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The OFCCP strikes, puts State Street’s pay inequity problem out on Front Street

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. …

Paying workers after inclement weather closes businesses

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 salary for any week in which the employees perform work, regardless of the number of days or number of hours of work performed in that week. Thus, if an exempt employee only works one day during the week, he or she is still entitled to …

Texas district court strikes down Obama DOL’s proposed overtime rule

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 …

Texas court enjoins new salary basis rule set to go into effect December 1st

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 …

November election results likely will significantly impact labor and employment law in coming years

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.…

Decision on whether to block DOL salary basis increase to $47,476 per year expected by Nov. 22

After a hearing in the Eastern District of Texas on a lawsuit by 21 states to enjoin the Department of Labor’s scheduled increase of the minimum salary level for exempt status under the Fair Labor Standards Act (FLSA), the federal judge hearing the case indicated that he will rule by Nov. 22, 2016. As you know, the rule is set to go into effect on Dec. 1, 2016. For those exempt employees with salaries below $47,476, many employers are weighing whether to implement salary increases up to the new threshold or convert the employees to non-exempt status. Non-exempt status would …

DOL releases final rules on paid sick leave for federal contractors

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.…

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 …

Hiring minors: Not my teenage dream

It is summer, and you know what that means: teenagers, everywhere. And they are not just hanging out at the mall, they are working at the mall, at the local pool, and in other entry-level positions. Unlike other workers, however, teenagers come with their own special set of complications. Generational issues aside, the real concern for employers with employment of minors is complying with federal and state laws specific to employment of minors.

Hiring

Before hiring minors, each employer should verify whether it can hire minor employees in the industry in which the employer operates and the state in which …

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 …

Hiring seasonal workers during the summer

One issue that comes up for many employers in the summer is hiring seasonal workers. Hiring temporary seasonal employees presents some substantial legal traps for the unwary. Employers should assess their seasonal hiring practices to ensure compliance with various state and federal laws. In other posts, we advised you on the issues in hiring interns and minors, but here are some other issues employers should look out for when hiring seasonal workers:

  • Verify employees are legally permitted to work in the U.S.
  • Make sure you are following the rules when classifying a seasonal worker as an “independent contractor” versus an

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 …

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