Employer Law Report

DOL seeks to limit joint employer liability for wage and hour claims

On April 1, 2019, the Department of Labor (DOL) announced a proposed rule to narrow the definition of a “joint employer” under the Fair Labor Standards Act (FLSA). Because joint employers are jointly and severally liable for wage and hour claims brought under the FLSA, the change could have a significant impact on wage and hour litigation as we know it, offering franchisers and businesses that hire workers through staffing firms a shield from liability for some minimum wage and overtime pay violations.

Proposed regulation

Image depicting stack of wage and hour claims

Part 791 of Title 29 of the Code of Federal Regulations contains the DOL’s official interpretation of joint employer status. Under the proposed regulation, it would be significantly revised for the first time in over 60 years. A four-factor test would be used to analyze whether a potential joint employer relationship exists. Those are, whether the potential joint employer exercises the power to:

  • Hire or fire an employee
  • Supervise and control an employee’s work schedules or employment conditions
  • Determine an employee’s rate and method of pay
  • Maintain a worker’s employment records

Significantly, the proposed rule removes the threat of businesses being deemed joint employers based on the mere possibility that they could exercise control over a worker’s employment conditions. As such, merely having a contractual right under a staffing-agency or franchise agreement to exercise control over employment conditions would not amount to the level of control necessary to establish a joint employment relationship.

Expect the unexpected

Once the proposed rule is published in the Federal Register, the notice-and-comment process will begin. The DOL will accept comments from interested parties for 60 days. After that, public hearings on the proposed rule will commence and the DOL will draft formal responses to substantive comments.

In the meantime, expect the unexpected. Workers’ rights advocates who believe the rule goes too far will likely challenge it in court before final publication (if we even get to that point). We will be keeping close tabs and will report on future developments.

DOL formally publishes notice of proposed rulemaking regarding salary threshold increase

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 less than about $35,308.00 per year would be automatically eligible for time-and-a-half pay for all hours worked beyond 40 a week under the proposed rule. The total annual compensation requirement for highly-compensated employees would also increase from $100,000.00 to $147,414.00 under the proposed rule. The proposed rule does not modify the “duties test,” a test used to determine whether workers who make more than the salary threshold are entitled to overtime wages. Continue Reading

Michigan Paid Medical Leave Act: Are you ready?

Michigan’s Paid Medical Leave Act (PMLA) goes into effect on March 29, 2019. It requires a number of new practices for employers operating in Michigan, including revision of written policies and posting notice to employees. Below are some highlights of the PMLA about which employers in Michigan should be aware:

Who does the law cover?

Employers covered by the PMLA are those that employ 50 or more persons. What is unclear is whether an employer’s employees who work outside of Michigan would count for purposes of determining whether the employer is covered by the PMLA. Unless the sate provides clarity on the question, multi-state employers with more than 50 employees nationwide, but less than 50 employees in Michigan, will need to weigh the risks – those who choose not to comply with the law may find themselves in violation and subject to penalties. Continue Reading

Resources and events for employers offered by the Ohio Bureau of Workers’ Compensation

The Ohio Bureau of Workers’ Compensation (BWC) hosts monthly webinars for employers to learn more about workers’ compensation topics. The brief webinars help employers stay up to date on developments in the workers’ compensation system. You can visit the employer webinar webpage on the Ohio BWC website to learn more about upcoming webinars and register to attend.

In addition, the BWC is hosting its Fourth Annual Workers’ Compensation Medical and Health Symposium on April 26-27, 2019 at the Great Columbus Convention Center.  There is no cost to attend.

Attendees of the provider clinical education track will have access to state and national medical experts. These experts will speak on topics such as: Continue Reading

New forms I-539 and I-539A, and additional fees, required on March 21, 2019

Foreign nationals, especially spouses and dependents of nonimmigrant workers and students, are warned that U.S. Citizenship and Immigration Services (USCIS) is revising the Form I-539, Application to Extend/Change Nonimmigrant Status. This form is used by nonimmigrants to extend their stay in the U.S. or change to another nonimmigrant status, as well as for F and M students applying for reinstatement. The new form was issued on March 11, 2019 and after March 21, 2019, USCIS will accept only the newly revised version of the form, with an edition date of Feb. 4, 2019. All other versions of the form, including the current one dated Dec. 23, 2016, will be rejected. Additionally a new Form I-539A, Supplemental Information for Application to Extend/Change Nonimmigrant Status, generally used to extend or change status of dependent children, has been being revised and published. Continue Reading

DOL releases notice of proposed rulemaking regarding salary threshold increase

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 automatically eligible for time-and-a-half pay for all hours worked beyond 40 a week under the DOL’s proposal. Importantly, the proposed rule does not modify the “duties test,” a test used to determine whether workers who make more than the salary threshold are entitled to overtime wages. Furthermore, the proposed rule does not establish automatic, periodic increases of the salary threshold. Instead, the DOL is soliciting comments form the public regarding how the DOL should update overtime requirements every four years. The DOL released these details on its website ahead of the Federal Register’s expected publication of the regulation next week. Continue Reading

Employer’s good faith offer to reinstate employee as part of settlement negotiations in exchange for dismissing a lawsuit is not considered retaliation

In a recent case, Bresler v. Rock, 2018-Ohio-5138, an employee incongruously argued that an employer’s offer to reinstate his employment in exchange for dismissal of his pending lawsuit was a retaliatory action.  The Ohio Court of Appeals soundly rejected that contention. Rather, employers can continue to negotiate settlements of discrimination allegations and include conditions of dismissal of lawsuits and releases of all claims and courts should not consider it a retaliatory action.

At the age of 60, after working for Anchor Hocking for over 41 years, Darrell Bresler was terminated. Earlier in the year, the company shut down its operations due to financial distress and most of its employees were furloughed. Four employees, including Bresler, were not recalled to work. Bresler’s plant manager contacted him and informed him that his employment was being terminated. He was offered a four-week severance package in exchange for a release of claims. Continue Reading

Ninth Circuit holds that inclusion of state law disclosures violates the FCRA’s “stand-alone” Requirement

The Fair Credit Reporting Act (FCRA) requires employers who obtain a consumer report on a job applicant to provide the applicant with a “clear and conspicuous disclosure” that they may obtain such a report (the “clear and conspicuous” requirement) “in a document that consists solely of the disclosure” (the “standalone document” requirement) before procuring the report. Because neither of these requirements are defined in the statute, they have been the subject of almost constant litigation in recent years. Most notably, the 9th Circuit has led the way in finding that an employer’s inclusion of a liability waiver in its disclosure form violates the standalone requirement. Now, in Gilberg v. California Check Cashing Stores, LLC, a panel of the 9th Circuit Court of Appeals has held that an employer’s inclusion of state law mandated requirements in the disclosure form provided to job applicants violates the standalone document requirement despite the fact that they were included in the form in an effort to assist the applicants in understanding all of their rights as it related to the background screen being obtained on them. In short, the panel was not moved by the employer’s argument that its additional disclosure of the applicable state laws “furthers rather than undermines FCRA’s purpose.” To the contrary, the panel held that “the presence of this extraneous information is as likely to confuse as it is to inform” and therefore, it does not further FCRA’s purpose. Instead, the panel noted that the only exception to the standalone document requirement is the one in the statute itself that permits the disclosure and authorization to be combined into a single document.

Continue Reading

NLRB overrules Obama-era precedent for independent contractor test

On Jan. 25, 2019, the National Labor Relations Board (NLRB) addressed its independent contractor test in a case involving airport shuttle drivers for the franchise, SuperShuttle. The SuperShuttle DFW, Inc. decision overruled the NLRB’s 2014 decision in FedEx Home Delivery, which the Board criticized as incorrectly limiting the significance of a worker’s entrepreneurial opportunity for economic gain in determining independent contractor status. Continue Reading

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