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Policy Innovation or Pandora’s Box? The Department of Labor Considers Revising Pay Calculations in 2018 Regulatory Agenda

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The Department of Labor (DOL) surprised many observers by announcing it would issue a new proposed rule on calculating the “regular rate of pay” for determining overtime wages in its recently issued 2018 regulatory agenda. The DOL has only stated that it intends to “clarify, update, and define regular rate requirements” for the Fair Labor Standards Act, and that the proposed rule will be issued in September 2018. More

Department of Labor Issues New Opinion Letters, Reversing Obama-Era Policy

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The Department of Labor (DOL) recently issued its first set of opinion letters since 2010, when the Obama administration suspended the practice of issuing such guidance. The return of opinion letters is welcome news for employers. Among other things, obtaining the DOL’s informal opinion on a wage and hour compliance question may help avoid costly disputes and, in certain circumstances, provide affirmative defenses to liability in the event of litigation. More

Fair, Not Necessarily Narrow: Supreme Court Changes Course Regarding the Interpretation of FLSA Exemptions

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Recently, the U.S. Supreme Court issued a ruling concluding that service advisors at car dealerships are exempt from overtime pay under the Fair Labor Standards Act (FLSA). In doing so, the Court abandoned 70 years of precedent, construing FLSA exemptions fairly rather than under the historic narrow standard. This change may signal a more level playing field for employers when courts interpret FLSA exemptions. More

Overtime Calculations in California: California High Court Favors an Expansive Formula and Declines to Follow Federal Precedent

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On March 5, 2018, the Supreme Court of California declined to follow federal precedent and ruled that employers must follow a more generous state formula for calculating overtime pay where employees receive flat sum bonuses. In Alvarado v. Dart Container Corp., the Court held that the “regular rate of pay” for any flat sum bonus must be calculated by dividing the total amount of the flat sum bonus by the number of non-overtime hours worked by the employee during the pay period applicable to the bonus. The calculated “regular rate of pay” is then multiplied by 1.5 or 2 (depending on the applicable overtime rate under California law) and the total number of overtime hours worked during the applicable pay period to get the total amount of overtime pay attributable to the bonus. More

After Cold Reception from Appellate Courts, DOL Rescinds Internship Enforcement Guidance and Adopts “Primary Beneficiary” Test

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In the wake of multiple federal courts rejecting its previous guidance, the Department of Labor (DOL) has revised its guidelines for determining when an intern may qualify as an “employee” under the Fair Labor Standards Act (FLSA.) Going forward, the DOL will follow the “primary beneficiary” test–a standard endorsed by several appellate courts. This shift may reduce costly investigations and lawsuits, because the “primary beneficiary” factors are viewed as providing more flexibility in structuring unpaid internship programs. More

A Tipping Point? DOL Reconsiders Stance on Tip Pooling

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On December 4, 2017, the U.S. Department of Labor (“DOL”) announced proposed changes that could have a large impact on many businesses that employ tipped workers. Citing changes in state laws and significant litigation involving tip pooling, the DOL is considering rescinding certain restrictions on tip pooling for employers who do not claim a tip credit against the federal minimum wage. A Notice of Proposed Rulemaking regarding these potential changes was published on December 5, 2017 for public comment. More

Halt the Lawsuit: Appeal of DOL’s Salary Level Raise on Hold

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On November 6, 2017, a federal appellate court granted the U.S. Department of Labor’s (DOL) motion to halt the litigation surrounding its 2016 overtime rule. The 2016 rule would have more than doubled the salary thresholds for exempt employees under the administrative, executive, and professional exemptions. More

Employers Beware: The Sixth Circuit Clarifies How Sales Commission Plans Can Violate Wage and Hour Laws – Even When the Employer Does Not Enforce the Plan

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The Sixth Circuit’s recent decision in Stein v. hhgregg, Inc. should be required reading for any employer with a commission workforce. More

New Administration Abandons Appeal of Obama Era Increases, Leaving Status Quo for Now

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On September 5, 2017, the U.S. Department of Justice (DOJ) dropped its appeal in support of the U.S. Department of Labor’s (DOL) intended increases to the Fair Labor Standards Act’s (FLSA) salary-basis test for the white-collar overtime exemptions. The appeal stemmed from a preliminary injunction issued by a federal district court in Texas, which halted the nationwide implementation of the DOL’s 2016 amendments to the FLSA. The DOJ’s request to dismiss the appeal comes just days after the same federal judge permanently struck down those amendments. More

DOL Takes Another Look at the Overtime Regulations

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The Department of Labor (DOL) recently issued a request for information (RFI) relating to the 2016 amendments to the Fair Labor Standard Act’s (FLSA) overtime regulations. The DOL seeks information “to aid in formulating” revisions to the amended regulations that remain subject to a nationwide injunction. Once again, companies face uncertainty regarding impending changes to the FLSA’s regulations. More