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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 February 4, 2019, New Jersey Governor Phil Murphy signed into law legislation, available here, which gradually raises the minimum wage in New Jersey to $15 per hour by the year 2024 for many workers in New Jersey. Under this law, for employers with more than six employees, the current New Jersey statewide minimum wage of $8.85 will incrementally rise to $15 per hour as follows:

Date of Increase Minimum Wage Amount
July 1, 2019 $10 per hour
January 1, 2020 $11 per hour
January 1, 2021 $12 per hour
January 1, 2022 $13 per hour
January 1, 2023 $14 per hour
January 1, 2024 $15 per hour

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Continue Reading New Jersey Minimum Wage Set to Increase to $15 Per Hour by 2024

After two years, California courts are finally putting California’s “A Fair Day’s Pay Act” (the “Act”) to the test. While intended to help employees collect judgments against employers that are judgment proof, the Act created potential personal liability for an employer’s owners, directors, officers, and managing agents. Indeed, the Act added Labor Code Section 558.1, which imposes personal liability for certain wage and hour violations. Specifically, Section 558.1 states that “[a]ny employer or person acting on behalf of an employer, who violates, or causes to be violated,” provisions regulating wages or hours, may be held personally liable “as the employer.” Section 558.1 expressly defines “employer or other person acting on behalf of an employer” to include a “natural person who is an owner, director, officer, or managing agent of the employer.” Accordingly, potentially any managing agent who “causes” a wage and hour Labor Code provision to be violated could be held personally liable. While the passing of Section 558.1 caused uproar over the imposition of personal liability for wage and hour violations, the California Court of Appeal recently clarified that even in the absence of this new section, the labor code imposes personal liability.
Continue Reading Managers Beware: Can you be held personally liable for wage and hour violations?

On June 19, 2018, District of Columbia residents voted to pass (by a 55.14% to 44.86% margin) Initiative 77, providing for a single minimum wage for all employees, including tipped workers.

The restaurant industry led the opposition to the Initiative noting that the additional labor costs of the minimum wage will need to be sourced by one of the following: (1) through job cuts; (2) by the employer’s overhead; or (3) by passing the costs to the consumer through an increase in the costs of goods and services, which can decrease business and/or decrease the likelihood of customers tipping.
Continue Reading Minimum Wage Inches Closer to Reality for Tipped Workers in the District of Columbia

On Tuesday, March 6, 2018, the U.S. Department of Labor (“DOL”) announced its launch of the Payroll Audit Independent Determination (PAID) Program (“PAID” or the “Program”) – aimed at increasing employers’ FLSA compliance and timely payment of back wages to employees. The Program, which will start with a six-month pilot period prior to evaluation and finalization, is explained in detail below.

What is the PAID Program’s Goal?

The Program’s goal is to increase compliance with the FLSA’s overtime and minimum wage requirements by providing employers the opportunity to self-audit and report inadvertent non-compliance without fear of litigation or penalties. The Program also hopes to expedite payment of back pay to affected employees and to cut down on litigation costs to employers, employees, and taxpayers.
Continue Reading Department of Labor Announces New Payroll Audit Pilot Program

Beginning January 1, 2018, the new California minimum wage rate for employers with 26 or more employees will be $11.00 per hour and the new California minimum wage rate for employers with 25 or fewer employees will be $10.50 per hour.

As we previously reported, effective January 1, 2017, the California state minimum wage began increasing yearly through January 1, 2022 for employers employing 26 or more employees. Effective January 1, 2018, the California state minimum wage will begin increasing yearly through January 1, 2023 for employers employing 25 or fewer employees.
Continue Reading New Year, New Minimum Wage Rates in California

As we previously reported here, the New York State Department of Labor (“NYSDOL”) issued final regulations in September 2016 imposing new notice and consent requirements on employers who pay wages via direct deposit and debit card.  The regulations, which were scheduled to take effect on March 7, 2017, have been invalidated and revoked by the New York State Industrial Board of Appeals (“IBA”) which recently issued a decision finding, among other things, that the NYSDOL’s regulations exceeded its rulemaking authority by imposing restrictions on financial institutions.
Continue Reading *UPDATE* New York State Department of Labor’s Direct Deposit and Debit Card Notice Regulations Held Invalid and Revoked

Last year the New York legislature and New York Department of Labor amended several employment laws implementing changes that took effect at the end of 2016 or are set to take effect early this year.  This post summarizes the new and updated legal requirements included in those amendments to help New York employers comply in 2017.
Continue Reading New Year, New Rules for Employers Doing Business in New York