As previously reported, the FAR council published its Fair Pay and Safe Workplaces final rule on August 25, 2016, and the Department of Labor (DOL) simultaneously issued guidance on the final rule. As we also reported, the disclosure and arbitration provisions of the final rule that were set to take effect on October 25, 2016, were halted by Court Order leaving only the pay transparency provisions in play. These pay transparency provisions, which take effect January 1, 2017, include wage statement requirements, and independent contractor and exempt employee classification notifications. This communication is intended to provide Federal Contractors with a more detailed understanding of the pay transparency mandates to which they will be subject in the new year.
Paycheck Transparency
Under the paycheck transparency provisions of the final rule, covered contractors and subcontractors to provide wage statements to covered workers, giving them information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay.
Covered contractors and subcontractors are also required to provide to workers whom they treat as independent contractors a document informing them of their independent contractor status. Contractors and subcontractors must also provide written notice to inform workers if they are exempt from overtime pay.
The requirement to provide notice of exempt-status raises the stakes even further of proper classification, particularly in light of the new white collar overtime regulations. The required independent contractor notice itself takes on added import and risk given the DOL’s assault on alleged misclassifications of employees as independent contractors and recent related guidance.
The wage statements must contain the following information:
• Total number of hours worked in the pay period
• The number of those hours that were overtime hours
• The rate of pay
• Gross pay
• Any additions or deductions made to gross pay, itemized to identify and list each separately
• For wage statements other than weekly, hours worked and overtime hours broken down to correspond to period for which overtime is calculated
Employers will be deemed in compliance with the pay statement transparency requirements enumerated above if they comply with requirements for any of the following states, which have been determined to have “substantially similar” requirements as those set forth above:
• Alaska
• California
• Connecticut
• District of Columbia
• Hawaii
• New York
• Oregon
The wage statements must be translated into the language of its workforce if a “significant” number of workers are not fluent in English.
For additional information on the Paycheck Transparency effective January 1, 2017, please click here.
As always, if you have any questions regarding this Alert please contact your Relationship Manager or Service Team.