A Year of Change – Increasing Penalties and More

One thing we already know about 2016– this year will bring changes in many of the “numbers” we are accustomed to in the world of employment law: the OSHA penalties are likely to significantly increase, the salary level for exempt employees and highly compensated employees will be increasing, and even the minimum wage is increasing in certain states.

construction peopleOSHA Penalties Will Increase

In early 2015, a “catch up adjustment” was authorized for OSHA penalties that are imposed against employers who receive citations for safety hazards. This adjustment will be effective no later than August 1, 2016. While the new regulations identifying the specific changes have not been published, the initial adjustment will likely be approximately 80% (based on a mathematical formula I won’t even try to explain here).

Therefore, assuming the 80% adjustment (it’s actually not exactly 80%–so there will be some rounding when the final numbers are rolled out)— an other than serious and serious violation that currently has a maximum fine of $7,000 could be up to $12,600. A repeat or willful citation could rise from $70,000 to $126,000. The amounts will then be set to increase every January 15th. Ultimately, the maximum increase can be up to 150% of the current amounts.

These changes are significant as they represent the first time OSHA penalties will increase in 25 years. You can check out the changes here – in section 701 of the Bipartisan Budget Act of 2015.

The Salary Levels in the Fair Labor Standards Act will Increase

We are still waiting for the final regulations to be published, but one thing is certain—the salary level for exempt employees will change in 2016. As I have previously discussed on this blog, the new regulations propose to increase the minimum amount of pay and set the standard salary level to the 40th percentile of weekly earnings for full-time salaried workers—which means the amount would more than double and increase to approximately $970 per week ($50,040 annually) in 2016. And this amount will automatically increase annually.

In addition, the salary level for highly compensated employees will increase. The highly compensated employee exemption currently applies only to employees who have a guaranteed total annual compensation of at least $100,000 and who “customarily and regularly” perform one or more of the exempt duties of an administrative, executive or professional employee, and are not engaged in manual work.

It is anticipated that amount will increase to approximately $122,148 total annual compensation. We are awaiting the final regulations to confirm what that amount will be and it will almost certainly cause waves in 2016.

pile of moneyMinimum Wage Increasing in 16 States

I am a fan of interactive maps – so check this one out.

(Disclaimer: It’s not mine, so I can’t guarantee its accuracy) – BUT it purports to show the 14 of the 29 states (plus D.C.) that have minimum wages higher than the federal minimum wage that are increasing in 2016.

If you like lists and not maps – check this one out.

Or maybe you prefer charts. Then, you might enjoy this.

Arizona’s minimum wage will remain the same in 2016 at $8.05 per hour, which is higher than the federal minimum wage of $7.25.

About Ashley Kasarjian

Attorney at Snell and Wilmer in Phoenix, Arizona, and publisher of the blog, Employment and the Law.
This entry was posted in Arizona, FLSA, OSHA and tagged , . Bookmark the permalink.

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