Fair Labor Standards Act (FLSA)

I can’t tell you how many times I’ve been asked in the last few weeks:  is there any chance the new overtime rule will go away or at least be postponed to sometime after December 1?  Well, apparently the answer is…

YES!  Yes.  Yes.  The answer — much to my surprise — is YES, the overtime change is NOT happening December 1.

A federal court in Texas just entered a nationwide injunction, enjoining the Department of Labor’s Final Rule, which was set to make sweeping changes to the white collar exemptions beginning December 1.  Yes, nationwide.  Injunction.  December 1 change, done.  Gone.  If you want to read the opinion, click Nevada v DOL Injunction.

So what does this mean for employers?  For employees?  It means there is no change happening December 1.  For now, the salary level remains at $455/week, or $23,660/year.  Will it happen someday?  Who knows.  The likelihood of it happening under a Republican White House, Senate, and House is, in my opinion, quite slim (at least in its current form).  Once we have had a chance to digest the decision and its effects, we will be back with more information.

I’m not sure what to say right now other than WOW.

The moment we have all been waiting for (dreading?) has arrived — the Department of Labor issued its “Overtime” Final Rule.  The details are available on the DOL’s website, with the “official” Final Rule to be published in the Federal Regulations tomorrow.

As anyone who follows HR or employment law knows, this Final Rule has been highly anticipated — not to mention hotly debated — due to what is essentially a complete overhaul of the salary basis portion of executive, administrative, and professional overtime exemptions.  We now know:

  • The new minimum salary basis is $913/week or $47,476/annually.
  • The highly compensated employee salary basis jumps to $134,004/annually.
  • The salary basis will be “automatically” updated every three years, beginning January 1, 2020.
  • Employers may now use nondiscretionary bonuses and incentive payments, including commissions, to satisfy up to 10 percent of the salary basis.
  • Perhaps most importantly, the effective date of the Final Rule is December 1, 2016.

To me, what stands out the most is the effective date — it gives employers much more time to adopt the new regulations than most people anticipated (some suspected it would be as few as 30 days).  So, that’s good news for the thousands of employers who will be impacted by these changes.  Also notable? The DOL did not make any changes to the duties test for any of the exemptions.

Once we have a chance to fully digest the Final Rule, we will be back with additional updates.   In the meantime, check out the DOL’s Questions and Answers section and Fact Sheet for additional information.  You can also comment on this post or email me directly if you have questions.  Stay tuned!

8230562364_710b5ef675_mFootball fans around the globe may be rejoicing at the official start of the NFL season, but the cheering may be somewhat less than usual this year. That’s because a number of current and former NFL cheerleaders have filed lawsuits in Florida, New Jersey, New York, California and other states for violations of state and federal wage and hour laws, including the Fair Labor Standards Act (FLSA). The cheerleaders are claiming they were significantly underpaid—or in some cases not paid at all—for their services, which include performing during games, rehearsing prior to games, and attending community events. Teams that have been sued include the Tampa Bay Buccaneers, New York Jets, Buffalo Bills, Oakland Raiders and Cincinnati Bengals.

In the Florida Complaint, plaintiff Manouchcar Pierre-Val filed a proposed federal class action seeking to represent a class of cheerleaders who worked for the Tampa Bay Bucs within the last three years, and who were allegedly not compensated at the required minimum wages due under the FLSA. The lawsuit claims that the cheerleaders were paid only $100 per game for an average of 8 home games per season, plus limited wages for appearances made at paid corporate events. However, according to the complaint, the cheerleaders actually worked many more hours each week and each year for which they were not properly compensated as required by federal and Florida law. Plaintiff Pierre-Val alleges she received about $2.00 per hour for all of her services.

Continue Reading Football Season Off to a Litigious Start

Consider this scenario:newborn - flickr cc gabi_menashe

Eve is employed as a counter person at Cars-R-Us, an auto parts store with twenty employees. Eve recently returned to work after giving birth. She asked Cars-R-Us for periodic breaks to express her breast milk. She also asked the company provide her with a dedicated, private room to use her breast pump.

Which of the following statements is correct?

A.  Cars-R-Us can deny Eve’s request because it has less than 50 employees.

B.  Cars-R-Us can deny Eve’s request unless she has worked for the Company more than 1,250 hours during the consecutive twelve-month period preceding her request.

C.  Cars-R-Us should permit Eve reasonable lactation breaks, but it may require her to use the women’s bathroom to express milk.

D.  Cars-R-Us should permit Eve to take a reasonable lactation break in a private location, unless to do so would pose an undue hardship.

Continue Reading Employment Law IQ: Nursing Mothers in the Workplace

clock flickr katerhaTravel time is one of the most hotly contested issues under the FLSA. This week we will test your employment IQ on compensable travel time.

Scenario. Timmy Tee is employed as a non-exempt public relations coordinator for Go Gators Enterprises. Timmy’s regular work schedule is 8:00 a.m. to 5:00 p.m., Monday through Friday. Go Gators Enterprises requires Timmy to attend a two-day marketing conference in Atlanta, Georgia. Timmy travels by bus on Wednesday, from 10:00 a.m. to 4:00 p.m. Timmy returns home by bus on Saturday, traveling from 2:00 p.m. to 8:00 p.m.

Which of the following statements is correct?

A.  Go Gators Enterprises must pay for all of Timmy’s travel time, since it required him to attend the marketing conference.

B.  Go Gators Enterprises must pay for the Wednesday bus trip, since these hours cut across Timmy’s normal work hours.

C.  Go Gators Enterprises must pay for the Saturday travel between 2:00 and 5:00 p.m., the travel time which cuts across Timmy’s normal work hours.  This is required even though Timmy does not normally work on Saturdays.

D.  Both B and C are correct.

Continue Reading When Is Travel Time Compensable?

When President Franklin D. Roosevelt signed the Fair Labor Standards Act of 1938 (FLSA) into law, it was a landmark and welcome law that originally only applied to about 20% of the labor force (mostly factory workers). The law banned oppressive child labor, set minimum wage at 25 cents per hour, and set a maximum workweek at 44 hours.

Over the past 75 years, the FLSA has morphed into a complex and highly-litigated area of the law that regulates nearly all workplaces. It is now almost universally despised by employers. Decades of amendments have made the FLSA so expansive it requires multi-volume sets of legal treatises to fully comprehend, its nuances ensure almost no employer can fully comply, and plaintiffs’ attorneys crank out lawsuits by the dozens, knowing a single dollar owed entitles them to recover all of the attorney’s fees spent prosecuting the case.

Continue Reading A Labor Day Toast to Seven Subjects the FLSA Does Not (Yet) Regulate

Yesterday, April 16, 2013, the United States Supreme Court rendered a significant decision within the FLSA arena that will surely change the strategy of many employers facing potential collective action claims.

For the three hundred or so of our readers who attended our HR Law & Solutions Seminar last month at the Sanibel Harbour Resort, you may recall a case Bob Shearman and I briefed in the case law update portion of our seminar, Genesis HealthCare Corp. v. Symczyk. The case was in the “on the horizon” portion of our presentation, as it was on appeal to the U.S. Supreme Court and oral argument had occurred in December 2012, but no decision had yet been rendered. That decision is now in, and it’s a rare breath of fresh air to employers, who do not very often hear “good news” and “FLSA” in the same sentence.

Case Background

Continue Reading A Monumental Win for Employers in Latest FLSA Decision

Two of my favorite employment law bloggers, Jon Hyman at the Ohio Employer’s Law Blog, and Daniel Schwartz at the Connecticut Employment Law Blog, have weighed in on the following question, first posed by Walter Olson at Overlawyered:

If I could press a button and instantly vaporize one sector of employment law….

Olson says age discrimination.  According to Olson, "Its beneficiaries are among those needing least assistance. The main cash-and-carry effect of age-bias law is to confer legal leverage on older male holders of desirable jobs, such as managers, pilots, and college professors, who by threatening to raise the issue can extract ampler severance packets than might otherwise be offered them." 

Schwartz would rebuild (as opposed to vaporize) leave laws. Apparently in Connecticut employers have to deal with no fewer than six leave laws (yikes!).  Schwartz says, "Imagine, for example, an employee who injures his back while on the job, perhaps suffering a permanent partial disability. Six laws may cover what type of leave and time off the employee is entitled to. That seems inefficient and ineffective."

Jon Hyman would vaporize the Fair Labor Standards Act.  "The FLSA needs to go because compliance is impossible…I would bet any employer in this country a free wage and hour audit that I can find an FLSA violation in your pay practices…Instead, what employers and employees need is a more streamlined system to ensure that workers are paid a fair wage."

I am with Jon 100%.  While I would obviously never advocate for employers paying unfair wages, as a management side employment lawyer I despise the FLSA for my clients.  It must be the most plaintiff (and plaintiff lawyer) friendly law on the planet.  There are so many complicated requirements, classifications, exemptions, etc employment lawyers can barely get them straight.  How do you think that struggling small business owner down the street who is truly doing his best to do the right thing, but made a simple, honest mistake on record-keeping or classification or calculating overtime feels?  That honest mistake could literally put that small company out of business once the process server comes knocking with a wage and hour lawsuit.  Unfortunately, I’ve seen it happen.

Even when employers do everything right (which, because the law is so complicated and detailed, is admittedly rare), it’s too expensive to fight the case.  It’s also too risky to fight it, since one tiny slip up could result in a large attorneys’ fee award for the plaintiff. 

As I’ve mentioned in previous posts, here in the Middle District of Florida employers are all too familiar with these cases, as we have one of the highest FLSA filing rates in the country.  We get calls from recently-served clients, both new and old, all the time.  Though we are obviously grateful for the work, I can’t help but wince everytime I receive those calls.  One of the first things I tell the client during the initial conference is that I feel like the grim reaper — there really isn’t a bright side for the employer in these cases.  More often than not the goal is to get out as quickly and cheaply as possible, even when the employer believes it has done everything right.  And that, to me, means something needs to change. 

What about you — which sector of employment law would you vaporize?

 

 

 

As we’ve mentioned here before, there has been proliferation of FLSA wage cases filed in the last few years, particularly in the Florida district courts.  In fact, the volume of FLSA claims has nearly tripled in the past 10 years.  According to updated federal statistics, over 5,500 FLSA lawsuits were filed nationwide between March 2008 and March 2009, marking a 7.5% increase over the previous period, and representing the second-highest total on record.

I bring up these staggering statistics because the FLSA affects everyone.  Unlike some of the other employment laws that only apply to employers with 15+ employees (Title VII, ADA), or 20+ employees (ADEA), or 50+ employees (FMLA), and so on, the FLSA applies to employers who have just one employee.  Everyone!  

It is imperative that employers take care to ensure they are in compliance with all parts of the FLSA.  Review employee classifications closely — make sure you are only exempting employees who truly fit into one of the exempt classifications.  Check into your policies regarding on-the-clock and off-the-clock time, and make sure you are properly applying the rules on compensable time.  Set up complaint procedures and investigation guidelines.  Put a "Salary Basis Policy" in your employee handbook if you do not already have one. 

While these actions are neither exhaustive nor a complete defense to liability, taking each and every proactive approach to limit liabiity is a wise move these days.  Do it now, before your company becomes a statistic.

 

The Department of Labor recently issued a fact sheet on the break time requirement nursing mothers, which I discussed in a previous post.  As a brief review, the Patient Protection and Affordable Care Act included a provision amending the Fair Labor Standards Act to require employers to

"provide reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk."

The fact sheet clarifies the effective date, which was March 23, 2010.  It also addresses issues such as time and location of breaks, covered employers, and compensation for the nursing mothers. 

Of note for many of our readers is the exception for employers with fewer than 50 employees:  if compliance with the provision would "impose an undue hardship," companies with fewer than 50 employees are exempt.  Exemption status will be determined on a case-by-case basis, with consideration given to the size, financial resources, and structure of the business, among other things.

View the fact sheet by downloading it here