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This rule, which increases the minimum salary that employers must pay certain white-collar and highly compensated employees to exempt them from federal overtime requirements, has left many employers scrambling to ensure compliance.

How will these changes impact your business, and what steps must you take to navigate this complex regulatory environment effectively?

A Brief History of Overtime Rule Changes

The recent rule change marks the third modification attempt by the DOL in the past eight years, following a twelve-year period of stagnation between 2004 and 2016. The primary focus of these modifications has been on adjusting the salary threshold required for exemption under the federal Fair Labor Standards Act (FLSA), leaving the duties test unchanged.

It’s key to remember that an employee’s exemption status hinges not only on their salary but also on their job duties fitting specific exemption categories.

Employers often mistakenly equate salaried positions with exempt status, which can lead to non-compliance.

Key Changes Under the New Rule

Effective July 1, 2024, the annual salary requirement for executive, administrative, and professional white-collar exemptions increased to $43,888, with a further increase to $58,656 set for January 1, 2025. Similarly, the threshold for the highly compensated exemption has risen to $132,964, with an increase to $151,164 also slated for January 1, 2025. Additionally, the new rule mandates automatic adjustments to these salary requirements every three years, starting July 1, 2025, based on federal labor data.

Strategic Considerations for Employers

1. Dual Criteria for Exemption: Employers must evaluate both the duties and salary of employees to determine exemption eligibility. Simply meeting the new salary threshold does not guarantee exemption status.
2. State and Local Laws: The federal FLSA sets a minimum standard, but state and local laws may impose higher requirements. Ensure your compliance strategy encompasses all relevant jurisdictions to avoid discrepancies between federal and state regulations.

The recent changes to the overtime rule underscore the importance of staying informed and proactive in managing compliance risks. Employers must carefully review their payroll practices and exemption classifications to align with the new requirements. By doing so, businesses can mitigate potential legal exposure and ensure fair compensation practices.

Are your current payroll practices compliant with the new DOL rule? How will you adapt to the forthcoming changes in 2025? Taking action now can safeguard your organization against future regulatory challenges and reinforce your commitment to lawful and ethical employment practices.

For further guidance on navigating these complex changes, contact Dawda. Our team of experienced attorneys is here to provide expert legal counsel and support tailored to your business needs.

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At its core, the Chevron doctrine (which was established by the Court during the Reagan era) provided federal agencies with significant deference in interpreting ambiguous statutes. The Court’s decision to overturn this long-standing principle now places the onus of interpretation squarely on the judiciary. This shift presents certain benefits and concerns for businesses operating in regulated industries:

Benefits

1. Regulatory Flexibility.   Federal agencies, knowing that their rules could be easily challenged in court and wanting to avoid that, will have to be proactive.  They will be more likely to consider competing views and alternatives at the outset, rather than waiting for them to bubble up through the public comment period.
2. More Business Input.  The comments submitted by the regulated community during the public comment period will be assessed more closely.  Agencies will have to either incorporate them or provide compelling arguments why they should not be incorporated.
3. Fewer Rules.  Federal agencies may be less inclined to go through the rulemaking process for marginal issues.

Concerns

Regulatory Uncertainty

The elimination of agency deference introduces a new era of regulatory uncertainty. Judges with little or no expertise will have to weigh in on matters ranging from drug efficacy to automobile safety and assess the competing views of agency and regulated community experts.   We think this could result in  federal rules being upheld or rejected based on the judicial temperament of a judge or judges and, possibly, inconsistent rulings.  This fragmentation of regulatory interpretation poses a significant challenge for businesses seeking to maintain uniform compliance standards across state lines.

Increased Litigation Risk

With courts now bearing the responsibility for statutory interpretation, we foresee a surge in litigation as various stakeholders challenge agency rulemaking.   This will draw out the rulemaking process and leave businesses guessing  what the outcome could be.  .

Operational Disruptions

Agencies such as the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) possess specialized technical expertise crucial for interpreting complex regulations. The transition to judicial interpretation may result in less informed decisions and unworkable outcomes in the real world;  potentially leading to operational disruptions and increased compliance burdens.

Strategic Planning Challenges

As rules become law, businesses will be forced to either rely on the validity of the rule in making business decisions or wait and see the outcome of litigation. The ruling necessitates a reevaluation of strategic planning and compliance strategies. Businesses must now prepare for a more dynamic and potentially volatile regulatory environment. This uncertainty may impact long-term investments and operational decisions. Have you considered how this change might affect your company’s five-year plan or capital allocation strategies?

Financial Implications

The ripple effects of this decision extend to the financial realm. Companies may need to allocate additional resources to monitor and respond to regulatory changes and legal interpretations. This reallocation could impact overall financial planning and potentially affect shareholder value. How will your organization balance these new compliance costs against other business priorities?

In light of these challenges, proactive measures are essential. Consider the following strategies:

• Enhance your legal and compliance teams to monitor and analyze judicial decisions across various jurisdictions.
• Develop flexible compliance frameworks that can adapt to evolving interpretations of regulatory statutes.
• Engage in industry trade groups to advocate for clear legislative language, reducing ambiguity in future regulations.
• Implement robust risk management strategies to mitigate potential liabilities arising from regulatory uncertainties.
• Conduct regular audits of your compliance programs to ensure they align with the latest judicial interpretations.

While the Court’s decision represents a victory for proponents of reduced federal agency power, it undeniably introduces new complexities. The path forward requires vigilance, adaptability, and a commitment to staying abreast of the evolving legal landscape.

As we navigate these uncharted waters, Dawda stands ready to guide you through the complexities of this new regulatory environment. Our team of experienced legal professionals is committed to helping you mitigate risks, ensure compliance, and capitalize on opportunities in this transformed legal landscape.

Are you prepared to meet the challenges and seize the opportunities presented by this landmark decision? Let us work together to safeguard your interests and position your business for success in this new era of regulatory interpretation.

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Companies that are engaged in renovation activities that have the potential to disturb painted surfaces in pre-1978 structures should evaluate their activities in light of the RRP Rules, a copy of which can be reviewed by clicking here. Renovation is broadly defined as any activity that disturbs painted surfaces and includes most repair, remodeling and maintenance activities, including window replacement.

Painters, plumbers, carpenters and electricians are potentially responsible for adhering to the RRP rules. If your company’s activities involve projects that will disturb lead-based paint in pre-1978 homes, child care facilities, and schools (child-occupied facilities), your company must be certified by the EPA as an approved lead safe certified firm, and it must use certified renovators who are trained by EPA approved training providers. Child- occupied facilities are defined as residential, public or commercial buildings where children under the age of 6 are present on a regular basis.

If work in one of these affected building types will disturb more than 6 square feet of lead-based paint in an interior room or more than 20 square feet of lead-based paint on the exterior of the building, the contractors must use certain lead safe work practices which include:

• containing the work area,
• minimizing dust, and
• cleaning up thoroughly

In addition, prior to performing any such work, a contractor must provide the owners, tenants and child care/child occupied facilities with a copy of EPA’s lead hazard information pamphlet entitled “Renovate Right: Important Lead Hazard Information for Families, Child Care Providers and Schools” . The contractor must keep records showing that it supplied this disclosure form prior to commencing the work. These records should be retained for three years. More information regarding compliance with EPA’s RRP Rule can be obtained by reviewing the EPA’s “Small Entity Compliance Guide to Renovate Right” and EPA’s January 2010 Enforcement Alert pamphlet entitled “Compliance With New Federal Lead Based Paint Requirements”. As can be seen, failure to follow the RRP Rules can result in legal costs and significant fines.

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Class A operators have primary responsibility to operate and maintain the UST, and confirm completion of all maintenance tasks.

Class B operators are generally responsible for the day-to-day operations, including maintenance and record keeping for the UST system. A Class B operator generally has an in depth understanding of the operation and maintenance aspect of the tank system.

Class C operators are generally on-site daily, and are often the initial responder to emergencies and alarms in the event of spills and releases. There can be multiple Class C operators at an individual facility. A at a minimum, there should be at least one Class C operator (or an A or B operator) on-site while the tank system is operating. Class C operators, while they are not required to pass the aforementioned exam, they must still be trained in appropriate emergency response procedures.

The test and training is to confirm that operators of a UST facility possess the necessary knowledge regarding the proper operation of a UST system. Michigan, in conjunction with the federal requirement, has an August 8, 2012 deadline for operators to obtain certification. Beginning August 2012, the Hazardous Materials Storage Tank (“HMST”) inspectors will be checking for compliance with these certification requirements. Because of the very restrictive time frame, Michigan has indicated that it will not take enforcement actions until after January 2, 2013.

The International Code Council (ICC) is in charge of Michigan-specific testing. Tank owners and operators can get additional information on the ICC testing program here.

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Introduction

Redevelopment of contaminated land and land adjacent to contaminated sites can be a relatively straightforward process when you work with a good environmental consultant that understands the special risks and concerns a developer faces. However, there is one issue that can get any consultant tied up in knots because of the increasing attention given to it by regulators: vapor intrusion.

What’s the Concern?

Vapor intrusion occurs when certain types of contaminants in the soil or groundwater evaporate (volatilize) and migrate through spaces in the soil into occupied spaces within a building on the property. The type of contaminants that tend to evaporate are called volatile organic compounds (VOCs) and include substances such as benzene, toluene, xylene, acetone, and perchloroethylene (dry cleaning solvent). The scientific studies that regulators rely on suggest that the presence of such VOCs in indoor air can adversely affect the health of building occupants. Because of potential health risks, regulators, especially the EPA, are increasingly focusing their attention on vapor intrusion issues. Therefore, purchasers and redevelopers can be exposed to liability (both regulatory and for personal injuries) if they acquire property with vapor intrusion issues that are not abated. A good consultant should identify such potential risks during the pre-acquisition due diligence process and, depending on site location, the consultant might use one or a combination of the following screening methodologies.

ASTM Assessment

The American Society for Testing and Materials (ASTM) has developed a recommended vapor intrusion standard (E 2600: “Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transactions”) which is beginning to be followed by many consultants. ASTM E2600 prescribes a tiered approach to the vapor intrusion risk assessment. The first tier (Tier 1) of the analysis relies solely on documentary evidence. If information shows that there is a contaminated plume or potential plume within 100 feet of a proposed or existing building or property boundary (or within 30 feet for dissolved petroleum hydrocarbons), then a potential vapor intrusion concern (pVIC) is presumed to exist. (The consultant can modify these distances based on site specific conditions such as groundwater flow, depth to groundwater, vapor conduits, etc.). When a pVIC is identified, the consultant moves on to Tier 2 of the analysis, which can include sampling. If sampling is performed as part of Tier 2, the consultant compares the results to determine if any of the contaminants (within the 100 or 30 foot radius) exceed risk-based concentrations (RBCs) established by federal or state policy or site-specific RBCs established by the consultant. If there are any RBC exceedances, then further testing is undertaken during the Tier 3 analysis to confirm the presence of a VIC. If the presence of a VIC is confirmed in Tier 3, the consultant can propose a mitigation strategy using the Standard’s Tier 4 process.

EPA Assessment (Proposed)

On March 17, 2011 the EPA issued draft guidance for evaluating vapor intrusion entitled “Evaluating the Vapor Intrusion to Indoor Air Pathway from Groundwater and Soils” (which can be accessed here). EPA’s goal is to finalize the guidance by November 30, 2012. The guidance will be used at RCRA Corrective Action, CERCLA and Brownfield sites but it will not supersede state guidance. Like the ASTM assessment, the EPA guidance is to be used to determine if there is a potential for an unacceptable risk. While this risk assessment approach is not appropriate at sites where employees are working with hazardous substances similar to those that are contaminating the site, the guidance is intended for use in other situations.

Like the ASTM standard, EPA’s VI guidance relies on a tiered analysis and the first step (Tier 1) is very similar to the first tier of the ASTM standard. In this step, the consultant determines if existing data indicates that VOCs are near (within 100 feet) of occupied buildings. If they are, then the consultant proceeds to the next step (Tier 2) which can include comparison of available indoor air concentrations to generic criteria established by the EPA or the collection of soil gas samples and comparison of that data to the generic criteria. Site specific factors such as depth of the contamination and soil type are also considered. Based on the results of Tier 2, the consultant will then move to Tier 3 to further refine the assessment by collecting site specific data such as collecting indoor air and/or sub-slab air samples. The consultant can also use modeling techniques to factor in variables such as soil type, depth to groundwater, and various building characteristics that can impact indoor air such as type of ventilation, air exchange rates, etc.

Michigan DEQ Assessment

Michigan, under Part 201 of its Natural Resources and Environmental Protection Act (NREPA), has promulgated specific numerical screening criteria for many hazardous substances. The generic criteria that are used to assess vapor intrusion to indoor air for residential and non-residential properties are the groundwater volatilization to indoor air inhalation criteria (GVIIC) and soil volatilization to indoor air inhalation criteria (SVIIC). (These generic criteria would be the RBCs relied on if the consultant uses ASTM E 2600). If soil and groundwater testing identifies an exceedance of the GVIIC or SVIIC criteria on property where buildings are or will be located, then there is a potential risk to indoor air quality. If site-specific factors such as lack of cement or block foundation, shallow groundwater plume, or preferential pathways, the rules preclude reliance on the generic criteria and the consultant must perform a site specific analysis to determine if a vapor intrusion (indoor inhalation) risk is present that must be abated.

To clarify the process set forth in its rules, the Michigan Department of Environmental Quality has prepared draft vapor intrusion guidance (“Guidance Document for the Vapor Intrusion Pathway“) that sets forth the steps that can be taken to evaluate the potential for a vapor intrusion risk. In its current form, the guidance is structured in a 4-step process like ASTM E 2600, however, it uses a 100 foot receptor radius for the preliminary screening area. Step 2 involves the collection of soil-gas data and Step 3 involves the refinement of that data through sampling of indoor air and sub-slab soil gas as well as an evaluation of conditions such as the presence of cracks, utility lines and operational uses of hazardous substances. If a vapor intrusion risk is confirmed, a remediation strategy is developed in Step 4.

As you can see, when consultants encounter a site that may have a vapor intrusion risk there are several ways of approaching the assessment that are similar but at the same time have subtle differences. Although each of the approaches allows consultants to consider site specific factors and the consultant’s professional judgment, a consultant’s ultimate conclusion could be different depending upon the assessment methodology used.

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This new Agreement places an emphasis on studying aquatic ecology to develop solutions to problems of aquatic invasive species and habitat protection. The Agreement also comments on the impact climate change has on the Great Lakes.

Some environmental activists are critical of the GLWQA-4 as being a belated recognition of climate change, that is too soft on detailing the impact of climate change on the hydrogeology of Great Lakes. They believe GLWQA-4 fails to contain sufficient remedial measures and lacks specific goals to combat changing environmental conditions. By contrast prior versions of the Agreement set very specific objectives and measurable goals such as establishing unacceptable concentration levels for mercury, lead and certain pesticides in the lakes.

Proponents of this environmental accord argue that it is an appropriate response to tackling the problems of; invasive species, pollution and climate change. They specifically point to a positive history of improving lake conditions. For example, when GLWQA was initially signed forty years ago, Lake Erie was in a significant state of decline but the lake has vastly improved, which means a reduction in phosphorous levels in Lake Erie.

These bi-national efforts to protect the chemical, physical and biological integrity of the waters of the Great Lakes are overseen by the International Joint Commission (IJC) which advises the U.S. EPA and Environment Canada on establishing policy, science and action. The International Joint Commission shares information and assess progress on their priority issues of protecting nearshore environment, aquatic invasive species, habitat degradation and impact of climate change. These priorities are the focus of IJC’s continuing efforts to limit threats to public health and the environment in the Great Lakes Basin from harmful algae, toxic chemicals and discharges from vessels. Lake conditions will continue to be monitored and studied with progress reports made public every three years, at the direction of the IJC.

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The SMCRA, which was enacted in response to concerns with strip mining, sets minimum federal standards for regulating coal mining, and was enacted to ensure that land could be reclaimed after surface mining. Coal mine operators are required to comply with strict performance standards, permitting conditions, inspection requirements, and enforcement actions. The Department of the Interior administers the SMCRA through the Office of Surface Mining Reclamation and Enforcement, and may delegate permitting authority under the program to states with approval of the Secretary of the Interior.

In addition to SMCRA permits, mining operators also must obtain CWA permits to begin coal mining projects. The U.S. Army Corps of Engineers issues permits under §404 of the CWA for discharge of dredged and fill material into navigable waters of the U.S. at disposal sites. Once the EPA approves a State permitting program, the State may issue §402 permits, which cover discharge of pollutants that do not fall under §404. Section §404 permits contain effluent limitations restricting the amounts of specified pollutants that may be discharged. States must also adopt water quality standards under §303 that the EPA reviews for approval.

The controversy began in 2009 when the EPA issued guidance on the use of conductivity testing to determine the levels of dissolved solids in stream water. The guidance was to be used by regional offices for issuing surface mining permits.

The District Court found that the guidance was being employed in the field more like a rule than a recommendation, and held that EPA failed to follow the formal notice and comment procedures for promulgating a new rule. Although this holding was a win for the National Mining Association, it will remain to be seen whether this ruling will stand as the Justice Department recently filed a notice of appeal. Several environmental groups also filed a notice of appeal in the same matter.

(Thank you to DMMS law clerk, Kylie Angileri, who assisted with the preparation of this post.)

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In conjunction with remediation projects, many property owners are recording Restrictive Covenants which set forth limitation on the future use of the property. Pursuant to MCL 324.20114(c), a copy of the recorded Restrictive Covenant that is part of a post-closure plan or an MDEQ approved remediation must be filed with the MDEQ.

Provisions of the Restrictive Covenant may include limitations on future use such as installation of drinking water wells, testing of soils during development, maintaining exposure barriers, restricting site use for commercial or industrial purposes only. The Restrictive Covenant constitutes one element of giving public notice on the limitations of the property.

This online database is available on the MDEQ web site under “environmental mapper” which can be accessed here. The database can be searched by city and county. Sites can be identified within a radius of a specific location.

It has been a concern of MDEQ that without plotting this information and reporting use restrictions, the Agency has never had a complete inventory on all the parcels within the state that may be subject to certain future use restrictions. This inventory also provides an accounting of sites subject to continuous inspection and monitoring.

This source of information may also prove to be a helpful tool for prospective purchasers that undertake Baseline Environmental Audits or Phase I Environmental Audits. We would anticipate that this database will take several years to be comprehensive or reliable as an investigative tool.

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