Wage and Hour Defense Blog

Wage and Hour Defense Blog

Category Archives: White Collar Exemptions (General)

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Adjusting Wage Rates? Be Mindful of State Notice Requirements

Even employers who were opposed to the new overtime regulations are in a quandary after the District Court for the Eastern District of Texas enjoined the Department of Labor from implementing new salary thresholds for the FLSA’s “white collar” exemptions.

Will the injunction become permanent?  Will it be upheld by the Fifth Circuit? 

Will the Department of Labor continue to defend the case when the Trump Administration is in place? 

What does the rationale behind the District Court’s injunction (that the language of the FLSA suggests exempt status should be determined based only on an employee’s duties) mean for the Continue Reading

Compliance with the New DOL Overtime Exemption Rule May Create Unexpected Challenges for Employers

In May of this year, the U.S. Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white-collar exemptions, effective December 1, 2016. With less than two months to go before that new rule takes effect, 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.

The New Salary Thresholds

Effective December 1, 2016, the salary threshold for the executive, administrative, and professional exemption will effectively double, increasing from $23,660 ($455 per week) … Continue Reading

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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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

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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President Obama’s Direction To Revise Overtime Regulations May Ultimately Have Little Real Impact

by Michael Kun

Much has been made of President Obama’s March 13, 2014 presidential memorandum directing the Secretary of Labor to update the Fair Labor Standards Act (“FLSA”) regulations to expand overtime protection to more employees.  At this time, it is only speculation about what the resulting changes will be.  But some of that speculation leads to the conclusion that the changes may ultimately have little impact for most employers and most employees.

One of the articulated goals in the presidential memorandum  is to simplify overtime rules to make them easier for both employers and employees to understand.  Given how … Continue Reading

President Seeks Increase to Salary Threshold for Exempt Status

By Brian Steinbach

True to its word, the Obama administration is continuing its effort to do administratively what it cannot achieve legislatively.

While efforts to increase the minimum wage to $10.10 per hour are mired in the Congress, the administration on March 13 announced that it has instructed the Secretary of Labor to “update” and “simplify” the regulations defining who is considered an exempt employee not entitled to overtime pay. These regulations were most recently overhauled in 2004.

 
“Regulations regarding exemptions … for executive, administrative, and professional employees (often referred to as "white collar" exemptions) have not kept up with our modern economy.”  - Barack Obama
Regulations “for executive, administrative, and professional employees (often referred to as ‘white collar’ exemptions) have not kept up with our modern economy.”               
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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

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

EBG Complimentary Webinar: Don’t Be a Target of the Wage and Hour Class Action Epidemic: Tips for Avoiding Exposure

Wage and hour investigations and class action lawsuits continue to be a potentially serious problem for many employers, resulting in an abundance of new cases filed and many large settlements procured.  In addition, in September 2011, under the guidance of the Obama Administration, the Department of Labor and IRS announced an effort to coordinate with each other to address misclassification of employees as independent contractors, which is resulting in additional investigations, fines, and/or legal liability levied on an employer.

Click here to register for this complimentary webinar.

Thursday, April 12, 2012
9:00 a.m. – 10:00 a.m. CDT – Program and
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Payday for Unpaid Interns?

By Amy Traub and Desiree Busching

Like the fashions in the magazines on which they work and the blockbuster movies for which they assist in production, unpaid interns are becoming one of the newest, hottest trends— the new “it” in class action litigation. As we previously advised, there has been an increased focus on unpaid interns in the legal arena, as evidenced by complaints filed by former unpaid interns in September 2011 against Fox Searchlight Pictures, Inc. and in February 2012 against Hearst Corporation. In those lawsuits, unpaid interns working on the hit movie “Black Swan” and at Harper’s Bazaar magazine, respectively, alleged … Continue Reading

An Overview of Wage Hour Laws and Litigation: Avoiding the Pitfalls of Back Wage Claims

Wage Hour laws and regulations are complex, non-intuitive, and constantly changing.  Mistakes in wage and salary administration have led to class actions resulting in six and seven figure recoveries against the most sophisticated employers – banks and major industrial giants as well as smaller employers without in-house legal and high level Human Resources officials.  Peter M. Panken, Lauri Rasnick and Douglas Weiner in our New York Office have recently authored an article in conjunction with a major national Continuing Legal Education program in Washington entitled: “ An Overview of Wage Hour Laws and Litigation: Avoiding the Pitfalls of Back Wage Continue Reading

The Administrative Exemption from Overtime Pay Continues to Plague Employers: Is There a Cure?

By John F. Fullerton, III, Douglas Weiner, and Meg Thering

The plague of lawsuits for unpaid overtime compensation by employees who claim that they were misclassified by their current or former employer as “exempt” from overtime under the “administrative” exemption of the Fair Labor Standards Act shows no signs of receding.  These lawsuits continue to present challenges to employers, not just in terms of the burdens and costs of defending the cases, but in the uncertainty of the potential financial exposure.

Read the full article online. … Continue Reading

First Circuit Finds Employees Exempt from Overtime Pay

By Peter M. Panken, Michael S. Kun, Douglas Weiner, and Larissa Lalor-Rosado

Misclassification of employees as exempt from overtime compensation has become a cottage industry for plaintiff’s lawyers and for the United States Department of Labor (“DOL”) in the Obama years.  One of the most difficult issues is whether employees meet the so-called administrative exemption to the Wage Hour laws.  In Hines v. State Room, the United States Circuit Court in New England offered some clarity and help to beleaguered employers holding that former banquet sales managers were exempt from overtime requirements under the Fair Labor Standards Act … Continue Reading

U.S. Supreme Court Grants Review of the “Outside Sales” Exemption Found Applicable to Pharmaceutical Sales Representatives

By David Garland and Douglas Weiner

In February 2011, the U.S. Court of Appeals for the Ninth Circuit gave a resounding victory to employers in the pharmaceutical industry by finding that pharmaceutical sales representatives are covered by the outside sales exemption of the Fair Labor Standards Act (“FLSA”). Christopher v. SmithKline Beecham, No. 10-15257 (9th Cir. Feb. 14, 2011). Plaintiffs, and the U.S. Department of Labor (“DOL”) in an amicus brief, had argued the exemption did not apply because sales reps are prohibited from making the final sale. Prescription medicine in the heavily regulated pharmaceutical industry can only be sold to the … Continue Reading

Proposed Legislation May Expand the Scope of the Computer Employee Exemption

By Douglas Weiner and Meg Thering

On October 20, 2011, the Computer Professionals Update Act (“the CPU Act”) – one of the first potential pieces of good news for employers this year – was introduced in the U.S. Senate.  If passed, the CPU act would expand the computer employee exemption of the Fair Labor Standards Act (“FLSA”).  S. 1747

Unlike much of the other legislation affecting employers that has been proposed or passed this year, the CPU Act would make business easier for employers and decrease the risk of employee misclassification lawsuits.  If the proposed legislation passes, employers would … Continue Reading

Is the Job So Easy a Caveman Could Do It?

By Doug Weiner

            In a decision dated January 5, 2010 the D.C. Circuit raised that question in a case involving the administrative exemption in a Fair Labor Standards Act class action.  

Stating the District Court had no occasion to decide whether the job of a GEICO auto damage adjuster is so easy a caveman could do it, (referring to GEICO’s well known ad campaign in a light hearted footnote) the appellate court held that GEICO satisfied its burden of proof that its employees performed exempt administrative duties. The appellate court reversed the district court’s summary judgment for plaintiffs, and in … Continue Reading

Furlough FAQs

Furloughs are a hot topic in today’s economy.  I previously reported on the potential usefulness of furloughs, as well as the risk that reducing an employee’s salary as part of a furlough program could run afoul of the "salary basis" test and jeopardize the employee’s exempt status. 

Recognizing the need for legal guidance on this issue, the U.S. Department of Labor’s Wage and Hour Division recently issued a user-friendly "Frequently Asked Questions" fact sheet on furloughs. (Special thanks to my EBG colleague Elissa Silverman for bringing this to my attention.)

I don’t see any major surprises here.  Nevertheless, employers considering the … Continue Reading

Reducing Hours and Pay of Exempt Employees May Run Afoul of “Salary Basis” Test

The U.S. Department of Labor’s Wage & Hour Division has issued two new opinion letters addressing circumstances under which employers may not reduce the hours of exempt employees without running afoul of the "salary basis" test and risking loss of the employees’ exempt status.  

First, some background.  Employees exempt from the FLSA’s minimum wage and overtime requirements as professional, executive, or administrative employees must be paid a salary of at least $455 per week. Under 29 C.F.R. § 541.602(a),

[a]n employee will be considered to be paid on a "salary basis" . . . if the employee regularly receives each pay period . … Continue Reading

Amid Tough Times, Furloughs Can Save Employers Money and Employees Jobs

The following is a reprint of a client alert authored by EBG attorneys Doug Weiner and Frank Morris, Jr.  It should be of interest to all Florida employers that are considering a reduction in force.

For many employers, these are desperate economic times. Every entity facing diminished revenue must consider cost cuts to survive. As news reports show, reductions in force (RIFs) are being used daily to achieve cost savings, and for some employers they may be the best solution. In some cases, however, the savings are not immediate as a result of statutorily required or voluntary notice periods, as … Continue Reading

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