Blogs Archive

Once again, the California Supreme Court has held that California’s wage and hours laws do not always follow well-established rules applicable to claims under the federal Fair Labor Standards Act (the FLSA).  More specifically, on July 26, 2018, in Troester v. Starbucks Corp., the California Supreme Court rejected Starbucks’ argument that the FLSA’s de minimis exception to compensable working time applied to wage claims brought under California wage and hour laws.  Instead, the court ruled that California employees must be paid for every minute (and possibly every second) of working time.

On May 21, 2018, the Supreme Court upheld the use of class action waivers in employment arbitration agreements, which is one of the few options employers have to limit costly “bet the business” class actions.  Prior to this decision, the National Labor Relations Board (NLRB) and a few appellate courts had held that these waivers were invalid because they conflicted with the National Labor Relations Act (NLRA), the federal law governing collective bargaining and other labor union issues. In its recent decision, Epic Systems Corp. v. Lewis, the high court rejected that conclusion and reinstated the practice of using class action waivers nationwide.  In light of this ruling, employers should consider revising their policies or adopting new arbitration agreements.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

Today, in a return to pre-Obama era standards, the U.S. Department of Labor (DOL) announced the withdrawal of two informal guidance letters impacting the “joint employer” doctrine.

A hot topic in 2016 was the implementation of new regulations more than doubling the minimum required salary amount for the executive, administrative and professional exemptions under the Fair Labor Standards Act (FLSA). In late November 2016, a federal court in Texas enjoined the rules from taking effect, and in December, President Obama’s administration appealed that ruling.

As most employers know by now, on November 22, 2016, a federal court in Texas issued a preliminary injunction that, at least temporarily, halted the implementation of the U.S. Department of Labor’s (DOL) amendments to the Fair Labor Standards Act’s (FLSA) white-collar exemptions. The amendments were to have gone into effect on December 1, 2016, and would have more than doubled the salary requirements for exempt executive, administrative, and professional employees. Much to the business community’s chagrin, this saga continues. 

In a surprising turn of events, a federal court in Texas issued a preliminary injunction yesterday halting the nationwide implementation of the Department of Labor’s new overtime rule increasing the salary threshold for exempt employees to $47,476 per year (for additional information on the rule, see Honigman’s prior blog posts.) 

The long-awaited presidential election is over. Although a new President will be sworn in next year, the amendments to the white collar exemptions are scheduled to take effect less than three weeks from now. Are you ready?

A franchisor may find itself between a rock and a hard place when the U.S. Department of Labor (DOL) comes calling; particularly when the call concerns franchisee compliance under the federal Fair Labor Standards Act (FLSA). On the one hand, a franchisor can refuse to cooperate. Though such refusal risks an aggressive response by the DOL, including costly litigation and increased damages claims. On the other hand, a franchisor can agree to cooperate. However, such cooperation is not without its own risks. Among other things, such cooperation may spur on “joint employer” claims under the FLSA (and other laws) against the franchisor.

Federal judge probes deep on Uber’s proposed deal with drivers in 2 states as drivers in the other 48 sue, yet ride-sharing giant appears set to avoid trial on merits of misclassification issue

If you are waiting for an answer to the question of how workers in the “gig economy” should properly be classified, you probably should not hold your breath.

On June 20, 2016, the U.S. Supreme Court decided the case of Encino Motorcars, LLC v. Navorro, which concerned the Fair Labor Standards Act (FLSA) classification of service advisors working at automobile dealerships. While the High Court did not actually decide the classification issue, it sent a strong message to the U.S. Department of Labor (DOL) that it “has some explaining to do” before it reverses its position and changes its interpretation regarding FLSA exemptions.

On June 14, 2016, the Department of Labor (DOL), through its Office of Federal Contract Compliance Programs (OFCCP), announced a Final Rule implementing sweeping changes to the OFCCP’s sex discrimination regulations. The regulations, which apply to federal contractors and subcontractors, were initially promulgated to implement the anti-discrimination provisions of Executive Order 11246, and were last updated decades ago. In April 2014, however, President Obama signed Executive Order 13672, which amended the previous Executive Order and added protections against discrimination on the basis of sexual orientation and gender identity. The Final Rule, which implements this amendment and otherwise significantly modifies the OFCCP’s existing anti-discrimination rules as discussed below, takes effect August 15, 2016.

In a recent opinion, the U.S. Court of Appeals for the Seventh Circuit broadened the conflict over whether employers may require employees to arbitrate their employment claims individually, instead of through class or collective actions. Specifically, in Lewis v. Epic Systems Corp., issued on May 26, 2016, the Seventh Circuit sided with the National Labor Relations Board (NLRB) and held that collective action waivers violate the National Labor Relations Act (NLRA) and cannot be enforced. 

They’re here! The U.S. Department of Labor (DOL) is set to unveil the new overtime regulations concerning the exempt status of executive, administrative and professional employees (the Final Rules) today at 2:00 pm (EST) at an event in Columbus, Ohio, which will feature Vice President Joe Biden and Secretary of Labor Tom Perez. In advance of the formal release, the DOL has published a Fact Sheet that outlines the key provisions of the Final Rules.

The grapevine is abuzz! The word on the street is that the Department of Labor (DOL) could release the final amendments to the Fair Labor Standards Act’s (FLSA) white-collar exemptions as soon as this week.

The United States Department of Labor’s long-anticipated revisions to the Fair Labor Standards Act’s (FLSA) overtime regulations may become effective sooner than expected. The Department announced on March 14, 2016 that it submitted its final overtime rules to the Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget. Once OIRA signs off on the final rules, publication could take place as early as April or May. The Department of Labor previously estimated publication would take place in July of 2016. 

Under the Fair Labor Standards Act (FLSA), a non-exempt employee generally must be paid time and a half (1.5x) his or her regular rate of pay for all time worked in excess of 40 hours in a workweek.  The law nevertheless provides some exceptions. One such exception is the “fluctuating workweek method” for calculating overtime (FWW method). Using the FWW method, an employer need only pay an employee half (0.5x) his or her regular rate of pay for every hour over 40. This method makes pay more predictable and less variable to an employee where his or her hours fluctuate week-to-week.

The final amendments to the Fair Labor Standards Act’s (FLSA) white-collar exemptions soon will be upon us. Employers should begin preparing now for substantial changes to the federal minimum-wage and overtime exemptions that currently apply to bona fide executives, managers, supervisors, administrative employees, and professionals. At the opening session of the American Bar Association’s mid-winter meeting for the Federal Labor Standards Legislation Committee (FLSL Committee), Solicitor of Labor M. Patricia Smith confirmed again that the Department of Labor (DOL) anticipates publishing the final amendments to the white-collar regulations by late spring or summer of 2016. The DOL also is committed to making the amendments effective before the end of the year.

Wage and hour class and collective actions have sky-rocketed in recent years. This increase in “bet the business” litigation has been facilitated, in part, by the unique process courts must follow under the Fair Labor Standards Act (FLSA) to certify an FLSA collective action (versus a typical class action under Rule 23 of the Federal Rules of Civil Procedure). Citing the “modest” showing necessary to conditionally certify an FLSA collective action, plaintiffs’ attorneys regularly obtain employee lists without establishing that a case actually can proceed on a class basis. Employers should know, however, that the fight is not over once a court conditionally certifies a collective action.

The minimum wage requirements in different states, cities and counties across the country became even more of a patchwork on New Year’s day, with fourteen states adopting increased minimum wages above the federal standard of $7.25 per hour. Such states include California, Massachusetts, Michigan and Nebraska. More than a dozen cities and counties also increased their minimum wages at the end of 2015 or will do so in the Summer of 2016. Employers should pay close attention to minimum wage increases at the state and local level, because they can impact more than just employees earning the current minimum wage.

On January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (DOL) articulated a new standard that it will use to identify joint employment relationships. Specifically, the DOL published Administrator’s Interpretation No. 2016-1 (AI 2016-1), which is the first Administrator’s Interpretation this year, following the DOL’s similar pronouncement regarding independent contractor classifications in July 2015.

With holiday parties behind us and companies settling back into their normal routines, it’s the perfect time to highlight some recent changes in California employment law that may require your attention. Some of the laws outlined below, including the California Fair Pay Act, changes to piece-rate compensation requirements, and expanded anti-retaliation protections, may necessitate revisions to existing company policies or creation of new policies. 

In June 2015, the Department of Labor (DOL) announced proposed changes to overtime regulations that would significantly increase the minimum salary required to classify an employee as an exempt executive, administrative, or professional employee, and proposed indexing those wages to the Bureau of Labor and Statistics data on annual earnings in future years. Those proposed regulations would increase the minimum weekly salary to the 40th percentile of weekly earnings for full-time salaried workers, which in 2016 the DOL projects will be $970 per week, or $50,440 per year. For highly compensated employees, the threshold would increase to the 90th percentile, or $122,148 annually.  

The dust has settled and now it is official:  Businesses that provide home care services can no longer rely on industry-specific exemptions to federal overtime and minimum wage requirements, and the final rule that says so now has the force and effect of law.

Employee claims under the Fair Labor Standards Act (FLSA) for unpaid minimum wages are routinely dismissed where the employer can demonstrate that wages, when averaged across work hours in a week, meet or exceed the minimum wage.  However, a federal judge in the District of Rhode Island has given plaintiffs an alternative argument to avoid such dismissal, which employers should note.  

Employers and other sponsors of apprenticeship programs take notice. Today, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking (NPRM) intended to expand and update regulations concerning the National Apprenticeship Act of 1937. Among other things, these proposed regulations would add age (40 or older), genetic information, sexual orientation, and disability to the list of classifications protected under the statute and strengthen related affirmative action requirements.

The status of live-in home care workers and companionship employees under the Fair Labor Standards Act (FLSA) has become a moving target in recent years, and the most recent move spells big changes for the home care industry.

Are you paying the intern you just sent out to grab your morning cup of coffee?  If not, you may have a wage and hour violation on your hands.  Private employers have increasingly come under attack over their use of unpaid interns by the Department of Labor and private litigants.  This is especially the case where an unpaid intern performs tasks more akin to an administrative assistant than an on-the-job student/trainee.

Sometimes the hunter becomes the hunted.  That’s a lesson the U.S. Department of Labor (“DOL”) recently learned.  In an opinion dated July 2, 2015, the United States Court of Appeals for the Fifth Circuit reprimanded the DOL for pursuing “poorly documented” and “legally dubious” claims.  The Fifth Circuit found that the DOL had engaged in “uncivil and costly litigation tactics,” attempting to prevail by oppressively pursuing a very weak case.  Ultimately, the court held that the DOL had “acted in bad faith” and ordered the district court to enter an award against the DOL for hundreds of thousands of dollars in attorneys’ fees.

Is Uber just a software platform, or is it an employer of hundreds of thousands of drivers?  Federal and state courts in California are considering this issue, and their ultimate findings will have implications for the new start-up economy.

On July 15, 2015, the U.S. Department of Labor (DOL) articulated a standard that will be used to call into question independent contractor classifications. Specifically, the DOL published Administrator’s Interpretation No. 2015-1 (AI 2015-1), which is the first Administrator’s Interpretation in more than a year.

Further information has been made available to the public concerning the proposed changes to the FLSA’s “white-collar” exemptions in the 295 pages of materials released by the Department of Labor yesterday.

The White House announced that the long-awaited proposed amendments to the Fair Labor Standards Act regulations concerning the so-called “white collar” exemptions will include a substantial increase to the salary required to maintain exempt status for most executive, administrative, and professional employees.

Allowing an employee to work four to five days per week from home is not a reasonable accommodation for most jobs under the Americans with Disabilities Act (ADA) after all. On April 10, 2015, the Sixth Circuit Court of Appeals issued its ultimate decision in  EEOC v. Ford Motor Co., a case arising from Ford’s rejection of an employee’s request to work from home several days per week to accommodate her disability (irritable bowel syndrome).

The use of independent contractors has come under attack in recent years. Several states have passed laws increasing the penalties for misclassifying independent contractors. Further, the U.S. Department of Labor aggressively investigates independent-contractor classifications. Courts also have limited the use of independent contractors by expanding the definition of “employee.”

The U.S. Supreme Court recently held that an employee can establish a prima facie case of pregnancy discrimination if the employee can establish that she belongs to a protected class (i.e., is or was pregnant), she sought an accommodation, and the employer did not accommodate her but the employer accommodated others “similar in their ability or inability to work.”

The U.S. Department of Labor (DOL) issued a new definition of “spouse” under the Family and Medical Leave Act (FMLA) to cover employees seeking leave for a same-sex spouse. 

Earlier this week, the United States Supreme Court unanimously ruled that time spent by employees in employer mandated security screenings is not compensable under the Fair Labor Standards Act (FLSA).

New reporting requirements for workplace injuries and a revamped industry classification system will take effect on January 1, 2015 pursuant to a new final rule from the Occupational Safety and Health Administration (OSHA).

Allowing an employee to work from home four to five days per week might not be a reasonable accommodation under the Americans with Disabilities Act (ADA) after all. On August 29, 2014, in a rare move, the Sixth Circuit Court of Appeals vacated its earlier three-judge panel decision against Ford Motor Company.

On Tuesday, May 27, 2014, Michigan’s House and Senate reached a bipartisan agreement to raise the state’s minimum wage by 25 percent over the next four years, to $9.25 an hour by January 1, 2018.

Allowing an employee to work four to five days per week from home may be required as a reasonable accommodation under the Americans with Disabilities Act (ADA).

Yesterday, President Obama directed the Secretary of Labor to draft new regulations that will require the payment of overtime wages to many white collar employees who presently do not receive overtime pay.

Employers should be vigilant, now more than ever, concerning the steps they take to ensure compliance with wage and hour laws.

In connection with statutory amendments to the Family and Medical Leave Act (FMLA) and new regulations issued by the Department of Labor’s Wage and Hour Division, employers will be required to display an updated poster describing employees’ rights under the FMLA by March 8, 2013.