On December 22, 2020, the U.S. Department of Labor (DOL) issued its final rule modifying federal regulations concerning compensation for “tipped employees.”  The new final rule follows 2018 federal legislation, which amended the Fair Labor Standards Act (FLSA) to, among other things, prohibit employers from keeping their employees’ tips “for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips” even if they do not claim a tip credit.

Continue Reading Share The Tip Jar: Department of Labor Finalizes Rule Opening Tip Pooling To Back-of-the-House Workers

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 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

In a welcome departure from its recent practice, the U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued its first new opinion letters in almost ten years. In addition to issuing three new opinion letters earlier this month, on January 5, 2018, WHD reissued seventeen opinion letters previously withdrawn under the Obama administration.

The resurrection of this practice offers employers a useful tool to ensure compliance with federal employment laws. Prior to the Obama administration, the WHD had a longstanding practice of issuing opinion letters in response to inquiries from employers concerning the application of the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA) and other laws enforced by the WHD. These letters have traditionally provided guidance to both employers and employees concerning compliance with the laws and regulations under WHD’s purview. Significantly, for employers, good faith reliance upon WHD’s opinion letters can provide a defense to potential claims of a violation of the FLSA or other laws under the WHD’s jurisdiction.
Continue Reading Department of Labor Offers Employers Clarity By Resuming Its Practice of Issuing Opinion Letters

The recent passage of the Consolidated Appropriations Act of 2018 (“H.R. 1625”), an 878-page omnibus spending bill, significantly changes the rules for tip pooling under the Fair Labor Standards Act (the “FLSA”). While the conditions for taking a tip credit toward federal minimum wage obligations remain essentially unchanged, H.R. 1625 appears to permit the inclusion of a larger group of employees in tip pools when a tip credit is not taken. At the same time, H.R. 1625 still prohibits an employer from keeping any portion of the tips received by its employees and expands the scope of remedies and penalties available for violations of the tip rules.
Continue Reading New Tip Pooling Guidelines For Employers

Washington D.C. may become the next local government to require that restaurants pay minimum wage to its servers, bartenders, and any other workers who currently earn a “tipped wage” – a lower base wage, plus tips. Presently, that base wage is $3.33 per hour.
Continue Reading D.C. Voters Will Decide Whether to Eliminate Tipped Restaurant Wages

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

Last month, the Sixth Circuit revived a lawsuit brought under the Fair Labor Standards Act (“FLSA”) alleging that a retailer’s commission policy was unlawful in Stein v. hhgregg, Inc., 2017 U.S. App. LEXIS 19908 (6th Cir. Ohio Oct. 12, 2017). The decision provides support for the legality of taking a draw on an employee’s future commissions, and highlights the problem with having a policy that requires repayment of draws upon termination.
Continue Reading Sixth Circuit Provides Clarification On Legality Of Draw-On-Commission Policy

This month, the U.S. Court of Appeals for the Third Circuit held that the Fair Labor Standards Act (“FLSA”) requires employers to compensate employees for all rest breaks of twenty minutes or less.

Background

American Future Systems arose from a suit filed by the U.S. Department of Labor (“DOL”) on behalf of former employees of publishing company American Future Systems, Inc. dba Progressive Business Publications (“Progressive”) under the FLSA. Progressive employed sales representatives who were paid by the hour and received bonuses based on the number of sales made while they were logged onto their work computers. These employees were previously subject to a policy which gave them two fifteen-minute paid breaks per day, however, Progressive eliminated the policy in favor of a so-called “flexible time” policy under which they could log-off their work computers at any time, for any reason. Although employees were free to take as many breaks as they wanted, they were not paid for these breaks if they were logged off for more than a minute and a half, including short breaks spent in the bathroom or getting coffee.


Continue Reading Short Rest Breaks are Compensable Under the FLSA

On November 22, 2016, a federal court in the Eastern District of Texas issued a preliminary injunction blocking the Department of Labor from enforcing new regulations that would have drastically reduced the number of white collar employees who are exempt from overtime.  The disputed regulations were set to take effect on December 1.
Continue Reading Texas Federal Court Blocks New Salary Restrictions for Exempt Employees

On May 26, 2016, in the matter of Lewis v. Epic Systems Corporation, the U.S. Court of Appeals for the Seventh Circuit held that an arbitration agreement, which required employees to submit to individual arbitration for any wage and hour claims against the company, violates the National Labor Relations Act (“NLRA”) and is unenforceable under the Federal Arbitration Act (“FAA”).  In issuing this decision, the Seventh Circuit gave credence to the National Labor Relations Board’s (“NLRB”) decision in D. R. Horton and, in doing so, has created a split amongst U.S. Circuit Courts of Appeal regarding the enforceability of arbitration agreements that preclude class actions.
Continue Reading Seventh Circuit Holds Class Action Waivers are Unlawful and Unenforceable Creating a Circuit Split