Wage and Hour Defense Blog

With more than 24 million mothers with children under the age of 18 in the U.S. workforce, many of whom breastfeed their children, it is important for employers to understand the break time and pumping space protections afforded to nursing mothers by the Fair Labor Standards Act (FLSA).

Reasonable Break Time to Pump

Under the FLSA, nursing employees are entitled to reasonable break time during the workday to express breast milk for their nursing child for one year following the child’s birth. The employee must be entitled to a break “each time such employee has need to express milk.” The frequency, duration, and timing of the breaks an employee may need will likely vary depending on the employee and child.

Employers are not required to pay non-exempt employees for break time to pump unless otherwise required by applicable law, or if the employees are not completely relieved of their duties while pumping. Under the Department of Labor (DOL) regulations implementing the FLSA, breaks of 20 minutes or less must be paid, and if an employer provides such breaks to its employees generally, nursing employees may use such paid breaks to pump. Additionally, if an employer provides paid breaks to all employees, the employer must pay employees who choose to pump during their paid breaks.

On August 23, the United States Court of Appeals for the Fifth Circuit issued its much-anticipated decision in Restaurant Law Center v. United States Department of Labor.  In one of the very first federal appellate court rulings since the Supreme Court overruled Chevron USA Inc. v. Natural Resources Defense Council, Inc.  this year, the unanimous three-judge panel concluded that the Department of Labor’s 2021 Final Rule regarding tipped employees and the minimum wage, commonly known as the “80/20 Rule” or the “80/20/30 Rule,” is both contrary to the pertinent statutory text and  arbitrary and capricious.  As a result, the court vacated the rule.

Background: Minimum Wage, the Tip Credit, Dual Jobs, and 80/20

The Fair Labor Standards Act (the “FLSA”) allows employers to count a portion of tips received by a “tipped employee” toward satisfying the federal minimum wage obligation.  The statute defines a “tipped employee” as “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.”  That portion of the statute has been in place, largely unchanged, since 1966.  Whether an employee counts as a “tipped employee” determines whether the employer may pay a reduced hourly wage of as low as $2.13, so long as the tips suffice to make up the difference to minimum wage.  Employees who are not tipped employees must receive at least the full minimum wage directly from their employer.

In 1967, the Department of Labor issued a regulation positing that workers may have more than one job with an employer, one of which involves tips and one or more of which does not.  The example the Department used was a hotel employee who works some shifts as a server in the hotel restaurant and other shifts as the hotel’s maintenance person.  The so-called “dual jobs” regulation took the position that the employer may pay the lower hourly wage, known as taking the tip credit, for the time spent in the tipped occupation of server, but not for the time spent in the untipped maintenance occupation.

Employers are generally required to pay nonexempt employees overtime compensation of at least one and a half times their regular rate of pay for hours worked over 40 in a workweek. While this is nothing new for employers, determining an employee’s regular rate is often more complex than one might think, and it is often a great cause of confusion for employers.

As we have previously discussed on this blog, the regular rate is a term of art that encompasses all nondiscretionary payments to an employee, and not just hourly wages—subject to certain exceptions. (For a discussion of what must be included in the regular rate, please see our prior post.) If, for instance, an hourly, non-exempt employee receives a productivity bonus, the regular rate for that employee is the hourly rate of pay plus the productivity bonus.

The Department of Labor Fact Sheet #56A explains the basic calculation of the regular rate in the following way:

Total compensation in the workweek (exclusive of statutory exclusions) ÷ Total hours worked in the workweek = Regular rate for the workweek

The Michigan Supreme Court has written the latest, and perhaps last, chapter of an ongoing saga affecting most Michigan employers. In Mothering Justice v. Attorney General, the Michigan Supreme Court fully restored sweeping minimum wage and paid sick leave laws, bringing finality to a legal controversy that has been churning since the laws were first proposed in 2018. Pursuant to that decision, the laws will take full effect in their original form, about six months from now, on February 21, 2025.

How We Got Here

In 2018, labor advocacy groups presented the Michigan legislature with two voter initiatives related to minimum wage (the Improved Workforce Opportunity Wage Act (IWOWA)) and paid sick leave (the Earned Sick Time Act (ESTA)) through the state’s citizen initiative process. Michigan’s constitution allows voter initiatives to propose legislation, and the legislature may take one of these three actions: (1) adopt “without change or amendment”; (2) reject and place the proposed legislation on the ballot; or (3) reject and propose an amendment, placing both on the ballot. As we previously explained, the Legislature quickly enacted amended versions of the IWOWA (2018 PA 368) and the ESTA, which was renamed the Paid Medical Leave Act (PMLA) (2018 PA 369), with significant changes. As we detailed here, the amended versions of these laws were less burdensome to employers.

The legislature’s actions led the initiatives’ advocates to file a legal action challenging the lawmakers’ authority to modify a voter initiative so quickly and dramatically through a process labeled “adopt and amend.”  That lawsuit has wended its way through Michigan’s courts, with the final outcome decided on July 31, 2024, echoing that of the initial holding issued in 2022: the Michigan legislature’s adoption-and-amendment of the two initiatives violated the State constitution’s provision on voter initiatives. Hence, those amendments are void as unconstitutional and the laws as originally conceived should take effect.

In an increasingly cashless society, many employers are considering moving to payroll debit cards to provide workers with greater flexibility and convenience. However, employers considering offering payroll debit cards should be aware of a number of potential pitfalls associated with the technology, ensuring that their payroll debit card plan is compliant with relevant state laws.

Why Use a Payroll Debit Card?

There a number of benefits associated with payroll debit cards both for employers and employees. Employers can benefit from payroll debit cards by avoiding the cost of printing and mailing paychecks for all participating employees. Payroll debit cards are helpful for employees who do not have bank accounts and wish to avoid check cashing fees or other fees associated with maintaining a bank account. Additionally, payroll debit cards may provide a nimbler mechanism for employers who desire to offer a more flexible pay period option for employees, such as daily or instant pay.

Much has been made about the recent, hurried legislation to amend the Private Attorneys General Act (“PAGA”) in order to take the Fair Pay and Employer Accountability Act (“FPEAA”) off the California ballot this November.  

If passed by California voters, the FPEAA would have repealed PAGA and replaced it with a new statute and a new process that were more employer-friendly -- and more employee friendly. 

(The idea of a ballot initiative to repeal or create laws may sound very unusual to anyone outside of California.  But California permits this kind of mob rule, for better or worse, so long as enough signatures are gathered and verified to qualify to be placed on the ballot.)

For all of the celebration about how these PAGA amendments will benefit employers, the PAGA amendments remind me of nothing so much as New Coke. 

You don’t know about New Coke, do you? 

You see, back in 1985, Coca-Cola announced that it was changing the longtime formula for its soda and replacing it with a new formula that everyone would love even more. There was much excitement about it.  (Keep in mind that this was before the internet, smartphones, texting, streaming, etc.)  The launch of the new version of the soda was covered in the mainstream media, and people just couldn’t wait. They actually lined up outside stores to be the first to get their hands on it.

And then New Coke was launched.

As we previously reported, the U.S. Department of Labor (DOL) issued a new final rule increasing the minimum salary amounts for the executive, administrative, and professional (EAP) and highly compensated employee exemptions. Shortly after the DOL announced its final rule, three lawsuits were filed in federal district courts in Texas challenging the DOL’s authority to increase the salary thresholds. However, despite these challenges, the first increase took effect on July 1, 2024 for all employers, except for the State of Texas as an employer.

State of Texas v. DOL

On May 22, 2024, a group of national business associations filed a complaint in the United States District Court for the Eastern District of Texas against the DOL challenging the final rule.[1] This lawsuit was later consolidated with a complaint filed in the same court by the State of Texas similarly challenging the final rule.[2] Notably, the consolidated action alleges that the final rule exceeds the DOL’s statutory authority under the Fair Labor Standards Act (“FLSA”) and the Administrative Procedure Act (“APA”), and that the final rule is arbitrary and capricious, in violation of the APA.

With an anticipated increase in workers no longer subject to exemption from overtime pay under a new U.S. Department of Labor rule that is scheduled to take effect on July 1, 2024 (learn more here), employers will need to sharpen their pencils and make adjustments. What’s more, on that date, many states and localities will see a hike in minimum wage requirements.

Most of these jurisdictions will have straightforward rate adjustments, with a uniform increase across all industries. However, a somewhat more complicated and significant development comes out of California, which has raised minimum wage mandates for just one sector.

On May 15, 2024, the New Jersey Supreme Court held in Maia v. IEW Construction Group that both the six-year look-back period and liquidated damages provided by the state Wage Theft Act (WTA) do not apply retroactively. Notably, the WTA’s extended statute of limitations will only apply to conduct that occurred after the WTA’s effective date—August 6, 2019. As such, employees filing suit before August 6, 2025 to recover unpaid wages may only recover for conduct occurring after the WTA’s effective date even though the relevant time period would not include the full six-year look-back period. Although the look-back period is now six years, if an employee files a lawsuit today, that employee would only be able to recover for conduct dating back to August 6, 2019 (which is a limitations period of less than 5 years). Similarly, employees may only recover liquidated damages—which were not previously available under the state wage and hour laws—for conduct occurring after the WTA’s effective date.

For background, the New Jersey Wage and Hour Law (WHL) and the New Jersey Wage Payment Law (WPL) require employers timely pay their employees for all wages earned, including any overtime. In August 2019, New Jersey enacted the WTA, amending the WHL and WPL by adding liquidated damages and extending the statute of limitations from two years to six years. This means that, pursuant to the WTA amendments, employees who file suit seeking to recover unpaid wages may recover any unpaid wages within six years prior to the commencement of such lawsuit (often referred to as the “six-year look-back period”) plus liquidated damages up to 200% of the wages owed, together with costs and reasonable attorney’s fees.

Workday breaks can go a long way to reduce employees’ stress and fatigue on the job while also improving overall job satisfaction and productivity. It important for New York State employers and employees to familiarize themselves with the legal requirements of workplace breaks. This tip offers an overview of New York State workplace meal and rest period laws and provides guidance on how to remain in compliance.

Meal Periods

Meal Period Requirements

Generally, New York law requires employers to provide a meal break. Section 162 of the New York State Labor Law establishes the ...

Washington, D.C. is poised to extend the reach of its minimum wage requirements. On January 10, 2024, Washington D.C. Mayor Bowser signed the Minimum Wage Clarification Amendment Act of 2023 (B25-0134) (the “Amendment”), which modifies the circumstances under which an employee must be paid the District of Columbia’s minimum wage.

Traditionally, D.C.’s wage and hour law has required employers to pay employees at least the D.C. minimum wage when they (i) perform more than 50% of their work in the District, or (ii) the employee is based in D.C., and “regularly spends a ...

More than a decade ago, Epstein Becker Green (EBG) created its complimentary wage-hour app, putting federal, state, and local wage-hour laws at employers’ fingertips.

The app provides important information about overtime, overtime exemptions, minimum wages, meal periods, rest periods, on-call time, and travel time, as well as tips that employers can use to remain compliant with the law and, hopefully, avoid class action, representative action, and collective action lawsuits and government investigations. 

As the laws have changed over the years, so too has EBG’s free ...

Here’s a question you likely have never considered: Are hackers overseas infiltrating employers’ computer systems just to sign arbitration agreements with class action waivers for random employees?

While there is no evidence that this has ever happened anywhere, and no logical reason why it would, plaintiffs’ lawyers and even some courts seem to believe this could happen. And that is at the heart of the latest battleground over arbitration agreements with class actions waivers.

Since the United States Supreme Court’s decision in Epic Systems v. Lewis, more and more ...

On January 17, 2024, the Appellate Division of the New York Supreme Court for the Second Department held in Grant v. Global Aircraft Dispatch, Inc. that no private right of action exists for a violation of New York Labor Law (“NYLL”) Section 191, the frequency of payment provision that dictates how often New York employers must pay certain types of employees. The decision in Grant creates a departmental split with a previous decision issued by the First Appellate Department over whether a private right of action exists under the NYLL and arrives on the heels of Governor Hochul’s ...

On January 18, 2024, the California Supreme Court issued its much-anticipated decision in Estrada v. Royalty Carpet Mills, resolving a dispute among the appellate courts and concluding that Private Attorneys General Act (“PAGA”) claims may not be stricken as unmanageable. 

While some have read the decision as a resounding victory for the plaintiffs’ bar that will force every PAGA case to settle for large amounts, the decision does no such thing.

It may challenge employers and their lawyers to be more creative, but it does not mean that every PAGA action now warrants an outsized ...

With the new year comes raises in minimum wages, yet again.  As reflected in the charts below, in 2024, minimum wage and, in applicable jurisdictions, tipped minimum wage will increase in 23 states and in a number of counties and cities.

Accordingly, employers with minimum wage workers (or tipped minimum wage workers) should consult with counsel to ensure that their compensation practices are compliant with the laws in all of the jurisdictions in which they operate.

With limited exceptions, California law does not require employers to provide employees with a premium rate of pay for working during holidays or paid days off for holidays unless contractually obligated to do so. However, many employers chose to do so for a variety of reasons. For employers that choose to provide holiday benefits, your “presents” is requested for this read.  

Why offer holiday pay?

Many employers voluntarily elect to offer holiday benefits. Some common reasons for doing so are:

• Boosting employee morale;
• Increasing company loyalty;
• Making an employment offer ...

The Clash famously asked “Should I stay, or should I go?” on their 1982 album, Combat Rock, and with recent attacks on non-competes at both the state and federal level, some employers are imposing additional costs on employees who take advantage of an employer’s training opportunities only to leave and join a competitor. So-called “stay or pay” clauses, or training-repayment-agreement-provisions (TRAPs), typically require an employee to pay the employer the cost the employer incurred to train the employee if the employee leaves their employment within a certain ...

Although incorporating nondiscretionary compensation like commissions and (promised or contractual) production bonuses into the calculation of the “regular rate of pay” has been federal law for decades, claims involving that calculation – or lack thereof – have increasingly been brought by California plaintiffs’ lawyers.  Even though miscalculations or noncalculations may result in a difference of a few dollars or even pennies lost, plaintiffs’ lawyers litigate these claims in hopes of obtaining penalties that far outweigh any underpayments.  Rather than ...

Over the past five years, ten states and several local jurisdictions across the country have passed wage transparency laws in an effort to address gender and racial wage disparities.  Wage transparency laws may apply to wage range disclosures and promotional opportunities in job advertisements, among current employees and job applicants.  In this changing landscape, employers must be diligent in order to comply with these laws, given their variety with respect to who must receive disclosures, which factual circumstances trigger disclosure requirements, and what information ...

What is the 8 and 80 overtime system?

The Fair Labor Standards Act (“FLSA”) generally requires covered employers to pay non-exempt employees overtime for all hours worked over 40 in a workweek. However, the FLSA provides an exception for certain employers in the healthcare industry, who are instead permitted to adopt a fixed work period of 14 consecutive days and pay overtime for all hours worked: (a) over 8 in a single day, or (b) over 80 in a 14-day work period.

Under the 8 and 80 overtime system, for example, an employee who works a 12-hour shift would be entitled to 4 hours of ...

There is a comedian by the name of Jeff Foxworthy who has been enormously popular for the past two decades or so. 

Perhaps you are familiar with him.  (And if you are, you probably thought that you stumbled upon the wrong blog just now.)

Remarkably, Mr. Foxworthy’s name comes up frequently when talking about whether workers have been properly classified as independent contractors.  Not because there is anything funny about that issue; there isn’t.  And not because Mr. Foxworthy was misclassified as an independent contractor.  Instead, his name pops up because Mr. Foxworthy has ...

On September 13, 2023, the United States Department of Labor’s (DOL) Wage and Hour Division (WHD) and the U.S. Equal Employment Opportunity Commission (EEOC) entered a Memorandum of Understanding (MOU) to work together to enforce federal laws and regulations that advance equal employment opportunity and fair pay. The MOU outlines procedures for the agencies to increase their coordination in information sharing, joint investigations, trainings, and outreach efforts.

I. Information Sharing

The MOU allows the agencies to consolidate and share information on issues ...

An amended version of AB 1228 was passed in the California Legislature on September 14, 2023, [1] which would raise minimum wages for fast food workers and water down the authority of the new Fast Food Council that was created in a bill passed last year. AB 1228, originally introduced on February 16, 2023, was revised on September 11, 2023 after negotiations occurred between labor unions and the fast food industry. It significantly modifies provisions from the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act) passed last year, which does not go into effect ...

An amended version of SB 525 was passed in the California Legislature on September 14, 2023, [1] which would raise minimum wages for health care workers across the state, starting June 1, 2024.  SB 525 is now awaiting signature or veto from California Governor Gavin Newsom, who has until October 14, 2023 to sign or veto this bill.

CHANGES IN MINIMUM WAGES:

SB 525 sets forth different tiers of minimum wage increases that vary based on the following:

• Large health systems and dialysis clinics:[2]
  • Minimum wage for covered health care employees shall be:
    • From June 1, 2024, to May 31, 2025 ...

On August 16, 2023, a unanimous three-judge panel of the Third Circuit vacated and remanded a decision from the Middle District of Pennsylvania ruling that the time spent by oil-rig workers changing in and out of their protective gear was not compensable.

Plaintiffs Rodney Tyger, Shawn Wadsworth brought a Fair Labor Standards Act collective action against Defendants Precision Drilling Corp., Precision Drilling Oilfield Services, Inc., and Precision Drilling Company, LP (“Precision”), an oil rig, for failing to pay them for pre-shift donning and post-shift doffing of ...

On August 30, 2023, in one of the U.S. Department of Labor’s most highly anticipated rulemakings of the year, the Wage and Hour Division announced the details of its forthcoming Notice of Proposed Rulemaking regarding the salary requirements of the Fair Labor Standards Act’s overtime exemption for executive, administrative, and professional employees.  In short, the Department has elected to go big, with the soon-to-be-published draft rule containing the following key elements:

1. Increasing the minimum salary for the basic executive, administrative, and professional ...

Earlier this year, on February 6, 2023, the New Jersey Governor signed the Temporary Workers’ Bill of Rights into law.

On August 21, 2023, the New Jersey Department of Labor and Workforce Development (NJDOL) Division of Wage and Hour and Contract Compliance published Proposed Regulations to govern the new law. The Department will be accepting public comments regarding the Law until October 20, 2023. While the Bill of Rights has wide-sweeping consequences for temporary laborers and third-party clients, it is also notable for making New Jersey the first state to require equal ...

On August 4, 2023, the Governor of Illinois signed HB 2862 into law, amending the Illinois Day and Temporary Labor Services Act (DTLS).

Under the amendments, temporary labor service agencies must pay temporary workers who are assigned to a third-party client for more than 90 days wages and benefits (or the cash value of such benefits) equal to the lowest-paid comparable direct-hire employee at the third-party client.

A direct-hire comparator means an individual with equal seniority status to the temporary worker who performs the “same or substantially similar” role under ...

The “regular rate of pay,” an often-misunderstood legal term of art, can be a thorn in the side of employers when calculating how to pay non-exempt hourly employees. These employees must be paid an overtime rate of at least one and a half times their regular rate of pay. Issues can arise when, in addition to their hourly wages, non-exempt hourly employees receive compensation that can change their regular rate of pay, and thus their overtime rate of pay, on a weekly basis. In some states, such as California, the regular rate of pay is also used when paying meal and rest break premiums ...

Psychologist Abraham Maslow once observed, “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.”[1] That sums up the state of commission litigation under the Massachusetts Wage Act: mandatory treble damages, attorneys’ fees, and the prospect that a court might strike a term of an agreed-upon commission plan as an unenforceable “special contract” that deprives an employee of earned wages has led to an uptick in the number of commission claims. Given these potential consequences, employees sometimes try to fit a square peg into a ...

With $3 million in funding from A.B. 102, California’s recent appropriations bill, the Industrial Welfare Commission (IWC), the administrative body charged by statute to regulate wages, hours, and working conditions, will reconvene for the first time since 2004, when it was defunded for budgetary reasons.  The IWC was established in 1913 and has gone through several changes throughout the years.  Its most recent, lasting impact on employment in California, however, consists of 17 “wage orders” regulating the wages, hours and working conditions in specific industries. 

For decades, many employers have rounded non-exempt employees’ work time when calculating their compensation.  Maybe they have rounded employee work time to the nearest 10 minutes, maybe to the nearest quarter hour, but they done it. And, generally, the courts have approved of the practice.

But as more and more lawsuits are filed challenging the practice, and as the courts begin to review time-rounding more frequently and more critically, the question employers with time-rounding policies should ask themselves today is this:  Why are we still rounding our employees’ time?

The California Court of Appeal for the First Appellate District recently issued its opinion regarding business-related expenses in Thai v. International Business Machines Corporation. The Court found that expenses incurred by employees in direct consequence of performing their jobs may be reimbursable regardless of whether such expenses are directly caused by the employer.

Paul Thai was employed by defendant and respondent IBM. Thai required, among other things, internet access, telephone service, a telephone headset, a computer and accessories in order to perform the functions of his job. On March 19, 2020, Governor Newsom issued a stay-at-home order that instructed all California residents “[t]o stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors” and any other additional sectors later designated as critical. After the order went into effect, IBM directed Thai and thousands of other workers to continue performing their regular job duties from home. Thai and the other IBM workers personally paid for the services and equipment necessary to do their jobs while working from home, and IBM did not reimburse them for those expenses.

On July 21, 2023, a unanimous three-judge panel once again affirmed a California federal court’s ruling that the truck drivers who deliver ingredients from Domino’s Southern California Supply Chain Center to Domino’s California franchisees are exempt from the Federal Arbitration Act (“FAA”).

Employers with operations both large and small in California are all too familiar with California’s Private Attorneys General Act (“PAGA”), the controversial 2004 statute that permits a single employee to stand in the shoes of the state’s attorney general and file suit on behalf of other employees to seek to recover penalties for alleged Labor Code violations.

PAGA lawsuits are filed with great regularity by members of the plaintiffs’ bar.

And the in terrorem effect of PAGA lawsuits, in which a plaintiff need not satisfy class certification criteria to represent an entire workforce, has led many employers to pay large settlements just to avoid legal fees and the possibility of larger awards -- even when the evidence of unlawful conduct is spotty or entirely absent.

Handbooks are developed to outline policies and procedures employees must abide by in the workplace.  But a handbook serves a dual, equally important purpose:  to act as an operable defense against workplace claims brought by employees as a way to demonstrate that the employer had equitable and compliant policies in place.

In California, employers are required to disseminate such workplace information to employees another way: through workplace postings.  The Department of Industrial Relations requires workplace postings be displayed in a ‘conspicuous’ place where they are easily visible to the intended audience, such as a bulletin board or mail-room/break-room wall or, in special circumstances, in a binder if there is no room to post such materials.  In California, every business must post not only the Wage Order(s) that apply to its operation and the minimum wage[1] where employees can see them, but also 16 other employment notices.  Failure to post required, up-to-date notices can have serious consequences, including costly penalties[2] and criminal charges. 

The current statewide minimum wage rate in California is $15.50 for all employers. However, some localities across the Golden State have set their own higher minimum wage rate. For many of these localities, the next increase is set to take effect on July 1, 2023.

For example, in Los Angeles County, the minimum wage increases from $16.04 to $16.78 in the City of Los Angeles and from $15.96 to $16.90 in unincorporated areas.  Here is a list of those local cities and counties raising their minimum wage rates:

As the COVID-19 Public Health Emergency has come to an end, employees are heading back to conferences in droves and resuming their usual training activities. While employers big and small understand they must compensate employees for all time worked under the Fair Labor Standards Act (“FLSA”) as well as state and local wage and hour laws, whether attendance at such conferences and other training time constitutes hours worked for non-exempt employees remains a murky area for employers.

Four-Factor Test

Generally, training programs, lectures, meetings, and similar activities are compensable hours worked unless all four of the following factors are true:

On May 3, 2023, New York Governor Kathy Hochul announced – and then signed into law – the New York Legislature’s 2024 Budget Agreement (“Budget”), which includes increases to the state’s minimum wage.  Effective January 1, 2024, the minimum wage will increase to $16 per hour in New York City and Nassau, Suffolk, and Westchester counties, and to $15 per hour in the remainder of the state.  The minimum wage will then increase by another $.50 each year in 2025 and 2026—reaching $17 per hour in downstate New York by 2026. Subsequent annual increases to the minimum wage will be tied to the inflation rate. The State Department of Labor (DOL) is required to publish future adjusted minimum wage rates by no later than October 1st of each year.

On April 28, 2023, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a decision from the Western District of Texas declining to issue a preliminary injunction barring the Department of Labor (“DOL”) from enforcing a regulation known as the “80/20/30 rule.”

As we previously reported, on October 29, 2021, the DOL issued a final rule for determining which tipped employees may receive “tip credit” in lieu of receiving the full minimum wage directly from the employer.  Under the 80/20/30 rule, employers must pay employees at least the minimum wage if they spend more than 20% of their time on tasks that do not immediately and directly generate tips, including wiping down tables, filling salt and pepper shakers, rolling silverware into napkins, and other duties referred to in the industry as “side work,” or if they spend more than 30 consecutive minutes performing such tasks.  The Restaurant Law Center and the Texas Restaurant Association promptly sought a preliminary injunction in the Western District of Texas.

The lingering morning chill in the air (at least, here, in the Northeast) suggests that summer is not quite here, but as the daylight persists through the evening hours, businesses small and large are gearing up for yet another summer – intern – season.

In anticipation of the arrival of these ambitious and eager workers, companies’ human resources professionals and stakeholders are asking the age-old questions:

Should these interns be classified as “employees” of the company?

Must they be compensated?

Isn’t knowledge and real-world experience the appropriate reward (and maybe some academic credit)?

Is this a wage and hour violation?

The answer to this question is that, it depends, which is a dependably frustrating response from a management-side employment lawyer.

work | \ wərk \ (noun):  activity in which one exerts strength or faculties to do or perform something

In common parlance, the concept of “work” connotes some physical or mental exertion.  The law, however, defines the term more broadly, and properly compensating employees often is not as simple as paying for all time spent performing “work” in the usual sense of that term.  The Fair Labor Standard Act (“FLSA”) and the laws of many states require employers to also pay for certain periods of time during which employees are idle and simply waiting to begin working—even if those employees never become engaged in work. 

On March 10, 2023, a unanimous three-judge panel upheld an Oregon federal court’s ruling that time Amazon employees spent undergoing mandatory security screenings before and after work shifts and off-premises meal breaks was not compensable, as the screenings were not integral and indispensable to their jobs under state law.

Following the California Supreme Court’s remand of Naranjo v. Spectrum Security Services, Inc., the California Court of Appeal in that same case held that the defendant-employer had not committed “knowing and intentional” violations of the wage statement statute by not including meal period premiums on the wage statements and had not “willfully” paid all wages due at the end of employment by not previously paying meal period premiums that were owed. The Court held that, although the employer did not prevail on its defense that employees in a certified class action were subject to valid on-duty meal period agreements, neither waiting time penalties (capped at 30 days’ of wages at the daily rate of pay for each former employee) nor wage statement penalties (capped at $4,000 per employee) could be imposed against the employer given the good faith dispute that any meal period premiums were owed.

Gratuities are often helpful for both employees and their employers: tips supplement a worker’s income, and federal law and the laws of most states allow employers to credit a portion of a worker’s tips toward the company’s minimum wage obligations. But what exactly is a tip and how do employers take this so-called “tip credit?”

What is a tip or gratuity?

More than a decade ago, Epstein Becker Green (EBG) created its complimentary wage-hour app, putting federal, state, and local wage-hour laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips that employers can use to remain compliant with the law—and, hopefully, to avoid class action, representative action, and collective action lawsuits and government investigations. 

Generally speaking, the FLSA requires that employers pay employees the required minimum wage and overtime for all hours worked in excess of 40 hours in any workweek (at a rate of one and one-half times the employee’s regular rate of pay). Accordingly, courts have consistently held that the FLSA provides employees with a basis to sue for the recovery of unpaid wages if an employee is paid below the required minimum wage or an employee is not adequately compensated for overtime hours worked in excess of 40 hours.

But what about claims that do not fit neatly into either of those two buckets? Cue in gap-time claims.

The Los Angeles City Council passed the Fair Work Week Ordinance (“FWWO”) that seeks to “implement enforcement measures for the new fair work week employment standards” for employees in the retail sector.  Going into effect April 1, 2023, the FWWO will apply to any person, association, organization, partnership, business trust, limited liability company or corporation in the retail business or trade sector that directly or indirectly exercises control over the wages, hours or conditions of at least 300 employees globally.  This includes employees through an agent or any other person, including through the services of a temporary staffing agency.

We seem to say this every year -- December always seems to go by far too fast.  And with holidays and vacations, not to mention many employees still working remotely, it’s not unusual for matters to be put off until the new year — or for a project or two to fall through the cracks.

In reversing a Nevada district court’s grant of summary judgment, the Ninth Circuit, in Cadena v. Customer Connexx LLC, recently held that the time call center employees spent booting up their computers is compensable. Because a functioning computer was necessary for the call center employees to do their job, the court unanimously agreed that the time required to turn on their computer and log in was “integral and indispensable to their principal activities” and, therefore, compensable, subject to certain limitations.

California plaintiffs’ lawyers typically bring every type of wage-hour claim they can.  Increasingly, however, they have focused on one type of claim – wage statement violations.

As we have previously written about, bringing class and representative actions under California’s Private Attorneys General Act (“PAGA”) alleging that employers did not fully comply with California’s onerous wage statement laws has become a lucrative practice for the plaintiffs’ bar.  Given the flurry of litigation, it is beneficial for employers that do business in California to review their wage statements to best ensure compliance.

work·week | \ ˈwərk-ˌwēk \

noun

Perhaps one of the most important terms of art under the Fair Labor Standards Act (“FLSA”), an employer’s designated workweek impacts nearly every aspect of an employee’s pay – from minimum wage and overtime to application of most exemptions. Let’s break down this concept.

What is a workweek?

The FLSA regulations define workweek as “a fixed and regularly recurring period of 168 hours - seven consecutive 24-hour periods.” Contrary to popular belief, a workweek need not coincide with a calendar week, nor must it align with an employer’s hours of operation. Instead, it can begin on any day and at any hour of the day. However, the key is that once a workweek is determined, it must remain fixed regardless of the employees’ hours worked with limited exception.

Our colleague Michael S. Kun at Epstein Becker Green was recently quoted in SHRM, in “How to Respond to Class Actions,” by Allen Smith.

Following is an excerpt:

Frequently involving wage and hour issues, class actions against employers can result in lengthy litigation, but early response to them may reduce damages. This article, the first in a two-part series on class actions, examines strategies for responding to such actions, including how to interact with current employees who are seeking information on a lawsuit. The second part explains the differences among class, collective and representative actions. …

Pursuant to two voter initiatives, Michigan has a new minimum wage of $12 per hour, as well as a requirement that employees be provided up to 72 hours of paid sick leave – but those changes will not go into effect until February 19, 2023.

In 2018, two initiatives – the Improved Workforce Opportunity Wage Act (2018 PA 368) and the Earned Sick Time Act (2018 PA 369) – were presented to the Michigan legislature. The wage initiative raised the minimum wage to $12 per hour by 2022. The paid sick time initiative required most employers to provide up to 72 hours of paid sick leave per year.

On June 28, 2022, Rhode Island Governor Daniel McKee signed into law a comprehensive tip protection bill. The law, which took effect immediately upon passage, generally prohibits employers from retaining any portion of an employee’s tips.

The weather is not the only thing changing this summer. As reflected in the charts below, nearly two dozen states and localities are increasing their respective minimum wages effective July 1, 2022. Accordingly, employers with minimum wage workers should consult with counsel to ensure that their compensation practices are compliant with the laws in all jurisdictions in which they operate nationwide.

Litigators who defend cases brought under the Fair Labor Standards Act (“FLSA”), particularly ‘collective actions” alleging wage-and-hour violations, often have been able to counter, or even sometimes support, allegations that arbitration agreements have been waived where the conduct of a party has caused prejudice to the other side. In the case of Morgan v. Sundance, Inc., a unanimous Supreme Court has now held that the determinant of waiver is solely dependent upon the nature and magnitude of the actions of the party that might be inconsistent with arbitration, without respect to alleged prejudice.

The Biden Administration continues to increase administrative agency enforcement initiatives.

In a recent press release, the United States Department of Labor’s Wage and Hour Division (“WHD”) announced that it now offers new resources “to help combat employer retaliation against workers who exercise their legal rights.” One of those resources is a Field Assistance Bulletin on “Protecting Workers from Retaliation” (“Bulletin”).

As COVID-19 restrictions have continued to loosen or be lifted altogether, employees have gradually resumed working in the office—and traveling away from it for work-related reasons.  When it comes to travel time in the employment context, the answer to the question, “Do I need to pay for that?” often has no straightforward answer.  Rather, under the Fair Labor Standards Act (“FLSA”) and U.S. Department of Labor (“DOL”) regulations, whether time an employee spends traveling is compensable depends on the type of travel.  In this month’s Time Is Money segment, we provide a refresher on when and how employers must pay employees for travel time.

Neither fish nor fowl
Salaried with overtime
Brings pain and regret

We don’t see a lot of wage and hour poetry these days, but if we did, it would probably look a bit like the foregoing example from an anonymous former U.S. Department of Labor official.  When it comes to paying office workers who do not qualify for an overtime exemption, businesses often look for ways to treat those workers as much like exempt personnel as possible, including by paying wages in the form of a salary rather than hourly pay.  Salaried nonexempt status ordinarily starts with good motives, but it frequently ends with claims for unpaid overtime.  In this month’s Time Is Money segment, we explain that although paying overtime-eligible employees on a salary basis is a lawful, available option, it comes with significant risks that an employer must understand and navigate in order to pay these workers correctly.

Years ago, Epstein Becker Green (“EBG”) created its free wage-hour app, putting federal, state, and local wage-laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips.

As the laws have changed, so, too, has EBG’s free wage-hour app, which is updated to reflect those developments.

Employers with operations both large and small in California are all too familiar with California’s Private Attorneys General Act (“PAGA”), the controversial statute that permits a single employee to stand in the shoes of the state’s attorney general and file suit on behalf of other employees to seek to recover penalties for alleged Labor Code violations.

The in terrorem effect of PAGA lawsuits, in which a plaintiff need not satisfy class certification criteria to represent an entire workforce, has led many employers to pay large settlements just to avoid legal fees and the possibility of larger awards, even when the evidence of unlawful conduct is spotty or entirely absent.

Will 2022 be the year that PAGA is repealed?

Over the past few years, lower courts in Massachusetts have grappled with determining whether the “ABC test” under the independent-contractor statute provides the proper framework for assessing joint-employment liability. The Supreme Judicial Court (SJC) has finally answered that question.  On December 13, 2021, in Jinks v. Credico (USA) LLC, the SJC held that the independent-contractor statute’s “ABC test” does not apply and instead adopted the Fair Labor Standards Act’s (FLSA) “totality of the circumstances” approach to joint employment.

Credico was a client broker for independent direct marketing companies. It contracted with DFW Consultants, Inc. (DFW) to provide sales and marketing services for its clients in Massachusetts. To provide those services, DFW hired three of the plaintiffs – Kyana Jinks, Antwione Taylor, and Lee Tremblay – as salespeople. DFW classified Jinks and Taylor as independent contractors and Tremblay as an employee.

December is not the shortest month of the year, but it always seems to go by the fastest.

And with holidays and vacations, not to mention employees working remotely, it’s not unusual for matters to be put off until the new year -- or for a project or two to fall through the cracks.

Often times, there are no real consequences if a project gets pushed off into the new year.

But that’s not the case with new state or local wage-hour laws.

As reflected in the charts below, minimum wages increased in dozens of states and localities when the new year rang in on January 1, 2022 – and exempt salary thresholds also increased in some states effective January 1, 2022.

Before ringing in the New Year, employers should carefully evaluate whether they need to adjust their current practices to ensure that they remain compliant with state and local laws, including those relating to minimum wage and salary thresholds for exempt employees.

As reflected in the charts below, in 2022, minimum wages will increase in more than two dozen states and localities, with many changes taking effect January 1st. Accordingly, employers with minimum wage workers should consult with counsel to ensure that their compensation practices are compliant with the laws in all jurisdictions in which they operate. Employers should pay particular attention to the effective date to ensure compliance by the appropriate date.

More than three years after its landmark decision in Epic Systems Corp. v. Lewis, the United States Supreme Court has granted certiorari in Viking River Cruises, Inc. v. Moriana to determine whether Epic Systems extends to arbitration agreements that include waivers of representative actions brought under the California Private Attorneys General Act (PAGA).

Employers with operations in California, who have been plagued by the filing of boilerplate PAGA actions, could be heard to breathe a sigh of relief.

On September 27, 2021, California Governor Gavin Newsom signed into law the Garment Worker Protection Act, which makes California the first state to ban piece rate pay for garment workers, requiring instead that they be paid the minimum hourly wage.

The Division of Labor Standards Enforcement Manual defines piece rate as, “[w]ork paid for according to the number of units turned out … [that] must be based upon an ascertainable figure paid for completing a particular task or making a particular piece of goods.”

On June 1, 2021 the Southern District of Florida granted the motion by Uber Technologies, Inc. (“Uber”) to compel arbitration, finding that the company’s drivers did not engage in sufficient interstate commerce to meet the interstate commerce exclusion in the Federal Arbitration Act (FAA).

Plaintiffs Kathleen Short and Harold White brought a class action against Uber alleging that the company’s policy of classifying its drivers as independent contractors violates the Fair Labor Standards Act and the Florida Minimum Wage Act because the company failed to pay drivers the minimum wage. Uber sought to enforce its arbitration agreement which unambiguously required plaintiffs to pursue any potential claims in an individual arbitration.

Many New York families employ domestic workers –individuals who care for a child, serve as a companion for a sick, convalescing or elderly person, or provide housekeeping or any other domestic service. They may be unaware of federal and New York requirements that guarantee those domestic workers minimum wage for all hours worked, paid meal breaks, and overtime compensation.

In addition, New York imposes specific requirements on employers regarding initial pay notices, pay frequency, and pay statements that also apply to persons who employ domestic workers.

To avoid inadvertent wage and hour violations, it is important that persons who employ domestic workers in New York understand the relevant laws regarding domestic workers and approach what many understandably consider a personal relationship as a formal, business one for wage and hour purposes.

Many people are employed at airports.  Of those, many individuals work within the terminals for private companies.  Federal law requires that those employees who work in the terminals must go through security checks – just like travelers.

Jesus Cazares was one of those employees, working at Los Angeles International Airport (LAX).  In bringing a lawsuit against his employer, Host International, Inc. – which operates the Admiral Club at LAX – Cazares alleged that he and his fellow employees were not paid for the time they spent passing through airport security checks en route to their work at the Admiral Club.  The district court rejected the notion that such time is compensable under California law and, earlier this month, the Ninth Circuit agreed in Cazares v. Host International, Inc.

Employers grappling with the many questions related to bringing employees back into the workplace safely in the midst of the COVID-19 pandemic should pay close attention to the potential wage-and-hour risks attendant to doing so—including whether to pay employees for time spent waiting in line for a temperature check, verifying vaccination status, or completing other health screening inquiries.

Given the growing trend of COVID-19 lawsuits, ignoring these risks could leave employers vulnerable to costly class and collective action litigation.

What the Law Requires

Under ...

This summer, the Colorado Supreme Court addressed whether employers may implement practices by which employees forfeit accrued, unused vacation pay upon the termination of employment.  In Nieto v. Clark’s Mkt., Inc., 2021 CO 48, 2021 Colo. LEXIS 423 (Colo. June 14, 2021), the Court held that the Colorado Wage Claim Act (“CWCA”) requires employers to pay employees for earned but unused vacation upon the separation of their employment. The requirement applies irrespective of an employment agreement or policy forfeiting an employee’s right to such payment.

In Nieto, the ...

1. Introduction

If you have hourly employees that earn bonuses, commissions, or other performance payments, this article is for you.

Properly compensating such employees is often not as simple as paying “time and a half” or “double-time” for qualifying hours.  Rather, federal law, and the laws of many states, require employers to “recalculate” overtime rates to include certain types of non-hourly compensation and pay overtime at those higher rates.  Many employers fail to make such payments, and of those that attempt to pay overtime (and double-time) at rates which ...

On July 19, 2021, Delaware Governor John Carney signed legislation that will gradually increase the state’s minimum wage to $15 per hour by 2025. This is a substantial increase from Delaware’s current minimum wage of $9.25 per hour. The minimum wage requirements apply to all employers who employ individuals in the state.

Following the examples set by neighboring Maryland and New Jersey, Delaware’s minimum wage increase will occur in phases. Effective January 1, 2022, the minimum wage will increase to $10.50 per hour. Thereafter, the minimum wage will increase annually on the ...

Effective July 1, 2021, Virginia employers must ensure that their pay practices comply with a new stand-alone overtime law called the Virginia Overtime Wage Act (“VOWA”). VOWA largely tracks the federal Fair Labor Standards Act (“FLSA”) in that it incorporates most FLSA exemptions and requires employers to pay 1.5 times a nonexempt employee’s regular rate of pay for all hours worked in excess of 40 hours each workweek. However, VOWA and the FLSA differ in several ways.

Determining an Employee’s Regular Rate of Pay

VOWA’s most significant divergence from the FLSA ...

On June 16, 2021, Hawaii enacted Senate Bill 793 (the “Act”), which repeals an exemption to the minimum wage for disabled employees, often referred to as “the disability subminimum wage.” The Act took effect immediately and requires all Hawaii employers pay disabled individuals no less than the state minimum wage.

Previously, Section 14(c) of federal Fair Labor Standards Act permitted Hawaii employers to pay individuals with disabilities less than the state minimum wage, which is currently set at $10.10.  However, the Act explains that the exemption, which was intended to ...

As we previously reported, starting in 2016 the District of Columbia by statute gradually increased its minimum wage to $15.00 per hour, and its tipped minimum to $5.00, effective July 1, 2020. However, included in the statute were provisions for subsequent increases of both these rates based on the annual average increase in the Consumer Price Index for All Urban consumers in the Washington Metropolitan Statistical Area. See D.C. Code §32-1003(a)(6) and (f)(2).  The D.C. Department of Employment Services (DOES) recently announced that pursuant to these provisions, effective ...

On May 28, 2021, the Ninth Circuit Court of Appeals delivered a win to Walmart in a lawsuit brought by Roderick Magadia (“Magadia”) alleging violations of California’s wage statement and meal break laws.

The Ninth Circuit overturned a $102 million dollar judgment issued by United States District Judge Lucy H. Koh – comprised of $48 million in statutory damages and $54 million in civil penalties under California’s Private Attorneys General Act (“PAGA”).  It did so because it found that Magadia lacked Article III standing because he could not establish that he suffered ...

On May 25, 2021, both houses of the Illinois General Assembly approved an amendment to the State’s Wage Payment and Collection Act (“the Act”).  The change would require employers who violate the Act to pay damages of 5% of the amount of any underpayment of wages, compensation, or wage supplements for each month following the date of payment during which the amount(s) owed remain unpaid.  This represents a 150% increase to the penalty, as the statutory rate before this amendment was 2%.  The measure will take effect immediately upon signature by Governor J.B. Pritzker.

The Act

For decades, the practice of motor carriers arranging for freight to be transported by independent owner-operators—i.e., independent contractors who drive their own trucks—has been ubiquitous. However, this practice is now under threat in California because of a recent court decision.

On April 28, 2021, in California Trucking Ass’n v. Bonta, No. 20-55106 (9th Cir. 2021) (“CTA v. Bonta”), the United States Court of Appeals for the Ninth Circuit addressed whether the broad preemption language of the Federal Aviation Administration Authorization Act of 1994 ...

With the United States in the midst of dealing with the coronavirus pandemic, there has been focused attention on the rollout of vaccines approved for emergency use by the U.S. Food and Drug Administration, and the actual number of individuals being vaccinated. Presently, 250 million COVID-19 vaccine shots have been administered and individuals 16 years of age and older are eligible to receive the vaccine.  Now, in an effort to get more people vaccinated, employers are being encouraged to provide paid time off for employees who have not yet been vaccinated against the virus.

Federal ...

For more than 80 years, federal law has provided a general right to premium pay for working overtime hours, originally just for covered employees, then later for employees of covered enterprises.  The laws of more than 30 states contain a comparable requirement, though in some instances differing in the particulars.

This presumptive right to the overtime premium is, of course, subject to the familiar exemption construct whereby individuals whose employment satisfies one or more of the dozens of exempted categories fall outside the premium pay requirement.  Many of the most ...

Years ago, Epstein Becker Green (“EBG”) created its free wage-hour app to put federal, state, and local wage-laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips.

As the laws have changed, so, too, has EBG’s free wage-hour app, which is updated to reflect new developments.

No fewer than 46 states (or the localities within them) had changes to their overtime, minimum wage, or child labor laws effective January 1, 2021 – and EBG’s ...

I had planned to focus this month’s installment of “Time Is Money” on the practice of rounding timeclock entries, addressing the history behind the practice as well as factors that make rounding today a riskier proposition than it used to be.  Then, while reviewing our previous writings on the subject, I came across my colleague Mike Kun’s treatment of the topic in our July 2019 installment, where he already said pretty much everything I had to say.

Back at the drawing board, it occurred to me that rounding is part of a broader challenge that businesses face: how best to record ...

We have previously discussed on this page how rounding practices can be problematic.  Now, in Donohue v. AMN Services, LLC, the California Supreme Court has provided yet another reason for employers in California to review their time rounding practices, as well as their meal period practices.

As we previously discussed, more than eight years ago in Brinker Restaurant Corp. v. Superior Court, the California Supreme Court clarified many of the general requirements for meal and rest periods under California law.  Relevant to the decision in Donohue, the Court held that employees must be ...

In November 2020, California voters approved Proposition 22, removing businesses that operate on-demand rideshare and food delivery platforms from the scope of AB 5, California’s controversial independent contractor law.  But before voters approved Proposition 22, the Attorney General of California filed suit against two such businesses, seeking injunctive relief, restitution, and penalties.

As we wrote about here, in August 2020, a California Superior Court judge issued a preliminary injunction prohibiting those businesses from treating drivers who use their ...

As part of a “third wave” of executive orders, on January 22, 2021, President Biden issued an executive order instructing the Director of the U.S. Office of Personnel Management to “provide a report to the President with recommendations to promote a $15/hour minimum wage for Federal employees.”  The Biden Administration announced via a Fact Sheet published on the White House’s website that the move is purportedly designed to ensure that the federal government is a model employer:

[Federal employees] keep us healthy, safe, and informed, and their work transcends partisan ...

To close out 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) recently issued two new opinion letters addressing overtime payments for caregivers and travel time for partial-day teleworkers under the Fair Labor Standards Act (“FLSA”).  We recommend a close review of these opinion letters as they offer a helpful overview of key FLSA principles and may provide answers to questions shared by numerous employers.

FLSA2020-19

In Opinion Letter FLSA2020-19, the WHD addressed whether an employee who voluntarily teleworks for part of the day and works at the ...

At the time we are posting this, we are just weeks away from the inauguration of President-Elect Joseph Biden. Although perhaps not at the very top of the list of questions about the forthcoming Biden administration, somewhere on the list has to be this question: “What changes will we see in wage-hour law?”

We don’t have the proverbial crystal ball, but there are a number of issues that the Biden administration may focus on at some point during the next four years, be it through legislation, new rules implemented by the Department of Labor (DOL) or even executive orders.  They may ...

Many employers may be eager to put 2020 in the rearview mirror.  But before ringing in the New Year, employers should carefully evaluate whether they need to make any changes to their current practices to ensure that they remain in compliance with state and local laws, including those relating to minimum wage.

As reflected in the chart below, in 2021, minimum wage will increase in more than two dozen states, with most of the changes set to take effect on January 1.  Minimum wage will also increase at the local level in a number of counties and cities.  Accordingly, employers with minimum wage ...

Which state’s wage and hour laws apply to Louisiana employers whose employees applied and interviewed for their jobs in Louisiana, acknowledged receipt of employment documents in Louisiana, and resided in Texas, Mississippi, and Ohio while they worked offshore?  The answer, according to the California Court of Appeals, is California if the employees are based in California.

In Gulf Offshore Logistics, LLC et al. v. Superior Court of Ventura County, employees worked on a vessel that provided maintenance services to offshore oil platforms located outside California’s ...

In a continuing trend, employers are abandoning on-call scheduling as states and cities continue to pass predictive scheduling laws.

1. What is Predictive Scheduling?

Predictive scheduling laws require employers to give employees adequate notice of when they will work so that they can plan for and around their work shifts.  The idea is that, unlike on-call scheduling, predictable schedules make it easier for workers, especially part-time retail and restaurant workers, to meet their needs, such as working another job, attending school, or arranging childcare.  The laws generally ...

With the end of the year just around the corner, many employers may be contemplating giving year-end bonuses to their non-exempt employees. And bonuses, year-end or otherwise, can create problems for employers when it comes to calculating overtime compensation for those employees.

One mistake some employers make concerns calculating an employee’s regular rate for purposes of paying overtime premiums.  Indeed, many employers have found truth in the adage “no good deed goes unpunished” after implementing bonus policies or issuing other forms of compensation intended to ...

In response to the increased use and enforcement of class and collective action waivers, plaintiffs’ attorneys are now relying on a new strategy to gain leverage over businesses.  More specifically, they have started to commence mass arbitrations by simultaneously filing hundreds—and in some cases, thousands—of individual arbitration demands in an effort to trigger a business’ obligation to pay its share of filing fees for the arbitrations.

Depending on the number of arbitration demands at issue, the filing fees alone can add up to tens of millions of dollars.

Postmates ...

Many employers may—understandably—view gratuities as discretionary payments that customers leave in exchange for superior service.  After all, federal wage and hour regulations define “tips” as “sum[s] presented by a customer as a gift or gratuity in recognition of some service performed.”  29 C.F.R. § 531.52 (emphasis supplied).  The regulations also state that “compulsory charge[s] for service” are not tips.  29 C.F.R. § 531.55 (emphasis supplied).

But in some cases, a mandatory charge may qualify as a tip that employers must distribute to staff under state or ...

We recently authored “Elections May Decide Fate of Gig Worker Classification Regs,” the first of a series of articles on wage and hour issues for Law360.  Subscribers can access the full version here - following is an excerpt:

As the gig economy has grown, so too have questions about it. One of the most consequential questions in the past several years has been whether workers in the gig economy are properly classified as independent contractors for purposes of various federal and state statutes, or whether they should be classified as employees of the businesses with which they ...

On September 9, 2020, Governor Newsom signed Assembly Bill (“AB”) 736, expanding the professional exemption under Industrial Welfare Commission (“IWC”) under Wage Orders Nos. 4-2001 and 5-2001 to expressly include part-time or “adjunct” faculty at private, nonprofit colleges and universities in California.  The sponsors of AB 736, the Association of Independent California Colleges and Universities, advocated for the bill to address perceived ambiguities in the California Labor Code that had spawned litigation causing some colleges and universities to ...

On September 8, 2020, a federal district court struck down the U.S. Department of Labor’s (“DOL”) Final Rule on joint employer liability, concluding that the Rule violated the Administrative Procedure Act (“APA”) by impermissibly narrowing the definition of joint employment under the Fair Labor Standards Act (“FLSA”), departing from the DOL’s prior interpretations on joint employment without adequate explanation, and otherwise being arbitrary and capricious.  We previously blogged about the details of the Final Rule here.  The DOL published the Final Rule in ...

In a case of first impression for the Fifth Circuit Court of Appeals, a Fifth Circuit panel has ruled that it is the employee, not the employer, who has the burden to establish that bonus payments are non-discretionary and, therefore, must be included in the regular rate of pay for computation of overtime under the Fair Labor Standards Act (“FLSA”).  Joshua Edwards, et al. v. 4JLJ LLC, et al., Case Number 19-40553 (5th Cir. September 3, 2020).

Under the FLSA, a non-exempt employee’s regular rate is the hourly rate actually paid to that employee for all remuneration.  Section ...