In 2018, employers in New York encountered several important changes, including in the areas of anti-harassment and scheduling, warranting a Fall review of current employment practices and preparation for next year’s developments. Employers should take the time now to review current practices and prepare for the imminent future. NEW YORK CITY’S TEMPORARY SCHEDULE CHANGE LAW New York City’s Temporary Schedule Change Law (“TSC Law”) became effective July 18, 2018, and requires private employers to provide eligible employees with an allowance of a “temporary change” to their usual work schedule for certain qualifying “personal events” for up to two occasions per year (i.e., one business day twice per year or two business days on one occasion). Eligible employees are those who work at least 80 hours a year in New York City and have been employed by their employer for 120 or more days, with limited exceptions, including employees covered by collective bargaining agreements waiving the law. Temporary schedule changes may include paid time off, use of short-term unpaid leave, permission to work remotely, or working hour swaps or shifts. Qualifying “personal events” include: (a) an employee’s need to: (i) care for a minor child or care recipient (i.e., a person...
On April 2, 2018, in Encino Motorcars, LLC, v. Navarro, the Supreme Court held that auto service advisors – those who “interact with customers and sell them services for their vehicles” – are exempt from the overtime pay requirements of the Fair Labor Standards Act (“the FLSA”). The Court’s decision will certainly affect auto service advisors, but its impact will not be limited to the auto dealership industry. The crux of the Court’s decision centered around Section 13(b)(10)(A) of the FLSA, which states that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” is exempt from the FLSA overtime requirement. In a 5-4 decision, the majority found that a service advisor is “obviously a salesman” under the ordinary meaning of salesman, given that a salesman sells goods or services and service advisors “sell [customers] services for their vehicles.” The Court also found that service advisors are “primarily engaged in . . . servicing automobiles” due to their integral involvement in the servicing process. Thus, the Court held that sales advisors are exempt from the FLSA overtime pay requirement under Section 13(b)(10)(A). Significantly, in reaching its conclusion, the majority departed from the Supreme Court’s longstanding principle that FLSA...
In 2017, employers in New York encountered several important statutory changes affecting recruitment of applicants and retention of independent contractors. More legal change will come in 2018, warranting a mid-year review of current employment and hiring practices, as well as preparation for next year’s developments. Employers should take the time now to audit current practices and prepare for the imminent future. Pay Equity On May 4, 2017, Local Law 67 was enacted to prohibit all employers in New York City from inquiring about an applicant’s salary history (including current or prior wages, benefits, and other compensation), and from relying on an applicant’s salary history when determining his or her compensation package during the hiring process, including contract negotiations. The law applies to both public and private employers and employment agencies, and to their employees and agents (collectively, “employers”). Employers may, however, engage in communications with an applicant about his or her expectations as to salary, benefits, and compensation, including any deferred compensation or unvested equity which the applicant may forfeit as a result of leaving his or her current employer. In addition, if the candidate voluntarily (and without any prompting by the prospective employer), discloses his or her salary history to...
With the final overtime rule for the “white collar” exempt employee minimum salary level issued by the United States Department of Labor (the “DOL”) on hold, the New York State Department of Labor’s proposed overtime rules may take precedence for New York employers. As we previously communicated, the DOL’s new overtime rule – which substantially increases the minimum salary that employers must pay to certain classes of employees to avoid the overtime pay requirements of the federal Fair Labor Standards Act (“the FLSA”) – was scheduled to take effect December 1, 2016, but was placed on hold by a preliminary injunction issued by a Texas federal district court. New York State has now taken matters into its own hands independent of the now-suspended federal rule change.
Seventh Circuit Creates Circuit Split, Striking Down Agreement to Arbitrate Employment Claims on an Individual Basis
On May 26, 2016, the United States Court of Appeals for the Seventh Circuit issued its decision in Lewis v. Epic Systems Corp., becoming the first federal court of appeals to decide that an agreement between an employer and an employee to arbitrate wage-and-hour claims only on an individual basis, as opposed to a class action basis, is unenforceable. The court’s opinion has created a circuit split, as the Second, Fifth, and Eighth Circuits have enforced similar agreements.
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.
With summer around the corner, it is a good time for a refresher on legal implications when hiring interns. Specifically, when must interns be paid and what other legal protections do interns have? Wage and Hour Issues – As has been widely publicized in recent years, a number of companies who utilize unpaid interns have found themselves the object of lawsuits. It is thus important for companies to make an informed decision on the compensation issue before the hiring process begins.
Senate and House Republicans pushed back on the DOL’s proposed final rule on the “white-collar” overtime exemptions by proposing a new bill, the Protecting Workplace Advancement and Opportunity Act, seeking to invalidate the DOL rule. Under current regulations, employees must satisfy certain tests regarding the job duties they perform and be paid at least $23,660 per year, on a salary basis to be considered exempt under the FLSA’s “white-collar exemptions.” The DOL’s proposed final rule, however, seeks to more than double the minimum salary level from $23,660 to $50,440 per year and provides for automatic annual increases to the minimum salary threshold. Although the proposed final DOL rule does not include any specific changes to the “job duties” component of the exemptions, such changes may be included in the final rule.
EEOC to Collect Wage and Hour Data Based on Race, Ethnicity, and Gender in Effort to Aid Enforcement of Laws Requiring Pay Equity
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.
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.