With a new president in office, employers are curious about the effect this new administration will have on them. Employers, in general, have many things to look forward to with the new administration. Some of the more business-friendly aspects of the incoming administration are the repeal of Obamacare provisions placing obligations on employers, the appointment of conservative members to the National Labor Relations Board and its General Counsel, as well as potential limitations to joint employer liability. Two areas where car-care business owners and operators can expect changes are immigration and the overtime rule.
The vast majority of the eight to 12 million undocumented immigrants in the Unites States are employed in the service and agricultural industries. Although there are no known issues regarding undocumented employees in the car-care business, as service providers, it would not be surprising to learn that they may have undocumented employees on staff. Statistically speaking, car-care business owners and operators are more likely to have to deal with the issue of an undocumented employee.
An item on the new administration’s list is requiring all employers, big or small, private or public, to utilize e-verify. Under the Immigration Reform and Control Act (IRCA) employers are required to verify the identity and employment eligibility of all employees hired in the United States after November 6, 1986. Employers face civil and criminal penalties for knowingly hiring or continuing to employ people without employment authorization.
IRCA designates the Form I-9 as the means of documenting this verification process. E-verify is an Internet-based system that allows employers to determine the employment eligibility of new hires. E-verify compares information from an employee’s Form I-9 to federal databases to confirm employment eligibility.
Remember, Forms I-9 are not the same as e-verify. Unlike Forms I-9, e-verify is not mandatory; it requires employees to provide their social security number, and it requires a photo on identity documents. This information is then compared to the records available to the U.S. Department of Homeland Security and Social Security Administration. A great feature of e-verify is that it gives employers almost instantaneous results on whether an employee is eligible to work in the United States.
Many employers have opted to use e-verify because they only have to use e-verify to confirm employment eligibility for new hires. Employers are not required to run existing employees’ information through e-verify. In essence, all employees hired before the employer starts using e-verify are “grandfathered” in.
The new administration has suggested it will make the use of e-verify mandatory. If this were to happen, there is a question as to whether employers will be required to run all of their employees (current and new) through e-verify. One thing that is certain, the enforcement of mandatory e-verify creates a higher risk of penalties for employers who may be employing a person who is unauthorized to work.
Additionally, the new administration has said it will increase the efforts to enforce immigration regulations. Part of the plan is to triple the number of agents in the Immigration and Customs Enforcement agency (ICE) and automatic deportation of criminal aliens.
Some of ICE’s enforcement efforts consist of conducting raids at certain business locations. Although the most recent raids are said to be focused on criminal aliens, ICE is known to focus its resources in industries known to have a large percentage of their workforce composed of illegal immigrants. Again, most undocumented immigrants work in the agricultural and service industries. With the increase of ICE agents and enforcement measures, businesses in the service industry can expect to be the target of raids and undocumented immigrant round ups.
UPDATE ON NEW OVERTIME RULES
In 2015, the Department of Labor (DOL) issued a proposed rule to modify the Fair Labor Standards Act (FLSA) rules on current minimum wage for white-collar, salaried employees. White-collar, salaried employees are exempt from the FLSA’s minimum wage and overtime pay protection. Employees are exempt if they are employed in an executive, administrative, or professional capacity as defined by DOL regulations.
The new overtime rule would require employers to pay certain exempt employees at least $913 per week or $47,476 annually. The rule also provided that employers would be required to pay highly compensated employees a base salary of $134,004. Another aspect of the proposed rule was that these increases were subject to an automatic periodic adjustment. DOL estimated that over four million employees would be affected by the change.
The rule was intended to go into effect on December 1, 2016. Of course, this set off a mass panic among many employers. Twenty-one states filed suit against the Department of Labor seeking declaratory relief and an injunction that would block the revisions to FLSA. In the case, Nevada v. U.S. Dept. of Labor, a Texas federal court blocked the proposed overtime rule. No. 4:16-cv-00731, 2016 WL 6879615 (E.D. Tex. Nov. 22, 2016).
Although the new rule was blocked, employers can expect the new administration to make a change to the overtime rule, but not nearly as drastic as the one proposed under the former administration. The current minimum wage salary for exempt employees is $455 per week or $23,600 annually. The purpose of the new rule is to update the current minimum wage salaries for exempt employees to reflect the effects of inflation and ensure that the intended overtime protections are fully implemented. For now, employers must continue to abide by the prior rules still in force.
Jacob M. Monty is the managing partner of the Houston-based law firm, Monty & Ramirez LLP. Monty is board certified in labor and employment law by the Texas Board of Legal Specialization. He regularly advises employers on a wide array of labor and employment issues. Monty & Ramirez LLP is an employment, labor, and business immigration law firm. Please visit www.montyramirezlaw.com for more information.