Fair Labor Standards Act (FLSA)

On September 22, 2020, the United States Department of Labor (DOL) released a long-awaited proposed rule (the “Proposed Rule”) providing guidance for determining employee versus independent contractor status under the Fair Labor Standards Act (FLSA).  For decades, employers have struggled with properly classifying workers, oftentimes resulting in substantial liability for, among other things, unpaid overtime and unpaid payroll taxes.  If adopted, the Proposed Rule may make it easier for employers to classify workers as independent contractors.
Continue Reading Independent Contractor v. Employee: DOL Releases Proposed Rule Clarifying Test for Classification of Workers

On August 24, 2020, the U.S. Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2020-5 (“FAB 2020-5” or the “Bulletin”) in an effort to guide an increasing number of employers faced with the challenge of tracking compensable hours worked by teleworking non-exempt employees.  Specifically, FAB 2020-5 offers clarity regarding how, and to what extent, employers must monitor the number of hours worked by non-exempt employees who work remotely.  As many workforces seem poised to continue partial or complete telework for the balance of the year, FAB 2020-5 provides useful insight to assist employers in properly monitoring remote hours and avoiding liability for unpaid wages.
Continue Reading Trust, but Verify: DOL Issues New Guidance for Tracking Teleworkers’ Time

On December 12, 2019, for the first time in 60 years, the U.S. Department of Labor (DOL) announced a final rule clarifying the types of benefits that must be included in determining an employee’s “regular rate of pay” when calculating overtime wages. This new rule becomes effective January 15, 2020.
Continue Reading Department of Labor Issues Final Rule on Calculating the Regular Rate of Pay Under the Fair Labor Standards Act

On December 6, 2019, the Second Circuit issued a decision that will have a strong impact on the settlement of wage and hour actions under the Fair Labor Standards Act (FLSA). In Yu v. Hasaki Restaurant, Inc., the U.S. Court of Appeals for the Second Circuit reversed a district court ruling and held that FLSA settlements pursuant to a Rule 68 offer of judgment do not require court approval. This decision departs from the conventional view that settlements of FLSA claims generally require formal approval from a court or the Department of Labor (DOL) in order to be enforceable.
Continue Reading Second Circuit Holds That FLSA Settlements Pursuant To An Offer of Judgment Do Not Need Court Approval

After years of uncertainty, on September 24, 2019, the Department of Labor released a Final Rule making changes to the Fair Labor Standards Act (“FLSA”) overtime regulations.

BACKGROUND

Since 2004, there had been no significant changes in the overtime salary thresholds under the FLSA. In 2016, the Obama administration attempted to make significant increases to the salary thresholds. Those proposed changes came to a halt when a federal judge in the Eastern District of Texas, granted a preliminary injunction, and ultimately invalidated the rule. Now, several years later, the DOL’s Final Rule provides employers with much more certainty as to their obligations under the FLSA.
Continue Reading It’s Here: The DOL’s Final Overtime Rule has Been Released

Hoping to clarify when entities should be treated as “joint employers” under the FLSA, the Department of Labor (“DOL”) recently announced its intent to revise its so-called “joint employer” regulations under the Fair Labor Standards Act (“FLSA”). Under the FLSA, covered employers must pay nonexempt employees at least the federal minimum wage for all hours worked and overtime wages for all hours worked in excess of 40 hours in a workweek. Since 1939, the DOL has recognized that two or more entities may sometimes “jointly” employ a single employee and share legal responsibility for that employee’s wages for hours worked for either entity. However, the DOL has not formally addressed the conditions under which “joint employment” relationships exist since 1958.
Continue Reading Aiming for Clarity, DOL Proposes to Update the FLSA’s “Joint Employer” Regulations

On March 27, 2019, the U.S. House of Representatives voted to pass the Paycheck Fairness Act, an act designed to amend and strengthen the existing federal Equal Pay Act (“EPA”), 29 U.S.C. § 206(d). The Paycheck Fairness Act, which passed the House by a vote of 242-187 on a largely party-line basis, is sponsored by Representative Rosa DeLauro (D-CT), and would make sweeping changes to existing law.
Continue Reading Equal Pay Act Amendment Passes House of Representatives

On March 7, 2019, the United States Department of Labor (“USDOL”) issued its long-awaited proposed rule that would increase the minimum salary threshold to qualify for exemption from the overtime provisions of the Fair Labor Standards Act (“FLSA”) from their current level of $455 per week ($23,660 annually) to $679 per week ($35,308 annually). The proposed rule would also raise the threshold for “highly-compensated employees” from $100,000 annually to $147,414 per year. It is anticipated that the changes will extend overtime coverage to approximately one million United States workers. The proposed rule will be subject to a period of public comment and is anticipated to take effect in January 2020.
Continue Reading United States Department of Labor Issues Final Rule Concerning Minimum Salary Threshold to Qualify for Exemption from Overtime Under the Fair Labor Standards Act

Last week, the California State Supreme Court struck a decisive victory in favor of payroll companies, issuing a unanimous opinion that an employee is not a third-party beneficiary of the contract between her employer and its payroll service provider. The court held that an employee-plaintiff has no standing to sue her employer’s payroll company for an alleged failure to pay wages under California’s employee-friendly labor laws.
Continue Reading California Supreme Court Announces a Win for Payroll Outsourcing Industry

On July 26, 2018, the California Supreme Court issued its long awaited decision in Troester v. Starbucks Corporation (S234969) on whether California wage and hour law recognizes the de minimis doctrine established by the United States Supreme Court in Anderson v. Mt. Clemens Pottery Co. 328 U.S. 680 (1946) for wage claims arising under federal law.  Under the federal de minimis rule, small amounts of otherwise compensable work time are not actionable when tracking and paying for it is impractical.  Anderson held: “When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.  Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act.  It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.”  Id. at 692.  In deciding whether compensable work time is de minimis, federal courts consider “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.” See e.g. Lindow v. U.S. 738 F.2d 1057, 1063 (9th Cir. 1984); Kellar v. Summit Seating Inc., 664 F.3d 169, 176 (7th Cir. 2011); Kosakow v. New Rochelle Radiology Assocs., P.C. 274 F.3d 706, 719 (2d Cir. 2001).  Ten minutes or less is generally considered de minimis under federal law.  See Lindow, 738 F.2d at 1062.  The issue before the California Supreme Court in Troester (certified from the Ninth Circuit) was whether California wage and hour law recognizes the same or a similar rule.  Even though de minimis worktime is (by definition) small and insignificant, whether or not a de minimus exception to the requirement to pay for all time worked applies has major implications because relatively small amounts of unpaid wages have the potential to trigger substantial penalties and liability for plaintiffs’ attorneys’ fees in California.
Continue Reading California Supreme Court Issues Narrow Holding In De Minimis Case, Leaving Many Issues Unresolved