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DOL issues long-anticipated overtime rules—Here are the highlights

Today the Department of Labor (DOL) issued information about the final rules increasing the salary minimum for employees covered by the white-collar FLSA exemptions. While the official rules have not been published yet, here are the key points you need to know:

  1. The new minimum salary level will rise to $47,476 or $913 per week
  2. The annual compensation for highly compensated employees will rise to $134,004
  3. The effective date of the changes is Dec. 1, 2016
  4. The salary and compensation levels will automatically rise every three years
  5. Employers may use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up

Minimum wage exemptions upheld in Ohio Supreme Court case

A divided Ohio Supreme Court held that Ohio’s minimum wage law exempts employees engaged in an executive, administrative or professional capacity, or as outside salespersons, summer camp employees, fishing employees, small publication employees and family farm employees. In Haight v. Minchak, No. 2016-Ohio-1053, two sales representatives challenged the constitutionality of Ohio’s minimum wage statute (R.C. 4111.14)—arguing that the definition of employee in R.C. 4111.14(B)(1) conflicts with the definition in the Ohio Constitution. The Court held that the definitions did not conflict.

John Haight and Christopher Pence were sales representatives for Cheap Escape Company. They were paid by commissions plus …

Assistant managers’ wage hour battle with Bob Evans Farms settled for $16.5 million

It is not news that class action lawsuits for unpaid overtime are on the rise. A settlement agreement approved recently by the United States District Court for the Southern District of Ohio shows just how costly those claims can be.

In Thorn v. Bob Evans Farms, Inc. the U.S. District Court in Columbus, Ohio approved a settlement between Bob Evans Farms, Inc. (BEF) and a class of 1,566 current and former assistant restaurant managers. The assistant managers had been treated by BEF as exempt from overtime requirements under federal and state law. In the class action lawsuit, the assistant managers …

EEOC proposed wage reporting rules: could be a major problem

Think for a moment about all of the employment law obligations you face as a Human Resources professional or employment legal counsel. As extensive as those are, there is actually very little that you have to report to the federal or state government on a regular basis about your employment activity. You have very few obligations to report to the government on your personnel actions, including compensation – at least as of now. In fact, about the only obligation to report information to the federal government is the annual federal EEO-1 report, which must be filed by companies with 100 …

Fair pay laws on the horizon?

According to the American Association of University Women (AAUW), female workers earn 79 cents for every dollar earned by their male counterparts. For women of color or women with children, this number is even lower. There are many movements across the country demanding equal pay for women, including one right here in Ohio. On Jan. 1, 2016, California’s Fair Pay Act (The Act) became effective, and many employers are wondering- is my state next?…

Overtime proposed rules delayed

The proposed rules on overtime issued by the Department of Labor (DOL) earlier this year will likely not be final until late 2016 according to Solicitor of Labor Patricia Smith, as reported by the Wall Street Journal. Employers had been expecting the rule to go into effect late 2015 or early 2016, the Journal said, but now that seems unlikely.

The proposed rules were released June 30 of this year and have received over 250,000 comments, which may explain why the agency is taking so long to finalize them. Many commentators believe that the agency will still seek to …

Another FLSA case gets to trial based only on uncorroborated testimony

In June, we told you about Moran v. Al Basit LLC, 14-2335 (6th Cir. 2015), a new decision from the Sixth Circuit Court of Appeals demonstrating how easy it is to get to trial on a claim of unpaid overtime. Last month, in Garcia v. SAR Food of Ohio, Inc., 1:14-cv-01514 (N.D. Ohio 2015), a district court in Ohio relied on that decision to deny summary judgment to an employer that did most things right with regard to its Fair Labor Standards Act compliance.

Jose Garcia and Raymond Sutton were employed by SAR Food of Ohio, Inc. (“SAR”), …

Second Circuit rejects DOL test for unpaid internships

The Second Circuit Court of Appeals in Glatt et al. v. Fox Searchlight Pictures, Inc. recently rejected the Department of Labor (“DOL”) six factor test for determining whether an individual has been properly classified as an unpaid intern in favor of another test that looks at whether the intern or the employer is the primary beneficiary of the relationship.

The DOL’s six factors are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;

DOL memo says most workers are FLSA employees, not independent contractors

Following on the heels of its proposed rule expanding the number of employees entitled to overtime under the FLSA, the Department of Labor’s Wage & Hour Division has issued an Interpretation Letter that addresses independent contractor misclassification. Though the Letter, issued by WHD Administrator David Weil, contains no earthshaking new compliance obligations for employers, it does suggest that businesses can expect a more aggressive enforcement regime from the Department of Labor on independent contractor issues. In fact, the Letter directly states that “applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers …

Proposed FLSA regulations greatly expand overtime coverage

Today, the Department of Labor announced a proposed rule that would extend overtime pay to an additional 5 million Americans.  Currently, those executive, administrative, professional, outsides sales, and computer employees who make above $23,660 annually are exempt from the minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA). Under the proposed regulation, the salary threshold for white collar exempt employees’ pay would more than double to $50,440, or 40th percentile of weekly earnings for full-time salaried employees in 2016. The regulations also seek to increase the total annual compensation requirement needed to exempt highly compensated employees …

Employee’s testimony about hours worked is enough evidence to get to trial

In another example of how easy it is for an employee to get to trial on a claim for unpaid overtime, in Moran v. Al Basit LLC, 14-2335 (6th Cir. 2015), the Sixth Circuit Court of Appeals this week reversed a district court decision granting summary judgment for the employer on a former employee’s Fair Labor Standards Act claim. Most notable about the decision is that the only evidence presented by the employee in support of his claim was his own uncorroborated testimony.

Jeffrey Moran was employed as a mechanic at an auto repair shop from summer 2011 to …

Is Ohio’s Minimum Wage On the Rise?

Based on a constitutional amendment in 2006, every year Ohio’s minimum wage is increased based on considerations such as cost of living. As of January 1, 2015, Ohio’s minimum wage raised to $8.10. However, this rate increase is not considered sufficient by some State Senators. All 10 members of the Ohio Senate Democratic Caucus co-sponsored Senate Bill 25, titled Ohio Worker’s Rights Act, introduced on February 4, 2015, proposing reform to Ohio’s state wage and hour laws.

Specifically, Senate Bill 25 proposes to raise the minimum wage to $10.10, expand the threshold for overtime compensation for salaried employees to $50,000 …

Employment Law Proposals Highlight State of the Union Address

In last night’s State of the Union Address, President Obama reemphasized that employment and labor reform are at the forefront of his current agenda. He urged lawmakers to pass laws regarding the following:

  • Equal pay law for women;
  • Higher federal minimum wage;
  • Government-mandated 7 days of paid sick leave per year.

As we have previously reported, many states, including Ohio, and municipalities have raised minimum wages at the state or local level. As of January 1, 2015, Ohio’s minimum wage is $8.10 per hour for employers with annual gross receipts of $297,000 or more, which is higher than the current …

Appellate Court throws exemptions to minimum wage laws in Ohio out the window

A divided Montgomery County Court of Appeals has determined that the Ohio minimum wage statute unconstitutionally restricted the definition of “employee” in the Ohio constitution and declared the law invalid, thereby eliminating exemptions to Ohio’s minimum wage laws.

John Haight and Christopher Pence were employed as advertising salespeople for Cheap Escape Company dba JB Dollar Stretcher, which published a coupon magazine and website for electronic coupons, and were paid mostly through commissions. In 2012, Haight and Pence sued Cheap Escape alleging they were employees of Cheap Escape and that the company failed to pay them minimum wages each week. Cheap …

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

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 …

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

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 …

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

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 …

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

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 …

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

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 …

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

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, …

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

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. …

State Minimum Wage Increases for 2014

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.

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

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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