Employment Law Alert

Employment Law Alert

News and Updates on Employment Law

Category Archives: Wage & Hour

Subscribe to Wage & Hour RSS Feed

Department of Labor Final Overtime Rule

Posted in Wage & Hour
The United States Department of Labor (“the DOL”) has finally issued the long-awaited rules dramatically increasing the minimum salary level for the overtime-exempt classifications under the Fair Labor Standards Act (“the FLSA”). The new rules also incorporate mechanisms to adjust this salary level in the future. The effect of future adjustments will require an employer to pay wage increases unrelated to the employer’s financial condition or employee performance. The new rules will have the greatest impact on those employees currently classified as exempt but who will not meet the new minimum salary threshold. These rules go into effect December 1, 2016, a date later than DOL originally communicated, which gives employers an opportunity to conduct a self-analysis to prepare for these changes.… Continue Reading

EEOC to Collect Wage and Hour Data Based on Race, Ethnicity, and Gender in Effort to Aid Enforcement of Laws Requiring Pay Equity

Posted in Wage & Hour
The United States Equal Employment Opportunity Commission ("EEOC") has proposed a change to the EEO-1 Report, the standard form used to collect workforce profiles from certain private industry employers and federal contractors. In its current iteration, the form annually requires employers to categorize their workforces based on gender, race, ethnicity, and job category, using data collected from one pay period occurring in July, August, or September of the reporting year. The amended form would require further categorization of employees based on W-2 earnings and hours worked.… Continue Reading

Federal DOL Issues Joint Employer Guidance to Interpret FLSA and MSPA

Posted in Family Leave, Wage & Hour
The U.S. Department of Labor (“DOL”), Wage and Hour Division (“WHD”) recently issued an Administrator’s Interpretation (“Interpretation”) on joint employer liability under the Fair Labor Standards, Act, 29 U.S.C. § 1801 et seq. and the Migrant Seasonal Agricultural Worker Protection Act, 29 U.S.C. § 201 et seq., that provides additional guidance to employers but also may demonstrate the DOL’s increased efforts to focus on joint employer liability for wage and hour compliance. According to the WHD, the workplace increasingly involves use of outsourcing, shared employees, integrated employers, and other forms of co-dependent business models. The WHD seeks to ensure compliance with wage and hour laws for entities that rely upon such alternative workforces. While the Interpretation is not binding upon the courts and constitutes guidance for employers, it lists factors extrapolated from court decisions, other DOL guidance, and related sources that should be considered where an employer utilizes alternative labor sources or has sister or related entities that share common operations or are interdependent.… Continue Reading

Executive Order Mandates Paid Sick Leave

Posted in Wage & Hour
On Labor Day, President Obama issued an Executive Order that increases paid time out for employees of federal contractors. In legislation similar to that enacted in recent years in municipalities, cities, and states across the country, Executive Order 13706 mandates that federal contractors provide paid sick leave on an accrual basis. More specifically, employees must be able to accrue one (1) hour of paid sick leave for every 30 hours worked. While the Order states that its goal is to ensure that employees on federal contracts “can earn up to 7 days or more of paid sick leave annually,” it requires that contractors “not set a limit on the total accrual of paid sick leave per year, or at any point in time, at less than 56 hours.” Thus, the Order mandates a minimum of seven (7) paid days, but permits an employer to allow accrual of a larger number of days. Although the paid time is not required to be paid out when an employee separates from employment, it must be eligible for carry-over from year to year if unused, and must be reinstated if an employee separates and is rehired by the same employer within twelve (12) months. In addition to time needed for an employee resulting from his or her own “physical or mental illness, injury or medical condition,” the Order permits a broad range of uses, such as obtaining diagnostic or preventive care; “caring for a child, a parent, a spouse, a domestic partner, or other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship” and who needs care for an illness, injury or condition, or diagnostic or preventive care “or is otherwise in need of care;” or for recovery from or attending to matters related to domestic violence, sexual assault, or stalking, whether for the employee or any of the members of the employee’s family as defined above. Notably, the Order’s definition of those whom the employee may use paid time to care for – individuals “related by blood or affinity whose close association with the employee is the equivalent of a family relationship” – is among the most expansive of any similar legislation.… Continue Reading

Second Circuit Rejects the Department of Labor Test for the Lawful Employment of Unpaid Interns

Posted in Wage & Hour
In a much anticipated decision in Glatt v. Fox Searchlight Pictures, Inc., the United States Court of Appeals for the Second Circuit recently adopted the “primary beneficiary” test for determining whether individuals performing services for no compensation have been properly classified as “unpaid interns” or are, in fact, “employees” who have been improperly denied wages mandated by the Fair Labor Standards Act (FLSA). The district court, in an opinion that received a great deal of attention, had ruled that the plaintiffs were employees for FLSA purposes, applying the factors enumerated in the test proposed by the U.S. Department of Labor (DOL). The Second Circuit rejected the DOL’s test and, accordingly, reversed the district court’s order granting the plaintiffs’ motion for partial summary judgment and their motion to certify a collective action.… Continue Reading

Supreme Court Upholds Department of Labor’s Authority to Issue Interpretive Rules Without Public Notice or Comment

Posted in Wage & Hour
Rules promulgated by agencies of the federal government can be divided into those which have the force and effect of law and those which are merely “interpretative” or provide general statements of policy concerning the agency’s view of the law. When an agency wishes to promulgate rules having the force and effect of law it must comply with the requirements of the Administrative Procedures Act (APA) by, among other things, publishing the proposed rules in advance, allowing sufficient time for public comment and responding to significant comments received. In Perez v. Mortgage Bankers Association, the United States Supreme Court addressed the issue of whether the Department of Labor (the “DOL”) was free to reverse itself about the proper interpretation of the laws over which it has enforcement responsibility without giving notice or allowing public comment of the proposed change. The Court unanimously held that the DOL was free to do so.… Continue Reading

Supreme Court Decides Time Spent to Undergo Security Screening is Noncompensable

Posted in Wage & Hour
The time warehouse workers spent waiting to undergo and undergoing antitheft security screenings before leaving work is not compensable under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201 et. seq., as amended by the Portal-to-Portal Act of 1947, §251 et. seq. (Portal-to-Portal Act), according to the United States Supreme Court, which unanimously decided Integrity Staffing Solutions, Inc. v. Busk on December 9, 2014.… Continue Reading

Changes to FLSA Overtime Exemption for Domestic Service Workers are Coming

Posted in Labor, Wage & Hour
Effective January 1, 2015, the Fair Labor Standards Act overtime exemption for “domestic service workers” will change, having significant ramifications for employers of these employees. Until this change, domestic service workers generally have been exempt from overtime compensation, which means they need not be paid at the rate of time and a half for hours worked in excess of 40 per workweek. The U.S. Department of Labor has issued a Fact Sheet to summarize the changes.… Continue Reading

“School’s Out For Summer”: Legal Issues Impacting Employers Who Engage Summer Interns

Posted in Wage & Hour
With summer fast-approaching, employers who plan on utilizing summer interns should be aware of two issues that can have serious legal implications. The first applies to employers who engage, or are considering engaging, unpaid interns ─ when is an unpaid intern in fact an “employee” legally entitled to wages? The second issue applies to both paid and unpaid interns ─ do the discrimination laws protect interns from adverse employment actions based on their protected class status? Consideration of the these questions before “intern season” begins can avoid problems down the road and prevent expensive and time-consuming litigation. … Continue Reading

Eleventh Circuit Becomes Latest Court of Appeals to Enforce Agreement to Arbitrate FLSA Collective Action

Posted in Wage & Hour
On March 21, 2014, the United States Court of Appeals for the Eleventh Circuit joined a growing number of federal Courts of Appeals to reject arguments that class waivers contained in arbitration agreements should not be enforced in the employment context. In Walthour v. Chipio Windshield Repair LLC, the Eleventh Circuit (which covers Georgia, Florida, and Alabama) upheld a broad arbitration provision which required employees to bring all employment claims in their “individual capacity and not as a plaintiff of class member in a purported class or representative proceeding ….”… Continue Reading

Supreme Court Holds that Severance Payments to Employees Terminated Involuntarily are Taxable Wage for FICA Purposes

Posted in Wage & Hour
On March 25, 2014, the Supreme Court of the United States unanimously ruled that severance payments ─ that are not linked to the receipt of state unemployment benefits ─ are taxable wages subject to the Federal Insurance Contributions Act (“FICA”). United States v. Quality Stores, Inc., 572 U.S. ___ (2014). Specifically, the Supreme Court ruled that the severance payments made to employees who were terminated involuntarily fit within the broad definition of “wages” under both FICA § 3121(a) and Internal Revenue Code § 3401(a).… Continue Reading

U.S. Supreme Court Clarifies Meaning of “Changing Clothes” Under FLSA

Posted in Wage & Hour
On January 27, 2014, the U.S. Supreme Court issued a unanimous opinion in Sandifer v. United States Steel Corp., which clarified what it means for an employee to be "changing clothes" under Section 3(o) of the Fair Labor Standards Act ("FLSA"). The Court's decision will affect unionized workplaces, where employees change in and out of (or "don and doff") protective or sanitary clothing in connection with their jobs.… Continue Reading

Minimum Wage Increased in New York and New Jersey; Salary Basis Requirements Increased in New York

Posted in Wage & Hour
All employers operating in either New York or New Jersey should take note that -- effective immediately -- the minimum hourly wage for non-exempt employees has increased. In New York, the minimum wage is now $8.00 per hour. In New Jersey, the minimum wage is now $8.25 per hour. In these states, employers must pay at least the new minimum hourly wage to non-exempt employees for each hour worked. Other than raising the hourly minimum wage, the changes do not alter the way that overtime is calculated.… Continue Reading

Second Circuit Declines to Rehear Decision Allowing Class Action Waivers in FLSA Suits

Posted in Wage & Hour
The question concerning the enforceability of class action waivers in arbitration agreements to foreclose an employee's ability to litigate collective actions under the Fair Labor Standards Act ("FLSA") has been answered affirmatively in New York by the Second Circuit Court of Appeals. On October 15, 2013, the Second Circuit rejected a rehearing petition from Stephanie Sutherland, a former Ernst & Young LLP employee, who challenged a class action wavier in an arbitration agreement that barred her from pursuing a collective action for overtime pay under the FLSA. The decision lets stand the Circuit Court's August 9th panel ruling that an employee can be required as a condition of employment to waive, pursuant to an arbitration agreement, the right to bring a collective or class action.… Continue Reading

Intern or Employee? – The Southern District of New York Offers Guidance

Posted in Wage & Hour
An employee by any other name is still an employee, even if that other name is "intern." On June 11, 2013, the District Court for the Southern District of New York granted summary judgment to several former unpaid interns of Fox Searchlight Pictures, holding that they were, in fact, employees entitled to wages under the Fair Labor Standards Act ("FLSA") and New York Labor Law ("NYLL").… Continue Reading

The Supreme Court Addresses Offers of Judgment in the Context of Collective Actions

Posted in Wage & Hour
In Genesis Healthcare Corp. v. Symcyk, the U.S. Supreme Court, by a vote of 5 to 4, rejected an employee's contention that her employer should not have been permitted to thwart her attempt to bring a collective action under the Fair Labor Standards Act ("FLSA") by making an offer of judgment to her under Rule 68 of the Federal Rules of Civil Procedure that included all of the relief to which she would have been entitled in connection with her individual FLSA claim. The Court's April 16, 2013, ruling provides encouragement to employers who may seek to block an FLSA collective action with an offer of judgment--although, as detailed below, the Court's opinion did leave one issue unresolved. The Court's opinion also applies to cases brought under the Age Discrimination in Employment Act ("ADEA") and the Equal Pay Act ("EPA"), as both of those statutes are governed by the collective action procedures of the FLSA rather than by the class action procedures of Rule 23 of the Federal Rules of Civil Procedure.… Continue Reading

New York Expands Scope of Permissible Deductions From Employee Wages

Posted in Wage & Hour
Effective November 6, 2012, amendments to Section 193 of the New York Labor Law ("NYLL") will expand the list of items that private sector employers may deduct from employee paychecks to include, among other things, repayment of pay advances and overpayment of wages. Employers will welcome this amendment to the current version of the law, which limits permissible deductions only to those made for United States bonds, insurance premiums, pension contributions, charitable donations, and payments due to labor organizations (such as union dues).… Continue Reading

Third Circuit Establishes Test for Determining “Joint Employer” Liability Under the FLSA

Posted in Wage & Hour
A recent Third Circuit decision, In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, addresses the circumstances under which a parent company will be liable under the Fair Labor Standards Act ("FLSA") as a "joint employer" of employees of the parent's subsidiaries. The Third Circuit's opinion gives concrete guidance to employers confronted by the broad definition of "employer" set forth in the FLSA's regulations, providing a standard for assessing joint employer liability. (The FLSA defines an employer as "any person acting directly or indirectly in the interest of an employer in relation to an employee.") Although the standard announced by the Third Circuit is by no means a bright-line test, it does provide fair notice to employers of the factors that will determine joint employer status.… Continue Reading

U.S. Supreme Court Rules Against OT Pay for Pharmaceutical Salespeople

Posted in Wage & Hour
In a major victory for pharmaceutical companies, the U.S. Supreme Court recently held that company sales representatives who promote their employer's products to doctors and hospitals are exempt from the overtime requirements of the Fair Labor Standards Act ("FLSA"). In doing so, the Court resolved a split in the Circuit Courts of Appeal over the scope of the "outside salesman" exemption to the FLSA's overtime pay requirements. The Court's holding in Christopher v. SmithKline Beecham Corp. regarding the scope of this exemption has provided much needed clarity to pharmaceutical companies and employers with similar types of sales forces who have relied - and hope to continue to rely - on the exemption.… Continue Reading

Seventh Circuit Applies FLSA’s Administrative Exemption to Pharmaceutical Sales Representatives

Posted in Wage & Hour
The United States Court of Appeals for the Seventh Circuit has held that two pharmaceutical companies did not violate the Fair Labor Standards Act (FLSA) by failing to pay overtime to their sales representatives, concluding that the FLSA's "administrative exemption" from the statute's overtime requirements was applicable to these employees. Although the Court's opinion focused on the job duties of pharmaceutical sales representatives (PSRs), the Court's analysis of the general scope of the administrative exemption may prove useful to employers in other industries.… Continue Reading

Third Circuit Opens the Door for “Hybrid” Wage & Hour Claims in New Jersey, Pennsylvania, Delaware, and the U.S. Virgin Islands

Posted in Wage & Hour
On March 27, 2012, the United States Court of Appeals for the Third Circuit issued a precedential decision in Knepper v. Rite Aid Corp. which dramatically alters the landscape for wage and hour litigation for employers operating in the jurisdictions within the Third Circuit, i.e., in New Jersey, Pennsylvania, Delaware, and the U.S. Virgin Islands. Specifically, the Third Circuit ruled that the procedures for litigating a class action alleging state wage and hour violations is not "inherently incompatible" with the procedures for litigating a collective action under the federal Fair Labor Standards Act ("FLSA"). As a result, courts in these jurisdictions may well see a wave of hybrid class/collective actions alleging wage and hour violations under both the FLSA and the corresponding state wage and hour laws in the same complaint.… Continue Reading
Lexblog