Wage and Hour Defense Blog

Wage and Hour Defense Blog

Category Archives: DOL Enforcement

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Twenty-One States Allege the New White Collar Salary Thresholds are Unlawful

A group of 21 states (“the States”) has filed a Complaint in the Eastern District of Texas challenging the new regulations from U.S. Department of Labor that re-define the white collar exemptions to the overtime requirements of the FLSA.  The States argue the DOL overstepped its authority by, among other things, establishing a new minimum salary threshold for those exemptions.

Pursuant to the new regulations from the U.S. Department of Labor, effective December 1, 2016:

  • the salary threshold for the executive, administrative, and professional exemption will effectively double from $23,660 ($455 per week) to $47,476 ($913 per week);
  • “Highly Compensated
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Preparing a Benefits Program in Advance of the DOL’s Overtime Rule – Employment Law This Week

In a “Tip of the Week” segment on Employment Law This Week, Will Hansen, Senior Vice President of Retirement Policy for The ERISA Industry Committee (ERIC), offers some advice on preparing a benefits program in advance of the Department of Labor’s overtime rule:

“The Department of Labor’s Final Rule increasing the overtime exemption threshold to $47,476 dollars will not only have an impact on the wages an employee receives, but also the benefits that they receive. In advance of these changes taking effect on December 1st, it’s important for companies to review their benefit programs. First, they should determine … Continue Reading

Time Is Running Out for Employers to Make Important Decisions to Comply with New DOL Overtime Exemption Rule

Time Is Running Out for Employers to Make Important Decisions to Comply with New DOL Overtime Exemption RuleIn May, the Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white collar exemptions.  With little more than two months to go before that new rule takes effect on December 1, 2016, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule by either increasing their salaries or converting them to non-exempt status.

But some of those decisions may not be easy ones.  And they may create some unexpected challenges, both financially and operationally.

New Salary Thresholds

Effective December 1, 2016, the … Continue Reading

U.S. District Court Holds That an Employer May Retain Tips If It Takes No Tip Credit

Julie Badel

Julie Badel

Addressing an unusual set of facts, the U.S. District Court for the Northern District of Georgia has dismissed a suit challenging an employer’s practice of retaining tips that customers give to valets. The plaintiff in Malivuk v. Ameripark, No. 1:15:cv-2570 WSD (N.D. Ga. 2016), alleged that she was promised an hourly wage plus tips but that her employer, who provided valet parking services, retained a portion of the tips.

The defendant moved to dismiss the case because the plaintiff did not allege that the company took a tip credit against the minimum wage or in any other way … Continue Reading

U.S. Supreme Court Declines to Review DOL Home Care Rule

Our colleagues Denise Merna Dadika and Brian W. Steinbach, attorneys in the Employment, Labor & Workforce Management practice at Epstein Becker Green, have a post on the Health Employment and Labor blog that will be of interest to many of our readers: “U.S. Supreme Court Declines to Review DOL Home Care Rule”

Following is an excerpt:

On Monday, June 27, 2016, the U.S. Supreme Court declined to review a D.C. Circuit Court of Appeals decision upholding the new U.S. Department of Labor’s (DOL) requirement that home care providers pay the federal minimum wage and overtime to home care workers. … Continue Reading

DOL Final White Collar Exemption Rule to Take Effect on December 1, 2016

Overtime Clock Faces - Abstract PhotoNearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016.

While the earlier notice had indicated that the salary threshold for the executive, administrative, and professional exemption would be increased from $23,660 ($455 per week) to $50,440 ($970 per week), the final rule will not raise the threshold that far.  Instead, it will raise it to $47,476 ($913 per week).

According to the DOL’s Fact Sheet, the final rule … Continue Reading

Wage and Hour Division’s Latest Newsletter Confirms Its Aggressive Approach

Wage and Hour Division’s Latest Newsletter Confirms Its Aggressive Approach

Infographic by DOL Wage and Hour Division.

The Department of Labor’s Wage and Hour Division, which is charged with enforcing federal wage laws, has just issued its latest newsletter.

Included in the newsletter is the Division’s presentation of a variety of statistics relating to its efforts.

Among the statistics reported by the Division:

  • It has assisted more than 1.7 million workers since 2009.
  • It has recovered approximately $1.6 billion for workers since 2009.
  • It recovered more than $246 million in back wages in 2015 alone for more than 240,000 workers.
  • In 2015, the Division found violations in 79% of
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Ninth Circuit: Tip Pooling for Kitchen Employees Is Prohibited – Even Where No Tip Credit Is Taken

Michael Kun, co-editor of this blog, has a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers: “Ninth Circuit Approves DOL Rule Prohibiting ‘Tip Pooling’ for Kitchen Employees Even Where No ‘Tip Credit’ Is Taken.”

Following is an excerpt:

The Fair Labor Standards Act (“FLSA”) permits employers to use “tip credits” to satisfy minimum wage obligations to tipped employees.  Some employers use those “tip credits” to satisfy the minimum wage obligations; some do not.  (And in some states, like California, they cannot do so without running afoul … Continue Reading

DOL’s Fiduciary Rule Takes Final Step – Employment Law This Week

One of the featured stories on Employment Law This Week is the Department of Labor’s proposed fiduciary rule heading to the White House.

The new rule would impose stricter conflict-of-interest rules and fiduciary requirements on advisors working with retirement plans and investors. Critics of the DOL proposal have charged that it would prevent workers who cannot afford highly individualized advice from receiving basic retirement planning services. As with the EEOC, the Department of Labor is making a big regulatory push in Obama’s last year as president. Next on the horizon is the Department’s contentious overtime rule, which will most likely … Continue Reading

Wage and Hour Division Offers Guidance on Joint Employment – Employment Law This Week

The top story on Employment Law This Week – Epstein Becker Green’s new video program – is the Department of Labor’s Wage and Hour Division’s new interpretation of joint employment.

The federal Wage and Hour Division issued an Administrator’s Interpretation with new guidelines for joint employers under the FLSA and Migrant and Seasonal Agricultural Worker Protection Act. The Division makes it clear that it believes employers are regularly part of joint employment relationships with their vendors and business partners. If an employee files a claim or lawsuit and a joint-employment relationship is found, both employers can be found liable for … Continue Reading

The Department Of Labor Addresses Independent Contractor Misclassification And Concludes That “Most Workers Are Employees”

The Administrator of the Wage Hour Division of U.S. Department of Labor has issued an Administrator’s Interpretation of the FLSA’s definition of “employ.” And the conclusion is one that not only could have a significant impact on the way companies do business, but lead to numerous class and collective actions alleging that workers have been misclassified as independent contractors.

Addressing the misclassification of employees as independent contractors, the Administrator’s Interpretation notes that the FLSA’s defines the term “employ” as “to suffer or permit to work.” Based on that definition, the DOL concludes that “most workers are employees.”

The Interpretation cites … Continue Reading

The Supreme Court Approves DOL Interpretive Rules Holding That Mortgage-Loan Officers Are Entitled To Overtime

The United States Supreme Court has upheld an Administrator’s Opinion issued by the United States Department of Labor stating that “typical” mortgage-loan officers are not covered by the Administrative exemption to the FLSA’s overtime requirements.

The Supreme Court’s decision in Perez v. Mortg. Bankers Ass’n reversed a Circuit Court decision vacating the Opinion for failure to comply with the procedural requirements of the Administrative Procedure Act (“APA”).  Specifically, the Supreme Court ruled that the APA expressly exempts the Department of Labor (and other federal agencies) from the notice-and-comment rulemaking process when it makes changes to its own interpretive rules.

Rulemaking Continue Reading

District Court Decision Vacates DOL Regulation Barring Third Party Employers from Claiming Exemptions for Companionship and Live-In Domestic Service Workers

On December 22, 2014, the District of Columbia federal district court vacated a new U.S. Department of Labor regulation, scheduled to go into effect January 1, 2015, barring third-party employers from claiming minimum wage and overtime exemptions for “companionship” domestic service workers, as well as a statutory overtime exemption for live-in domestic service employees.

In his scathing opinion in Home Care Association of America v. Weil, Judge Richard J. Leon pointed out that the United States Supreme Court has already rejected “a challenge to the validity of the long-standing inclusion of employees paid by third parties within the companionship … Continue Reading

If I Was (Still) The Secretary of Labor

 

As our readers know, for the purposes of certain blog entries, I have unilaterally declared that I am the Secretary of Labor.

Effective immediately:

  1. The “computer professional” exemption applies to anyone with a salary of at least $800 per week whose primary duty requires “highly specialized knowledge of computers and software.”  The exemption now includes employees who provide help desk services, troubleshooting support, or who install hardware or software.
  2. In regard to New York law, building owners who provide free apartments to their janitors can still count the value of the apartment as wages.  However, that value is
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Minimum Wage for Employees of Federal Contractors and Subcontractors to Rise to $10.10 Per Hour

By Evan J. Spelfogel

On Feb. 12, 2014 President Obama signed Executive Order 13,658 to raise the minimum wage for workers on federal service and construction contracts from the current $7.25 to $10.10 per hour.  On June 12, 2014 the United States Department of Labor announced proposed implementation of the Executive Order with respect to all new and renegotiated federal contracts starting Jan. 1, 2015.

This increased minimum wage would apply to the approximately 200,000 employees working for government contractors and subcontractors, and is another salvo in the President’s push for an increase in the federal minimum wage in the … Continue Reading

Take 5 Views You Can Use: Wage and Hour Update

By: Kara M. Maciel

The following is a selection from the Firm’s October Take 5 Views You Can Use which discusses recent developments in wage hour law.

  1. IRS Will Begin Taxing a Restaurant’s Automatic Gratuities as Service Charges

Many restaurants include automatic gratuities on the checks of guests with large parties to ensure that servers get fair tips. This method allows the restaurant to calculate an amount into the total bill, but it takes away a customer’s discretion in choosing whether and/or how much to tip the server. As a result of this removal of a customer’s voluntary act, the … Continue Reading

Texas Health Care Provider’s Miscalculation of Overtime Pay Proves Costly

By: Kara Maciel and Jordan Schwartz

On September 16, 2013, the U.S. Department of Labor (DOL) announced that Harris Health System (“Harris”), a Houston health care provider of emergency, outpatient and inpatient medical services, has agreed to pay more than $4 million in back wages and damages to approximately 4,500 current and former employees for violations of the Fair Labor Standards Act’s overtime and recordkeeping provisions. The DOL made this announcement after its Wage and Hour Division (“WHD”) completed a more than two-year investigation into the company’s payment system prompted by claims that employees were not being fully compensated.

Under … Continue Reading

Wage & Hour FAQ # 3: What to Expect During a DOL “Walk Around” Inspection.

By Elizabeth Bradley

This on-going series of blog posts flows from EBG’s publication of its Wage and Hour Division Investigation Checklist for employers. The Checklist, along with this series, is aimed at guiding employers through DOL Wage and Hour Division Investigations.

We have previously blogged our way through How to Prepare for a Wage and Hour Inspection, What to Do When a Wage and Hour Investigation Team Arrives to Start Auditing, and What Records Must be Provided to the DOL. In this post, we discuss what to expect during the “walk around” inspection portion of the on-site … Continue Reading

Wage & Hour FAQ #3: What Records Must Be Provided to the Department of Labor?

By Michael D. Thompson

From restaurants in New York to childcare providers in Arkansas to the garment industry in Southern California, Department of Labor investigators continue to uncover FLSA violations by conducting unannounced workplace inspections.

Accordingly, in January, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

We previously blogged about how to prepare for an audit, and how to develop a general protocol for the investigation.  … Continue Reading

Wage & Hour FAQ #2: What to Do When a Wage Hour Investigation Team Arrives to Start Auditing

By Douglas Weiner

Last month, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address an increasingly common issue that many employers are facing in light of aggressive government enforcement at the state and federal level from the Department of Labor.

QUESTION: If a DOL team of Wage Hour Investigators arrive unannounced demanding the immediate production of payroll and tax records and access to … Continue Reading

Wage & Hour FAQ #1: How to Prepare for a Wage Hour Inspection

By: Kara M. Maciel

Earlier this month, we released our Wage and Hour Division Investigation Checklist for employers and have received a lot of great feedback with additional questions. Following up on that feedback, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address a common issue that many employers are facing in light of increased government enforcement at the state and federal level from the Department of Labor.

QUESTION: “I am aware that my industry is being targeted by the DOL for audits and several of my competitors … Continue Reading

Labor Secretary Hilda Solis Resigns: How Will the Enforcement Policy of the Wage and Hour Division Change?

By Douglas Weiner and Kara Maciel

“There’s a new sheriff in town.”  With those words in 2009, Secretary Hilda Solis initiated a policy at the Department of Labor that emphasized increased investigations and prosecutions of violators rather than the prior administration’s emphasis on providing compliance assistance.

Her departure – announced yesterday – is unlikely, however, to have much effect on the Department’s current aggressive enforcement policy, as the top enforcement officer of the Department remains Solicitor of Labor M. Patricia Smith.  Solicitor Smith was previously the New York State Commissioner of Labor, where she introduced task force investigations and procedures … Continue Reading

Independent Contractor Misclassification Should Remain Key Area of Concern for Employers

By Frederick Dawkins and Douglas Weiner

Earlier this month, at the ABA Labor and Employment Law Conference, Solicitor of Labor M. Patricia Smith reaffirmed that investigating independent contractors as misclassified remains a top priority of the U.S. Department of Labor’s (“DOL”) enforcement initiatives.  The DOL will continue to work with other federal and state agencies, including the IRS, to share information and jointly investigate claims of worker misclassification.  The joint enforcement effort is certainly driven by, among other things, an interest in collecting unpaid tax revenue, and could result in significant liability to employers.

In addition to potential liability resulting … Continue Reading

Landmark Fifth Circuit Ruling Allows Private FLSA Settlements Without DOL/Court Supervision

By: Greta Ravitsky and Jordan Schwartz

On July 24, 2012, the Fifth Circuit became the first federal appellate court in over thirty years to enforce a private settlement of a wage and hour dispute arising under the Fair Labor Standards Act (“FLSA”) in Martin v. Spring Break ’83 Productions LLC.

For decades, federal courts have consistently held that FLSA wage and hour disputes may not be settled privately without approval from either the Department of Labor (“DOL”) or a federal district court.  This apparently “settled” area of law was based exclusively on the Eleventh Circuit’s decision in Lynn’s Food Continue Reading

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