Wage and Hour Defense Blog

As the result of a sweeping “Wage Theft” law (“Law”), which became effective upon enactment on August 6, 2019,  New Jersey employers will face toughened penalties and increased exposure for failure to pay wages, benefits and overtime (collectively “wages”) owed to workers. Employers should take immediate notice because any missteps or mistakes may prove extremely costly. In sum, the Law:

• makes employees eligible to receive 200% liquidated damages for all unpaid wages and benefits and recovery of attorneys’ fees and costs;
• permits employees to bring collective ...

Earlier this year, in New Prime, Inc. v. Oliveira, 586 U.S. __, 139 S. Ct 532 (2019), the United States Supreme Court held that the Federal Arbitration Act (“FAA”) does not apply to arbitration agreements with independent contractors who are engaged in interstate commerce.  The Supreme Court did not address whether such agreements could be enforced through other laws.

Now, two different panels of the New Jersey Appellate Division have rendered decisions addressing this unresolved issue.  Those panels, however, reached different conclusions regarding whether the arbitration ...

The Acting Administrator of the U.S. Department of Labor’s Wage and Hour Division recently issued opinion letters addressing (i) the 8-and-80 overtime pay system available to certain healthcare employers; (ii) the overtime exemption for teachers, and (iii) the exemption for employees in agriculture.  The analyses and conclusions in those opinion letters are instructive for employers not only in those industries, but in many other industries as well, because they confirm the Department’s commitment to construing FLSA exemptions fairly rather than narrowly.

“8 ...

The obligations of a district court to analyze conflicting evidence regarding class and collective action certification was recently addressed by the Third Circuit Court of Appeals in Reinig v. RBS Citizens N.A., 912 F.3d 115, (3d Cir. 2018) (“Citizens”). In that case, the Third Circuit opined that Fed.R.Civ.P. 23 class certification orders (i) must explicitly define the classes and claims that are the subject of a certification order and (ii) provide an analysis of how the court reconciled any conflicting evidence supporting class certification.

In addition, the Third ...

The Third Circuit Court of Appeals ruled that a federal statute that governs interstate trucking does not preempt the application New Jersey’s ABC test for distinguishing between employees and independent contractors.

In Bedoya v. American Eagle Express Inc., New Jersey-based delivery drivers for AEX alleged that the company misclassified them as independent contractors rather than employees in violation of the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law. AEX moved to dismiss the drivers’ claims as preempted by the Federal Aviation Administration ...

It is a common practice for employers to provide their employees with rest breaks during the work day.  (And in some states, like California, it is required by state law.) But under what circumstances is an employer required to pay its employees for break time?

In U.S. Department of Labor v. American Future Systems Inc. et al., the Third Circuit Court of Appeals was asked to decide whether the Fair Labor Standards Act requires employers to compensate employees for breaks of 20 minutes or less during which they are free from performing any work.

The employer in that case produced business ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

A group of 21 states ("the States") has filed a Complaint in the Eastern District of Texas challenging the new regulations from U.S. Department of Labor that re-define the white collar exemptions to the overtime requirements of the FLSA.  The States argue the DOL overstepped its authority by, among other things, establishing a new minimum salary threshold for those exemptions.

Pursuant to the new regulations from the U.S. Department of Labor, effective December 1, 2016:

• the salary threshold for the executive, administrative, and professional exemption will effectively double ...

[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 ...

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 ...

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 ...

Employment Law This Week – Epstein Becker Green’s new video program – has a story this week on off-the-clock security screenings, which are under scrutiny around the country. Two federal class actions challenging them have reached different outcomes.

Bath & Body Works recently agreed to settle a suit in California over unpaid overtime and off-the-clock security inspections. But a federal judge in the same state dismissed a similar class action against Apple in which retail workers claimed that they should be compensated for time spent having their bags checked. The judge ...

In recent years, employers across the country have faced a great many class action and collective action lawsuits in which employees have alleged they are entitled to be paid for the time spent in security screenings before they leave their employers’ premises – but after they have already clocked out for the day.  Retailers have been particularly susceptible to these claims as many require employees to undergo “bag checks” before they depart their stores to ensure that employees are not attempting to carry merchandise out in their bags or coats.

In late 2014, in Integrity ...

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 ...

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 ...

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 ...

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 ...

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 ...