increasing minimum annual salaries, reducing the three-year duration, implementing more rigorous interview processes and limiting visas for family members and more, will make it even harder for workers to get approval to work here in the U.S. In an already extremely tight labor market, these changes add complications for hiring teams to be effective in their chase for talent. Few organizations are immune to the pressures of the H-1B crackdown. According to Envoy Global, 85 percent of U.S. employers surveyed say they have already felt impacts of the shifting immigration system.

Context Around the H-1B Challenge

Having worked across a variety of industries in my career, at privately held companies where visa sponsorship was not common as well as at Fortune 500 companies with and without visa sponsorship programs, I’ve found the immigration challenge is twofold. First, companies often don’t have the infrastructure and budget to support individuals with H-1B visas, since acquiring sponsorship is a long and capital-intensive process that requires involvement from outside immigration counsel. Second, the visa quota set by the government tends to run out so quickly that unless a company proactively applies for a certain number of visas a year in advance, it is left out of the game entirely.

The other element to the H-1B issue that companies must, but often don’t, think about is the well-being of the future employee. When a candidate emigrates to the U.S. to take the job, they must relocate, often with their families, which costs money and requires navigating cultural barriers.

Hiring organizations must decide if they will prepare these individuals with cultural training and help them find communities and schools for their children or leave them to their own devices. Figuring out where to help foreign workers and where to draw the line is never easy as there’s a natural inclination to help; providing support often takes a lot of time and effort from the organization.

U.S. companies are also facing geographic difficulties in sourcing talent. For hiring managers, dealing with restrictions of a candidate’s citizenship reduces the likelihood of finding the best person for the job. It may be that the perfect coding guru or IT specialist is not an American and needs sponsorship to work in the United States.

With tightening qualifications for H-1B visas, recruiting and attracting the right talent gets more difficult, and in some cases is seemingly impossible. Even when looking inside the U.S., IT jobs are easier to fill in metropolitan regions like New York and Silicon Valley. Companies based outside of major urban center locations are having a hard time attracting the talent they need without large hiring budgets and third party recruiting firms with high retainers to help fill those jobs.

Making concessions on skill requirements or a candidate’s experience based on low talent availability is never ideal. When applied on a larger scale and for contract or short-term roles, this brings a completely new set of challenges for hiring teams.

Some of these challenges include higher budgets and increased bids to reach the right level of talent; an inability to fill projects and requisitions quickly; and having to delay projects because the right domestic workers don’t exist or are hard to attract.

It’s also important to note that an HR team’s regular responsibilities don’t stop during the recruiting process, which can lead to either putting projects on hold due to constrained resources, or stretching employees too thin as the company tries to cover the work, which doesn’t create a positive work environment.

When restricted to the U.S. labor market, it can take a long time for companies to find qualified candidates. There have been many times in my career where my team has had to repost job openings several times before we found someone to fill the position.

Typically, teams can fill most positions within 90 days, but STEM roles can take up to six months or longer. In these cases, settling for a candidate that doesn’t have all the ideal capabilities, education and experience is unfortunately common because there’s a dire need to fill the role.

How AI Can Help

The tightening labor market will continue as unemployment rates hit all-time lows, coupled with the proposed H-1B rules. Human resources, consulting and professional services, IT, engineering, management, clerical and administrative gigs are all increasingly being sourced from outside the United States and the changes would affect these areas the most.

Being proactive and staying on top of legislation changes to understand how they impact the organization is the minimum baseline for success, as it helps companies proactively plan their workforce. However, this still doesn’t solve for filling roles that become vacant unexpectedly — so organizations also need a hiring strategy that utilizes technology and contingent labor to fill critical worker voids.

For example, AI mechanisms are aiding hiring managers in bringing in the right talent by making it easier to find, filter, interview and vet candidates on a variety of hard and soft skills. The matching capabilities bridge the skills gap by helping teams find domestic workers when H-1B visa rules make it tough to source abroad. The depth and breadth of candidate screening enabled by AI can help hiring teams find previously considered “nonexistent” employees and go beyond a candidate’s resume to determine if they are the right person for the job.

HR can now prioritize their time on reviewing the candidates that AI identifies, not spending countless hours trying to find the right candidates, sort through scrambled resumes and CVs, or deal with visa paperwork and other regulatory complexities. Not only will they be able to sort through resumes faster, but also get better-qualified candidates to interview more quickly, ultimately gaining an edge in the race for global talent.

Hiring departments across the nation are finding it challenging to uncover the right talent to bridge the growing STEM skills gap as attracting and supporting candidates from abroad is exponentially more expensive and harder than ever before. For U.S. organizations, not being able to find, attract and retain the right workers, especially those from abroad, to fill highly skilled or specialized roles stifles innovation and opportunity. Hiring teams at companies across all industries need to follow the H-1B visa changes, leverage emerging technologies and understand how to attract and acquire the talent they need — at the right cost — regardless of candidates’ country of origin.

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The FLSA’s Exemptions Are Becoming More ‘Fair’ for Employers

Jon Hyman The Practical Employer

In Encino Motorcars, LLC v. Navarro, the Supreme Court ruled that overtime exemptions under the Fair Labor Standards Act “are to be given a ‘fair reading,’ meaning they are not to be construed too narrowly” (as had historically been the case).

The court applied this “fair reading” standard to conclude that automobile service advisors are exempt under the FLSA’s automobile-service exemption.

Since Encino, federal courts have applied the “fair reading” standard to find that various classes of employee are non-exempt (or likely non-exempt) under various of the FLSA’s categories of exemptions:

Recently, the Department of Labor itself applied this “fair reading” standard to conclude, in an Opinion Letter [pdf], that the FLSA’s “retail or service establishment” exemption applies to sales representatives who sell credit-card-payment platforms to merchants.

Courts and the DOL are more willing than ever to conclude that employees are exempt under the FLSA. Yet, employers should not read this “fair” construction test as a license to reclassify all of their non-exempt employees as exempt. However, it should give employers some comfort that in closer cases, courts should not be so quick to conclude that they misclassified an employee.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.