Wage and Hour Defense Blog

Wage and Hour Defense Blog

Category Archives: Wage and Hour Policies

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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

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

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 … Continue Reading

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

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 … Continue Reading

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

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 Continue Reading

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

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 … Continue Reading

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

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 … 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

NLRB Alleges McDonald’s and Franchisees Are Joint-Employers

By Steven M. Swirsky

On our Management Memo blog, my colleagues Adam Abrahms, Martin Stanberry, and I posted “NLRB Issues 13 Complaints Alleging McDonald’s and Franchisees Are Joint-Employers.”

The National Labor Relations Board continues to focus on the changes in the nature of the employer-employee relationship, and the question of what entity or entities are responsible to a company’s employees for compliance with the range of federal, state, and local employment laws, including wage payment and overtime laws.

The Board’s General Counsel has now taken another big step in his effort to broaden the definition of “employer,” issuing … Continue Reading

Unusual Wage Payment Issue in 2015 for Many Employers: 27 Bi-Weekly Pay Periods, Not 26

There is an unusual wage issue for 2015 that will affect many employers that pay exempt employees on a bi-weekly basis (rather than weekly, semi-monthly or monthly).

It is an issue that may have both financial and legal repercussions.

And it is an issue we suspect many employers had not noticed or considered.

With 52 weeks in a year, there normally are 26 bi-weekly pay periods in a calendar year.  In 2015, however, there will be 27 for many employers.

This oddity occurs every 11 years.  In short, it happens because 26 bi-weekly paychecks only cover 364 days in a … Continue Reading

Supreme Court Holds That Time Spent in Security Screening Is Not Compensable Time

US Supreme CourtIn order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with valuable merchandise being removed in bags, purses or jacket pockets.

Often in the context of high-stakes class actions and collective actions, parties have litigated whether time spent undergoing a security screening must be compensated under the Fair Labor Standards Act (“FLSA”). On December 9, 2014, a unanimous United States Supreme Court answered that questionno.

The Court’s decision in Integrity Staffing Continue Reading

Epstein Becker Green’s Free Wage-Hour App Has Added More Checklists for Employers

Wage Hour Guide ChecklistsAs readers of this blog know, EBG’s free wage-hour app is now available for download on Apple, Android, and Blackberry devices. The app puts federal wage-hour laws and those of many states at users’ fingertips.

Now, the app also includes 7 checklists that employers should find helpful.

Each of the following checklists can be accessed through the “Downloads” icon on the app, then downloaded in seconds:

  • Applying the Administrative Exemption
  • Applying the Computer Employee Exemption
  • Applying the Executive Exemption
  • Applying the Highly Compensated Employee Exemption
  • Applying the Learned Professional Exemption
  • Common FLSA Exemption Pitfalls to Avoid
  • Wage and Hour
Continue Reading

Ninth Circuit Requires Plaintiffs To Plead Facts In Support Of Their Wage-Hour Claims

In a great many wage-hour complaints alleging unpaid overtime or failure to pay minimum wage, plaintiffs will bring suit without identifying any specific instances in which the plaintiffs ever worked unpaid overtime or worked for a period of time without being paid at least the minimum wage.  The absence of such basic facts plagues many class action and collective action complaints, in particular.  The Ninth Circuit’s recent opinion in Landers v Quality Communications rejects the notion that plaintiffs can survive a motion to dismiss by relying on cookie-cutter allegations.  The Ninth Circuit has made it clear that plaintiffs must plead … Continue Reading

Non-specific Testimony Regarding “Typical” Hours Cannot Sustain a Claim for Unpaid Overtime

In Holaway v. Stratasys, Inc., the plaintiff was employed as a field service engineer and classified as exempt from the FLSA’s overtime requirements.  Based on that classification, the plaintiff’s employer did not keep records of his hours worked.

After being discharged, the plaintiff filed lawsuit in the U.S. District Court for the District of Minnesota claiming he was non-exempt, seeking overtime wages and alleging that he worked sixty hours per week every week of his employment.  The District Court concluded that the plaintiff failed to produce sufficient evidence to show he worked more than forty hours per week, and … Continue Reading

Illinois Employers Will Soon Be Able To Legally Pay Their Employees by Payroll Cards, But Beware Of The Fine Print

In August, Illinois Governor Pat Quinn signed into law HB 5622, amending the Illinois Wage Payment and Collection Act (IWPCA), which now recognizes for the first time payment of wages by payroll card. The law goes into effect on January 1, 2015. While the law provides a new option for Illinois employers, they must be careful to comply with the conditions under which payroll cards may be used.

Under the current Illinois law, employers are required to pay employees via check or direct deposit. The current law is silent as to whether payroll cards, which operate like debit cards, can … 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 no
Continue Reading

California Employers Must Revisit Exempt Status of Commissioned Employees In Light of Supreme Court Ruling

By:  Amy Messigian

In a major blow to California employers who utilize a monthly commission scheme but pay biweekly or semimonthly salary to their commission sales employees, the California Supreme Court ruled earlier this week in Peabody v. Time Warner Cable, Inc. that a commission payment may be applied only to the pay period in which it is paid for the purposes of determining whether an employee is exempt from overtime.  Employers may not divide the commission payment across multiple pay periods in order to satisfy the minimum compensation threshold for meeting the exemption in any earlier pay period.  California … Continue Reading

California Supreme Court Decision Guarantees Only One Thing – More Wage-Hour Class Actions with More Expert Witnesses

By Michael Kun

Much has already been written about last week’s California Supreme Court decision in Duran v. U.S. Bank Nat’l Ass’n, a greatly anticipated ruling that will have a substantial impact upon wage-hour class actions in California for years to come.  Much more will be written about the decision as attorneys digest it, as parties rely on it in litigation, and as the courts attempt to apply it.

In a lengthy and unanimous opinion, the California Supreme Court affirmed the Court of Appeal’s decision to reverse a $15 million trial award in favor of a class of employees … Continue Reading

Hot Topic for Summer: How to Handle Unpaid Internships

By: Michael S. Kun

My colleagues have a new post on the Retail Labor and Employment Law blog that will help many of our readers at this time of year: “Summer’s Coming! How to Handle Unpaid Internships,” by Jeffrey M. Landes, Susan Gross Sholinsky, and Nancy L. Gunzenhauser.

Following is an excerpt:

A hot topic for every summer – but particularly this summer – is the status of unpaid interns. You are probably aware that several wage and hour lawsuits have been brought regarding the employment status of unpaid interns, particularly in the entertainment and … Continue Reading

Webinar, May 22: Creating and Maintaining a Lawful Internship Program

In a complimentary webinar on May 22 (1:00 p.m. ET), our colleagues Jeffrey M. Landes and Susan Gross Sholinsky will present a webinar on how to strategically structure internship programs to comply with applicable wage and hour guidelines.

Join us for a discussion on how to minimize both your organization’s liability and the risk of wage and hour lawsuits. In particular, below are just a few of the many questions we will address during the webinar:

  • What are the best practices for recruiting and hiring seasonal interns, and what critical language should you include (or avoid) in offer letters, employment
Continue Reading

Improper Expense Reimbursements may be a “Shadow Wage”

By Michael D. Thompson

A recent decision by the First Circuit Court of Appeals examined the question of whether expense reimbursements were actually "shadow wages" that should have been included when calculating an employee’s overtime rate.

In Newman v. Advanced Technology Innovation Corp., the plaintiffs were non-exempt engineers who worked remotely. Each plaintiff signed an agreement with Advanced Tech under which they were to receive (i) an hourly wage, (ii) overtime at a rate more than one-and-a-half times the hourly wage, and (iii) a "per diem expense reimbursement" in light of their remote work assignments.

The plaintiffs claimed that the per diem was “tied to … 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

Epstein Becker Green Releases New Version of Wage & Hour Guide App

Wage & Hour Guide App for EmployersWe are pleased to announce the release of a new version of our Wage & Hour Guide app that puts federal and state wage-hour laws at employers’ fingertips. To download the app, click here.

The new version features an updated main screen design; added support for iOS 6, iPhone 5, iPad Mini, and fourth generation iPad; improved search capabilities; enhanced attorney profiles; expanded email functionality for sharing guide content with others; and easier access to additional wage and hour information on EBG’s website, including the Wage and Hour Division Investigation Checklist  and other resources.    The new version continues to … 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

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