As I have previously pointed out, the U.S. Department of Labor (DOL) and the U.S. Treasury Department have been pursuing cases of misclassification of workers—that is, the practice of classifying a worker as an independent contractor instead of an employee. Employers typically resort to this approach as a means of reducing the employer’s share of withholding taxes—and several other “benefits.” See this previous discussion.
On February 25, 2016, Governor Robert Bentley signed House Bill 174 which nixed the local minimum-wage ordinance passed by the Birmingham city council on August 18, 2015. The bill then became Alabama Act 2016-18, which is entitled the Alabama Uniform Minimum Wage and Right-to-Work Act.
Just in case you don’t think the U.S. Department of Labor is serious about going after misclassification of workers:
On July 6, 2015, the Federal Register published extremely significant proposed changes to the rules governing overtime under the Federal Fair Labor Standards Act (FLSA). This is the first step in the U.S. Department of Labor (DOL) changing the rules and is primarily directed toward decreasing the number of executive, administrative, and professional (EAP) employees who are exempt from the requirement that employers pay them time-and-a-half (1.5 times) their hourly rate for any time worked over 40 hours during a 7-day period. Put another way, this proposed change is likely to increase the number of people who get paid overtime by raising the threshold “salary basis” for those in traditionally white-collar positions.
A recent Presidential memorandum and a recent U.S. Supreme Court decision are likely to make a big difference in whether employers have to pay overtime to some managerial, administrative, or professional employees.