Wage and Hour Defense Blog

Wage and Hour Defense Blog

Tag Archives: FLSA

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
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

Should Training Time Be Compensated? Fourth Circuit Raises Issues

Our colleague Nathaniel M. Glasser, a Member of the Firm at Epstein Becker Green, has a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers: “Fourth Circuit Decision Highlights Need for Employers to Assess Whether Training Time Should Be Compensated.”

Whether time spent in training is compensable time under the Fair Labor Standards Act (“FLSA”) is an issue that the courts have addressed in a variety of contexts. A new Fourth Circuit decision – Harbourt v. PPE Casino Resorts Maryland, LLC – addressed that issue in the … Continue Reading

FLSA Settlement Terms: Be Sure They’ll Pass Judicial Muster

Brian W. Steinbach, attorney at Epstein Becker Green, has a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers: “Southern District of New York’s Rejection of FLSA Settlement Highlights Need to Settle on Terms That Will Pass Judicial Muster.”

Following is an excerpt:

In rejecting the terms of a collective action settlement in Yun v. Ippudo USA Holdings, No. 14-CV-8706 (S.D.N.Y. March 24, 2016) the United States District Court for the Southern District of New York has confirmed the significance of last year’s Second Circuit Court … Continue Reading

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

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 Third Circuit Adopts Predominant Benefit Test For Meal Periods, Leaving The Ninth Circuit As The Sole Holdout

PostThe Third Circuit Court of Appeals recently joined the chorus of Circuits adopting the pro-employer “predominant benefit test” when weighing the compensability of meal periods under the Fair Labor Standards Act (“FLSA”).  As a result, the Ninth Circuit is the lone Circuit to apply a different standard, opting to follow the U.S. Department of Labor regulations providing that an “employee must be completely relieved from duty” in order for a meal period to be deemed bona fide and thus not compensable.

In Babcock v. Butler County, a putative class action lawsuit, employees at the Butler County prison alleged that … Continue Reading

FLSA Lawsuits Hit Record in 2015 – Employment Law This Week

The top story on Employment Law This Week – Epstein Becker Green’s new video program – is the record high for Fair Labor Standards Act lawsuits in 2015.

The number of federal wage-and-hour suits rose almost 8% this year. There are many reasons for the increase, including more worker-friendly rules and increased publicity around minimum wage and overtime issues. Some point to the difficulties of applying an outdated law to our modern day economy.

Jeff Ruzal, co-editor of this blog, is interviewed. Click below to view the episode.

Continue Reading

Beauty School Unpaid Wage Lawsuit Dismissed – Employment Law This Week

Featured in Employment Law This Week – Epstein Becker Green’s new video program: Beauty school students are not entitled to wages – that was the conclusion reached by federal judges in two different cases where the students challenged the practice of serving salon customers in a clinical setting.

In both cases, the Court held that the students had not proven that the educational benefit they received was outweighed by the unpaid work they did, and they therefore did not qualify for minimum wages and overtime. Unpaid internships are under a lot of scrutiny right now by the Department of Labor … Continue Reading

“Small Doses” of Non-Educational Work Did Not Turn Students into Employees

Beauty and fashion background with open notebook, lipstick and pearls.Following recent precedent by the Second and Eleventh Circuits, the U.S. District Court for the Northern District  of California dismissed the claims of cosmetology and haircutting students who claimed they acted primarily as workers rather than students. 

In Benjamin v. B&H Education, Inc., the plaintiffs sought to represent a putative class of students seeking wages from their schools under the federal Fair Labor Standards Act (“FLSA”) and the wage hour laws of California and Nevada.

The District Court held that the putative class representatives had not established that the educational benefits they received from attending the defendant’s schools were … Continue Reading

Meal Periods with Travel Restrictions May Be Compensable

In Naylor v. Securiguard, Inc., the Fifth Circuit Court of Appeals held that an employer may be required to compensate employees for meal breaks if the employees are required to spend a significant portion of that period traveling to a required break area.

Facts Black white striped sentry box

Securiguard employees guarded several gates to a Naval air station.  During their shifts, the guards received two scheduled thirty-minute meal breaks.  The guards expressed a desire to eat at their posts, but Securiguard prohibited them from doing so (out of concern that the customer would think they were shirking their security duties).

Accordingly, the guards … Continue Reading

Eleventh Circuit Joins Second Circuit in Rejecting DOL Position on Unpaid Interns

On September 11, 2015 the U.S. Court of Appeals for the Eleventh Circuit announced that it joined the Second Circuit in rejecting the U.S. Department of Labor’s (“DOL”) rigid six part test for determining whether unpaid interns were employees and should have been paid minimum wages and overtime for their services. Schumann and Abraham et al v Collier Anesthesia, P.A., Wolford College, LLC, Thomas Cook and Lynda Waterhouse, No. 14-13169, 2015 BL 294459 (11th Cir. Sept. 11, 2015), citing to Glatt v. Fox Searchlight Pictures, Inc., Nos. 13-4478-cv, 13-4481-cv (2d Cir. July 2, 2015)

As did the … Continue Reading

Second Circuit Holds FLSA Cases Cannot Be Settled Without Court Review

Wage and Hour Image 3

On August 7, 2015 the Second Circuit held that parties cannot enter into private settlements of Fair Labor Standards Act (“FLSA” or the “Act”) claims without  the approval of either the district court or the Department of Labor. Cheeks v. Freeport Pancake House, Inc., No. 14-299 (2nd Cir. 2015).

Although other circuits are split on the issue of whether pre-suit agreements to settle FLSA claims are enforceable, this is the first appellate decision to address the issue of whether judicial approval is required to terminate an FLSA lawsuit once it has been filed. See Lynn’s Food Stores, Inc. Continue Reading

Proposed DOL Rule To Make More White Collar Employees Eligible For Overtime Pay

More than a year after its efforts were first announced, the U.S. Department of Labor (“DOL”) has finally announced its proposed new rule pertaining to overtime. And that rule, if implemented, will result in a great many “white collar” employees previously treated as exempt becoming eligible for overtime pay for work performed beyond 40 hours in a workweek – or receiving salary increases in order that their exempt status will continue.

In 2014, President Obama directed the DOL to enhance the “white collar” exemptions to the Fair Labor Standards Act (“FLSA”), which currently exempt from overtime some employees who earn … Continue Reading

Motor Carrier Exemption Applies to Drivers Who can be Expected to Drive Interstate

In Resch v. Krapf’s Coaches, Inc., the Third Circuit Court of Appeals ruled that drivers who “rarely or never crossed state lines” were nevertheless covered by the motor carrier exemption to the FLSA because they worked in safety-affecting jobs and reasonably could have been expected to drive interstate routes.

The FLSA’s motor carrier exemption creates an overtime exemption for employees who are covered by the Secretary of Transportation’s authority to regulate the safe operation of motor vehicles in interstate or foreign commerce.  To fall under the Secretary of Transportation’s authority, the transportation involved in the employee’s duties must cross … Continue Reading

Strategic Use of Arbitration Agreements in FLSA Context Gets Boost

In a case that has strategic implications for employers’ use of arbitration agreements in response to collective claims brought under the Fair Labor Standards Act (“FLSA”), the Eighth Circuit has held that former servers at an Arkansas pizzeria chain lack standing to challenge the pizzeria’s enforcement of an arbitration agreement that bars current employees from joining the FLSA collective action.  Conners v. Gusano’s Chi. Style Pizzeria, No. 14-1829 (8th Cir. Mar. 9, 2015).

In Conners, the plaintiff filed a proposed collective action lawsuit on behalf of herself and other restaurant servers, alleging Gusano’s maintained an illegal tip pool … 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

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

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 … 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

A Simple Proposal to Amend the FLSA to Benefit Everyone – Yes, Everyone

Michael S. KunSeveral years ago, I received a kind note around the holidays from my opposing counsel in a wage-hour class action, thanking me and my firm for being their “partners” in addressing employment issues.

Maybe the word he used wasn’t “partners,” but it was something close to it.

At first, I must admit that I thought he was joking.

Then I realized that this attorney, for whom I have great respect, got it.

He got that employers are not looking to violate employment laws, and that the attorneys who represent them are not trying to help them violate the laws.

He … 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

Offset as Defense to FLSA Suit May Mitigate Unpaid Wage Claims

Our colleague Jeffrey H. Ruzal recently wrote an article entitled “Offset as Defense to FLSA Suit May Mitigate Unpaid Wage Claims,” which appears in the June 2014 issue of Hospitality Law.

Following is an excerpt:

A federal district court in Michigan recently preserved for trial the question of whether a defendant employer may mitigate its back wage liability by offsetting paid break time, which would effectively extinguish plaintiff employees’ claims under the Fair Labor Standards Act.

In Hayes, et al., v. Greektown Casino, LLC, et al., No. 12-1552 (E.D. Mich. 03/31/14), a group of current and former … Continue Reading

Supreme Court Declines to Review CEO’s Personal Liability

By Aaron Olsen

The United States Supreme Court declined to review the Second Circuit’s decision in Irizarry v. Catsimatidis, in which the Court of Appeals affirmed the District Court’s decision holding a CEO personally liable for violations of the Fair Labor Standards Act (FLSA).

By way of background, in July 2013, the United States Court of Appeals for the Second Circuit affirmed the District Court’s decision that the CEO of a supermarket chain could be held personally liable for damages in Irizarry v. Catsimatidis.  The District Court had granted summary judgment in favor of plaintiffs in the class … Continue Reading

Supreme Court To Decide Whether Employees Must Be Paid for Time Spent in Security Screenings

By John Fullerton

The U.S. Supreme Court has agreed to resolve a split among the federal circuits regarding whether time spent in security screenings is compensable under the Fair Labor Standards Act (FLSA), as amended in 1947 by the Portal-to-Portal Act.  The outcome of the case, Integrity Staffing Solutions v. Busk, could have a significant economic impact on employers who require employees to submit to security searches before or after they begin their workday if employers are required to pay for the time employees spend doing so.

The case arises from claims filed by two former employees of Integrity … Continue Reading

.