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Employer Law Report

Category Archives: Wage & Hour

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Secretary of Labor announces proposed rules for minimum wage for federal contractors

Posted in Wage & Hour

The Secretary of Labor announced proposed regulations raising the minimum wage for workers on federal contracts to $10.10 per hour. This new requirement applies to: (1) construction contracts covered by the Davis-Bacon Act (but not those covered only by the Davis-Bacon Related Acts); (2) procurement and nonprocurement contracts exceeding $2,500 covered by the Service Contract Act; (3) concession contracts with the federal government; and (4) contracts to provide services to federal employees, their dependents, or the general public on federal property. These proposed regulations implement Executive Order 13658, which we reported on previously. Interested parties can submit written comments …


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Recent decision provides a useful reminder that FLSA exemptions are still “narrowly construed” against the employer

Posted in Wage & Hour

Although we’ve noticed that the U.S. Supreme Court may be taking a more practical approach to interpreting the sometimes-impractical Fair Labor Standards Act, a recent Sixth Circuit decision reminds us that FLSA exemptions are still strictly interpreted by the courts. In Bacon v. Eaton Corp., a group of “front line” supervisors sued their employer under the FLSA. They argued they were misclassified as exempt employees, and as a result of that misclassification, they were entitled to overtime for any workweeks in which they worked more than forty hours. The employer, understandably, argued these employees were properly exempt under the …


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What employers need to know about employee time off for Primary Elections (and new 50-state survey)

Posted in Wage & Hour

Election day will soon be upon us. With that comes common questions from employers about what they must do regarding employees who may need time off to work to vote.

What is an Employer Prohibited from Doing?
Ohio Revised Code §3599.06 prohibits employers from discharging or threatening to discharge an employee for taking a “reasonable amount of time to vote.” The law further prohibits employers from inflicting or threatening to inflict any injury, harm, or loss against an employee to induce an employee to vote or refrain from voting for or against any person, issue or question submitted to the …


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Daylight $avings $tart$ $unday. $pring Forward and Pay Employee$ Correctly

Posted in Wage & Hour

Most states, including Ohio, participate in Daylight Savings Time.  This means that this Sunday, March 9, 2014, Daylight Savings Time begins, and we spring forward and push the clocks forward one hour at 2:00 a.m.  Daylight Savings Time runs from the second Sunday of March to the first Sunday of November.

So, what does this mean for employers?  Well, the key concern for employers is how the change impacts hourly (non-exempt) employees who work during the time change, e.g., the graveyard shift?

As you know, the Fair Labor Standards Act (FLSA) requires employers to credit and pay employees for all …


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President Obama Signs Executive Order Requiring $10.10 Minimum Wage for Federal Contractors

Posted in Wage & Hour, Workforce Strategies

As we reported was likely to occur, President Obama signed an Executive Order yesterday requiring federal contractors to pay their employees at least $10.10 per hour beginning January 1, 2015.  The minimum wage only applies to new federal contracts and contracts renewed by the federal government after January 1, 2015.  However, the Executive Order states that “for all new contracts . . . negotiated between the date of this order and the effective date[] . . . , agencies are strongly encouraged to take all steps that are reasonable and legally permissible to ensure that individuals working pursuant to …


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Supreme Court interprets meaning of “changing clothes” under FLSA collective bargaining exception

Posted in Wage & Hour

The Supreme Court recently clarified the meaning of “changing clothes” under Section 203(o) of the Fair Labor Standards Act in Sandifer v. United States Steel.  In general, non-exempt employees who spend time “donning” (putting on) and “doffing” (taking off) certain articles of clothing associated with their job must be compensated for that time. Section 203(o) provides an exception to this requirement in the context of collective bargaining—if an employer and the employees’ union agree that employees will not be paid for time spent “changing clothes,” the employer does not have to compensate for that time.

In a unanimous decision, …


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Sixth Circuit Holds that Subcontracted Employees Can Sue the General Contractor on Construction Project as Their De Facto Employer

Posted in Wage & Hour

Yesterday, the Sixth Circuit revived the Equal Employment Opportunity Commission (EEOC)’s lawsuit against Skanska USA Building, Inc., holding that it was the de facto employer for subcontracted employees, a decision with potentially broad-reaching implications for employers with subcontracted employees and independent contractors, particularly in the construction industry.

Skanska was the general contractor for a hospital construction project. It subcontracted with C-1 Inc. Construction Company to provide operators for temporary elevators on the construction site. A C-1 employee, Maurice Knox, alleged that other workers at the work site engaged in racial slurs directed toward him and other black employees of C-1. …


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State Minimum Wage Increases for 2014

Posted in Wage & Hour, Workforce Strategies

Come Jan. 1, 2014, the federal minimum wage rate will remain at $7.25 per hour for non-tipped employees, and $2.13 per hour for tipped employees. As of Jan. 1, 2013, 19 states and the District of Columbia had minimum wage rates higher than the federal minimum wage rate. In 2014, not only will that number grow to 20 states, but a number will see their minimum wage rates increase further.

Click on the map to find out more.


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When Managers and Social Media Collide: Court Finds That Blog and Drunken Facebook Posts By Coyote Ugly’s Managers Do Not Amount to Adverse Actions or are Enough for Constructive Discharge Claim

Posted in Social Media, Wage & Hour

Stewart v. CUS Nashville, LLC, No. 3:11-cv-0342, 2013 U.S. Dist. LEXIS 16035 (M.D. Tenn. Aug. 8, 2013) serves as a cautionary tale to employers about the disastrous impact that can happen when managers and social media collide. And while this case turned out well for the employer in the end, that end was after a long and expensive two-day bench trial that I am sure the employer would have much rather avoided.

If you are not familiar with the Stewart case, here is the background you need to know. CUS Nashville, LLC owns Coyote Ugly franchises. (Yes, the …


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Sixth Circuit Holds Six-Month Limit in Employment Agreement Is A Waiver and Cannot Be Used to Bar FLSA and EPA Claims. Wait, EPA Claims Too! What? Why?

Posted in Wage & Hour

The Sixth Circuit held that a six-month time limitation in an employment agreement constitutes an invalid waiver of an employee’s claims brought under the Fair Labor Standards Act (“FLSA”) and, more surprisingly, the Equal Pay Act (“EPA”).

In Boaz v. FedEx Customer Information Services, Inc. No. 12-5319 (6th Cir. Aug. 6, 2013), the plaintiff, Margaret Boaz, was employed with FedEx since 1997. Her employment agreement with FedEx (the “Agreement”) included the following provision: “To the extent the law allows an employee to bring legal action against Federal Express Corporation, I agree to bring that complaint within the time prescribed by …


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Court Denies Employer’s Access to Social Media Posts in FLSA Collective Action and Sends Warning: If You Want Access to Social Media, Come with Both Barrels Loaded … Leave the Water Gun at Home

Posted in Employment Class & Collective Actions, Wage & Hour

A federal court has denied a defendant-employer’s request that plaintiffs sift through and turn over all their social media posts made during their work hours in an FLSA collective action in which the plaintiffs claim their employer failed to give them meal breaks. How did that happen? I thought you’d never ask.

By way of background, Jewell v. Aaron’s Inc., is a nationwide,1,700+ FLSA collective action pending in the Northern District of Georgia. In the suit (Complaint accessible here), the class plaintiffs (current and former employees of Aaron’s) claim they were not paid for their 30-minute meal periods. …


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Genesis: A Unicorn, or the Beginning of a New Tactic? Supreme Court Holds Employers Can “Pick Off” a Named Plaintiff and Defeat a FLSA Collective Action with an offer of Judgment, but Leaves Open If All Employers Can Employ This Strategy

Posted in Wage & Hour

By a tight five-to-four decision, the United States Supreme Court’s Genesis Health Care Corp. v. Symczyk decision provides employers a method to "pick off" the lead plaintiff in an FLSA collective action using a Federal Rule of Civil Procedure 68 offer of judgment and by doing so, take out the remaining collective action. For reasons we will explain in a bit, however, the Court merely "assumed" — without deciding — that an unaccepted Rule 68 offer of judgment that offers complete relief moots the named plaintiff’s individual claim and, in the absence of any other claimant having opted into the …


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Defending an FLSA Auto-Deduct Policy Case Starts with the Foundation — Another Smart Employer with Smart Policies Sends Another Group of Nationwide Plaintiffs Packing

Posted in Employment Class & Collective Actions, Wage & Hour

The Northern District of Ohio is the latest in a long line of courts to send the following message to nationwide collective class plaintiffs: Stop seeking nationwide class certification where the plaintiffs are spread across facilities and have too many factual differences to be "similarly situated" and to have experienced a common injury under the Fair Labor Standards Act ("FLSA").

In Creely v. HCR ManorCare, Inc. (N.D. Ohio Jan. 31, 2013), a group of 318 nurses, licensed practical nurses, certified nursing assistants, and admissions coordinators opted into a collective action lawsuit alleging that their employer, HCR ManorCare, Inc. ("HCR"), …


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Stick a Fork in It: Supreme Court Declines Review and Allows Fifth Circuit’s Ruling Approving Private Settlements in FLSA Cases to Stand

Posted in Wage & Hour

We have kept you up to speed on Martin v. Spring Break ’83 Productions, L.L.C., here and then here, a Fifth Circuit case in which the Fifth Circuit approved a private settlement of employees’ claims for unpaid overtime under the Fair Labor Standards Act ("FLSA"). More specifically, the court held that parties could privately settle and release wage claims, under the right circumstances, and that doing so would not compromise employee rights guaranteed by the FLSA. The plaintiffs asked the Supreme Court to review the case arguing that the decision creates a split among the circuits, which it does. …


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A Helpful Trend? Employees’ Failure to Follow Timekeeping Procedures Doom Two Recent FLSA Claims

Posted in Wage & Hour

It’s no secret that employers face an uphill battle when defending claims of unpaid hours worked by employees. These claims usually involve a similar pattern: the employee fails to report or record time worked, then the employee later raises that unpaid time worked in the form of a Fair Labor Standards Act claim for unpaid overtime against his employer. Many courts side with employees because the Fair Labor Standards Act places the burden upon employers, not employees, to accurately record time worked. But two recent federal appellate court decisions show that things may not be so grim when employers have …


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‘Tis the Season For Holiday Workplace Issues – Download our Holiday eBook with FMLA Stocking Stuffer – “Three FMLA Holiday Stocking Stuffers: How to Avoid a Big Lump of Coal”

Posted in Leave Administration, Traps for the Unwary, Wage & Hour, Workforce Strategies

We hope you enjoyed our five-part series last week addressing the Top 5 Holiday Headaches for Employers. Due to popular demand, we have compiled this series into an eBook for you and have added a special bonus:

Three FMLA Stocking Stuffers: How to Avoid a
Big Lump of Coal

We couldn’t do a holiday-blog series and NOT include something about every employer’s favorite holiday topic. Like fruitcake, it is a gift that nobody really wants or knows what do with… the FMLA.

Here we tackle three prickly FMLA-holiday questions. First, do holidays count against an employee’s FLMA leave entitlement? Second, …


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‘Tis the Season for Holiday Workplace Issues. Day 4 – Holiday Pay and How Not to Get Scrooged by the FLSA

Posted in Traps for the Unwary, Wage & Hour, Workforce Strategies

Many employees believe they are entitled to holiday pay, even if they do not work on the holiday. This is not the case. In fact, neither the Fair Labor Standards Act ("FLSA") nor most state laws, including Ohio, require a private employer to pay hourly employees for working or not working on holidays (federal or otherwise).  (For employers in Massachusetts, however, be sure to check your Blue laws.) This type of pay, if provided, is typically considered a fringe benefit and is a matter of agreement between an employer and an employee (or the employee’s union representative). Please note that …


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Sixth Circuit Awards Employer Over $55,000 in Costs in FLSA Collective Action

Posted in Employment Class & Collective Actions, Wage & Hour

In September, we told you about the Sixth Circuit’s decision in Frye v. Baptist Memorial Hospital, Inc., where the court handed down, not one, but two favorable rulings for employers in an FLSA collective action. First, the court held that automatic pay deduction policies for unpaid meal breaks do not per se violate the FLSA, and that a class representative plaintiff in a collective action must formally opt-in to their own case to "commence" suit and stop the running of the statute of limitations or be barred from suit. Here’s that blog.

After considering the employer’s motion for …


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Martin v. Spring Break ’83 Productions, LLC … the Sequel or Part Deux? The Supreme Court is Asked to Review Whether a Private Settlement Agreement Dismissing FLSA Claims is Enforceable

Posted in Wage & Hour

As you might recall, in August we blogged on Martin v. Spring Break ’83 Productions, LLC, a case involving the blockbuster movie "Spring Break ’83" [stated with sarcasm], where the Fifth Circuit became the first federal appellate court to enforce a private FLSA settlement. In that blog, available here, we crossed our fingers and hoped the Fifth Circuit’s decision would come to a jurisdiction near you. Well, that hope is one step closer to reality as the plaintiffs/appellants – now the Petitioners – filed a Petition for Writ of Certiorari (the "Petition") and asked the United States Supreme …


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What Ohio Employers Need to Know About Employees Taking Time Off to Vote

Posted in Traps for the Unwary, Wage & Hour, Workforce Strategies

Election Day will soon be upon us, and with that comes some common questions from employers about what they must do regarding employees who take off work or arrive late to work to vote.

What is an Employer Prohibited from Doing? Ohio Revised Code §3599.06 prohibits employers from discharging or threatening to discharge an employee for taking a “reasonable amount of time to vote.” The law further prohibits employers from inflicting or threatening to inflict any injury, harm, or loss against an employee to induce an employee to vote or refrain from voting for or against any person, issue or …


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Minimum Wage for Ohio Employers Increases January 1, 2013

Posted in Wage & Hour

As we begin the final quarter of 2012, employers are reminded that effective January 1, 2013, Ohio’s minimum wage rate will increase by $.15 cents per hour, from $7.70 to $7.85 for non-tipped employees and by $.08 cents per hour, from $3.85 per hour to $3.93 per hour, excluding tips. The increased minimum wage applies to Ohio employers with annual gross receipts exceeding $288,000 per year, which is up from last year’s $283,000 threshold.

Exclusions from the Ohio Minimum Wage Law
Ohio employers with 2012 annual gross receipts less than $288,000 are excluded from Ohio’s minimum wage requirements; however, they …


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The Sixth Circuit Gives Employers a “Twofer”: An Employer’s Automatic Pay Deduction Policy Does Not Automatically Violate the FLSA and a Class Plaintiff Must “Commence” Suit

Posted in Employment Class & Collective Actions, Wage & Hour

In Frye v. Baptist Memorial Hospital, Inc., the United States District Court for the Sixth Circuit handed down not one, but two favorable rulings for employers in an FLSA collective action. First, in considering an automatic pay deduction policy for unpaid meal breaks in a collective action for the first time, the Court held that such a policy does not automatically, or per se, violate the FLSA. Second, a class representative plaintiff must formally opt-in to their own case to "commence" suit and stop the running of the statute of limitations.

1.  The Sixth Circuit Holds that Automatic Pay


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Supreme Court finds pharmaceutical sales reps exempt under the outside sales exemption

Posted in Employment Class & Collective Actions, Wage & Hour

In a highly anticipated decision under the Fair Labor Standards Act, the United States Supreme Court handed down a big win on Tuesday for the pharmaceutical industry when the Court found pharmaceutical sales representatives are covered by the outside sales exemption in Christopher v. Smith Kline Beecham Corp. We covered in previous posts the differing interpretations of the Second Circuit, which held the reps to be non-exempt, and the Ninth Circuit, which said they were exempt. The Court agreed with the Ninth Circuit that the sales activity pharma sales reps engaged in were sufficient "outside sales" even though federal …


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Hiring Unpaid Summer Interns? Keep These Important Tips In Mind

Posted in Wage & Hour

Many employers consider hiring interns during the summers or school year to help students gain experience or learn about a certain industry or career. However, when these interns are unpaid, there are certain rules employers need to follow to guard against liability for failure to pay minimum wage or overtime under the Fair Labor Standards Act—which carries risks of lawsuits by former interns (a few of which have been very recently filed), class actions, and DOL investigation and other enforcement activities.

In fact, in the last few years the DOL has focused some attention on unpaid internships, as we said …


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