New Fair Labor Standards Act Regulations May Change How You Do Business

(h/t to my colleague, Fran Dwornik, for her informative presentation on this issue.)

Enacted in 1938 in response to the Great Depression, the Fair Labor Standards Act (“FLSA” or the “Act”) regulates Federal minimum wage, overtime and child labor standards.  All employees are covered unless they are deemed to be exempt (i.e., certain executives, administrative, professional, outside sales, computer specialists and highly compensated employees as defined within the Act).   To be exempt, certain requirements must be met that look at the basis for the salary paid, salary level (currently $23,660 per year) and the duties of the employee. 

Effective with the pay period including December 1, 2016, the new FLSA regulations will increase the salary level to $47,476 per year, which will then be updated every 3 years beginning January 1, 2020.  This means that as an employer, if your employee is salaried and not earning $47,476 annually, then either the salary will have to be increased to the new minimum to continue to classify the employee as exempt or the employee will need to be switched to hourly pay and you will have to track hours and pay overtime as appropriate.  There are quarterly catch-up payments that can be made to cure an issue, but you first have to recognize that an issue exists.

Also changing on December 1, 2016 is that the salary threshold to classify an employee as a ‘highly compensated employee’ will increase from $100,000 per year to $134,000 per year, provided the employee performs at least one exempt duty.  This threshold will also increase every 3 years beginning on January 1, 2020.

What does this mean for business owners and employers.  First, employers who are subject to FLSA need to review and analyze their employee records and salaries to determine who will be exempt and who will not be exempt under the new regulations.  Next, employers will have to make some decisions regarding whether to convert currently salaried employees to hourly employees or increase the base salary to the new minimum to maintain exempt status.  If the employer converts employees to hourly pay, this may mean that employees will lose some level of flexibility in their day-to-day jobs as hours will now be tracked.  For example, working from home may no longer be an option for a once salaried employee who now is paid hourly as an employer may want to be able to visibly track hours and time in the office.  If the employer increases base salaries to the new minimum, this may result in an overall reduction of other benefits to cover the increased salary.  More part-time jobs may be developed by employers where there are middle management exempt employees who will no longer be exempt (e.g., retail and restaurant industries). 

Ultimately, the impact of the new regulations is not yet fully determined.  However, if your are an employer subject to FLSA, then you should review your records and sit down with your professional advisor to ensure you are or will be in compliance with the new regulations. #businessplanning #FLSA #newregulations @bgnthebgn


Elder Law Update – Changes to Laws Impacting Virginia’s Seniors and the Disabled

On July 1st (unless otherwise noted) a number of new laws took effect in Virginia that may have an impact on you.  Below is a summary of a few key pieces of legislation of which you should be aware.

Section 51.5-44.1 – It is a now a Class 4 misdemeanor to misrepresent your dog as a service dog to gain access to public areas with the animal.

SB 553 – Requires the Board of Health to promulgate regulations relating to audio and visual monitoring of residents in a nursing home by July 1, 2017.  The regulations are to address privacy, notice, disclosure, liability, responsibility for equipment, costs and security, among other items.

Section 63.2-1806 – An assisted living facility is not required to provide or allow hospice care at the facility so long as this is disclosed to the resident prior to admission and is otherwise allowed by Federal law.

Section 64.2-2019 – A guardian of an adult incapacitated person is not permitted to ‘unreasonably restrict’ an incapacitated person’s ability to communicate with, visit, or interact with others with whom they have had an ‘established relationship’.

Sections 37.2-817, 37.2-837 and 37.2-838 – A person being discharged from involuntary admission in general or to mandatory outpatient treatment who does not have an advance medical directive must now be provided with a written explanation of the process for executing an advance medical directive and a form of an advance medical directive.

Sections 64.2-2011 and 64.2-2014 – The Department of Medical Assistance Services must now be notified of guardianship appointments, modifications and terminations.

Sections 64.2-2001 and 64.2-2009 – In a petition for a guardianship and/or conservatorship of an incapacitated individual who has not reached age 18, the statute clarifies that the court may enter an order for such guardianship/conservatorship appointing a guardian or conservator prior to age 18, but the court order should state whether the order is effective immediately or when the person turns 18.

Section 63.2-1605 – When investigating financial exploitation of an individual age 6o or older, if the department of social services or adult protective services believes there is ongoing exploitation totaling more than $50,000, then the police are required to be told so an investigation can ensue.

Section 8.01-220.2 – The principal residence held by tenants by the entireties (i.e., ownership between spouses) cannot be used to pay for one spouse’s debt incurred for emergency medical care unless the property is refinanced or transferred to new owners.

Section 23-38.81ABLE savings accounts are excluded as countable resources for means-tested public benefits. (Effective October 1, 2016.)

#elderlaw #guardianship #Virginialaw #incapacityplanning #specialneeds @bgnthebgn


Digital Assets Under Virginia Law

In an earlier post, there was a discussion about Maryland’s Fiduciary Access to Digital Assets Act.  But what has Virginia done with respect to digital assets?  Virginia has not adopted the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”) or any version of it.  Instead, in 2015 Virginia adopted a version of the Privacy Expectation Afterlife and Choices Act (“PEAC”).  Under this statute, a personal representative or executor may petition a court for access to certain information within a deceased individual’s digital records for the 18 month period prior to death.  However, the petition will not permit the personal representative to gain access to the content within the digital records unless it can be shown that the deceased individual consented, in some fashion, to have that information released.  If the deceased individual did not consent or deleted the information, the information will not be released.  Furthermore, the holders of the digital content have the ability to show an undue burden if they release the information, and therefore, can argue against disclosure.  The overall impact of Virginia’s statute is still being tested, and therefore, whether it is now simpler for a personal representative to gain access to digital assets is questionable.  Furthermore, the statute does not appear to apply to trustees, guardians or agents under a power of attorney or address access to such digital assets during any period of incapacity. 

So, what can you do to protect your digital assets but also ensure that your fiduciaries have authority to act on your behalf with respect to your digital assets?  You can make sure your last will and testament, revocable living trust and/or general durable power of attorney are updated to include authority and power regarding digital assets.  Moreover, you need to organize your digital assets by making sure the location of hard files and back-up files (i.e., in the cloud, on a USB drive, etc.) are known to your fiduciaries.  Your fiduciaries will need to be able to provide user names, passwords, answers to security questions and any other authentication methods associated with the accounts. 

Finally, your fiduciaries also need to know what digital assets are out there, so be sure to list the following information: e-mail accounts, domain names, online storage accounts (e.g., Dropbox), financial software, bank accounts, securities or brokerage accounts, types of devices, taxes, retirement accounts, credit cards, insurance (e.g., health, homeowners’, car, disability, etc.), debts (e.g. mortgage or car loans), utilities, social media, digital media (e.g., Netflix, Kindle, iTunes), membership or loyalty programs (e.g., frequent flyer accounts) as well as any other account that requires an online presence (e.g., Skype, Amazon or professional affiliations). 

When you really think about it, your digital footprint might be quite extensive and your fiduciaries need the information to be better able to provide for your care and handle your estate.  #estateplanning #incapacityplanning #estateadministration #digitalassets @bgnthebgn

Maryland Enacts Fiduciary Access to Digital Assets Act

On October 1, 2016, Maryland’s Fiduciary Access to Digital Assets Act will come into effect, thereby giving a fiduciary (i.e., personal representative, guardian, agent or trustee) or a designated recipient (i.e., a person named using an online tool) the ability to request access to a person’s digital assets in certain circumstances.  Digital Assets is defined as “an electronic record in which an individual has a right or interest.”  The Act allows an individual to direct whether their digital content is disclosed, to whom and to what extent.  This authority can be granted through an online tool provided by the custodian (e.g., Google has Inactive Account Manager or Facebook has Legacy Contact) or through an individual’s will, trust or power of attorney.  Access may still be subject to the terms of service agreement and gives the custodian of such information (e.g., Google) some discretion as to the breadth of the disclosure and the ability to charge an administrative fee.  If a request is made, the Act requires that a custodian comply no later than 60 days from the receipt of the request, including receipt of all the ancillary documentation associated with the request as detailed under the statute.

So, next steps for you?  When creating accounts be sure to look for whether the website requires you to complete an online tool.  You may want to opt out of using the online tool so that you can better control your wishes through your estate planning documents.  Furthermore, if you reside in Maryland, you should review and update your estate planning documents to ensure that access to digital assets has been addressed in accordance with your wishes.  Finally, you should create and store in a secure location a list of all your digital assets, including your credentials, so that your nominated fiduciaries know what assets to access during any period of incapacity and upon death. #estateplanning #estateadministration #digitalassets #MFADAA @bgnthebgn