Wage and Hour Defense Blog

Wage and Hour Defense Blog

Tag Archives: Michael D. Thompson

Missouri Supreme Court Rules That St. Louis’ Minimum Wage Ordinance Is Not Preempted by State Law

Michael D. ThompsonThe Missouri Supreme Court has overturned a lower court’s ruling that St. Louis’ minimum wage ordinance is invalid, finding that the ordinance is not preempted by the state law.

St. Louis City’s Ordinance 70078 (“the Ordinance”) provides for a series of increases to the minimum wage for employees working within the boundaries of St. Louis. The plaintiffs argued that Ordinance 70078 was preempted by the state minimum wage law.  The plaintiffs contended that state law affirmatively authorized employers to pay as little as $7.65 per hour, the state minimum wage rate.

A trial court accepted the plaintiffs’ argument and, in … Continue Reading

Despite Expedited Fifth Circuit Review, the District Court Case Challenging the DOL’s Proposed Overtime Regulations Will Proceed

The District Court for the Eastern District of Texas has denied the U.S. Department of Labor’s application to stay the case in which the district court enjoined the DOL’s new overtime regulations. The DOL had asked the court for a stay while the Fifth Circuit Court of Appeals considered an interlocutory appeal of the injunction.

As wage and hour practitioners know:

  • In May 2016, the U.S. Department of Labor announced that it would implement new regulations increasing the salary threshold for the executive, administrative, and professional overtime exemptions to $47,476 ($913 per week);
  • In September 2016, a group
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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

Application of the FLSA’s Tip-Credit Requirements Remains Hotly Disputed

Over the past year, there has been an increased discussion of Fair Labor Standards Act (“FLSA”) requirements for tipped employees. The courts have focused on a number of issues related to tipped employees, including addressing who can participate in tip pools and whether certain deductions may be made from tips. While the FLSA requires employers to pay a minimum wage of $7.25 per hour in most cases, Section 203(m) of the FLSA provides that employers may take a “tip credit” and pay as little as $2.13 per hour to employees who customarily and regularly receive tips, so long as two … Continue Reading

Controls Imposed by Franchise Agreements May Support Class Action Claims That Franchisees Are Actually Employees

Claims that employees have been misclassified as independent contractors remain a focus for private plaintiffs and government agencies. Contracts that exert control over the business of another company may be a particularly fertile source of misclassification claims by plaintiffs seeking unpaid wages.

Two recent suits arising from franchise agreements with Jani-King, described by the Third Circuit as “the world’s largest commercial cleaning franchisor,” demonstrate the potential liability that can arise under these circumstances.

Wage Hour Division Sues Based on Misclassification of Franchisees

Last week, the Department of Labor filed suit claiming that franchisees of Jani-King of Oklahoma Inc. are actually … 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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A Plaintiff’s ATM & Cell Phone Records May Be Discoverable When There Is a Particularized Showing of Relevance

Michael D. Thompson

Michael D. Thompson

In Gonzalez v. Allied Concrete Industries, Inc., thirteen construction laborers filed suit in the Eastern District of New York.  The plaintiffs claimed they worked in excess of forty hours per week, but were not paid overtime in violation of the Fair Labor Standards Act and the New York Labor Law.

To obtain information regarding the plaintiffs’ activities during hours they claimed to have been working, the defendants sought an order compelling discovery of their ATM and cell phone records.

ATM Receipts

The defendants asserted that records of the plaintiffs’ ATM transactions were likely to lead to … Continue Reading

New York Attorney General Contends Domino’s Is a Joint Employer with Franchisees

New York Attorney General Contends Domino’s is a Joint Employer with Franchisees

After spending the last few years litigating with Domino’s franchisees over wage hour violations, the New York Attorney General has filed suit contending that franchisor Domino’s Pizza Inc. is a joint employer with three franchisees, and therefore is liable for the “systematic underpayment” of franchise employees.

The New York Attorney General also claims that, regardless of whether it’s a joint employer, Domino’s is liable for misrepresentations and nondisclosures that led to the underpayment of employees at the three franchises and violated the New York Franchise Sales Act.

Background

Through settlements in March 2014 and April 2015, twelve Domino’s franchise owners … 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 Wage Hour Division Issues an Interpretation on Joint Employment Relationships

Joint EmploymentAs part of the Wage Hour Division’s continuing focus on defining the employment relationships covered by the FLSA, the Division’s Administrator has issued an Administrators’ Interpretation (as well as a Fact Sheet) addressing joint employment relationships.  At the very least, the Interpretation suggests that the Division will be seeking to use the “joint employer” doctrine to pursue multiple entities – and “deeper pockets” – to address wage issues.

“Larger and More Established” Employers

The Administrator’s Interpretation notes that joint employment often involves one “larger and more established” employer “with a greater ability to implement policy or systemic changes to ensure … Continue Reading

Wages for Off-the-Clock Security Screenings – Employment Law This Week

Employment Law This Week – Epstein Becker Green’s new video program – has a story this week on off-the-clock security screenings, which are under scrutiny around the country. Two federal class actions challenging them have reached different outcomes.

Bath & Body Works recently agreed to settle a suit in California over unpaid overtime and off-the-clock security inspections. But a federal judge in the same state dismissed a similar class action against Apple in which retail workers claimed that they should be compensated for time spent having their bags checked. The judge concluded that the employees were not performing job duties … Continue Reading

Have We Now Seen the Last of “Bag Check” Class Actions?

Bag Security CheckIn recent years, employers across the country have faced a great many class action and collective action lawsuits in which employees have alleged they are entitled to be paid for the time spent in security screenings before they leave their employers’ premises – but after they have already clocked out for the day.  Retailers have been particularly susceptible to these claims as many require employees to undergo “bag checks” before they depart their stores to ensure that employees are not attempting to carry merchandise out in their bags or coats.

In late 2014, in Integrity Staffing Solutions, Inc. v. BuskContinue 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

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

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

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

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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