Personnel Practices: Employment Law Updates from 2015

Personnel Practices- Employment Law Updates from 2015 Picture

by C. Alexander Chiulli, Esq. and Kristen M. Whittle, Esq.

With 2015 at an end, it is fair to say that the past year provided numerous developments in the employment arena. The following summarizes important updates that Rhode Island employers should be aware of heading into 2016.

Misclassification of Independent Contractors
In 2015, the Rhode Island Department of Labor and Training (DLT) began cracking down on employers for misclassifying employees as independent contractors. Rhode Island employers must generally withhold state and federal income taxes, Social Security and Medicare taxes, pay unemployment taxes on wages paid to employees, and purchase workers’ compensation insurance for employees. Employers are not, however, typically required to pay taxes or purchase workers’ compensation insurance for independent contractors.

“Misclassifying employees as independent contractors may violate workers’ rights, cause a decrease in tax revenue, and lead to businesses obtaining an unfair competitive advantage.” In light of this issue, Governor Gina Raimondo remarked in a recent press release that “breaking the law not only hurts workers, it also hurts all of the Rhode Island companies that follow the rules, pay proper wages and help grow our economy.” Rhode Island employers that misclassify their workers now face substantial monetary penalties as well as other consequences, including a potential investigation by the Workplace Fraud Unit within the Department of Labor and Training’s Workplace Regulation and Safety division.

New Wage and Hour Requirements

The United States Department of Labor (DOL) has proposed drastic rule changes that are expected to take effect in 2016, making most workers earning $50,440 or less per year eligible for overtime wages. This is a significant increase from the present threshold of $23,660 per year under the “white collar” exemption to laws requiring the payment of overtime pay for work performed in excess of 40 hours per week. According to the DOL, this change is expected to extend overtime protection to up to 5 million workers nationwide within its first year of implementation. Rhode Island employers should take steps to evaluate their classification of employees as exempt vs. non-exempt from overtime pay in anticipation of this dramatic change.

In addition, the Rhode Island General Assembly raised the state’s minimum wage to $9.60 per hour effective January 1, 2016. The DLT also began rigorously enforcing employers’ compliance with hour and wage laws in 2015. As always, Rhode Island employers are wise to pay increased attention to determining and paying employees’ wages.

Pregnancy Accommodation Law 

Rhode Island’s General Assembly enacted legislation in June of 2015 to “combat pregnancy discrimination, promote public health, and ensure full and equal participation for women in the labor force by requiring employers to provide reasonable accommodations to employees with conditions related to pregnancy, childbirth, or a related condition.” R.I. Gen. Laws § 28-5-7.4. Under the new law, which heightened existing protections for pregnant workers, employers cannot restrict employment opportunities on the basis of pregnancy, childbirth, or a related medical condition and must provide reasonable accommodations for the same at an employee’s request.

Reasonable accommodation include “more frequent or longer breaks, time off to recover from childbirth, acquisition or modification of equipment, seating, temporary transfer to a less strenuous or hazardous position, job restructuring, light duty, break time and private non-bathroom space for expressing breast milk, assistance with manual labor, or modified work schedules.” R.I. Gen. Laws § 28-5-7.4. This new law further required employers to provide notice of these heightened protections to current employees by October 23, 2015, new employees upon the commencement of their employment, and any employee who notifies the employer of her pregnancy within ten days of such notification.

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