Wage and Hour Defense Blog

The Wage and Hour Division of the U.S. Department of Labor (“WHD”) issued six opinion letters in January 2021.[1]  They address a number of important issues under the Fair Labor and Standards Act (“FLSA”).  To ensure wage and hour compliance, we recommend reviewing these letters closely and consulting counsel with any questions as to how they may apply to a specific business situation.

FLSA2021-1

In FLSA2021-1, the WHD addressed whether account managers employed by a life science products manufacturer were properly classified as exempt from the FLSA minimum wage and ...

To close out 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) recently issued two new opinion letters addressing overtime payments for caregivers and travel time for partial-day teleworkers under the Fair Labor Standards Act (“FLSA”).  We recommend a close review of these opinion letters as they offer a helpful overview of key FLSA principles and may provide answers to questions shared by numerous employers.

FLSA2020-19

In Opinion Letter FLSA2020-19, the WHD addressed whether an employee who voluntarily teleworks for part of the day and works at the ...

At the end of August, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued four new opinion letters addressing various issues arising under the Fair Labor Standards Act (“FLSA”).  The topics covered include the retail or service establishment, highly compensated employee, and professional exemptions; reimbursing non-exempt employees for required use of a personal vehicle; and the fluctuating workweek method of calculating overtime pay.  These opinion letters offer a helpful overview of key FLSA principles and may answer fact-specific questions ...

While the COVID-19 pandemic remains a challenge to employers nationwide, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) continues to field non-COVID-related wage and hour questions.  On June 25, 2020, the WHD issued five new opinion letters addressing the outside sales, administrative, and retail or service establishment exemptions under the Fair Labor Standards Act (“FLSA”), as well as the relationship between third-party payments to workers and the FLSA’s minimum wage requirement.  Employers should take note of these useful explanations of key ...

As states across the country start to reopen their economies after COVID-19 shutdowns, many businesses are likewise preparing to have employees return to work.

However, before reopening, businesses will need to comply with numerous state and local protocols designed to ensure the health and safety of employees and consumers, including social distancing, maximum occupancy and one-way flow.

Even if not required, many employers are instituting employee temperature checks upon arrival at the workplace. While the U.S. Equal Employment Opportunity Commission recently endorsed ...

With summer rapidly approaching and COVID-19 shelter-in-place orders still in effect, many companies face an important and difficult decision of canceling this year’s summer programs, delaying start dates or conducting programs virtually. This ultimately will be a business decision with no one-size-fits-all answer.

A good first step is to assess whether the influx of new summer workers will help or hinder current operations. Are temporary summer interns a boost to productivity or a drag on experienced employees who may be called upon to train and mentor them? Will the employer expect to offer employment to these summer recruits following the internship?

In addition, given the seismic nature of COVID-19 that has indiscriminately shaken businesses in most industries, can an employer’s business afford to bring on temporary summer workers and, if so, does the business have the literal and figurative bandwidth to support these workers, especially if they will be teleworking for at least part of the summer?

Below are five compliance and management issues employers should consider for their upcoming summer programs.

Onboarding

Typically employers have a pre-employment screening process in place for summer interns/analysts/associates, which may include, among other things, screening for illegal drugs and controlled substances; investigating and verifying criminal history; and verifying education and prior employment history. Many steps in the screening process take place in person. However, even where new hires may be asked to commence employment remotely, including an incoming summer class, compliance is still possible.

Since the start of COVID-19 pandemic, the federal government has relaxed many of the regulatory requirements for onboarding new hires. On March 20, the U.S. Department of Homeland Security announced that for the next 60 days or for the duration of the National Emergency (whichever is sooner), employers with staff teleworking due to COVID-19 can obtain and inspect new employees’ identity and employment authorization documents remotely rather in the employee’s physical presence, as long as they provide written documentation of their remote onboarding and teleworking policy for each employee.

Generally, the Fair Labor Standards Act (“FLSA”) requires employers to compensate their non-exempt employees for all time that they are required or allowed to perform work, regardless of where and when the work is done.  However, an exception exists for small amounts of time that are otherwise compensable work time but challenging to record, otherwise known as the de minimis doctrine.  Of course, the million-dollar question is how much time is considered de minimis.  Unfortunately, there is no bright-line rule and the answer may differ under federal law and California law, or ...

Due to the COVID-19 pandemic and the resulting shelter-in-place and related orders, many businesses across America have already shuttered, while others are on the brink of collapse.  In these challenging times, businesses are understandably considering any and all potential solutions to keep their employees on payroll while remaining solvent.  Some employers have even been considering converting their W-2 employees to 1099 independent contractors.  The surface appeal is simple, which is that employers can avoid employment taxes, benefit costs, and overtime compensation ...

In addition to its recent, exigent responsibility of preparing guidance on the protections and relief offered by the Families First Coronavirus Response Act, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) has issued three new opinion letters addressing the excludability of certain types of payments from the regular rate of pay under the Fair Labor Standards Act (“FLSA”).  While these opinion letters do not tread new ground, they are useful reminders of important regular rate principles and merit careful review.

As background, under the FLSA, an employer ...

As the number of U.S. states reporting cases of COVID-19 coronavirus increases, many employers are imposing mandatory work from home (“WFH”) policies to mitigate risk of contamination and ensure business continuity.  Some employers are requiring employees who have travelled to or received visitors from mainland China (or other areas with high infection rates) and those with fever or other flu-like symptoms to remain at home for 14 days, while others are instructing half or more, up to their entire workforce, to work remotely until further notice.  Whatever the form, employers ...

In its first installment of opinions letters in 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) addressed two issues under the Fair Labor Standards Act (“FLSA”): (i) the salary basis requirements in the context of per-project compensation arrangements and (ii) calculation of overtime pay for employees who receive nondiscretionary lump-sum bonus payments earned over time and not tied to a specific period.  (A third letter, FMLA2020-1-A, considered FMLA requirements vis-à-vis public employees.)  While neither of these FLSA opinion letters ...

With the start of the New Year, new state and local minimum wage increases have gone into effect for non-exempt employees across the country.

The chart below summarizes the new minimum wage rates that went into effect on January 1, 2020, unless otherwise indicated.  (More will take effect July 1, 2020.)

Over the past six months, Congress has made two notable attempts to amend the Fair Labor Standards Act of 1938 (the “FLSA”).  In July, U.S. Representative Elise Stefanik (R-NY) introduced The Modern Worker Empowerment Act (“MWEA”) with the stated aim of harmonizing the FLSA’s definition of employee with the common law.  And last month, Senator Brian Schatz (D-HI) introduced the Treating Workers with Dignity Act of 2019 (“TWDA”), which would amend the FLSA to require certain compensated breaks.

Modern Worker Empowerment Act

Subject to certain exclusions, the FLSA ...

On December 6, 2019, the Second Circuit Court of Appeals held that judicial approval is not required for offers of judgment to settle Fair Labor and Standards Act (“FLSA”) claims made pursuant to Federal Rule of Civil Procedure 68(a). This development may provide employers with a valuable strategic tool for use in FLSA cases, at least in the Second Circuit, allowing the parties to include terms in offers of judgment that the courts might disallow were court approval required.

Generally speaking, Rule 68 offers of judgment are a pre-trial mechanism whereby defendants can cap their ...

Upsetting what many considered settled precedent, a California Court of Appeal has held that a mandatory service charge may qualify as a “gratuity” under California Labor Code Section 351 that must be distributed to the non-managerial employee(s) who provided the service.

In O’Grady v. Merchant Exchange Productions, Inc., No. A148513, plaintiff, a banquet server and bartender, filed a putative class action against their employer for its failure to distribute the entirety of the proceeds of an automatic 21% fee added to every food and beverage banquet bill to the ...

On August 26, 2019, we wrote of the plan by the U.S. Department of Labor’s Wage and Hour Division (“WHD”) to update the Fair Labor Standard Act (“FLSA”) regulations on calculating overtime pay for salaried non-exempt workers to allow employers to include additional forms of compensation in the so-called “fluctuating workweek” calculations.  Under a fluctuating workweek calculation, an employer divides all of an employee’s relevant compensation for a given workweek by the total number of hours the employee worked in the week to derive the regular rate for that ...

The U.S. Department of Labor’s Wage and Hour Division (“WHD”) continues to issue guidance at a rapid pace, releasing a new opinion letter regarding the retail or service establishment overtime exemption under the Fair Labor Standards Act (“FLSA”).  The letter brings clarity to a recurring issue affecting retailers.

FLSA Section 7(i) Exemption

As background, FLSA Section 7(i) exempts a retail or service establishment employee from the FLSA’s overtime pay requirements if (i) the employee’s regular rate of pay exceeds 1.5 times the federal minimum wage for any week ...

As part of its spring 2019 regulatory agenda, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) will consider a proposed revision to the Fair Labor Standard Act’s (“FLSA”) regulations on calculating overtime pay for workers whose hours fluctuate from week to week.

Generally, non-exempt employees covered by the FLSA must receive overtime pay for hours worked in excess of 40 in a workweek at a rate at least time and one-half their regular rates of pay – the standard calculation of overtime.  However, the FLSA provides an alternative method of calculating ...

The U.S. Department of Labor’s Wage and Hour Division (“WHD”) shows no signs of fatigue as it releases two new opinion letters on the Fair Labor Standards Act (“FLSA”) within the first week of August.  These opinion letters address the FLSA’s partial overtime exemption on a “work period basis” and the status of public agency volunteers.  As we have previously advised, employers should read the WHD’s opinion letters carefully and consult with experienced counsel with any questions about their practices vis-à-vis WHD interpretive guidance.

FLSA Section 7(k)

As ...

The U.S. Department of Labor’s Wage and Hour Division (“WHD”) has issued an opinion letter addressing the compensability of a long-haul truck driver time in a truck’s sleeper berth during multi-day trips.  While this question is highly fact-specific, the WHD’s response offers a useful refresher on the widely applicable Fair Labor Standards Act (“FLSA”) concepts of compensability of waiting, sleeping, and traveling time.

In Opinion Letter FLSA2019-10, issued on July 23, 2019, the employer operates a fleet of trucks, licensed by the Department of Transportation to ...

After a brief, two-month hiatus, the Wage and Hour Division of the U.S. Department of Labor (“WHD”) has issued another round of opinion letters answering various questions submitted by the public.  Specifically, these opinion letters address the calculation of overtime pay for nondiscretionary bonuses, the application of the highly compensated employee exemption to paralegals, and rounding hours worked under the Service Contract Act (“SCA”).  This guidance marks the first issued by the new Wage and Hour Administrator Cheryl Stanton, who has been in the seat since April.

On March 14, 2019, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) released two opinion letters concerning the Fair Labor Standards Act (“FLSA”). One letter addresses the interplay between New York State’s overtime exemption for residential janitors (colloquially referred to as apartment “supers”) and the FLSA, which does not exempt such employees, and the other addresses whether time spent participating in an employer’s optional volunteer program constitutes “hours worked” requiring compensation under the FLSA.

While these opinion ...

In putative class action lawsuits, it is not uncommon for counsel for the employer to interview putative class members about the claims in the lawsuit. A new decision from the United States District Court for the Eastern District of Pennsylvania has concluded that such communications could be improper, at least in that state.

In Weller v. Dollar General Corp., No. 17-2292 (E.D. Pa.), a case in which the plaintiff brought both putative class action claims under Fed. R. Civ. P. 23 and a proposed collective action on the Fair Labor Standards Act (“FLSA”), the employer interviewed ...

On January 15, 2019, the U.S. Supreme Court issued a unanimous decision in New Prime Inc. v. Oliveira, a case concerning the enforceability of arbitration agreements.

Petitioner New Prime Inc. (“New Prime”) is an interstate trucking company that engaged Dominic Oliveira to perform work as a driver pursuant to an “Independent Contractor Operating Agreement,” containing both an arbitration clause and a delegation clause giving the arbitrator authority to decide threshold questions of arbitrability.

Oliveira filed a putative class action against New Prime in federal ...

True to its promise last year, the U.S. Department of Labor’s Wage and Hour Division (the “WHD”) continues to issue a steady stream of opinion letters designed to offer practical guidance to employers on specific wage and hour issues solicited by employers. This past week, the WHD issued two new opinion letters concerning the Fair Labor and Standards Act (“FLSA”), where one addresses an employer’s hourly pay methodology vis-à-vis the FLSA’s minimum wage requirement, and the other the ministerial exception to the FLSA. While not universally applicable, employers ...

On December 4, 2018, New York City’s Taxi and Limousine Commission (“TLC”) voted to require ride-hailing companies operating in New York City to compensate its drivers who are treated as independent contractors, and not employees, on a per-minute and –mile payment formula, which will result in a $17.22 per hour wage floor.

This new rule is scheduled to take effect on December 31, 2018.

This new minimum wage for independent contractor drivers who operate vehicles on behalf of ride-hailing companies – including Uber, Lyft, Via, and Juno – will surpass the new $15 minimum ...

Last Friday, the Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2018-4 to help guide the DOL Wage and Hour Division field staff as to the correct classification of home care, nurse, or caregiver registries under the Fair Labor Standards Act (“FLSA”). This is the most recent piece of guidance on a topic first addressed by the DOL in a 1975 Opinion Letter. The bulletin is noteworthy in two respects. First, it confirms that the DOL continues to view a registry that simply refers caregivers to clients but controls no terms or conditions of the caregiver’s ...

On April 12, 2018, the Wage and Hour Division of the U.S. Department of Labor (“DOL”) issued the first Opinion Letters since the Bush administration, as well as a new Fact Sheet.  The Obama administration formally abandoned Opinion Letters in 2010, but Secretary of Labor Alexander Acosta has restored the practice of issuing these guidance documents.  Opinion Letters, as Secretary Acosta states in the DOL’s April 12 press release, are meant to explain “how an agency will apply the law to a particular set of facts,” with the goal of increasing employer compliance with the Fair ...