Page 24 - BusinessWest March 4, 2024

“When an employer misclassifies an employee as an independent contractor, the worker cannot take advantage of numerous workplace protections afforded to employees.”
with business initiative. If the worker does, that indicates independent contractor status; if the worker does not, that indicates employee status.
Proper classification of workers is of critical importance to employers. As explained above, when an employer misclassifies an employee as an independent contractor, the worker cannot take advantage of numerous workplace protec- tions afforded to employees. This can lead to significant administrative penalties for busi- nesses, not to mention costly misclassification lawsuits. When the classification analysis is a close call, employers should consult with their employment counsel prior to making the deter- mination to avoid costly mistakes.
New Overtime Protections for Millions of Employees
Last fall, the DOL announced a proposed rule that would increase the salary threshold for exemptions from minimum wage and over- time pay requirements under the executive, administrative, or professional exemptions — otherwise known as the EAP exemptions.
As a reminder, in order to qualify for an EAP exemption, employees generally must be paid a salary of at least $684 per week ($35,568 annu- ally). The DOL’s proposed rule would raise the current minimum weekly salary threshold for exempt employees to $1,059 per week, which amounts to $55,068 annually. In short, this means that most employees with a salary of
less than $1,059 per week will soon be entitled to overtime when working more than 40 hours in a workweek.
The DOL’s proposed salary threshold rule would also automatically update these earnings thresholds every three years. We expect the rule will be finalized in April, and may go into effect as soon as June. With the 2024 presidential election approaching, the Biden administration will want to finalize this rule as soon as pos- sible to avoid a new administration rescinding the rule.
Bottom Line
We encourage clients to take a proactive, preventive approach to wage and hour laws. Consider having your compensation practices audited by experienced counsel to be sure your business is not mistakenly classifying employ- ees as independent contractors. Also, an audit will help spot overtime exemption problems before litigation ensues. BW
John S. Gannon is a partner with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law. Gannon specializes in employment litigation and personnel policies and practices, wage and hour compliance, and non-compete and trade-secrets litigation; (413) 737-4753; [email protected]
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