Wage and Hour Defense Blog

November 3, 2020 has been circled on the calendars of app-based ride share and food delivery companies doing business in California for many months now.  After a new ruling by the California Court of Appeal, those companies have likely gone back and circled that date a few more times in thick red ink.

On November 3, 2020, California voters will decide the fate of Proposition 22, the ballot initiative that, if passed, will allow app-based ride share and food delivery companies to treat drivers as independent contractors rather than as employees, carving them out of California’s ...

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 ...

On September 22, 2020, the U.S. Department of Labor (“DOL”) released its highly anticipated proposed rule for distinguishing independent contractors from employees under the Fair Labor Standards Act (“FLSA”).

When evaluating independent contractor status under the FLSA, courts have traditionally applied what is known as the “economic realities” test. The test varies slightly from circuit to circuit, and, perhaps, court to court, but courts generally consider the following factors on a non-exclusive basis: (i) the degree of control that the putative employer ...

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 ...

At the end of August, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued four new opinion letters addressing various issues arising under the Fair Labor Standards Act (“FLSA”).  The topics covered include the retail or service establishment, highly compensated employee, and professional exemptions; reimbursing non-exempt employees for required use of a personal vehicle; and the fluctuating workweek method of calculating overtime pay.  These opinion letters offer a helpful overview of key FLSA principles and may answer fact-specific questions ...