Wage and Hour Defense Blog

Upsetting what many considered settled precedent, a California Court of Appeal has held that a mandatory service charge may qualify as a “gratuity” under California Labor Code Section 351 that must be distributed to the non-managerial employee(s) who provided the service.

In O’Grady v. Merchant Exchange Productions, Inc., No. A148513, plaintiff, a banquet server and bartender, filed a putative class action against their employer for its failure to distribute the entirety of the proceeds of an automatic 21% fee added to every food and beverage banquet bill to the ...

As we wrote here recently, California’s Governor Gavin Newsom signed a bill known as AB5, which is designed to make it more difficult for companies to treat workers as independent contractors.  The new law, which goes into effect on January 1, 2020, codified and expands the “ABC” test adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court for determining whether workers in California should be classified as employees or as independent contractors.

Now some gig economy businesses are striking back.  On October 29, 2019, a coalition of ...

On August 26, 2019, we wrote of the plan by the U.S. Department of Labor’s Wage and Hour Division (“WHD”) to update the Fair Labor Standard Act (“FLSA”) regulations on calculating overtime pay for salaried non-exempt workers to allow employers to include additional forms of compensation in the so-called “fluctuating workweek” calculations.  Under a fluctuating workweek calculation, an employer divides all of an employee’s relevant compensation for a given workweek by the total number of hours the employee worked in the week to derive the regular rate for that ...

California law has specific requirements regarding the payment of final wages to terminated employees. The failure to comply with those requirements can require an employer to pay an individual up to 30 days of pay – known as “waiting time” penalties. As “waiting time” claims are often pursued in the context of class actions, where plaintiffs seek up to 30 days of pay for each former employee, it is critical that employers understand when final wages must be paid. And that deadline is different depending up whether the company has terminated the employment or the employee has ...

In bringing meal and rest period claims on behalf of their clients, the plaintiffs’ bar has long argued that merely because there was an alleged meal or rest period violation, there were also “derivative” statutory violations entitling their clients to additional penalties.  By arguing that an employer is also on the hook for such penalties, plaintiffs’ attorneys argue that the potential exposure is greater.  And with greater potential exposure, employers will be more inclined to settle – or so the rationale goes.

These purported “derivative” violations have come in ...

As employers with operations in California had feared, Governor Gavin Newsom has signed AB 51, which effectively outlaws mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The bill not only prohibits mandatory arbitration agreements, but it also outlaws arbitration agreements in which employees must take an affirmative action to escape arbitration, such as opting out.

And as the statute is written in broad terms that extend to waivers of statutory “procedures,” it appears to ...

Our colleague Jeffrey H. Ruzal at Epstein Becker Green has recently published a post on the Hospitality Labor and Employment Law blog that will be of interest to our readers: “U.S. DOL Announces Proposed New Rule on Tip Credits and Pooling."

Following is an excerpt:

The proposed rulemaking will codify the DOL’s recent guidance that an employer may take a tip credit for any amount of time an employee in a tip-earning occupation performs related non-tipped duties that are performed contemporaneously with, or within a reasonable time immediately before or after ...

In the fall of 2016, before the Obama administration increases to the minimum salary were set to go into effect (spoiler alert – they didn’t!), we wrote in this space about the challenges facing employers in addressing those expected changes: “Compliance with the New DOL Overtime Exemption Rule May Create Unexpected Challenges for Employers.”

As we wrote earlier this week, the current administration’s changes are set to go into effect on January 1, 2020: “U.S. Department of Labor Issues Long-Awaited Final Rule Updating the Compensation Requirements for the FLSA’s ...

What is considered compensable travel time pursuant to the Fair Labor Standards Act (“FLSA”) is not always clear or intuitive to employers, even for those who usually have a good handle on wage and hour laws. This blog post hopefully will simplify the requirements set forth in the U.S. Department of Labor’s (“DOL”) regulations and interpretive guidance to help clarify when employees must be paid for travel time.

Ordinary Home-to-Work Travel

Likely not a surprise for most employers, employees are not entitled to pay for time that they normally spend commuting between their ...

For the past four-plus years, the U.S. Department of Labor (“DOL”) has actively pursued revisions to the compensation requirements for the executive, administrative, and professional exemptions to the Fair Labor Standards Act’s overtime requirement.  On September 24, 2019, DOL issued its Final Rule implementing the following changes, effective January 1, 2020:

• The new general minimum salary for these exemptions increases from the current level of $455 per week ($23,660 per year) to $684 per week ($35,568 per year).
• The new minimum annual compensation threshold for the ...