ARTICLE- Update to Fair Labor Standards Act Overtime and Minimum Wage Rules

Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

On January 1, 2020, a new rule took effect which updated the earnings threshold necessary to exempt executive, administrative or professional employees from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements.

The FLSA requires employers to pay the federal minimum wage to employees who work more than 40 hours per week, and overtime pay of at least 1.5 times the regular rate of compensation.

The FLSA also contains a provision which exempts executive, administrative or professional employees from the minimum wage and overtime pay requirements. To fall under this exemption, an employee must (1) be paid a pre-determined, fixed salary that is not subject to reduction based on quality or quantity of work; (2) meet a minimum specific amount; and (3) perform duties that primarily involve executive, administrative, or professional activity as defined by statute.

The updated rule increases the earnings threshold necessary for employees to fall under the exemption, and allows an employer to count a portion of bonuses or commission towards meeting the threshold. The update will (1) raise the “standard salary level” from $455 per week ($23,660 per year), to $684 per week ($35,568 per year); (2) raise the total annual compensation requirement for “highly compensated employees” from $100,000 to $107,432 per year; and (3) allow employers to count non-discretionary bonuses and commissions paid annually, toward 10 percent of the “standard salary level.”

In other words, while the old rule meant that employers did not have to pay overtime or minimum wage to employees who earned more than $23,660 per year. Under the updated rule, employers have to pay minimum wage and overtime to employees who earn less than $35,568 per year.

The Department of Labor estimates that the update will make an additional 1.3 million workers eligible for overtime pay.

Please note that this Article does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. – January 2020

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ARTICLE- Indiana Law Allows Enforcement of No-Contest Clauses

On July 1, 2018, Indiana joined the 48 other states that allow the enforcement of so called in terrorem clauses in wills and trusts. These clauses, more commonly known as “no contest clauses” are provisions in a will or trust that state if a beneficiary seeks to contest the will or trust, they lose the property they were going to inherit. And now, pursuant to Indiana Code § 29-1-6-2 and Indiana Code § 30-4-2.1-3, these clauses, if included in a will or trust are enforceable by an Indiana court.

The common purpose of no contest provisions in a will or trust document is simply to reduce or eliminate the likelihood that beneficiaries will seek to initiate lengthy and expensive litigation to contest a will or trust. In this respect, a no contest provision can at least give beneficiaries something to think about before filing suit to contest a will or trust. It remains to be seen, however, whether or not the law has deterred these contests.

There are numerous exceptions contained in the statutes that limit the enforcement of no contest clauses in certain factual circumstances. Some notable exceptions include:

(1) An action brought by an executor or other fiduciary who is not a beneficiary;

(2) An action to determine whether a proposed motion or proceeding constitutes a contest;

(3) An action seeking to interpret the construction or interpretation of a will; and

(4) An action brought in “good faith” by the beneficiary.

Whether a no contest provision should be included in your will or trust may be dependent on many variables. If you are interested in having a will or trust prepared, contact the attorneys at Hodges and Davis, P.C. who can help you decide if a no contest provision is right for your will or trust.

Note that this post is only a brief summary of no contest clauses.  It does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. – January 2020

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ARTICLE- Home Improvement Contracts

Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

Does your home improvement contract comply with Indiana’s Home Improvement Contract Act (“HICA”)? The Act can be found at Indiana Code § I.C. 24-5-11. Its intent is to protect home owners by placing minimum requirements on the contents of home improvement contracts. The law places the burden on the home improvement contractors (not home owners) to use contracts that comply with the mandates of the act.

A home improvement subject to the law includes any alteration, repair, replacement, reconstruction or other modification of residential property. For purposes of the law, a home improvement contract means the written or oral agreement between a home improvement contractor and home owner to make an improvement for which the contract price exceeds $150.00.

Under HICA, home improvement contracts must include:

  • The name of the home owner and the address of the home where the work will be done.
  • The names and phone numbers where the home owner can direct problems and inquiries, as well as an e-mail address maintained by the contractor.
  • The date the contract was submitted to the home owner and, if applicable, any time limit on the home owner’s acceptance of the home improvement contract.
  • A reasonably detailed description of the proposed home improvement(s).
    • However, if there are no specifications provided in the description of the work, a contractor can provide it later, so long as it is provided in a dated, written document prior to any work beginning and the home owner approves the specifications.
  • A statement that announces the approximate starting and completion dates of the home improvement(s).
  • A statement of any contingencies which would materially change the approximate completion date.
  • The contract price.
  • Signature lines for the contractor (or the applicable employees or agents) and for each home owner who is subject to the contract, including a legibly printed or typed version of that signature under each signature.

In addition to these mandatory contract provisions, the statute also requires that:

  • A home improvement contract must be written so each home owner who is a party to the contract can reasonably read and understand it.
  • A completed contract signed by the contractor must be provided to the home owner before the contract is signed by the home owner and before the contractor accepts a down payment for the work
  • The home owner be provided a fully executed copy of the home improvement contract “immediately” after the home owner signs it.
  • The contract must provide the dates each party signed the contract.
  • A modification of a contract must be in writing.

If a contractor fails to comply with the statutory provisions, he or she is subject to a deceptive acts lawsuit, which can be brought by either the Attorney General or a home owner. A home owner can be awarded damages actually sustained, and a court may triple the damage award for a willfully deceptive act. However, an award of treble damages cannot exceed $1,000.00. A court can also award attorney’s fees to a prevailing party and void or limit the application of a contract resulting from the deceptive acts.

In sum, Indiana contractors need to be aware of their duties to owners and tenants before entering into any home improvement agreement over $150.00; and failing to know the law could be costly. Please note that this article is only a brief summary of HICA, not legal advice, nor does it establish an attorney-client relationship. Should you have any specific questions regarding HICA, or any other business planning needs, please do not hesitate to contact Gregory A. Sobkowski at Hodges and Davis, P.C.

Please note that this Article does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. — January 2020

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