On March 13, 2014, President Obama signed a memorandum that launched the U.S. Department of Labor’s (DOL) efforts to update the Fair Labor Standards Act’s (FLSA) overtime rules for executive, administrative, professional, outside sales, and computer employees, commonly referred to as the “white collar” exemptions.  To be exempt from the overtime regulations, employees must meet both a salary basis test and a job duties test.  On Tuesday, June 30, 2015, the U.S. Department of Labor (DOL) released the long-awaited proposed rule regarding the expansion of overtime regulations under the Fair Labor Standards Act (FLSA). It is anticipated that, if these rules are imposed, nearly 5 million additional workers would be eligible for overtime under the FLSA’s regulations.

The most drastic difference in the proposed regulations is the raise of the minimum salary requirement to qualify for the white collar exemption.  Currently, the minimum salary requirement is $455 per week ($23,660 per year), a number that was set in 2004.  The proposed rule would increase the minimum salary requirement to $970 per week ($50,440 per year).  This figure is equal to the 40th percentile of weekly earnings for full-time, salaried employees.  The proposed rule also includes an automatic adjustment to the salary threshold so that the minimum salary requirement does not become outdated.  The DOL is also seeking comment on whether nondiscretionary bonuses can be included to satisfy the salary requirement.

Although the proposed rule does not specifically change any of the job duties requirements, the DOL did invite comment on whether or not these tests are working as intended or should be changed.  One suggestion is that the federal job duties test would mirror the job duties test from California in which employees have to spend at least 50 percent of their time on exempt duties to qualify as exempt. The current federal test simply looks at a worker’s “primary duty” and whether the employee’s primary duty meets the requirements of the particular exemption classification. A change in the duties test could also significantly decrease the number of employees who qualify for the overtime exemption.

Once the proposed rule is published, likely in the next few days, there will be a sixty-day public comment period.  Only after that will the DOL be able to issue a final rule.  Although employers do not have to do anything at this time and cannot know exactly how these proposed rule changes will impact them until they become final, they should be staying aware of these changes.  Once a final rule is published, employers will likely need to reevaluate their exempt and non-exempt classifications for their employees to make sure that they are in compliance with the final DOL rules.

According to the Centers for Disease Control, the prevalence of autism has increased by 6% to 15% annually since 2002, making autism the fastest-growing developmental disability in the United States.

While this trend may be alarming to young couples having children today, there are also families in our country right now dealing with the confusing prospect of providing for adult children with autism spectrum disorders. More than 3.5 million Americans currently live with autism and 35% of young adults (ages 19–23) with autism have not held a job or received any postgraduate education.

Doug, co-author of this article, is the father of an adult son (19 years old) with autism. Together, he and Megan wrote this article to help families understand that there are ways to provide for their autistic adult children without disqualifying those children from available government programs.

That is the heart of the issue: How can you help your child achieve a level of independence appropriate for him or her while also assuring that you keep all government assistance options available?

Your Help vs. Government Benefits

If you are a parent of an adult child with autism, you are likely looking for ways to help him or her today, and you also want to provide for your child after your death. However, there is a dilemma. If not carefully planned, gifts or inheritances from family members or friends can disqualify your child from eligibility for certain potential government benefits. Those benefits, though often modest in amount, may make the difference between your child living independently in adulthood, or remaining at home or possibly being institutionalized after your death.

For example, an adult child with autism often may meet the legal definition of “disabled” such that he or she could be entitled to Supplemental Security Income (SSI) benefits. The purpose of SSI is to provide income for food and shelter. It was designed to provide recipients with approximately 75% of the threshold amount for the federal poverty cut-off. As of January 1, 2015, the maximum federal SSI monthly payment for an individual is $733. Many states provide a supplemental SSI benefit, which ranges from about $20 to $100 per month, depending on the state. In Wisconsin, the maximum supplemental SSI benefit is currently $84 per month, which makes the total maximum SSI benefit $817 per month for Wisconsin residents.

Some SSI recipients may be eligible for an additional SSI benefit if they have exceptional needs. These benefits are called SSI-E benefits. Exceptional needs generally means 40 hours per week of attendant care, including custodial care. In Wisconsin, for those who qualify, the maximum SSI-E monthly payment is currently $95.99.

While not exorbitant, these payments can help your adult child have some level of financial independence. But, here’s the important part for parents to remember: There are strict limits on how much your child can earn and own and still be eligible for SSI. For example, the amount of your child’s SSI benefit is reduced dollar-for-dollar by “countable income.” This includes gifts or financial contributions (other than SSI) used by your child to pay for food or shelter. There is also a strict limit of how much your child can own and remain eligible for SSI. The asset limit is generally $2,000, with certain important (but limited) exceptions for necessary items such as a car, home, and certain other assets.

Unfortunately, this means that a well-intended gift or inheritance from a family member (such as you, or a grandparent) could result in your child being disqualified from receiving future SSI benefits. However, this dilemma can be avoided with proper estate planning, through which you can develop a comprehensive plan for your child’s financial future. Many times, this estate planning involves creating a special needs trust, through which certain financial assistance can be provided without impacting your child’s SSI eligibility.

Special Needs Trusts May Help You Achieve Your Goals

Special needs trusts (also called “supplemental needs trusts”) (SNTs) have specific provisions pertaining to the needs of disabled beneficiaries. The purpose of an SNT is to preserve the beneficiary’s eligibility to receive public benefits while supplementing his or her lifestyle with private funds in order to enrich his or her life. Usually, parents will set up an SNT during their lifetimes to benefit their disabled child after the parents pass away in order to ensure there are adequate funds available for the child’s benefit, without worrying that such funds will disqualify the child from receiving public benefits.

Why Use an SNT?

An SNT may be used to retain and expend funds to supplement (not supplant) government benefits without rendering the beneficiary ineligible to receive them. Here are a few examples of expenses that a properly created SNT generally may cover for the benefit of your disabled child:

• Purchase of a residence.
• More sophisticated or advanced medical, dental, psychiatric, or psychological treatment, cosmetic surgery, rehabilitation, and educational or vocational services.
• Paying the differential cost for shelter between a shared or private room in a group home or nursing home.
• Providing entertainment, such as admission to museums and movie theaters, tuition for art courses, restaurant meals while away from his or her residence, cable television service, a computer with games and other software installed, a stereo or CD or DVD player, and tapes or disks.
• Paying for travel for recreation purposes.
• Paying for any services needed by the beneficiary to permit him or her to reside in his or her own home.
• Providing household furniture and furnishings.
• Paying for preparation of income tax returns and paying any income tax liabilities.
• Paying the expenses of a hobby.
• Paying for legal services to obtain, maintain, or regain eligibility for governmental or private agency benefits, to pay for any legal advice and consultation needed by the trustee to administer the SNT properly and to maintain public benefits eligibility.
• Paying for hair grooming and nail care services.
• Paying for writing supplies and postage.
• Purchasing and paying the costs of maintaining pets.
• Purchasing an automobile, including any modifications or special accommodations needed due to his or her disabilities, whether the motor vehicle is operated by the beneficiary or someone else for his or her benefit.
• Paying the costs of making the beneficiary’s living environment more amenable in light of his or her disabilities, whether or not the home in which he or she resides is owned by him or her or by someone else, or is a residence purchased by the SNT, or is a nursing home, or health care center, or community based residential facility.
• Prepaying for funeral and burial pre-arrangements for the beneficiary.

SNTs provide a very powerful financial vehicle to help you provide for your child. But, SNTs are just one estate planning tool you might consider.

If you have a child with autism or other disabilities, you must think strategically about how you might help provide for your child in a way that ensures he or she will be adequately cared for, especially after your death, without taking any actions that might disqualify him or her from receiving government assistance.

If you would like additional information, you may contact either Doug Dehler or Megan Harried at (414) 276-5000.

Gregory Lyons, of O’Neil, Cannon, Hollman, DeJong and Laing S.C., has been selected to the 2015 list as a member of the Nation’s Top One Percent by the National Association of Distinguished Counsel. NADC is an organization dedicated to promoting the highest standards of legal excellence. Its mission is to objectively recognize the attorneys who elevate the standards of the Bar and provide a benchmark for other lawyers to emulate.

Members are thoroughly vetted by a research team, selected by a blue ribbon panel of attorneys with podium status from independently neutral organizations, and approved by a judicial review board as exhibiting virtue in the practice of law. Due to the incredible selectivity of the appointment process, only the top 1% of attorneys in the United States are awarded membership in NADC. This elite class of advocates consists of the finest leaders of the legal profession from across the nation.

Eleven attorneys from O’Neil Cannon have been named “Leading Lawyers” in Milwaukee by M Magazine (July 2015), Milwaukee’s Lifestyle Magazine. Those attorneys are the following:

• Melissa Blair (Banking)
• Jim DeJong (Business)
• Pete Faust (Securities Offerings)
• Grant Killoran (Litigation)
• Dean Laing (Litigation)
• Greg Lyons (Litigation)
• Greg Mager (Family)
• Patrick McBride (Litigation)
• Randy Nash (Litigation)
• Steve Slawinski (Construction/Development)

The “Leading Lawyers” were selected by Avvo, a Seattle-based company that rates attorneys. Avvo’s proprietary algorithm rates all attorneys on a 10-point scale, factoring in peer endorsements as well as experience, education, training, speaking, publishing, and awards. In order to make the list of “Leading Lawyers” as published by M Magazine, an attorney must be ranked in the top 5–10% of his or her area of specialty.

People describe an estate plan in a number of ways. Some people use very technical jargon, focusing on the specific tools: wills, trusts, powers. Others describe what the plan does—who gets what property and when. But in my opinion, planners need to help clients understand the “why”; that is, why they should invest in an estate plan. The answer to “why?” is that an estate plan is a strategy to take care of the people we care about when we, for whatever reason, cannot.

In that context, perhaps the most important issue that an estate plan must address is who should raise minor children if something happens to the parents. It’s an interesting, but little-known fact outside of the legal world, that the decision of who will raise the children falls solely in the hands of a probate court judge. Unfortunately, that judge has no idea who the right person is; that is, the person who shares the parents’ values, beliefs, and convictions. The judge will look to the parents for guidance on who that person is, and the place the judge will look is in the parents’ wills. But if the parents are like 70% of Americans and do not have wills, the judge will be lost without guidance from the people most qualified to provide it.

Stated simply, there is no planning issue more important for parents of minor children to address than the nomination of a guardian. Parents who abdicate that responsibility are truly committing a sin.

Grant Killoran, the Chair of O’Neil, Cannon, Hollman, DeJong and Laing’s Litigation Practice Group, recently presented an article and speech entitled “Ebola Panic—When Public Health Concerns Confront the Constitution” at the 9th Annual State Bar of Texas “Bill of Rights Course: Cutting-Edge Controversies in Constitutional Law” in Austin, Texas.

Attorney Killoran authored the article with Attorney Christa Wittenberg of O’Neil, Cannon, Hollman, DeJong and Laing and presented at the seminar an analysis of state and federal constitutional law governing public health emergencies, focusing on the recent Ebola virus outbreak in the U.S., along with presentations by law professors and attorneys from around the country on other constitutional issues.

A few weeks ago, we posted a blog about the protection of transgender employees under Title VII. Since then, Caitlyn Jenner has graced the cover of Vanity Fair, the EEOC has further solidified its position on the matter, and OSHA has weighed in on the issue.

One matter that has come up in many of the transgender discrimination lawsuits that have been filed to date is the use of bathrooms. This is the situation in the most recent lawsuit by the EEOC. It alleges that a Minnesota company discriminated against a transgender employee by not letting her use the women’s restroom and subjecting her to a hostile work environment.

Likely in response to these issues, the Department of Labor’s Occupational Safety and Health Administration (OSHA) issued “A Guide to Restroom Access for Transgender Workers.” OSHA requires, among other things, that employees are provided with sanitary and available restrooms. It is estimated that 700,000 adults in the United States are transgender, and OSHA stated that restricting employees to restrooms that do not conform with their gender identities or by requiring them to use a segregated gender-neutral or other specific restrooms singles transgender employees out and potentially makes them fear for their safety. Therefore, OSHA recommends that all employees should be permitted to use the facilities that correspond to their gender identity, and each employee should determine the most appropriate and safe option for him or herself. OSHA proposed two other optional solutions: 1) single occupancy, gender-neutral facilities for all employees; or 2) use of multiple-occupant, gender neutral restrooms with lockable single occupant stalls for all employees. Further, OSHA’s best practices recommend that employees should not be asked to provide any medical or legal documentation of their gender identity in order to have access to appropriate facilities.

Based on the EEOC’s current litigation trend and OSHA’s best practices recommendation, employers should permit all employees to use the facilities that correspond with their gender identity. For now, the stance of the federal government is that employees should have unrestricted access and use of restrooms according to their full-time gender identity. Employers will need to deal with these situations on a case-by-case basis to find solutions that are safe, convenient, and respectful.

Grant Killoran, the Chair of the O’Neil, Cannon, Hollman, DeJong and Laing’s Litigation Practice Group, recently was re-appointed to serve on the Meritas U.S./Canadian Litigation Group Steering Committee.

O’Neil, Cannon, Hollman, DeJong and Laing is a member of Meritas, a global alliance of over 7,000 lawyers from 170 full-service law firms across more than 70 countries. For more information about Meritas, please visit the Meritas website at www.meritas.org or contact us at 414.276.5000.

On June 8, 2015, Joe Maier, a shareholder in the Estate Planning Group, and Randy Nash, a shareholder in the Litigation Group, collaborated to present to the Appleton office of the Principal Financial Network a series of real life estate planning facts situations that have led to inheritance litigation.

The Principal Financial Group–Wisconsin Business Center is a client-focused financial services organization working with employers and individuals to help them establish priorities and develop strategies to achieve financial success.

On June 4, 2015, Gregory S. Mager spoke during the Family Law 101 portion of the Wisconsin Supreme’s Family Law Seminar, a continuing education program for Judges and Court Commissioners throughout the state of Wisconsin.

If you have any family law related questions, please contact Attorney Gregory Mager at O’Neil Cannon at 414-276-5000.