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Compliance Update: July 6th, 2015

The wait is over: the proposed FLSA overtime changes are out!

For those (like me!) anxiously awaiting the Department of Labor’s (DOL) proposed overhaul of the exemptions to the Fair Labor Standards Act (FLSA), the wait is over. The proposed rule [pdf] is now available on the DOL’s website (although it has not yet been published in the Federal Register). According to the DOL’s calculations, the proposed rule would result in 4.6 million currently exempt workers becoming entitled to minimum wage and overtime protection under the FLSA, with annualized direct employer costs totaling around $250 million per year and an annualized transfer of income from employers to employees (in the form of higher earnings) of around $1.2 billion.

A quick recap: The FLSA requires employers to pay minimum wage and overtime pay one and one-half times the employee’s regular rate for hours worked over 40 in a workweek) to employees. However, the FLSA provides a number of exemptions from the minimum wage and overtime pay requirements. One set of exemptions referred to as the “white collar exemptions” provide that employees who are paid at least $455/week ($23,600/year) on a salary basis and whose primary duties consist of certain executive, administrative and/or professional duties, are exempt from the FLSA’s minimum wage and overtime requirements. The regulations were last updated in 2004.

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Source: Lexology

Another Tech Company Just Converted Its Contractors Into Employees

Yet another Silicon Valley company is hiring its contractors as employees.

Shyp, which helps customers mail packages, said Wednesday it planned to reclassify hundreds of couriers as employees. The news follows a similar announcement made last month by grocery delivery startup Instacart.

Depending on how many hours they work, Shyp’s couriers will now receive access to benefits such as healthcare. The company — which operates in San Francisco, Los Angeles, Miami and New York — also promised to pay for vehicle expenses, unemployment, Social Security and Medicare taxes.

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Source: Huffington Post

Calif. Lawmakers Consider Uber-Backed Bill

Ride-hailing companies’ latest skirmish with those who would seek to regulate them in California is set for July 7. That’s when the state Senate Transportation and Housing Committee is scheduled to consider AB 828, legislation that would exempt drivers for services such as Uber, Lyft and Sidecar from having to register their personal cars as commercial vehicles. That’s not required right now.

But the specter of the state classifying the family minivan like a delivery truck was raised in January when the Department of Motor Vehicles issued a memo suggesting that any vehicle that transports paying customers—even on an irregular basis—needs commercial plates. The announcement carried multimillion-dollar implications, particularly for drivers, who would have to pay higher licensing fees, car-financing costs and insurance rates.

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Source: The Recorder

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