AAMP report: Social liabilities | MEAT+POULTRY

DES MOINES, IOWA – During a July 14 presentation at the American Association of Meat Processors’ American Convention of Meat Processors and Suppliers’ Exhibition, attendees heard a legal update on labor issues that concern or will soon concern small and very small processors.

Rick Alaniz, a partner at Houston-based Alaniz Law & Associates, and a MEAT+POULTRY editor, told attendees that some challenges stem from the Biden administration’s stance on issues such as immigration reform, minimum wage and overtime pay requirements, and union representation. With a workforce that has proven inconsistent with employer expectations, companies in the meat industry and across industries are struggling to recruit and retain workers.

“Sixty-six percent of your workforce, at any given time, is at risk of quitting your job,” Alaniz said, “so the challenge is to retain those people; doing the right things for the right reasons.

He pointed out that organized labor has historically been a strong supporter of the Democratic Party, and this is especially true of President Biden and therefore has implications for operators of meat and poultry processing plants.

“He considers himself a trade unionist,” he said of Biden, and future policies should reflect that.

An example of what this could mean for employers is the elimination of state right-to-work laws. Currently, 27 states have right to work laws in place.

“A right-to-work state is one where no employee has to pay a union to keep their job,” Alaniz said, and the current administration is focused on implementing legislation that would deter states from continuing to support right-to-work policies.

Meanwhile, efforts to raise the federally required minimum wage from the current rate of $7.25 an hour to $15 an hour are still being pursued by the current administration and Alaniz said he Republicans are likely to compromise on the issue and settle for around $10 per hour. hour in some states, like Hawaii, other states are crashing through the cap and supporting minimum wages above $20 an hour.

“It’s something that will definitely happen and [when it happens] it will affect everyone in this room, no matter how tall you are,” Alaniz said.

Wage and hour issues are by far the most common labor relations and employment issues that Alaniz advises clients on in her practice.

“The misclassification of individuals as exempt when they are not qualified to be exempt from overtime” is one of the most common issues that arises, Alaniz said. What determines employee classifications includes a salary threshold and a job threshold.

A common problem occurs when an employee is classified as a salaried worker but does not perform the duties required of someone who the law considers exempt from overtime pay. Examples of employees considered exempt include those at the managerial level.

Administrative-level exemptions apply to workers in positions such as office manager or business manager who make independent judgmental decisions about important business matters. Occupational exemptions apply to employees in specialized roles such as IT or IT-focused tasks. Penalties for violating these federal regulations include three years back pay for any overtime hours worked and the total is doubled, so the liability can be significant even if the oversights are unintentional.

“These are the types of errors that happen,” Alaniz said. “Keep in mind that these are areas of potential liability that you can correct if you wish.”

Raising the wage threshold for what constitutes exempt status is an issue that employers should be prepared to address later this year. The current minimum wage for an employee to be considered exempt is $684 per week, or $35,568 per year.

Alaniz said employees should be aware that the government announced plans to release a new rule in October that will likely double the current wage exemption amount after a 60-90 day comment period. He expects the new exemption salary threshold to be between $60,000 and $70,000 per year.

“For all employers, especially smaller employers, you’re talking about a major cost impact that you need to start thinking about now because it’s going to happen, there’s no doubt about it,” Alaniz said, adding that he will likely be implemented by January or February 2023.

Considerations employers should keep in mind when preparing for upcoming changes include weighing the additional cost of paying overtime for a position that will likely require more than 40 hours per week on a regular basis against the increased salary at the new minimum. Other factors to consider include the impact on productivity and morale of employees moving from salary-based compensation to hourly compensation.

“It has a negative effect,” Alaniz said, because some people see their salary status as an indicator of their success and longevity in their jobs, which is a source of pride.

Responsibility for workers’ non-hourly work in factories is another topic that Alaniz said employers should be aware of, even if employees voluntarily take a step ahead of their shift without clocking in or clocking in and returning to work. to complete certain Tasks.

“If they’re doing anything that’s job-related, it’s compensable time,” Alaniz said, and a US Department of Labor audit could reveal those realities and lead to costly back pay and penalties.

This compensation also applies to non-exempt employees in sales positions who might take after-hours business calls or administrative employees who take documents home with them at the end of the day.

One way employers can limit their liability is by posting notices in the workplace indicating a company policy that prohibits unauthorized overtime.

Post the notice and hold them accountable,” Alaniz said. “You can’t deny them the pay, but you can hold them accountable,” which may include disciplinary action.

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