Wage and Hour Defense Blog

In many industries, sales are subject to ebbs and flows.  Sometimes the fish are biting; sometimes they aren’t.

A common device that employers with commissioned salespeople use to take the edge off of the slow weeks and to ensure compliance with minimum wage and overtime laws is the recoverable draw.  Under such a system, an employee who earns below a certain amount in commissions for a given period of time, often a week, receives an advance of as-yet unearned commissions to bring the employee’s earnings for the period up to a specified level.  Then in the next period, the employees’ ...

A year ago, employers across the country prepared for the implementation of a new overtime rule that would dramatically increase the salary threshold for white-collar exemptions, on the understanding that the new rule would soon go into effect “unless something dramatic happens,” a phrase we and others used repeatedly.

And, of course, something dramatic did happen—a preliminary injunction, followed by a lengthy appeal, which itself took more left turns following the U.S. presidential election than a driver in a NASCAR race. The effect was to put employers in a constant ...

On September 5, 2017, the Department of Labor filed with the Fifth Circuit an unopposed motion asking the court to dismiss its appeal of the nationwide preliminary injunction ruling issued last November by a Judge Amos Mazzant in the Eastern District of Texas.  The motion states that DOL’s appeal is moot in light of Judge Mazzant’s entry of final judgment on August 31, 2017.  Barring any unusual further developments, we anticipate that the Fifth Circuit will dismiss the appeal promptly.

By withdrawing the appeal, the Department is signaling that it intends to abandon the 2016 Final ...

In Moon et al v. Breathless, Inc., the Third Circuit reviewed the dismissal of a class and collective action under the Fair Labor Standards Act, the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law.  The District Court for the District of New Jersey had dismissed the named plaintiff’s claims based on an arbitration clause in the written agreement between the her and Breathless, the club where she worked as a dancer.

In her lawsuit, the plaintiff alleged that she and other dancers were misclassified as independent contractors, and that Breathless unlawfully failed to pay ...

When an employer pays the minimum wage (or more) instead of taking the tip credit, who owns any tips – the employer or the employee? In Marlow v. The New Food Guy, Inc., No. 16-1134 (10^th Cir. June 30, 2017), the United States Court of Appeals for the Tenth Circuit held they belong to the employer, who presumably can then either keep them or distribute them in whole or part to employees as it sees fit. This directly conflicts with the Ninth Circuit’s decision last year in Oregon Restaurant and Lodging Ass’n v. Perez, 816 F.3d 1080, 1086-89 (9^th Cir. 2016), pet for cert. filed, No. 16-920 ...

Not all new laws go into effect on the first of the year. On July 1, 2017, new minimum wage laws went into effect in several locales in California. Specifically:

• Emeryville: $15.20/hour for businesses with 56 or more employees; $14/hour for businesses with 55 or fewer employees.
• City of Los Angeles: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
• Los Angeles County (unincorporated areas only): $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
• Malibu: $12/hour for ...

In a move likely to impact employers in a variety of industries, U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department of Labor has withdrawn the Administrator’s Interpretations (“AIs”) on independent contractor status and joint employment, which had been issued in 2015 and 2016, respectively, during the tenure of former President Barack Obama.

The DOL advised that the withdrawal of the two AIs “does not change the legal responsibilities of employers under the Fair Labor Standards Act . . . , as reflected in the department’s long-standing ...

A new “comp time” bill that would dramatically change when and how overtime is paid to private sector employees in many, if not most, jurisdictions has passed the House of Representatives.  And unlike similar bills that have been considered over the years, this one might actually have a chance of passing. If it can get past an expected Democratic filibuster in the Senate, that is.

“Comp time” – short for “compensatory time” – is generally defined as paid time off that is earned and accrued by an employee instead of immediate cash payment for working overtime hours.

A federal district court in California has weighed in on the question of whether student-athletes are employees for the purposes of minimum wage and overtime laws. And, like the courts before it, it has rejected that notion.

In Dawson v. National Collegiate Athletic Association, No. 16-cv-05487-RS (N.D. Ca. April 25, 2017), the United States District Court for the Northern District of California has joined the Seventh Circuit Court of Appeals and other courts in holding that athletes are not employees entitled to minimum wage and overtime time pay.

In Dawson, a former college ...

In Romero v. Top-Tier Colorado LLC, the Tenth Circuit Court of Appeals ruled that tips received by a restaurant server for hours in which she did not qualify as a tipped employee were not “wages” under the FLSA, and therefore should not be considered in determining whether she was paid the minimum wage.

Tipped Employees & the FLSA

The FLSA provides that employers may take a “tip credit” and pay employees as little as $2.13 per hour if: (i) the tip credit is applied to employees who customarily and regularly receive tips; (ii) the employee’s wages and tips are at least equal to the ...

Featured on Employment Law This Week - “For Want of a Comma.” It seems that punctuation was a key factor in a recent class action suit from a group of dairy delivery drivers in Maine.

The U.S. Court of Appeals for the First Circuit ruled that an exemption in the states overtime law is ambiguous enough to support the drivers’ overtime claim. The drivers argued that the exemption applies only to workers who pack perishable food products for distribution—and not those who actually distribute the products. On appeal, the First Circuit agreed that a missing “Oxford” comma makes ...

A Maine dairy company has received a potentially expensive grammar lesson from the U.S. Court of Appeals for the First Circuit, which held on March 13, 2017, that the company’s delivery drivers may be eligible for up to $10 million in overtime pay, because the lack of a comma in the statute regarding exemptions from the state’s wage and hour law rendered the scope of the exemption ambiguous.

Grammarians have long disputed whether writers should include a comma before the final item in a list—the so-called “serial” or “Oxford” comma.  Opponents of the serial comma consider ...

A little more than two years ago, we wrote about how a California Court of Appeal’s decision exposed health care employers to litigation if they relied upon IWC Wage Order 5 for meal period waivers. That decision was Gerard v. Orange Coast Memorial Medical Center (“Gerard I”), where the Court of Appeal concluded that IWC Wage Order 5 was partially invalid to the extent it authorized second meal period waivers on shifts over 12 hours. Much has happened since then.

After Gerard I was published, the Legislature moved quickly to enact SB 327, which amended Labor Code section 516 to state ...

On February 28, 2017, the California Court of Appeal issued its opinion in Vaquero v. Stoneledge Furniture, LLC. The opinion provides guidance to California employers who pay their hourly employees on a commission basis but do not pay separate compensation for time spent during rest periods.

In the case, the employer kept track of hours worked and paid hourly sales associates on a commission basis where, if an employee failed to earn a minimum amount in commissions – comprising of at least $12.01 per hour in commission pay in any pay period – then the employee was paid a “draw” ...

The Missouri Supreme Court has overturned a lower court’s ruling that St. Louis’ minimum wage ordinance is invalid, finding that the ordinance is not preempted by the state law.

St. Louis City’s Ordinance 70078 (“the Ordinance”) provides for a series of increases to the minimum wage for employees working within the boundaries of St. Louis. The plaintiffs argued that Ordinance 70078 was preempted by the state minimum wage law.  The plaintiffs contended that state law affirmatively authorized employers to pay as little as $7.65 per hour, the state minimum wage rate.

A trial ...

As we previously discussed here, acting on behalf of the Department of Labor (“DOL”), the U.S. Department of Justice (“DOJ”) urged
the Fifth Circuit Court of Appeals to expedite briefing on its interlocutory appeal of a Texas district court’s nationwide preliminary injunction barring implementation and enforcement of the new overtime rule that would double the minimum salary threshold for white-collar exemptions, among other things. The injunction was issued just days before the rule was to go into effect on December 1, 2016.

The DOJ obtained a fast-tracked briefing ...

In the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:

• Change in Labor Landscape Is Not Likely to Come Quickly

• For Wage and Hour Changes, Look Locally

• Employer Group Health Plans Post-ACA: What’s Next for Employers and Workers?

• Examination of Retirement Plans Under a Trump Administration Microscope

• Cyber Threats Are Front and Center for Employers as the Trump Administration Takes Office

On January 13, 2017, the United States Supreme Court granted certiorari to hear three cases involving the enforceability of arbitration agreements that contain class action waivers.

Whether such agreements are enforceable has been a hotly contested issue for several years now, particularly in cases involving wage-hour disputes.

The Fifth Circuit has held that such waivers can be enforceable (NLRB v. Murphy Oil, Inc.), joining the Second and Eighth Circuits in that conclusion. The Seventh (Epic Systems, Inc. v. Lewis) and Ninth Circuits (Ernst & Young LLP v. Morris) have held that ...

The District Court for the Eastern District of Texas has denied the U.S. Department of Labor's application to stay the case in which the district court enjoined the DOL’s new overtime regulations. The DOL had asked the court for a stay while the Fifth Circuit Court of Appeals considered an interlocutory appeal of the injunction.

As wage and hour practitioners know:

• In May 2016, the U.S. Department of Labor announced that it would implement new regulations increasing the salary threshold for the executive, administrative, and professional overtime exemptions to $47,476 ($913 per ...

Even employers who were opposed to the new overtime regulations are in a quandary after the District Court for the Eastern District of Texas enjoined the Department of Labor from implementing new salary thresholds for the FLSA’s “white collar” exemptions.

Will the injunction become permanent?  Will it be upheld by the Fifth Circuit? 

Will the Department of Labor continue to defend the case when the Trump Administration is in place? 

What does the rationale behind the District Court’s injunction (that the language of the FLSA suggests exempt status should be determined based ...

Barring some unexpected development or a last-minute injunction in one of the lawsuits challenging the new Department of Labor overtime rules, the new salary thresholds for white collar exemptions will go into effect on December 1, 2016.

That, of course, is now less than two weeks away.

We have written at length about those new rules, as well as the critical decisions that employers will need to make to comply with them:

• Whether to increase employees’ salaries to meet the new thresholds;
• Whether to reclassify employees as non-exempt and begin to pay them hourly rates, plus overtime;

On January 20, 2016, the DOL issued Wage and Hour Division Administrator’s Interpretation 2016-1 (“AI”) providing that businesses that use employees of third parties may be considered “joint employers” of those workers for purposes of compliance with the FLSA. The genesis of the joint-employment AI is the DOL’s expectation that businesses may seek to avoid the high costs and potential liabilities of maintaining their own employee workforce.

Although this AI is less than a year old, there are longstanding federal regulations on joint employment stating that when the ...

Perhaps in response to protests brought by employees and their advocates in recent years, states, counties, and cities across America have been increasing their minimum wage in piecemeal fashion. Few employers are fortunate enough to need worry about only one minimum wage—the federal minimum wage that is the floor below which employers may not go (unless an employer is not covered under the FLSA). Most large employers that operate in multiple states must now navigate a minimum-wage patchwork in which the hourly rate varies from state to state and, sometimes, between counties and ...

Over the past year, there has been an increased discussion of Fair Labor Standards Act (“FLSA”) requirements for tipped employees. The courts have focused on a number of issues related to tipped employees, including addressing who can participate in tip pools and whether certain deductions may be made from tips. While the FLSA requires employers to pay a minimum wage of $7.25 per hour in most cases, Section 203(m) of the FLSA provides that employers may take a “tip credit” and pay as little as $2.13 per hour to employees who customarily and regularly receive tips, so long as two ...

In May of this year, the U.S. Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white-collar exemptions, effective December 1, 2016. With less than two months to go before that new rule takes effect, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule, by either increasing their salaries or converting them to non-exempt status.

The New Salary Thresholds

Effective December 1, 2016, the salary threshold for the executive, administrative, and professional ...

Our colleague Michael Kun, co-editor of this blog, shared his thoughts on various wage and hour issues in the publication of "7 Deadly Sins,"  which discusses FLSA violations that must be avoided to ensure compliance at your company, published by TSheets.

Following is an excerpt:

“The most common issues we see regarding meal and rest periods occur in states like California where state laws – rather than the FLSA – require that employees be provided those breaks at certain times during the day, and employees are entitled to significant penalties if they are not provided breaks in ...

Claims that employees have been misclassified as independent contractors remain a focus for private plaintiffs and government agencies. Contracts that exert control over the business of another company may be a particularly fertile source of misclassification claims by plaintiffs seeking unpaid wages.

Two recent suits arising from franchise agreements with Jani-King, described by the Third Circuit as “the world’s largest commercial cleaning franchisor,” demonstrate the potential liability that can arise under these circumstances.

Wage Hour Division Sues Based on ...

When: Tuesday, October 18, 2016 8:00 a.m. – 4:00 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

• Latest Developments from the NLRB
• Attracting and Retaining a Diverse Workforce
• ADA Website Compliance
• Trade Secrets and Non-Competes
• Managing and Administering Leave Policies
• New Overtime Rules
• Workplace Violence and Active-Shooter Situations
• Recordings in the Workplace
• Instilling Corporate Ethics

In a "Tip of the Week" segment on Employment Law This Week, Will Hansen, Senior Vice President of Retirement Policy for The ERISA Industry Committee (ERIC), offers some advice on preparing a benefits program in advance of the Department of Labor’s overtime rule:

"The Department of Labor's Final Rule increasing the overtime exemption threshold to $47,476 dollars will not only have an impact on the wages an employee receives, but also the benefits that they receive. In advance of these changes taking effect on December 1st, it's important for companies to review their benefit ...

In May, the Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white collar exemptions.  With little more than two months to go before that new rule takes effect on December 1, 2016, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule by either increasing their salaries or converting them to non-exempt status.

But some of those decisions may not be easy ones.  And they may create some unexpected challenges, both financially and operationally.

New Salary ...

[caption id="attachment_2743" align="alignright" width="113"] Michael D. Thompson[/caption]

In Gonzalez v. Allied Concrete Industries, Inc., thirteen construction laborers filed suit in the Eastern District of New York.  The plaintiffs claimed they worked in excess of forty hours per week, but were not paid overtime in violation of the Fair Labor Standards Act and the New York Labor Law.

To obtain information regarding the plaintiffs’ activities during hours they claimed to have been working, the defendants sought an order compelling discovery of their ATM and cell phone ...

[caption id="attachment_2734" align="alignright" width="113"] Julie Badel[/caption]

Addressing an unusual set of facts, the U.S. District Court for the Northern District of Georgia has dismissed a suit challenging an employer’s practice of retaining tips that customers give to valets. The plaintiff in Malivuk v. Ameripark, No. 1:15:cv-2570 WSD (N.D. Ga. 2016), alleged that she was promised an hourly wage plus tips but that her employer, who provided valet parking services, retained a portion of the tips.

The defendant moved to dismiss the case because the plaintiff did not ...

Our colleagues Denise Merna Dadika and Brian W. Steinbach, attorneys in the Employment, Labor & Workforce Management practice at Epstein Becker Green, have a post on the Health Employment and Labor blog that will be of interest to many of our readers: "U.S. Supreme Court Declines to Review DOL Home Care Rule"

Following is an excerpt:

On Monday, June 27, 2016, the U.S. Supreme Court declined to review a D.C. Circuit Court of Appeals decision upholding the new U.S. Department of Labor’s (DOL) requirement that home care providers pay the federal minimum wage and overtime to home care ...

After spending the last few years litigating with Domino’s franchisees over wage hour violations, the New York Attorney General has filed suit contending that franchisor Domino’s Pizza Inc. is a joint employer with three franchisees, and therefore is liable for the “systematic underpayment” of franchise employees.

The New York Attorney General also claims that, regardless of whether it’s a joint employer, Domino’s is liable for misrepresentations and nondisclosures that led to the underpayment of employees at the three franchises and violated the New York ...

Nearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016.

While the earlier notice had indicated that the salary threshold for the executive, administrative, and professional exemption would be increased from $23,660 ($455 per week) to $50,440 ($970 per week), the final rule will not raise the threshold that far.  Instead, it will raise it to $47,476 ($913 per week).

According to the DOL’s Fact Sheet,

On May 2, 2016, the Ninth Circuit issued a published opinion in Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership. The Corbin Court best summarized the action in its opening sentence: “This case turns on $15.02 and one minute.” The “$15.02” represented the wages the plaintiff claimed he lost over a period of time as a result of the company’s neutral time-rounding policy. And the “one minute” represented the amount of off-the-clock time that the plaintiff worked, which the Court held was de minimis and, therefore, not compensable.

Federal and ...

[caption id="attachment_2672" align="alignright" width="113"] Evan J. Spelfogel[/caption]

On March 31, 2016, New York Governor Andrew Cuomo signed into law a bill increasing the statewide minimum wage on a phased in basis over the next five years, to $15.00 per hour in some, but not all New York counties (“Minimum Wage Law”).  This is in addition to a bill enacted on December 31, 2015, that increased the subminimum wage for tipped employees in the hospitality industry from $5 to $7.50 per hour.

The Minimum Wage Law now provides for a tiered increase from the current statewide rate ...

[caption id="attachment_2651" align="alignright" width="113"] Kevin Sullivan[/caption]

On March 31, 2016, the California legislature passed a bill that will gradually increase the state minimum wage to $15 per hour by 2022. Governor Jerry Brown is expected to sign the bill on April 4, 2016. This increase will impact employers statewide. Not only will it affect the wages of many non-exempt employees, but it will also result in an increase in the minimum salary paid to employees who qualify for most overtime exemptions.

The bill calls for the minimum wage to increase to $10.50 per ...

The new episode of Employment Law This Week features the U.S. Supreme Court's easing of class certification standards in a case against Tyson Foods.

In Iowa, a group of Tyson employees brought a hybrid class and collective action for unpaid overtime spent changing clothes and walking to their work area. An expert determined the average amount of time spent on those activities, and the employees relied on those averages to get class certified and prove liability and damages. On appeal, Tyson argued that the employees should never have been grouped into a single class, because each ...

On March 22, 2016, the United States Supreme Court issued its much anticipated decision in Tyson Foods, Inc. v. Bouaphakeo, a donning and doffing case in which a class of employees had been awarded $2.9 million following a 2011 jury trial that relied on statistical evidence. (A subsequent liquidated damages award brought the total to $5.8 million.)

In a 6-2 opinion, the Supreme Court affirmed that award.  While the Supreme Court’s decision may not have been the outcome many were expecting, the Court did not issue a broad ruling regarding the use of statistical evidence in class ...

It is often said that no employer is immune from a wage-hour lawsuit. That no matter how diligent an employer is about complying with wage-hour laws, there is nothing to prevent an employee from alleging that it did not comply in full with the law, leaving it to the attorneys and the court to sort things out. Perhaps the best evidence that no employer is immune from a wage-hour lawsuit came on Thursday, March 17, 2016. That is the date that history will always reflect that a wage-hour lawsuit was filed against Betty White.

Yes, that Betty White. Ninety-four year old Betty White. Sue Ann ...

[caption id="attachment_2607" align="alignright" width="300"] Infographic by DOL Wage and Hour Division.[/caption]

The Department of Labor’s Wage and Hour Division, which is charged with enforcing federal wage laws, has just issued its latest newsletter.

Included in the newsletter is the Division’s presentation of a variety of statistics relating to its efforts.

Among the statistics reported by the Division:

• It has assisted more than 1.7 million workers since 2009.
• It has recovered approximately $1.6 billion for workers since 2009.
• It recovered more than $246 million ...

The top story on Employment Law This Week – Epstein Becker Green’s new video program – is the Department of Labor’s Wage and Hour Division's new interpretation of joint employment.

The federal Wage and Hour Division issued an Administrator’s Interpretation with new guidelines for joint employers under the FLSA and Migrant and Seasonal Agricultural Worker Protection Act. The Division makes it clear that it believes employers are regularly part of joint employment relationships with their vendors and business partners. If an employee files a claim or lawsuit and a ...

As part of the Wage Hour Division’s continuing focus on defining the employment relationships covered by the FLSA, the Division’s Administrator has issued an Administrators’ Interpretation (as well as a Fact Sheet) addressing joint employment relationships.  At the very least, the Interpretation suggests that the Division will be seeking to use the “joint employer” doctrine to pursue multiple entities – and “deeper pockets” – to address wage issues.

“Larger and More Established” Employers

The Administrator’s Interpretation notes that joint ...

One of the featured stories on Employment Law This Week – Epstein Becker Green’s new video program – is that there will be no BlackBerry overtime pay for cops in Chicago.

A federal magistrate judge in the Northern District of Illinois ruled that time spent by Chicago police officers actually answering emails on their BlackBerries was work eligible for overtime. However, "monitoring" of their BlackBerries was not work because the officers were still free to use the time predominantly for their own benefit. Regardless, the judge found that the City did not know the employees were ...

As we mentioned earlier this week, I was recently interviewed on our firm’s new video program, Employment Law This Week.  The show has now released “bonus footage” from that episode – see below.

I elaborate on some of the reasons behind this year's sharp increase in federal wage-and-hour suits: worker-friendly rules, increased publicity around minimum wage and overtime issues, and the difficulties of applying an outdated law to today's “gig” economy.

[embed]https://youtu.be/Vd3K-9Dfvk4?list=PLi4sj4jEe5heNkhVnjMTh94ipZhPPpMVh[/embed]

The top story on Employment Law This Week – Epstein Becker Green’s new video program – is the record high for Fair Labor Standards Act lawsuits in 2015.

The number of federal wage-and-hour suits rose almost 8% this year. There are many reasons for the increase, including more worker-friendly rules and increased publicity around minimum wage and overtime issues. Some point to the difficulties of applying an outdated law to our modern day economy.

Jeff Ruzal, co-editor of this blog, is interviewed. Click below to view the episode.

On October 15, 2015, Epstein Becker Green hosted its 34th Annual Workforce Management Briefing, which featured senior officials from the U.S. Department of Labor and the Equal Employment Opportunity Commission.  This year's briefing boasted a record setting attendance, including industry leaders, general counsel and senior human resources professionals, many of whom attended the briefing workshop, Wage and Hour Compliance: You Are Not Exempt.

The Wage and Hour workshop featured three of Epstein Becker Green's wage and hour practice attorneys -- Michael Kun, Patrick Brady and ...

Following recent precedent by the Second and Eleventh Circuits, the U.S. District Court for the Northern District  of California dismissed the claims of cosmetology and haircutting students who claimed they acted primarily as workers rather than students. 

In Benjamin v. B&H Education, Inc., the plaintiffs sought to represent a putative class of students seeking wages from their schools under the federal Fair Labor Standards Act ("FLSA") and the wage hour laws of California and Nevada.

The District Court held that the putative class representatives had not established that ...

Although not widely reported, effective January 1, 2016, the District of Columbia joins New York City and San Francisco in requiring employers of 20 or more employees to offer qualified transportation benefits.  By that date, covered D.C. employers who do not already do so must offer one of three transit benefit options.

Under the Sustainable DC Omnibus Amendment Act of 2014, Title III, Subtitle A, “Reducing Single Occupancy Vehicle Use by Encouraging Transit Benefits,” at D.C. Code §32-151, et seq., covered employers must “provide at least one of the following ...

In Naylor v. Securiguard, Inc., the Fifth Circuit Court of Appeals held that an employer may be required to compensate employees for meal breaks if the employees are required to spend a significant portion of that period traveling to a required break area.

Facts

Securiguard employees guarded several gates to a Naval air station.  During their shifts, the guards received two scheduled thirty-minute meal breaks.  The guards expressed a desire to eat at their posts, but Securiguard prohibited them from doing so (out of concern that the customer would think they were shirking their ...

On September 11, 2015 the U.S. Court of Appeals for the Eleventh Circuit announced that it joined the Second Circuit in rejecting the U.S. Department of Labor’s (“DOL”) rigid six part test for determining whether unpaid interns were employees and should have been paid minimum wages and overtime for their services. Schumann and Abraham et al v Collier Anesthesia, P.A., Wolford College, LLC, Thomas Cook and Lynda Waterhouse, No. 14-13169, 2015 BL 294459 (11^th Cir. Sept. 11, 2015), citing to Glatt v. Fox Searchlight Pictures, Inc., Nos. 13-4478-cv, 13-4481-cv (2d Cir. July 2 ...

Reversing a decision by the United States District Court for the District of Columbia, an August 21, 2015 decision by the Court of Appeals for the District of Columbia Circuit in Home Care Association of America v. Weil (pdf) has approved a regulation by the United States Department of Labor (“DOL”) extending federal minimum wage and overtime protections to home care workers and live-in domestic service employees employed by third parties.

We previously wrote about the decision by the District Court for the District of Columbia that vacated a DOL regulation that had been ...

The Administrator of the Wage Hour Division of U.S. Department of Labor has issued an Administrator’s Interpretation of the FLSA’s definition of “employ.” And the conclusion is one that not only could have a significant impact on the way companies do business, but lead to numerous class and collective actions alleging that workers have been misclassified as independent contractors.

Addressing the misclassification of employees as independent contractors, the Administrator’s Interpretation notes that the FLSA’s defines the term “employ” as “to suffer ...

On June 8, 2015, the U.S. Supreme Court granted Tyson Foods’ petition for review of the Eighth Circuit’s decision affirming the district court’s class and collective certification of a donning and doffing case under what Tyson Foods has described as “seriously flawed procedures.” While it does not appear that the Supreme Court’s review will deal directly with the standards for donning and doffing – i.e., the practice of employees putting on and taking off their uniforms and/or personal protective equipment pre- and post-shift – the Court appears likely to resolve ...

In Resch v. Krapf’s Coaches, Inc., the Third Circuit Court of Appeals ruled that drivers who “rarely or never crossed state lines” were nevertheless covered by the motor carrier exemption to the FLSA because they worked in safety-affecting jobs and reasonably could have been expected to drive interstate routes.

The FLSA’s motor carrier exemption creates an overtime exemption for employees who are covered by the Secretary of Transportation’s authority to regulate the safe operation of motor vehicles in interstate or foreign commerce.  To fall under the Secretary of ...

The United States Supreme Court has upheld an Administrator’s Opinion issued by the United States Department of Labor stating that “typical” mortgage-loan officers are not covered by the Administrative exemption to the FLSA’s overtime requirements.

The Supreme Court’s decision in Perez v. Mortg. Bankers Ass'n reversed a Circuit Court decision vacating the Opinion for failure to comply with the procedural requirements of the Administrative Procedure Act (“APA”).  Specifically, the Supreme Court ruled that the APA expressly exempts the Department of Labor ...

Employers in California – and healthcare employers in particular – have been besieged by wage-hour class actions for more than a decade. They have been sued repeatedly on claims that they have not complied with the terms of Industrial Welfare Commission (“IWC”) Wage Orders. Now, as a result of a new decision from the California Court of Appeal, they may face lawsuits based not on a failure to comply with the language of a Wage Order, but because they in fact relied upon language in a Wage Order. It is a development that may lead many employers to throw up their hands and quote the old ...

Just over three weeks after vacating a regulation barring third party employers from claiming the companionship exemption for minimum wage and overtime, in a January 14, 2015 decision in Home Care Association of America v. Weil, U.S. District Court Judge Richard Leon has also vacated the Department of Labor’s attempt to drastically narrow the definition of “companionship services” (29 CFR Sec. 552.6,). Judge Leon had previously stayed the changes in the new definition, originally scheduled to go into effect on January 1, 2015.

The new definition of “companionship ...

In Ruffin v. MotorCity Casino, the Sixth Circuit Court of Appeals considered whether casino security guards were entitled to be paid for meal periods during which they were required to remain on casino property, monitor two-way radios and respond to emergencies if called to do so.

The District Court for the Eastern District of Michigan had granted summary judgment to the employer based on the conclusion that no reasonable jury could have found the meal periods to be compensable work time.

In affirming the ruling of the District Court, the Sixth Circuit relied on its earlier decision in ...

On December 23, 2014, Brian Steinbach posted regarding U.S. District Court Judge Richard Leon’s December 22^nd decision in Home Care Association of America v. Weil, vacating the portion of the new Department of  Labor regulation (proposed 29 CFR Sec. 552.109, scheduled to go into effect on January 1, 2015) barring third party employers from claiming the companionship services (minimum wage and overtime) or live-in domestic service (overtime) exemptions. The post noted that the decision did not address DOL’s separate changes to the definition of “companionship services” ...

Our colleagues at Epstein Becker Green have released an advisory that will be of interest, particularly to New York employers: "New York Wage Theft Prevention Act Update: Annual Notice Requirement Is Removed for 2015," by Susan Gross Sholinsky, William J. Milani, Jeffrey M. Landes, Dean L. Silverberg, Nancy L. Gunzenhauser, and Kate B. Rhodes.

Following is an excerpt:

On December 29, 2014, Governor Andrew Cuomo signed the long-awaited amendment (“Amendment”) to the Wage Theft Prevention Act (“WTPA” or “Act”) and a chapter memorandum. Notably, the ...

On December 22, 2014, the District of Columbia federal district court vacated a new U.S. Department of Labor regulation, scheduled to go into effect January 1, 2015, barring third-party employers from claiming minimum wage and overtime exemptions for “companionship” domestic service workers, as well as a statutory overtime exemption for live-in domestic service employees.

In his scathing opinion in Home Care Association of America v. Weil, Judge Richard J. Leon pointed out that the United States Supreme Court has already rejected “a challenge to the validity of the ...

By Steven M. Swirsky

On our Management Memo blog, my colleagues Adam Abrahms, Martin Stanberry, and I posted “NLRB Issues 13 Complaints Alleging McDonald’s and Franchisees Are Joint-Employers.”

The National Labor Relations Board continues to focus on the changes in the nature of the employer-employee relationship, and the question of what entity or entities are responsible to a company’s employees for compliance with the range of federal, state, and local employment laws, including wage payment and overtime laws.

The Board’s General Counsel has now taken another ...

There is an unusual wage issue for 2015 that will affect many employers that pay exempt employees on a bi-weekly basis (rather than weekly, semi-monthly or monthly).

It is an issue that may have both financial and legal repercussions.

And it is an issue we suspect many employers had not noticed or considered.

With 52 weeks in a year, there normally are 26 bi-weekly pay periods in a calendar year.  In 2015, however, there will be 27 for many employers.

This oddity occurs every 11 years.  In short, it happens because 26 bi-weekly paychecks only cover 364 days in a year, not 365 (or 366 in Leap ...

In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with valuable merchandise being removed in bags, purses or jacket pockets.

Often in the context of high-stakes class actions and collective actions, parties have litigated whether time spent undergoing a security screening must be compensated under the Fair Labor Standards Act (“FLSA”). On December 9, 2014, a unanimous ...

As readers of this blog know, EBG’s free wage-hour app is now available for download on Apple, Android, and Blackberry devices. The app puts federal wage-hour laws and those of many states at users’ fingertips.

Now, the app also includes 7 checklists that employers should find helpful.

Each of the following checklists can be accessed through the “Downloads” icon on the app, then downloaded in seconds:

• Applying the Administrative Exemption
• Applying the Computer Employee Exemption
• Applying the Executive Exemption
• Applying the Highly Compensated Employee Exemption

In a great many wage-hour complaints alleging unpaid overtime or failure to pay minimum wage, plaintiffs will bring suit without identifying any specific instances in which the plaintiffs ever worked unpaid overtime or worked for a period of time without being paid at least the minimum wage.  The absence of such basic facts plagues many class action and collective action complaints, in particular.  The Ninth Circuit’s recent opinion in Landers v Quality Communications rejects the notion that plaintiffs can survive a motion to dismiss by relying on cookie-cutter allegations.  ...

In Holaway v. Stratasys, Inc., the plaintiff was employed as a field service engineer and classified as exempt from the FLSA’s overtime requirements.  Based on that classification, the plaintiff’s employer did not keep records of his hours worked.

After being discharged, the plaintiff filed lawsuit in the U.S. District Court for the District of Minnesota claiming he was non-exempt, seeking overtime wages and alleging that he worked sixty hours per week every week of his employment.  The District Court concluded that the plaintiff failed to produce sufficient evidence to show he ...

In August, Illinois Governor Pat Quinn signed into law HB 5622, amending the Illinois Wage Payment and Collection Act (IWPCA), which now recognizes for the first time payment of wages by payroll card. The law goes into effect on January 1, 2015. While the law provides a new option for Illinois employers, they must be careful to comply with the conditions under which payroll cards may be used.

Under the current Illinois law, employers are required to pay employees via check or direct deposit. The current law is silent as to whether payroll cards, which operate like debit cards, can be used to ...

As our readers know, for the purposes of certain blog entries, I have unilaterally declared that I am the Secretary of Labor.

Effective immediately:

1. The “computer professional” exemption applies to anyone with a salary of at least $800 per week whose primary duty requires “highly specialized knowledge of computers and software.”  The exemption now includes employees who provide help desk services, troubleshooting support, or who install hardware or software.
2. In regard to New York law, building owners who provide free apartments to their janitors can still count the value ...

By:  Amy Messigian

In a major blow to California employers who utilize a monthly commission scheme but pay biweekly or semimonthly salary to their commission sales employees, the California Supreme Court ruled earlier this week in Peabody v. Time Warner Cable, Inc. that a commission payment may be applied only to the pay period in which it is paid for the purposes of determining whether an employee is exempt from overtime.  Employers may not divide the commission payment across multiple pay periods in order to satisfy the minimum compensation threshold for meeting the exemption in any ...

By Michael Kun

Much has already been written about last week’s California Supreme Court decision in Duran v. U.S. Bank Nat’l Ass’n, a greatly anticipated ruling that will have a substantial impact upon wage-hour class actions in California for years to come.  Much more will be written about the decision as attorneys digest it, as parties rely on it in litigation, and as the courts attempt to apply it.

In a lengthy and unanimous opinion, the California Supreme Court affirmed the Court of Appeal’s decision to reverse a $15 million trial award in favor of a class of employees who ...

In a complimentary webinar on May 22 (1:00 p.m. ET), our colleagues Jeffrey M. Landes and Susan Gross Sholinsky will present a webinar on how to strategically structure internship programs to comply with applicable wage and hour guidelines.

Join us for a discussion on how to minimize both your organization's liability and the risk of wage and hour lawsuits. In particular, below are just a few of the many questions we will address during the webinar:

• What are the best practices for recruiting and hiring seasonal interns, and what critical language should you include (or avoid) in ...

By: Kara M. Maciel

The following is a selection from the Firm's October Take 5 Views You Can Use which discusses recent developments in wage hour law.

1. IRS Will Begin Taxing a Restaurant's Automatic Gratuities as Service Charges

Many restaurants include automatic gratuities on the checks of guests with large parties to ensure that servers get fair tips. This method allows the restaurant to calculate an amount into the total bill, but it takes away a customer's discretion in choosing whether and/or how much to tip the server. As a result of this removal of a customer's voluntary act, the ...

By: Kara Maciel and Jordan Schwartz

On September 16, 2013, the U.S. Department of Labor (DOL) announced that Harris Health System (“Harris”), a Houston health care provider of emergency, outpatient and inpatient medical services, has agreed to pay more than $4 million in back wages and damages to approximately 4,500 current and former employees for violations of the Fair Labor Standards Act’s overtime and recordkeeping provisions. The DOL made this announcement after its Wage and Hour Division (“WHD”) completed a more than two-year investigation into the ...

We are pleased to announce the release of a new version of our Wage & Hour Guide app that puts federal and state wage-hour laws at employers’ fingertips. To download the app, click here.

The new version features an updated main screen design; added support for iOS 6, iPhone 5, iPad Mini, and fourth generation iPad; improved search capabilities; enhanced attorney profiles; expanded email functionality for sharing guide content with others; and easier access to additional wage and hour information on EBG’s website, including the Wage and Hour Division Investigation Checklist  and ...

By Elizabeth Bradley

This on-going series of blog posts flows from EBG’s publication of its Wage and Hour Division Investigation Checklist for employers. The Checklist, along with this series, is aimed at guiding employers through DOL Wage and Hour Division Investigations.

We have previously blogged our way through How to Prepare for a Wage and Hour Inspection, What to Do When a Wage and Hour Investigation Team Arrives to Start Auditing, and What Records Must be Provided to the DOL. In this post, we discuss what to expect during the “walk around” inspection portion of the ...

By Stuart Gerson

Wage-hour lawsuits filed under the federal Fair Labor Standards Act (FLSA) represent one of the fastest growing and most problematic areas of litigation facing employers today, especially when such cases are brought as collective actions. A recent Supreme Court case based in class action analysis provides a potentially-useful analog for employers to stave off such collective actions.

Class action criteria are set forth in Fed. R. Civ. P. 23, and they allow for one or more individual named plaintiffs to sue on behalf of a large – sometimes very large – group of ...

By Douglas Weiner

Last month, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address an increasingly common issue that many employers are facing in light of aggressive government enforcement at the state and federal level from the Department of Labor.

QUESTION: If a DOL team of Wage Hour Investigators arrive unannounced demanding the immediate production ...

By Michael Kun

We have written previously in this blog about California’s obscure “suitable seating” law, which requires that some employers provide “suitable seating” to some employees.

In short, the plaintiffs’ bar recently discovered a provision buried in California’s Wage Orders requiring employers to provide “suitable seating” to employees when the nature of their jobs would reasonably permit it.  Although the provision was written to cover employees who normally worked in a seated position with equipment, machinery or other tools, employers in a ...

By: Kara M. Maciel

Earlier this month, we released our Wage and Hour Division Investigation Checklist for employers and have received a lot of great feedback with additional questions. Following up on that feedback, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address a common issue that many employers are facing in light of increased government enforcement at the state and federal level from the Department of Labor.

QUESTION: “I am aware that my industry is being targeted by the DOL for audits and several of my ...

By Douglas Weiner and Kara Maciel

“There’s a new sheriff in town.”  With those words in 2009, Secretary Hilda Solis initiated a policy at the Department of Labor that emphasized increased investigations and prosecutions of violators rather than the prior administration’s emphasis on providing compliance assistance.

Her departure – announced yesterday – is unlikely, however, to have much effect on the Department’s current aggressive enforcement policy, as the top enforcement officer of the Department remains Solicitor of Labor M. Patricia Smith.  Solicitor ...

By Michael Kun

As we have written before in this space,  the latest wave of class actions in California is one alleging that employers have not complied with obscure requirements requiring the provision of “suitable seating” to employees – and that employees are entitled to significant penalties as a result.

The “suitable seating” provisions are buried so deep in Wage Orders that most plaintiffs’ attorneys were not even aware of them until recently.  Importantly, they do not require all employers to provide seats to all employees.  Instead, they provide that employers ...

By Evan J. Spelfogel

On December 17, 2012, in Crocker v Townsend Oil, the Massachusetts Supreme Judicial Court invalidated a settlement agreement, waiver and release to the extent it purported to release claims under the Massachusetts Wage and Hour Laws, but did not expressly include that statute by name among the claims being released. Specifically, the Court held:

We...conclude that a settlement or contract termination agreement by an employee that includes a general release, purporting to release all possible existing claims will be enforceable as to the statutorily ...

By Evan J. Spelfogel

In recent years employees have asserted claims for time allegedly worked away from their normal worksites, on their Blackberries, iPhones or personal home computers.  Until now, employers have been faced with the nearly impossible task of proving that their employees did not perform the alleged work.  The US Department of Labor and plaintiffs’ attorneys have taken advantage of the well-established obligation of employers to make and maintain accurate records of the hours worked by their non-exempt employees, and to pay for all work “suffered or ...

By Michael Kun

Employers with operations in California have become aware in recent years of an obscure provision in California Wage Orders that requires “suitable seating” for some employees.  Not surprisingly, many became aware of this provision through the great many class action lawsuits filed by plaintiffs’ counsel who also just discovered the provision.  The law on this issue is scant.  However, at least two pending cases should clarify whether and when employers must provide seats – a case against Bank of America that is currently before the Ninth Circuit Court of ...

By Frederick Dawkins and Douglas Weiner

Earlier this month, at the ABA Labor and Employment Law Conference, Solicitor of Labor M. Patricia Smith reaffirmed that investigating independent contractors as misclassified remains a top priority of the U.S. Department of Labor’s (“DOL”) enforcement initiatives.  The DOL will continue to work with other federal and state agencies, including the IRS, to share information and jointly investigate claims of worker misclassification.  The joint enforcement effort is certainly driven by, among other things, an interest in ...

Kara M. Maciel, contributor to this blog and Member of the Firm at Epstein Becker Green, has released the "HR Guide for Responding to Natural Disasters."  Following is an excerpt:

Natural disasters such as hurricanes, earthquakes, and tornadoes have posed unique human resource challenges for employers. While many employers are working around the clock on recovery efforts, other employers find themselves unable to function for extended periods of time because of damage or loss of utilities.

The economic effects of a natural disaster will have long-term consequences on businesses ...

By:  Elizabeth Bradley

The U.S. Court of Appeals for the Eighth Circuit recently confirmed that the Fair Labor Standards Act (“FLSA”) does not prohibit an employer from modifying its workweek in order to avoid overtime costs. The Court’s ruling in Redline Energy confirms that employers are permitted to modify their workweeks as long as the change is intended to be permanent. Employers are not required to set forth a legitimate business reason for making the change and are permitted to do so solely for the purpose of reducing their overtime costs. The only requirement on ...

By:  Kara M. Maciel

Hurricane Sandy is approaching this weekend, so employers along the East Coast should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.

A few brief points that all employers should be mindful of under the FLSA:

• A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if the employer has a collective bargaining agreement or handbook policies, the ...

By Michael Kun and Aaron Olsen

To the surprise of few, the California Supreme Court has decided to review the Court of Appeal’s decision enforcing a class action waiver in Iskanian v. CLS Transportation Los Angeles, LLC.

We wrote in detail about that decision on this blog earlier this year.

In reaching its conclusion, the Court of Appeals relied on the April 2011 United States Supreme Court’s landmark decision in AT&T Mobility, LLC v. Concepcion.  Whether the California Supreme Court will follow Concepcion or attempt to distinguish it is impossible to predict.   Unfortunately ...

By Michael Kun

EBG’s free wage-hour app, which allows users to access federal law and the laws of many states, has been updated to include Massachusetts law.

The app can be dowloaded here: https://itunes.apple.com/us/app/id1320249735

On September 19, 2012, several members of EBG’s Wage and Hour practice group will be presenting a briefing and webinar on FLSA compliance.  In 2012, a record number of federal wage and hour lawsuits were filed under the Fair Labor Standards Act (FLSA), demonstrating that there is no end in sight to the number of class and collective actions filed against employers. Claims continue to be filed, raising issues of misclassification of employees, alleged uncompensated "work" performed off the clock, and miscalculation of overtime pay for non-exempt workers.

In this interactive ...

By:  Adam C. Abrahms

Last week Assembly Bill 889 cleared a California State Senate Committee, advancing it one step closer to becoming state law.  The bill, authored by Assemblyman Tom Ammiano (D – San Francisco), seeks to extend most of California’s strict wage and hour regulations to domestic employees working in private homes.  While the bill excludes babysitters under the age of 18, it extends California wage and hour protections to babysitters over the age of 18 as well as any other housekeeper, nanny, caregiver or other domestic worker.

Should the bill become law individual ...

By Michael Kun

Earlier this year, we were pleased to introduce our free wage-hour app for iPhones and iPads.  The app puts federal wage-hour law, as well as that for many states, at users’ fingertips.

We have recently added New Jersey law to the app, as well as updated it to reflect changes in California law following the long awaited Brinker v. Superior Court decision clarifying meal and rest period laws.

The app may be found here:  https://itunes.apple.com/us/app/id1320249735