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As always, the New Year came with a slew of new state wage and hour laws. Among other things, this year ushered in increased wages and continued trends in employee rights and protections.  Below are some of the new changes that employers should consider when implementing their employment practices.

The National Labor Relations Board (“NLRB”) recently adopted a new make-while relief model for possible remedies arising from unfair labor practice charges. Traditionally, damages in such labor disputes have been limited to back-pay and similar financial compensation.  However, the new decision expands “make-whole” relief to include consequential damages caused by the alleged unfair labor practice.

For decades courts have followed the de minimis rule when analyzing whether small fractions of time are compensable under the Fair Labor Standards Act (“FLSA”).  However, recent court cases may be eroding the application of this de minimis rule. Employers should carefully assess whether the time employees spend on short tasks before they clock in for work, and after they punch out, must be considered compensable worktime under the FLSA and related laws.

On October 13, 2022, the United States Department of Labor (the “DOL”) published a new proposed rule to clarify who is an independent contractor under federal wage and hour law (the “Proposed Rule”). The Fair Labor Standards Act (FLSA) protects workers against unfair employment practices by requiring employers to provide certain benefits and protections to employees. Independent contractors are not employees under the FLSA. As such, employers that misclassify workers as independent contractors may wrongfully deny workers of benefits and protections under the FLSA and other laws.

Posting a job without a pay scale in California?  Think again. 

California is the latest state poised to enact a pay transparency law that impacts not only information provided in job postings but also information provided to candidates upon request.  The existing pay transparency law prohibited employers from relying on salary history when making employment decisions (including compensation decisions) and required employers to provide applicants who completed an interview the pay scale (which is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position”) upon request. Under the new law, employers must provide all applicants that pay scale upon a reasonable request, regardless of whether they have been interviewed or not.

While courts often interpret Michigan's Elliott-Larsen Civil Rights Act to track Title VII of the federal Civil Rights Act, the ELCRA protects more than just employment.

The ELCRA protects against discrimination in employment, housing, real estate, public service, and places of public accommodation, including restaurants, hotels, event venues, and all other businesses and facilities open to the public.

Recently, the Wage and Hour Division of the Department Labor (“DOL”) proposed regulations designed to implement President Biden’s Executive Order 14055, concerning the nondisplacement of qualified workers under federal service contracts (the “Order”).  The Order requires federal contractors and subcontractors to offer qualified service employees working on a contract the right of first refusal of employment under a successor contract when a service contract expires and a follow-on contract is awarded for the same or similar services.  The Order is intended to reduce disruption and offer a seamless transition for experienced employees already familiar with the Federal Government’s personnel and requirements.

A growing number of states have passed pay equity laws giving employees new rights to request wage information and openly discuss and disclose their wages with other employees and the public.  Some of these states include California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington.  Other states and localities have now enacted pay transparency laws requiring employers to proactively disclose pay ranges for positions (e.g., as part of a job posting or as part of internal communications around a promotion). 

On May 9, 2022, the Fifth Circuit Court of Appeals heard arguments regarding the Department of Labor’s (“DOL”) Dual Jobs Final Rule (the “New Rule”), which regulates when employers may take a tip credit against their employees’ wages under federal law.  Under the Fair Labor Standards Act, employees who “regularly and customarily” receive tips need not be paid the full minimum wage in the form of hourly wage payments.  Instead, employers may take a “tip credit” against their minimum wage obligations, and pay tipped employees an hourly rate as low as $2.13 per hour (under federal law).  Whether the tip credit applies depends on the amount of time employees spend performing “tipped work” versus “non-tipped work.”  The 80/20 rule is a historic DOL guideline to assist employers in making such determinations; however, it has been hotly debated over recent years.

As companies continue to struggle with staffing shortages, many employers may consider offering bonuses or other incentives to employees as a means of attracting talent to their workforce.  While this may be a prudent and effective means of hiring and retaining employees, companies should be aware of the potential overtime implications arising from awarding certain bonuses to nonexempt employees.

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