Wage & Hour

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Many employers allow students to intern in their workplaces so that the students can gain exposure to real world work, learn about a particular industry or career, or earn credit hours towards their degree requirements. If these interns are unpaid, however, employers risk liability for failure to pay minimum wage and overtime under the Fair Labor Standards Act (FLSA). Employers that enter into these arrangements without careful consideration of the FLSA risk lawsuits from former interns and United States Department of Labor (DOL) investigations.
Continue Reading New test should increase employer ability to create unpaid internship positions

The U.S. Department of Labor’s Wage and Hour Division (WHD) has announced a new nationwide pilot program, called the Payroll Audit Independent Determination (PAID) program, which is designed to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). According to the WHD’s website describing the program, the program’s primary objectives are to resolve wage and hour claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations and to ensure that more employees promptly receive any owed back wages.

WHD states that it will implement this pilot program nationwide for approximately six months. At the end of the pilot period, WHD will evaluate the effectiveness of the pilot program, as well as potential modifications to the program to determine its next steps.
Continue Reading Wage and Hour Division announces pilot limited “amnesty” program

Well known asset management company State Street Corporation will pay $5 million to settle allegations of pay inequity raised by the Office of Federal Contract Compliance Programs (OFCCP) in an audit. OFFCP alleged that the company paid female executives less than men and black executives less than whites at its Boston headquarters. The landmark settlement agreement is the largest back pay settlement collected by OFCCP since 2015.

By way of background, OFCCP audits federal contractors and subcontractors for compliance with workplace affirmative action and nondiscrimination requirements. OFCCP conducted a compensation analysis of State Street’s downtown Boston office in December 2012. According to OFFCP, that analysis revealed that, since at least December 2010, there were “statistically significant” disparities in compensation between male and female workers and black and white workers even when “legitimate factors affecting pay” such as performance, experience and education were taken into account.
Continue Reading The OFCCP strikes, puts State Street’s pay inequity problem out on Front Street

In the wake of Hurricane Irma, many employers have questioned their obligation to pay employees while their businesses have been closed. The answer will be different for employees who are exempt and non-exempt under the federal Fair Labor Standards Act (FLSA).

Under the FLSA, employees who are exempt from overtime requirements must receive their full…

Many thanks to Arslan Sheikh for his assistance in preparing this post.

Last week, a federal judge in Texas struck down a proposed Obama-era rule that would have expanded the number of workers who qualify for overtime pay under the Fair Labor Standards Act (FLSA).

The proposed rule

In 2016, the Obama administration’s Department of Labor (DOL) planned to implement a new rule that would have more than doubled the minimum salary threshold for “exempt” status under the FLSA from $23,660 to $47,476 per year. Under the DOL’s proposed rule, an employee who made an annual salary below $47,476 would have been entitled to overtime pay for all hours worked beyond 40 a week. We last reported on the proposed salary increase in November of 2016, when federal court Judge Amos Mazzant of the Eastern District of Texas issued a nationwide preliminary injunction against the DOL’s rule. Our blog post outlines the Texas court’s holding and rationale.

What happened this week?

On Aug. 31, Judge Mazzant issued another decision, striking down the Obama administration’s proposed salary threshold rule. As a result, the minimum salary for exempt status under the FLSA will remain, for the time being at least, at $23,600.

Judge Mazzant held that the DOL exceeded its authority by issuing the proposed rule because the department focused too heavily on employees’ salary-levels, rather than their job duties, to determine if they were exempt from overtime under the FLSA. Judge Mazzant struck down the rule, holding that because the DOL’s proposed rule would have doubled the annual salary threshold from $23,660 to $47,476, it would have made salary-level the predominant factor in determining who is exempt from overtime under the FLSA. It should be noted, however, that Judge Mazzant did not rule on the general lawfulness of a salary-level test; he only evaluated the salary-level test the DOL proposed in this instance.
Continue Reading Texas district court strikes down Obama DOL’s proposed overtime rule

As of yesterday, employers who have not yet fully implemented changes in preparation for the new salary basis increase should put those plans on hold because a Texas federal court issued a nationwide preliminary injunction against the rule while it evaluates the legality of the rule. The salary required for exempt status for executive, administrative, and professional employees  (EAP or white collar employees) will remain at $23,660 or $455 per week. (Employees, of course, must meet the respective duties tests.) Any employers who had planned to raise exempt employees’ salaries to $47,476 or convert them to non-exempt status can place those plans on indefinite hold. We recognize, however, that it may be difficult and bad for employee relations to roll back already announced or implemented salary increases. Each employer should evaluate the financial and good will costs of rolling back salary increases made to comply with the new rule or keeping them in place.
Continue Reading Texas court enjoins new salary basis rule set to go into effect December 1st

Now that it is clear that Donald Trump will be the 45th President of the United States, questions are continuously being asked about how the regime change when he takes office in January of 2017 will impact labor and employment law. Acknowledging that any discussion of Trump’s policies before he takes office on Jan. 20, 2017 is purely speculation, it is important for employers to consider the potential implications on labor and employment law.
Continue Reading November election results likely will significantly impact labor and employment law in coming years

A special thanks to Adam Bennett for his work on this article.

The U.S. Department of Labor recently released its final rule requiring federal contractors and subcontractors to provide their employees with at least seven days of paid sick leave each year. The final rules were published on Friday, Sept. 30 and will go into effect 60 days after publication (Nov. 29, 2016). Despite the “effective date,” the sick leave rule will only apply to federal contractors and subcontractors entering into new contracts where the solicitation was issued or the federal contract was awarded on or after Jan. 1, 2017.

The new rule further is limited to contracts or subcontracts that are:

  • Covered by the Service Contract Act or the Davis-Bacon Act
  • Concessions contracts
  • Service contracts in connection with federal property or lands

Continue Reading DOL releases final rules on paid sick leave for federal contractors