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The Department of Labor has issued a final rule which will have a dramatic effect on which employees are exempt from the Fair Labor Standards Act’s overtime pay requirements. These requirements, in general, provide that an employer must pay a non-exempt employee a minimum of one and one-half of his/her salary (computed on an hourly basis) for hours worked in excess of 40 in any given work week.
The existing regulations, modified by the new rule, had exempted so-called white collar employees: professional, executive and administrative, outside sales and computer employees (as defined by the regulations) who earned a minimum of $455 per week or $23,550 annually. Also exempt were highly compensated employees-employees who regularly performed some of the functions of professional, executive or administrative employees and were paid a minimum of $100,000 annually.
The new rule, while not changing the description of the exempt categories, increases the exemption threshold for white collar employees to $47,476 and the highly compensated employee to $134,004.
These salary thresholds will increase every three years based on statistics from the U.S. Bureau of Labor Statistics.
The effect of the rule is to eliminate the exempt status of white collar employees including professional, executive and administrative employees making $47,476 or less or highly compensated employees making $134,004 or less.
The effective date of the new rule is December 1, 2016.
Since the new rule greatly increases the number of non-exempt employees covered by the overtime regulations, employers should review the written job descriptions of their employees as well as the nature of the work their employees actually perform (often not the same as written descriptions). Employers should also review their salary and wage structure.
Antheil Maslow and MacMinn, LLP can assist employers in assuring compliance with the FLSA.
Pennsylvania has adopted specific provisions relating to a shareholder’s right to inspect the books and records of a corporation duly organized under the laws of the Commonwealth. The Business & Corporations Law clearly provides for a shareholder’s inspection of corporate records, including the share registry, books of account and records of proceedings upon written notice stating a proper purpose. However, when the legislature adopted the Limited Liability Company Law of 1994 (the “LLC law”) no similar provision was made relating to a member’s right to review company books and records, and no reference was made to the right of inspection applicable to corporations.
The absence of a specific reference in the LLC law does not mean that a member in a Limited Liability Company does not have the right to inspect business records. The statute approaches that right from a different direction through the application and incorporation of partnership law. Section 8904 of the LLC law incorporates by reference provisions relating to general partnerships in the case of a member managed LLC and additional provisions related to limited partnerships in the case of a manager managed LLC. In either case, the provisions of Chapter 83 relating to general partnerships are rendered applicable.
Section 8332 provides that “the partnership books shall be kept, subject to agreement between the partners, at the principal place of business of the partnership, and every partner shall at all times have access to and may inspect and copy any of them”. While partnership law does not define the types of records which are to be maintained in the same manner as the provisions relating to corporations, the statutory intent appears to be the same and thus the types of records subject to inspection are arguably similar in scope.
There are material differences between the right applicable to corporations and partnerships/ LLC’s. One major difference is that the partnership/LLC provision does not reference a requirement that the partner seeking an inspection state a “proper purpose” for the inspection. The right as stated appears to be absolute as to partnerships/LLCs whereas in a corporate setting the shareholder must identify and communicate the purpose. In addition, the provisions relating to corporations specifically provide for a cause of action for review of corporate records and for the recovery of attorney fees associated with the enforcement of that right. No provision in the partnership law applicable to LLCs provides a specific similar right, nor the recovery of attorney fees. A practitioner is left to argue the applicability of the provisions relating to corporations and the similarity of purposes served by the two statutory provisions.
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