Wage and Hour Defense Blog

Wage and Hour Defense Blog

The Ninth Circuit’s Request That the California Supreme Court Clarify Ambiguous Language in California’s Day-of-Rest Requirements Could Have a Tremendous Impact Upon Employers

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It is not often that long-standing laws cause a federal court to throw up its arms, but for the second time in little over a year, the Ninth Circuit Court of Appeals has done just that in attempting to understand a California employment law.

Last year, the Ninth Circuit threw up its hands and asked the California Supreme Court to clarify California’s obscure “suitable seating” laws, about which we wrote here.

Now, in Mendoza v. Nordstrom, Inc., the Ninth Circuit has thrown up its hands again, this time asking the California Supreme Court to clarify California’s day-of-rest laws.

man-in-suit-in-pool-on-float-shutterstock_151117196The Ninth Circuit has held that the statutory language in those laws is ambiguous, and the interpretation of certain words such as “any” or “cause” could lead to very different conclusions – and very different liability findings. Assuming the California Supreme Court accepts the challenge, its decision could have a huge impact on how employers set employee schedules or permit employees to swap shifts. And it could walk many employers right into wage-hour class actions based upon their past practices and interpretation of those terms.

Specifically, rather than try to interpret the statutory language itself, the Ninth Circuit has asked the California Supreme Court to answer the following three questions:

(1) With regard to California Labor Code section 551, which  provides that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven,” is the required day of rest calculated by the workweek, or is it calculated on a rolling basis for any consecutive seven-day period? As the Court noted, this is no mere matter of semantics. One answer would lead to liability for the employer, while the other would not.

(2) With regard to California Labor Code section 556, which exempts employers from providing such a day of rest when the total hours of employment do not exceed 30 hours in any week or six hours in “any” one day thereof, does the exemption apply when an employee works less than six hours in any one day of the applicable week, or does it apply only when an employee works less than six hours in each day of the week? As the Court noted, the word “any” could support either interpretation. And, again, this is not a matter of semantics. The different interpretations of “any” would lead to very different liability determinations.

(3) With regard to California Labor Code section 552, which provides that an employer may not “cause” his employees to work more than six days in seven, what does the word “cause” mean? Does it mean “force, coerce, pressure, schedule, encourage, reward, permit, or something else?” Again, the different interpretations of “cause” will lead to different liability determinations.

The California Supreme Court’s anticipated answers to these questions could have a huge impact upon employers in California, particularly in the hospitality and retail industries where it is not uncommon to schedule employees to work seven days or more in a row with shifts of varying lengths, and where employees may often swap shifts with each other such that they are working seven days or more in a row. Should the Supreme Court rule, for instance, that it is unlawful to permit employees to work seven days in a row spanning two workweeks, even where the employees wish to do so, employers will need to change their practices going forward to ensure that does not occur – and they may face class action lawsuits for permitting it to occur in the past.

California Court of Appeal Decision Exposes Healthcare Employers to Litigation if They Relied upon Wage Order for Meal Period Waivers

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Employers in California – and healthcare employers in particular – have been besieged by wage-hour class actions for more than a decade. They have been sued repeatedly on claims that they have not complied with the terms of Industrial Welfare Commission (“IWC”) Wage Orders. Now, as a result of a new decision from the California Court of Appeal, they may face lawsuits based not on a failure to comply with the language of a Wage Order, but because they in fact relied upon language in a Wage Order. It is a development that may lead many employers to throw up their hands and quote the old adage, “Damned if you do, damned if you don’t.”

The IWC issues industry-specific Wage Orders with which employers are expected to comply. The failure to comply may lead not only to agency investigations, but to class action lawsuits seeking damages, a variety of penalties, interest, and attorney’s fees.

On February 10, 2015, in Gerard v. Orange Coast Memorial Medical Center, the California Court of Appeal held that it was improper for an employer to rely upon the language of the governing Wage Order. The employer had relied upon a provision of Wage Order 5 that expressly authorized healthcare workers to waive one of their two required meal periods on shifts longer than 12 hours. The Court of Appeal concluded that the provision was contrary to the California Labor Code and partially invalidated it.

Blindfolded businessmanIn reaching this conclusion, the Court of Appeal determined that the IWC had no authority to adopt a regulation that conflicts with the express language of California Labor Code section 512(a), which provides as follows: “An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.” (Italics added.) For this reason, the Court partially invalidated Wage Order 5 to the extent it authorized second meal break waivers on shifts longer than 12 hours.

With one exception, the Court determined that the hospital and employees must now litigate whether or not the Court’s decision should apply retroactively. That one exception, however, is significant as the Court ruled that “there is no compelling reason of fairness or public policy that warrants an exception to the general rule of retroactivity for our decision partially invalidating [Wage Order 5]. Plaintiffs are entitled to seek premium pay . . . for any failure by [Orange Coast] hospital to provide mandatory second meal periods before [February 10, 2015] that falls within the governing three-year limitations period.” That premium pay which the Court determined the Gerard plaintiffs are entitled to seek consists of one hour of pay at an employee’s regular rate of compensation for each employee who worked more than 12 hours and did not get a second meal period – and for each instance there was no second meal period.

The decision is a troubling development for California healthcare employers who have relied upon the regulation – and that may now face class action lawsuits precisely because they did so. Healthcare employers that have relied on Wage Order 5’s express language permitting employees to waive their second meal periods when working more than 12 hours in a shift should reevaluate their practices with counsel promptly to determine how to address such practices prospectively. And, unfortunately, they may now also face lawsuits based upon their past reliance on the Wage Order.

California Court of Appeal Holds That On-Call Rest Periods Are Permissible, Reverses $90M Judgment

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On January 29, 2015, the California Court of Appeal published its long-awaited decision in Augustus v. ABM Security Services, Inc., reversing a near-$90 million judgment awarded in the favor of a certified class of current and former security guards on rest period claims. The decision is a welcome development for California employers, particularly those who ask employees to remain on-call while on breaks in case they are needed.

The Court of Appeal explained that the trial court’s judgment had rested on the false premise “that California law requires employers to relieve their workers of all duty during rest breaks.”

As the Court explained, while ABM’s security guards were required to remain on call during their rest breaks, they engaged in various non-work activities, such as smoking, reading, making personal telephone calls, and surfing the Internet. The Court determined that on-call restrictions were not sufficient to constitute “work” such that guards were not relieved from working during their rest breaks. Significantly, the Court stated that while “an on-call guard must return to duty if called to do so, [] remaining available to work is not the same as actually working.”

In reaching its conclusion, the Court rejected the employees’ argument that a prior Court of Appeal decision regarding rest breaks for security guards – Faulkinbury v. Boyd & Associates, Inc. – “recognized that Wage Order No. 4 requires that all rest breaks be duty free.” Distinguishing Faulkinbury, the Court held that the issue in that case was whether a class could be certified on the facts in that case given that the employer “maintained no ‘policy regarding the provision of rest breaks to security guards and had an express policy requiring all security guards to remain at their posts at all times.’” But the Faulkinbury Court “made no attempt to examine the merits of the employer’s policy or determine the scope of the DLSE’s opinion that rest periods must be duty free.”

The Court also rejected the employees’ assertion that, in Brinker Restaurant Corp. v. Superior Court, the California Supreme Court held that “an employer must relieve an employee of all duty on a rest break and relinquish any control over how the employee spends his or her time.” The Court acknowledged that while Brinker was instructive on the requirements for meal periods and class certification generally, “it said nothing about an employer’s obligation to relieve an employee of all duty on a rest break.”

The employees also argued that two prior decisions – Morillion v. Royal Packing Co. and Aguilar v. Association for Retarded Citizens – supported the notion that on-call rest breaks are unlawful. The Court again rejected the employees’ position because the Morillion and Aguilar cases determined what constitutes compensable work time, which was not at issue in Augustus since “a rest period is already compensable work time.”

Finally, recognizing the recent Mendiola v. CPS Security Solutions, Inc. case, about which we wrote here, the Court concluded that “although on-call hours constitute ‘hours worked,’ remaining available to work is not the same as performing work.”

For these reasons, the Court determined that the trial court’s orders granting summary adjudication and summary judgment in favor of the employees – which hinged on an erroneous interpretation of rest period requirements – must be reversed.

Separately, the Court determined that, based on the facts presented at the trial court, the trial court could reasonably conclude that “ABM possessed a uniform policy of requiring its security guards to remain on call during their rest breaks,” and under Brinker, “[w]hether such a policy is permissible is an issue ‘eminently suited for class treatment.’” Accordingly, the Court affirmed the decision certifying the class.

The decision is helpful to California employers as it clarifies that merely being on call during a rest break – while still being able to engage in many personal activities – does not render a rest period invalid and thus subject an employer to payment of a missed rest period premium. At this time, it is unclear whether the employees will petition the California Supreme Court to review this decision.

District Court Judge Vacates DOL’s Modified Definition of “Companionship Services”

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Just over three weeks after vacating a regulation barring third party employers from claiming the companionship exemption for minimum wage and overtime, in a January 14, 2015 decision in Home Care Association of America v. Weil, U.S. District Court Judge Richard Leon has also vacated the Department of Labor’s attempt to drastically narrow the definition of “companionship services” (29 CFR Sec. 552.6,). Judge Leon had previously stayed the changes in the new definition, originally scheduled to go into effect on January 1, 2015.

The new definition of “companionship services” would have drastically limited the provision of “care” – assistance with “activities of daily living” and “instrumental activities of daily living” –  to less than 20% of an employee’s total weekly hours worked. For the past forty years, there had been no limitation on the amount of such care, although there was a 20% limitation on the performance of general household work.  As a result, the vast majority of employees currently providing companionship services would no longer have qualified for the exemption.

In vacating the definition, Judge Leon found the DOL’s narrowed definition of “care” contrary to the statute and both arbitrary and illogical. Noting that the statutory exemption by its terms applies to services for individuals who “are unable to care for themselves,” he held that the new regulations’ drastic limitation in the quantity of the very “care” the elderly and disabled need directly contradicted the statute:  “Indeed, what services could possibly be required more by those ‘unable to care for themselves’ than care itself?” That the DOL was attempting to limit the very thing essential to the daily survival of the elderly and disabled was nonsensical.

Judge Leon also sharply criticized the DOL’s blatant disregard of Congressional intent geared towards preserving the companionship exemption for the benefit of the “millions of American families [struggling each day to financially] care for their loved ones.” Bearing in mind the ever-increasing number of families that will share in the struggle of caring for the elderly and disabled, Judge Leon reiterated that the DOL cannot circumvent the electorate.  As Judge Leon noted, even when the FLSA was otherwise amended, or when attempts were made to remove the exemption from third party employers, there was no attempt to change the definition of companionship services.  If Congress has not redefined the 40-year-old exemption, then the DOL should not be able to do it now, he reasoned.

The DOL has not yet indicated whether it will appeal, but an appeal is highly likely.

As we have previously noted, even though the long-standing FLSA minimum wage and overtime companionship services exemption definitions now will remain in effect for at least the near future , employers must still remember to comply with applicable state and local laws that may require minimum or higher wages and/or overtime for companionship services.

The ABC Test Determines Independent Contractor Status Under the New Jersey Wage Payment and Wage Hour Laws

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Michael D. ThompsonOn January 14, 2015, in Hargrove v. Sleepy’s LLC, the New Jersey Supreme Court answered a certified question from the Third Circuit and held that the “ABC” test governs whether a plaintiff is an employee or an independent contractor under the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law.

Therefore, companies defending their independent contractor classifications in either litigation or government investigations under these statutes will be required to show that an individual providing services:

(A)       is free from the company’s control in performing the services;

(B)       performs work outside the usual course of the company’s business or outside the company’s place of business; and

(C)       is engaged in an independently established business.

The plaintiffs in Hargrove v. Sleepy’s delivered mattresses for Sleepy’s, and filed suit under the New Jersey Wage Payment law (and several other statutes) alleging that Sleepy’s misclassified them as independent contractors.  The case was litigated before the U.S. District Court for the District of New Jersey.

Sleepy’s argued that plaintiffs’ status as employees should be decided under the “right to control” test applied by to ERISA claims by the United States Supreme Court in Nationwide Mutual Ins. Co. v. Darden.

The District Court applied the “right to control” test and concluded that the plaintiffs were, in fact, independent contractors.  The plaintiffs appealed to the Third Circuit Court of Appeals.

In May 2013, the Third Circuit petitioned the New Jersey Supreme Court to answer the following question:

Under New Jersey law, which test should a court apply to determine a plaintiff’s employment status for purposes of the New Jersey Wage Payment Law, N.J.S.A. § 34:11-4.1, et seq., and the New Jersey Wage and Hour Law, N.J.S.A. § 34:11-56a, et seq.?

Seal of the Supreme Court of New JerseyThe New Jersey Supreme Court granted the petition by the Third Circuit.

The New Jersey Supreme Court noted that neither the Wage Payment Law nor its regulations provide criteria for distinguishing between an employee and an independent contractor.  However, the New Jersey Department of Labor and Workforce Development’s regulations implementing the Wage Hour Law expressly provide that the distinction between an employee and an independent contractor should be resolved by reference to the ‘ABC’ test.”

The Supreme Court of New Jersey stated that the “express purpose” of both statutes is to foster “the provision of greater income security for workers.”  The Court asserted that the “ABC” test “operates to provide more predictability” than other tests of independent contractor status, and that there was no good reason “to depart from the standard adopted by the DOL to guide employment status determinations or to disregard the long-standing practice of treating both statutory schemes in tandem.”

For those reasons, the New Jersey Supreme court held that any dispute regarding independent contractor status arising under the Wage Payment Law and the Wage and Hour Law should be resolved by utilizing the “ABC” test.

The decision in Hargrove v. Sleepy’s is important in large part because the “ABC” test is significantly different from other independent contractor tests.  In particular, employers should scrutinize the New Jersey Supreme Court’s description of part C of the test as (requiring an independently-established business):

Therefore, part C of the “ABC” test is satisfied when an individual has a profession that will plainly persist despite the termination of the challenged relationship… When the relationship ends and the individual joins the ranks of the unemployed, this element of the test is not satisfied.

Accordingly, New Jersey employers should further examine their independent contractor relationships against the criteria of the “ABC” test.

California Supreme Court Holds That Sleep Time May Not Be Excluded from Hours Worked in Certain Industries

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On January 12, 2015, the California Supreme Court issued its decision in Mendiola v. CPS Security Solutions, Inc. While it will have no impact upon most employers, it is a decision that will have significant impact on some. It may well lead to the filings of class action lawsuits against some employers alleging that they did not pay employees for sleep time – lawsuits those employers now may have great difficulty defending.

To the surprise of some, the Court concluded that security guards who are assigned 24-hour shifts, but sleep 8 of those hours, must be compensated for the entire 24 hours. The Court reached this conclusion despite the fact that the employees agreed in advance that such sleep time should be excluded from their hours worked – and despite the fact that a prior Court of Appeal decision had approved such agreements several years ago.

The case involves interpretation of California Industrial Welfare Commission (“IWC”) Wage Order 4, which governs employees in professional, technical, clerical, mechanical, and similar occupations. (The IWC has issued different Wage Orders for different industries.)

Guards working 24-hour shifts for CPS had agreed that their 8 hours of sleep time would not be compensated. The issue was then raised in two putative class action lawsuits. Reversing the appellate decision on this issue, the California Supreme Court has held that the guards’ “on-call hours constituted compensable hours worked and, further, that CPS could not exclude ‘sleep time’ from plaintiffs’ 24-hour shifts . . . .”

Addressing whether “on-call” time is compensable, the Court reiterated the factors to which other courts have looked : “(1) whether there was an on-premises living requirement; (2) whether there were excessive geographical restrictions on employee’s movements; (3) whether the frequency of calls was unduly restrictive; (4) whether a fixed time limit for response was unduly restrictive; (5) whether the on-call employee could easily trade on-call responsibilities; (6) whether use of a pager could ease restrictions; and (7) whether the employee had actually engaged in personal activities during call-in time.” Additionally, the courts have also considered whether the time “is spent primarily for the benefit of the employer and its business.” Applying these factors, the Court determined that the guards should have been compensated for their on-call time.

The Court then concluded that sleep time could not be excluded from hours worked – even by agreement. Such agreements had generally been permitted since at least April 2011 when the Court of Appeal issued its decision in Seymore v. Metson Marine, Inc. The Seymore Court held that “California law authorizes employers to enter into an agreement with their 24-hour employees to exclude from compensation eight hours of sleep time in each 24-hour period,” following applicable federal regulations and a prior California appellate opinion in Monzon v. Schaefer Ambulance Service, Inc. Importantly, the Monzon Court found that such an exclusion was permissible under Wage Order 9, governing ambulance drivers and attendants. It did not address Wage Order 4, the one at issue in Mendiola.

The Mendiola Court disapproved of Seymore “as an improper extension of Monzon.” Moreover, noting the differences in the various Wage Orders, the Court explained, “Unlike Monzon, which at least could point to some evidence of the IWC’s intent concerning ambulance drivers and attendants, Seymore identified no such indication, much less convincing evidence, that the IWC intended to permit the exclusion of sleep time from compensable hours worked for all employees working 24-hour shifts.” The Court looked at Wage Order 4, finding that it contained no signal that the IWC intended to adopt a sleep time exclusion, while other wage orders – specifically, Wage Orders 5 and 9 – had done so. And because there was no evidence that the IWC intended to incorporate the federal sleep time exclusion into Wage Order 4, the employer was not permitted to exclude sleep time from the guards’ compensable hours worked in 24-hour shifts.

Significantly, the California Supreme Court declined to make its holding apply only prospectively, meaning that employers who believe they had been complying with the law under Seymore may well find themselves subject to wage claims for unpaid sleep time. That would include class action lawsuits, which may be difficult for some employers to defend in light of the Mendiola decision.

Employers who deduct employees’ hours worked for “on-call” time and/or agreed-upon sleep time should reevaluate their practices with counsel to determine how those employees must be paid, if at all, for such time.

Sixth Circuit Concludes That Ambulance Company Does Not Need To Compensate EMTs for “On-Call” Meal Periods

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In Jones-Turner v. Yellow Enterprise Systems, LLC, the Sixth Circuit recently upheld summary judgment in favor of an ambulance company in a collective action filed by three EMTs, finding that the plaintiffs’ meal and rest breaks were not compensable under the Fair Labor Standards Act (“FLSA”) and Kentucky law.  The Court analyzed whether the ambulance company’s policy of having “on-call” lunch periods required EMTs to be compensated for that time.

According to the “on-call” lunch period policy, EMTs in the field were not allotted a specific time period for lunch but were instructed to take advantage of down time between ambulance runs to eat a meal.  The EMT crews  were required to radio the dispatcher to request a lunch break.  During their lunch break, the crews were subject to various restrictions.  For instance, the crews had to eat within one mile of an assigned stand-by location.  If the crews were out of their unit, they had to maintain radio contact, they were expected to answer the radio after the first call and they were subject to any available run.  If an employee was unable to take a lunch break due to call volume, the company required the employee to submit a missed lunch form.

The Court noted that there did not appear to be any evidence that employees were frequently interrupted by radio contact.  Likewise, there was no evidence that crews could only eat in their ambulances.  To the contrary, the evidence showed that they could leave the ambulance so long as they maintained radio contact.   The Court explained that it may have reached a different conclusion if EMTs were required to stay in their ambulances or if they had to drive or perform other duties.

The decision is helpful to employers as it clarifies that merely carrying a radio or monitoring a radio during lunch does not result in the meal period being compensable under the FLSA.  Although employers must be careful that they do not require employees to perform work during their meal periods, being subject to an emergency call does not transform meal periods into compensable time under the FLSA.

The Sixth Circuit Holds That Meal Periods Spent “Doing Exactly What One Might Expect An Off-Duty Employee To Be Doing” Are Not Compensable.

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In Ruffin v. MotorCity Casino, the Sixth Circuit Court of Appeals considered whether casino security guards were entitled to be paid for meal periods during which they were required to remain on casino property, monitor two-way radios and respond to emergencies if called to do so.

The District Court for the Eastern District of Michigan had granted summary judgment to the employer based on the conclusion that no reasonable jury could have found the meal periods to be compensable work time.

In affirming the ruling of the District Court, the Sixth Circuit relied on its earlier decision in Hill v. United States, which in turn relied on 29 CFR §785.19.  That regulation provides that bona fide meal periods are not work time.  To qualify as bona fide meal period, an “employee must be completely relieved from duty for the purposes of eating regular meals.”

However, the Sixth Circuit further noted that so long as (i) the employee can “pursue his or her mealtime adequately and comfortably,” (ii) the employee does not perform any substantial duties during the period, and (iii) the mealtime is not predominantly for the employer’s benefit, the employee is “relieved of duty” and is not entitled to compensation under the FLSA.

The plaintiffs in Ruffin contended that monitoring their two-way radios, which exposed them to a steady stream of work-related radio chatter during meal periods, was a substantial job duty.

The Sixth Circuit disagreed and cited to caselaw holding that monitoring a radio and being available to respond if called, generally was a de minimis activity rather than a substantial job duty.

Furthermore, the plaintiffs in Ruffin spent their meal periods eating, reading, socializing and conducting personal business on their phones.   Their mealtimes were not interrupted with such regularity that they were spending the time primarily for the employer’s benefit.

While the plaintiffs were required to remain on the premises, the evidence showed that this restriction was not an indirect way of extracting unpaid work from the employee.  Rather, the plaintiffs “spent their meal periods doing exactly what one might expect an off-duty employee to be doing on a meal break.”

Based on the totality of the circumstances, the Sixth Circuit affirmed the District Court’s summary judgment in favor of the employer.

Therefore, in deciding whether or not to compensate employees for their meal breaks, employers should be mindful of Ruffin, 29 CFR §785.19 and the related caselaw.  Under those circumstances, employers should consider whether (i) the employees are performing any substantial duties during the meal period; (ii) the employees are regularly interrupted during the meal periods to perform work for the employer; and (iii) the employees are unable to leave the employer’s property or spend the meal periods predominantly for their own benefit.

District Court Judge Issues Temporary Stay of DOL’s Modified Definition of “Companionship Services”

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On December 23, 2014, Brian Steinbach posted regarding U.S. District Court Judge Richard Leon’s December 22nd decision in Home Care Association of America v. Weil, vacating the portion of the new Department of  Labor regulation (proposed 29 CFR Sec. 552.109, scheduled to go into effect on January 1, 2015) barring third party employers from claiming the companionship services (minimum wage and overtime) or live-in domestic service (overtime) exemptions. The post noted that the decision did not address DOL’s separate changes to the definition of “companionship services” (proposed new 29 CFR Sec. 552.6).  Those changes included:  narrowing to 20% the amount of time that can be spent assisting with “activities of daily living” (such as dressing, grooming, feeding, bathing, toileting and transferring) and “instrumental activities of daily living” (such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medication, and arranging medical care) that enable a person to live independently at home; and eliminating prior language that allowed the performance of general household work for up to 20 percent of the total weekly hours worked.

However, on December 24, 2014, just two days after Judge Leon’s decision issued, the Plaintiffs in Home Care Association moved to stay the changes in the definition of “companionship services.” In particular, Plaintiffs contended that, as a practical matter, the new rule effectively repealed the statutory exemption by removing the provision of “care” for more than 20 percent of working time from the regulatory definition, despite a forty year history to the contrary. Following a December 31, 2014 hearing, Judge Leon granted a temporary restraining order staying the new “companionship services” definition from going into effect until January 15, 2015. He also set an accelerated briefing schedule for a preliminary injunction, and scheduled a hearing for January 9, 2015.  A ruling is likely by January 15, 2015.

Notwithstanding these proceedings, home care agencies must continue to comply with state labor laws in effect. In New York, for example, notwithstanding the temporary stay of the “companionship services” definition, the home care industry must continue to pay minimum wage (now $8.75 per hour) and overtime (at a rate of one and a half times the minimum wage). Should the DOL prevail, the home care industry will be required to increase overtime pay from one and a half times the minimum wage to one and a half times the employee’s regular rate of pay. Though a seemingly minor increase, the home care industry, especially those agencies receiving state and federal funding, are already operating on thin margins and must continue to identify methods of remaining in business without sacrificing the quality of patient care.

The DOL’s revisions to sections 552.102 and 552.110, relating to keeping of actual records of the hours worked by such employees, have not been addressed at this time.

 

New York: No Wage Theft Prevention Act Annual Notice Requirement in 2015

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Our colleagues at Epstein Becker Green have released an advisory that will be of interest, particularly to New York employers: “New York Wage Theft Prevention Act Update: Annual Notice Requirement Is Removed for 2015,” by Susan Gross Sholinsky, William J. Milani, Jeffrey M. Landes, Dean L. Silverberg, Nancy L. Gunzenhauser, and Kate B. Rhodes.

Following is an excerpt:

On December 29, 2014, Governor Andrew Cuomo signed the long-awaited amendment (“Amendment”) to the Wage Theft Prevention Act (“WTPA” or “Act”) and a chapter memorandum. Notably, the Amendment and the chapter memorandum abolish the annual notice requirement for 2015. The text of the Amendment states that the law is not effective until 60 days following enactment; however, Governor Cuomo’s chapter memorandum states that it “accelerate[s] the effective date of the notification rules in section 1 of the bill to remove the notice requirement on employers for the 2015 calendar year.” This means that for 2015, employers do not need to provide annual notices of pay rates/pay dates to New York employees.

Further, the governor noted in the chapter memorandum that there were some other issues with the Amendment, which the New York Legislature agreed to address in the next legislative session. He did not address which provisions would require revision.

As a reminder, the WTPA is designed to prevent employers from failing to pay workers’ wages, in two ways. First, it requires written statements setting forth employees’ pay rates and pay dates. Second, the Act provides a civil cause of action against employers that fail to properly disclose or pay wages.

Read the full advisory here.

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