I have been watching, with interest and trepidation, the Baltimore City Council’s proposal to raise the minimum wage in the City to $15/hour by 2022. While I certainly understand the desire to “share the wealth” and to ensure a decent living standard, as several Council members have stated, I am very concerned about the unintended consequences of this well-meaning action – particularly on non-profit organizations. Continue Reading Thoughts on the Fight for Fifteen from a Management Lawyer
For nearly 35 years, automobile dealers relied on the U.S. Department of Labor’s position that service advisors fell within the Fair Labor Standards Act’s exemption from overtime for “salesmen, partsmen, or mechanics primarily engaged in selling or servicing automobiles.” In 2011, the DOL “upended” this interpretation by issuing regulations specifying that the exemption did not apply to “sales personnel” unless they sell vehicles. Thus, service advisors were deemed non-exempt.
In June 2016, in Encino Motorcars, LLC v. Navarro, No. 15-415, 2016 WL 3369424 (2016), the Supreme Court held that the 2011 regulation was not entitled to deference because it was issued without the requisite reasoned explanation for a change. The Court did not decide whether service advisors are, or are not, exempt. The U.S. Supreme Court remanded the case to the U.S. Court of Appeals for the Ninth Circuit (which had decided the case below) with instructions that the appellate court not give any deference to the DOL’s regulations. In other words, the appellate court should review the duties of the position (the sale of repair and maintenance services) and decide if the duties fell within the statutory exemption.
Today, December 1, 2016, the Department of Labor issued a press release announcing that it had filed an appeal to the U.S. Court of Appeals for the 5th Circuit of the emergency nationwide injunction of the new overtime rule, which had been granted last week by Judge Amos Mazzant, as discussed in our November 23 blog, “Overtime Rule Will Not Take Effect on December 1.” The preliminary injunction temporarily blocked the DOL’s new rule raising the required minimum salary level for the Fair Labor Standards Act’s white-collar exemptions from the requirement to pay overtime pay. The rule was set to go into effect on December 1st.
As discussed in our May 18, 2016 E-lert, in order to be exempt from overtime, a white-collar employee must meet three tests: (1) the salary basis test – the employee must be paid on a salary basis, not subject to reductions for fluctuations in quantity or quality of work; (2) the salary level test – the employee’s salary must currently be at least $455 per week (equaling $23,660 per year); and (3) a duties test – the employee must perform certain duties specific to the executive, administrative or professional exemption in question. There is also a highly-compensated employee exemption under which an employee must currently make at least $100,000 per year and perform at least one exempt duty.
The DOL’s revised rule would have doubled the salary requirement for white collar (executive, administrative and professional) employees from $23,660 per year ($455 per week) to $47,476 per year ($913 per week). The required minimum salary for the highly compensated employees’ exemption would also have been raised from $100,000 to $134,004. These salary levels would have been subject to automatic adjustments every three years. The new rule did not change the duties test for any of the exemptions.
The new rule was challenged by 21 states and multiple business groups, arguing that such change was unlawful. In issuing the preliminary injunction, the judge agreed, noting that the rule change “creates essentially a de facto salary-only test,” which Congress had not intended. In the press release, however, the DOL stated, “The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.”
A federal judge in Texas has issued a preliminary injunction that prevents the Department of Labor’s revised overtime exemption rule from taking effect as scheduled on December 1, 2016.
As discussed in our May 18, 2016 E-lert, in order to be exempt from overtime, a white-collar employee must meet three tests: (1) the salary basis test – the employee must be paid on a salary basis, not subject to reductions for fluctuations in quantity or quality of work; (2) the salary level test – the employee’s salary must currently be at least $455 per week (equaling $23,660 per year); and (3) a duties test – the employee must perform certain duties specific to the executive, administrative or professional exemption in question. There is also a highly-compensated employee exemption under which an employee must currently make at least $100,000 per year and perform at least one exempt duty. Continue Reading Overtime Rule Will Not Take Effect On December 1
I enjoy those cases where those (sometimes uppity) government agencies get a taste of their own medicine. I previously told you about the EEOC being sued for failing to accommodate its own employee’s disability, for example. Here’s another one – the U.S. Department of Labor, which is the federal agency that enforces the Fair Labor Standards Act (FLSA), including its overtime provisions, just agreed to pay $7 MILLION to settle a claim that it failed to pay overtime to its own employees!!! Continue Reading DOL Settles Its Own Multi-Million Dollar Overtime Suit
The Department of Labor has issued revised versions of its “Employee Rights Under the Fair Labor Standards Act – Federal Minimum Wage” and “Employee Rights – Employee Polygraph Protection Act” posters, which all covered employers are required to post. Employers must post the revised versions as of August 1, 2016. Continue Reading Revised Mandatory Fair Labor Standards Act and Employee Polygraph Protection Act Posters Effective August 1, 2016
On May 17, 2016, the Department of Labor announced the release of its long-awaited revisions to its overtime exemption rule. The new rule doubles the salary requirement for white collar (executive, administrative and professional) employees from $23,660 per year ($455 per week) to $47,476 per year ($913 per week). The required minimum salary for the highly compensated employees’ exemption also has been raised from $100,000 to $134,004. These salary levels will be subject to automatic adjustments every three years. The new rule does not change the duties test for any of the exemptions. It will take effect on December 1, 2016. Our firm will be holding a complimentary webinar on Wednesday, May 25 to discuss the changes and offer practical suggestions on how to comply with the new rules. Continue Reading NEW OVERTIME RULE
As you may know, I enjoy the cases where the tables are turned – like my colleague Jason Usher’s post on “Union Violates Employee’s Labor Rights” or my blog on “EEOC Sued For Failing to Accommodate Employee’s Disability.” Here’s another.
From time to time, my clients have had to deal with lying employees. They lie in an investigation, they lie to the federal agencies like the Equal Employment Opportunity Commission or the Department of Labor, they lie in depositions and at trial. And they’re good at it – it’s often hard to prove that they are lying, which is incredibly frustrating to my clients and to m Continue Reading Lying Employee Faces Prison Time
The Maryland 2016 legislative session ended on Monday. A friend of mine mentioned that she heard the General Assembly passed an equal pay law in Maryland. But guess what? There is already an Equal Pay for Equal Work law in Maryland – it’s been in place for almost 25 years!! The current law already prohibits employers from discriminating against employees of one sex who work in the “same establishment” and perform work of comparable character or work in the same operation, in the same business, or of the same type by paying a lesser wage than an employee of another sex.
The equal pay bill mentioned, House Bill 1003, expands the prohibitions on discriminatory pay practices. It also adds an entirely new pay transparency provision. Specifically: Continue Reading “New” Equal Pay Bill for Maryland
With the imminent blizzard of 2016, employers are thinking about work coverage issues. This is of particular concern for those employers who function on a 24-hour basis, like healthcare entities. In order to ensure coverage during perilous travel conditions, some employees may agree to (or even be required to) stay overnight. Obviously, any hours actually spent working must be paid, but they are likely not working during all of that time onsite. In fact, some of that time may be sleep time. What are the rules on pay under those circumstances?
The Fair Labor Standards Act provides that if an employee works for more than 24 hours, up to 8 hours of sleep time may be deducted pursuant to an agreement between the employer and employee. The FLSA does not define what is such an “agreement.” However, various courts have done so, and these courts have found that if an employer publishes a policy that explains the sleep time deduction and if employees continue to work for the employer, this constitutes an agreement for the deduction. In at-will employment states, any employee who chooses not to agree to any company policy, including one like this, can certainly choose not to work for the company. Conversely, the company can choose to terminate any employee who chooses not to agree to any of its policies. That is what at-will employment entails. If the company does not have a published policy on this issue, it will not be able to deduct for the sleep time. Continue Reading Employees Staying Over in the Storm – Sleep Time Deductions