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DOL issues final rule clarifying the regular rate of pay

By Jourdan Day on

The U.S. Department of Labor (DOL) is making significant changes to the regulations covering the regular rate of pay under the Fair Labor Standards Act (FLSA) for the first time in more than 50 years. The FLSA entitles most covered, nonexempt employees to receive overtime pay of at least one and one-half times the employee’s regular rate of pay for all hours worked over 40 in a workweek.

Definition of “Regular Rate”

Under the FLSA, “regular rate” includes all remuneration for employment paid to the employee, but excludes the following eight categories of payments:

  • Gifts and payments for special occasions
…

Multi-state employers: Be prepared for January 1 minimum wage increases

By Jourdan Day on

While many employers are gearing up for the holidays, many employees across the U.S. will see an increase in minimum wage. On Jan. 1, 2020, the minimum wage will increase in numerous states and cities throughout the country that have adopted their own minimum wage laws, which provide for a higher rate than the federal minimum wage of $7.25 per hour. In areas where minimum wage laws overlap, employees are entitled to receive the highest applicable rate.

The following minimum wage increases will become effective Jan. 1, 2020:

Alaska

  • State-wide: $10.19 per hour

Arizona

  • State-wide: $12.00 per hour
  • Flagstaff, Arizona:
…

DOL increases salary threshold for white collar exemptions to $35,568

By Jourdan Day on

After more than 15 years, the U.S. Department of Labor (DOL) is updating the overtime regulations under the Fair Labor Standards Act (FLSA). The FLSA entitles most employees to minimum wage and overtime pay for all hours worked over 40 in a workweek. However, employees who meet the salary threshold and the relevant duties test qualify for the executive, administrative, professional exemption (white collar exemption), and are not entitled to overtime pay. On Sept.24, 2019, the DOL issued a news release announcing its final rule regarding overtime regulations.

Effective Jan. 1, 2020, the new salary threshold for white collar exemptions …

DOL formally publishes notice of proposed rulemaking regarding salary threshold increase

By Arslan Sheikh on

Earlier this month, we reported that the United States Department of Labor (DOL) was reportedly set to propose a new regulation that would update time-and-a-half pay requirements for all hours worked beyond 40 hours a week. The Department’s proposed rule would raise the currently-enforced salary threshold, thus extending overtime protection to more workers.

On March 7, 2019, the DOL issued a draft Notice of Proposed Rulemaking (NPRM) to update the salary threshold for overtime exemption from $23,660.00 annually to $35,308.00 annually. On March 22, 2019, the DOL formally published the NPRM in the Federal Register. As expected, workers who make …

DOL releases notice of proposed rulemaking regarding salary threshold increase

By Arslan Sheikh on

Last week, the United States Department of Labor (DOL) was reportedly set to propose a new regulation that would update time-and-a-half pay requirements for all hours worked beyond 40 hours a week. The department’s proposed rule would raise the currently-enforced salary threshold, thus extending overtime protection to more workers. This would be the first such update to the salary threshold since 2004.

On March 7, 2019, the DOL announced a Notice of Proposed Rulemaking (NPRM) to update the salary threshold from $23,660.00 annually to $35,308.00 annually. In other words, workers who make less than about $35,308.00 per year would be …

New test should increase employer ability to create unpaid internship positions

By Arslan Sheikh on

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.…

Wage and Hour Division announces pilot limited “amnesty” program

By Brian Hall on

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 …

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

By Adam Bennett on

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

By Jourdan Day on

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

By Brian Hall on

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

By Porter Wright on

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

By Adam Bennett on

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

By Porter Wright on

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

By Porter Wright on

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

By Leigh Anne Benedic on

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

By Porter Wright on

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

By Mike Underwood on

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

By Mike Underwood on

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?

By Porter Wright on

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

By Porter Wright on

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

By Rachel Burke on

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

By Brian Hall on

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

By Brian Hall on

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 …

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