Total Articles: 47
DOL Targets Home Health Care Provider for Payment of Flat Daily Rates
In one of many recent Department of Labor (DOL) enforcement actions against the home health care industry, a federal court entered a consent decree ordering Aspen Nursing Services Inc. to pay $210,000 in back pay and liquidated damages to 22 employees. Aspen provides home health aides for individuals with disabilities in Kentucky and Ohio.
Justices Deny Review of Applebee's Tip Credit Ruling
In May, my partner Staci reported on a ruling against Applebee's by the 8th Circuit Court of Appeals, holding that tipped employees who spent more than 20 percent of their working time on nontipped activities like cleaning restrooms were entitled to the federal minimum wage of $7.25 per hour. Applebee's asked the U.S. Supreme Court to review the ruling, arguing that the Eighth Circuit incorrectly deferred to the U.S. Department of Labor's "informal interpretation" of its FLSA regulations in its 1988 Field Operations Handbook, and that as a result it applied an "utterly unworkable standard that has no basis in the text or purpose of the FLSA and that will impose crushing administrative and financial burdens on restaurants and other employers of tipped employees." Last week, the Supreme Court turned down Applebee's petition, leaving the Court of Appeals' ruling intact.
Supreme Court Refuses "Tip Credit" Appeal
In a move that could have a significant impact on employers with tipped employees, the Supreme Court rejected an appeal over "tip credit" practices.
Following the 2011 Appropriations Bill, Dealerships Face An Uncertain Future With Regard to Exempt Employees
Executive Summary: On December 23, 2011, President Obama signed the nearly $1 trillion omnibus spending act (H.R. 2055) into law, which provides $14.5 billion to the United States Department of Labor ("DOL") for fiscal year 2012. In addition to providing funding, the law places certain restrictions on actions by the DOL. Specifically, the act includes a rider in Section 113 which bars the use of funds to enforce Fair Labor Standards Act ("FLSA") regulation 29 C.F.R. § 779.372(c)(4). Section 779.372(c)(4) originally provided that a service manager, service writer, service advisor, or service salesman at an automobile dealership, who is not primarily engaged in the work of a salesman, partsman, or mechanic is not exempt under section 13(b)(10)(A). Section 779.372(c)(4) was deleted from the regulations in April 2011. Because § 779.372(c)(4) is no longer part of the final regulations, the rider appears unenforceable.
Clock Now Ticking On "Companionship", Live-In Domestic Restrictions December 31, 2011 02:52
The U.S. Labor Department has officially published the proposed provisions that would drastically limit the federal Fair Labor Standards Act's exemptions for "companionship" workers and live-in domestic employees. As we have reported, adopting these proposals in their current form will mean that the proportion of such companions and domestic-service workers who are exempt from that law's minimum-wage and/or overtime requirements will be far smaller than it is today.
U.S. Dept of Labor to Cut Overtime Exemption for Home Caregiver Agencies
The Fair Labor Standards Act exempts from minimum wage and overtime law:
New Protections Proposed for Domestic Caregivers Under FLSA
The Department of Labor’s (DOL) Wage and Hour Division recently announced proposed rules to expand minimum wage and overtime protections for domestic caregivers under the Fair Labor Standards Act (FLSA). The new rules propose to limit the types of work exempt from FLSA wage requirements, increase record keeping requirements for certain domestic workers, and clarify that companionship exemptions are limited to individuals employed by the family or household using the services.
"Service Writers" And Similar Workers: Good News/Bad News
Various news items published last Friday afternoon intimated that a part of the 2012 federal omnibus appropriations law now exempts automobile-dealership service writers and similar employees* from the federal Fair Labor Standards Act's overtime requirements. Those reports appear to have been mistaken so far as we can tell, but the spending provision does contain at least some good news in this respect.
U.S. Department of Labor Does an About-Face on Overtime and Minimum Pay Rates for Home Care Workers Employed By Third Party Agencies
Executive Summary: On Thursday, December 15, 2011, the U.S. Department of Labor ("DOL"), announced plans to revise the companionship exemption under the federal Fair Labor Standards Act ("FLSA"). The revisions would significantly change the way many home care agencies currently do business, exposing them to liability for overtime at one and one-half the worker's "regular rate of pay," and claims for failure to pay wages for all hours worked (including intra-day travel time, duty free meal time when work is performed, etc.) at the federal minimum wage rate.
Regulation Proposed to Limit FLSA's "Companionship" Exemption
As we suspected, efforts to eviscerate the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption have now formally moved to the regulatory arena. The U.S. Labor Department has proposed a regulation that would limit the exemption to a far-narrower segment of those employees who work as in-home caregivers. This move no doubt reflects a political judgment that legislative measures to amend the FLSA itself (about which we wrote in June) would not emerge from Congress.
DOL Limits Exemption for Home Care Workers
On December 15, 2011, the United States Department of Labor announced a proposed rule that would narrowly interpret the current exemption from minimum wage and overtime requirements for certain home care workers. Specifically, the proposed rule will clarify that the minimum wage and overtime exemption only applies to employees providing "companionship services." "Companionship services" are, in turn, defined as "fellowship and protection for a person who, because of advanced age or physical or mental infirmity, is unable to care for themselves." Under the current exemption, employees can engage in unlimited personal care services such as meal preparation, bed making, washing of clothes, and other similar services. Under the proposed regulation, an employee may not spend more than 20% of their time providing "incidental services", including dressing, grooming, toileting, driving to appointments, feeding, laundry, and bathing. This will cause most home health employees to fall outside of the exemption, causing their employers to be required to pay overtime and minimum wage.
DOL Proposes to Extend Minimum Wage, Overtime Requirements to In-Home Care Workers
On December 15, 2011, the Department of Labor’s Wage and Hour Division (WHD) issued its much-anticipated proposed rule (pdf) that could make more than a million domestic caregivers eligible to receive minimum wage and overtime pay under the Fair Labor Standards Act (FLSA).
The Future of Tip Credit – And The Businesses That Depend Upon It
The U.S. Supreme Court is being asked to decide what amounts to the future of tip credit for many businesses – particularly in the hospitality industry. In short, the issue is whether an employer can continue to pay tip credit employees on a tip credit basis if they spend more than 20% of their work time on duties that did not produce tips.
Is Your "Tip Credit" A Time Bomb?
Section 3(m) of the federal Fair Labor Standards Act allows a portion of the employee's FLSA-required minimum wages to consist of tips. Unfortunately, it is all-too-common for employers to make expensive mistakes where tips are concerned.
"Fissured Industry" Homebuilders Feel FLSA Heat
News that some of the nation's preeminent homebuilders have received information demands from the U.S. Labor Department under the federal Fair Labor Standards Act has drawn a variety of unhappy reactions. But whatever one thinks about the wisdom, appropriateness, timing, or manner of DOL's move, the fact is that the administration has had the construction industry in its FLSA sights for some time now.
Wage and Hour Division Issues New Regulations Affecting Tip Credits
New regulations issued by the Wage and Hour Division of the Department of Labor (DOL) interpreting the Fair Labor Standards Act (FLSA) recently went into effect; but the National Restaurant Association (NRA) and other industry groups are challenging the regulations.
Application of the Tip Credit and Potential Retaliation Implications
The Fair Labor Standards Act (FLSA) generally requires employers to pay a specified minimum wage to its employees and overtime for all hours worked over 40 in a work week. For restaurants and other hospitality-oriented businesses, the FLSA permits employers to pay a minimum wage of $2.13 per hour to employees engaged in a tipped occupation as long as the employees’ tips make up the difference between the $2.13 hourly wage and the current minimum wage, which is $7.25 per hour.
Restaurant Association Sues to Block Tip Credit Rules
On April 5, 2011, the U.S. Department of Labor published new final regulations that among other things require employers to give new detailed notices to tipped employees in order to credit tips toward the minimum wage. The new regulations took effect on June 5, 2011. Yesterday, June 16, 2011, the National Restaurant Association, the Council of State Restaurant Associations and the National Federation of Independent Businesses filed a lawsuit against the DOLseeking to block enforcement of the new rules. National Restaurant Association v Solis (PDF).
DOL's New Tip-Credit Interpretations
The federal Fair Labor Standards Act's "tip credit" was among the many topics addressed by the U.S. Labor Department's recent final rule. DOL's tip-related pronouncements are a mixed-bag for employers.
Reminder - DOL's "Tip Credit" Notice Requirement Took Effect Yesterday.
Employers who use the FLSA's "tip credit" provision should be aware that the Department of Labor's new notice requirements for the use of the tip credit take effect today, May 5, 2011.
USDOL Changes Tip-Credit Interpretations
The federal Fair Labor Standards Act's "tip credit" was among the many topics addressed by the U.S. Labor Department's recent Final Rule. DOL's tip-related pronouncements are a mixed-bag for employers.
Department of Labor Revises Tip Credit Rule, Articulates New Policy View on Fluctuating Workweek
The U.S. Department of Labor has issued a final rule on the use of the tip credit under Section 3(m) of the Fair Labor Standards Act. In addition to updating the amount allowed, the final rule will require employers to provide employees with additional information before taking a tip credit. The new rule will become effective on May 5, 2011.
Department of Labor Clarifies "Tip Credit" Regulations
On April 5, 2011 the Department of Labor issued final regulations impacting an employer's use of a "tip credit" for tipped employees.
What To Do About "Service Writers" And Similar Employees?
The federal Fair Labor Standards Act's Section 13(b)(10)(A) provides an overtime exemption for "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers."
Department of Labor Reverses Position on Exemption of Service Advisors Working for Automobile Dealerships
In a further attempt to add to the heavy regulatory burden already placed on car dealerships, the Wage and Hour Division of the U.S. Department of Labor announced on April 5, 2011, that a proposed clarification for overtime requirements for service advisors would not be adopted. Therefore, the Department of Labor will not regard service advisors as exempt from overtime.
Bill Would Compel Higher Cash Wages For Tipped Employees
A bill introduced recently by U.S. Representative Donna Edwards (D. Md.) would amend the federal Fair Labor Standards Act to require many employers to boost their direct cash payments to tipped employees by 76% within 90 days after passage, even though these employees are already receiving (by law) at least the FLSA minimum wage in combined tips and cash wages. A year later, the cash-wage requirement would be $5.00 (135% higher than the current level). In two years, the figure would increase to $5.50 (158% higher than today) or 70% of the FLSA minimum wage, whichever is more. H.R. 631 would be known as the WAGES Act ("Working for Adequate Gains for Employment in Services").
Auto Dealers: "It's Always Something!"
Just when you think you have everything under control, some new problem or challenge comes along. It is that way with many things and the law is no exception. The federal-wage hour law, called the Fair Labor Standards Act (FLSA), was passed in 1938, so you would think that in the last 70+ years, the courts and the Department of Labor have resolved every issue once and for all. Unfortunately, that is not the case.
Overtime for Home Care Workers: On the Horizon?
Home care workers are currently exempt from overtime under federal law. That exemption faces significant new challenges from proposed legislation and administrative rulemaking which, if successful, will require third party employers and home health care agencies to pay overtime to home care workers.
Dealership Update: Extra Pay For A Courtesy Inspection?
A dealership recently received a demand letter from an attorney for a former technician. In the letter, the attorney threatened to sue the dealership because it had failed to pay the technician extra money to conduct "courtesy inspections." Even though the technician had earned well in excess of the minimum wage and was exempt from overtime, the attorney insisted that the dealership was legally obligated to pay the technician for the extra work performed.
FLSA's "Companionship" Exemption In Peril.
If a recently proposed amendment becomes law, the federal Fair Labor Standards Act's Section 13(a)(15) exemption for certain "companionship" employees will essentially be eliminated.
Dealerships Working 24/7: Issues to Keep In Mind.
Many Toyota dealerships have announced that they will remain open 24 hours a day in order to fix the accelerator problem that has prompted the recent recall of several models. This unprecedented step is likely to raise a number of employment law issues for the affected dealerships, and may serve as a model for any other companies that may face similar issues in the future.
Are Your Tipped Employees Doing Tipped Work?
The wage and hour laws are outdated and compliance is exceedingly difficult in light of the way in which most hotels and restaurants are required to operate. But, you already knew these facts. Recent tip credit and tip pooling cases continue to highlight the problems and we will be addressing tipped employee issues in this and future editions of the Hospitality eAuthority.
Overtime Issue for Home Care Workers is Alive as Senators Press to Have US DOL Regulations Altered or Reinterpreted.
What Happened Two Years Ago... In Long Island Care at Home, Ltd. v. Coke, 549 U.S. 1105 (June 11, 2007), the Supreme Court deferred to the U.S. Department of Labor's interpretation of its own regulations and unanimously held that home care workers employed by third party employers or agencies were exempt from overtime under the "companionship exemption" to the Fair Labor Standards Act. Coupled with the overtime exemption available to non-profit agencies in New York (where Medicaid funded home care can be 24/7) who had timely filed a Statement of Non-Profitmaking Institutions with the NYS Department of Labor, this fully exempted those agencies, in particular, from overtime pay to home care workers.
Retail Industry Update: How Did They Manage? Part Two.
In the last issue of Retail Industry Update (March, 2009) we looked at the facts of Morgan v. Family Dollar Stores, an overtime lawsuit, which resulted in a jury verdict of over $35 million. The case was affirmed on appeal, and turned principally on the issue of how much actual control store managers had over the day-to-day operations in their outlets.
Dealership Update: Out of the Frying Pan, Into the Fire.
As the economy shows no immediate sign of recovery, dealers continue to look for ways to reduce their expenses. One area that they usually focus on is labor costs. Most dealers have already trimmed their workforces by not replacing employees who have left, or by out-and-out layoffs or reductions-in-force. Some dealers have also revised or restructured employee pay plans to reflect the current economy.
Are You Vulnerable to a Tip-Pooling Claim?
Employers increasingly face litigation under the wage and hour provisions of federal and state law, which include minimum wage, overtime pay, and equal pay requirements. A recent California decision may give plaintiffs’ lawyers yet another wage and hour issue to seize upon: tip-pooling.
Hospitality Labor Letter: Sailing Away With the Tips.
Cutting into potential profits, New York's highest court rules that restaurants may not pocket mandatory service charges that are represented to customers as gratuities for the wait staff.
Implications in Applebee's Case Still Worrying the [Hospitality] Industry.
In our October/November issue, we reported on a troubling interim decision by a federal district court judge in Missouri. The case involved pay for bartender Gerald Fast, and focused on two issues: whether the restaurant's automated timekeeping resulted in off-the-clock work (referred to as "Appletime"); and whether the restaurant unlawfully applied the federal tip credit to non-tipped work the bartender was required to do, in addition to his other duties.
Pay for “Tipped Employees” Under the Florida Minimum Wage Act.
Most Florida employers are aware that the Florida Minimum Wage Act imposes a higher minimum wage than is required by the federal Fair Labor Standards Act. As discussed in our January 3, 2008 Legal Alert, the state minimum wage increased on January 1 to $6.79 per hour (up from $6.67 per hour in 2007). This rate is higher than the current federal minimum wage rate of $5.85 per hour.
Supreme Court Upholds Companionship Exemption.
Third party home care providers breathed a collective sigh of relief yesterday when the United States Supreme Court reversed a ruling out of the Second Circuit Court of Appeals which held that the companionship exemption from the Fair Labor Standard Act's (FLSA) overtime requirements was not valid and binding as it related to third party providers of temporary home care services.
Is $2.13 An Hour Enough? Higher State Minimum Wage Rates Impact Tip Credit.
With employers making adjustments in their payroll systems, some of those in the hospitality industry are wondering how a state’s higher minimum wage rate impacts the tip credit.
Is $2.13 An Hour Enough? Higher State Minimum Wage Rates Impact Tip Credit.
Many employers are nervously awaiting the possibility of a new federal minimum wage under the FLSA, while others must deal with increases already passed at the state level.
Both Workers and Employers Should Know Tip-Pooling Laws.
Tip pooling is a way of life in certain establishments. Tip-oriented businesses from restaurants to golf courses can, under the law, require tipped employees to share that money with other employees.
DOL Clarifies Exempt Status Of Paralegals (pdf).
The U.S. Department of Labor (DOL) recently issued an opinion letter that examines
whether paralegals and legal assistants are exempt from overtime requirements
under the Fair Labor Standards Act (FLSA). Responding to a question posed
by a law firm with a staff of six paralegals who perform a variety of tasks, the agency
found that “paralegals and legal assistants generally do not qualify for the professional
exemption because an advanced specialized academic degree is not a standard
prerequisite for entry into the field.”
DOL Opinion Letter Clarifies Permissible Deductions from Credit Card Tips.
The U.S. Department of Labor (DOL) recently issued an opinion letter stating that restaurant employers may deduct an average standard composite amount from tips included on customers' credit card payments to recover the charges imposed by the credit card companies for liquidating the tip amounts, rather than deducting the precise amount charged by each credit card company. However, the employer may not deduct an amount that exceeds the employer's actual expenses incurred in transferring to cash the tips charged on a credit card. Additionally, an employer cannot deduct its administrative costs associated with credit card transactions from an employee's tips.
No free rides on 'imposed gratuities' for chauffeurs (pdf).
The Fair Labor Standards Act (FLSA) requires you to pay employees the federal
minimum wage and overtime when they work more than 40 hours in a workweek. The FLSA
provides certain exemptions for employees who receive tips. In some circumstances, you may
pay tipped employees a base hourly wage of less than the federal minimum wage because the tips
they receive are counted as part of their wages. That “tip credit,” however, is allowed only if
certain requirements are fulfilled. The U.S. Department of Labor (DOL) recently issued an
opinion letter that addresses the question of whether an employer may apply an “imposed
gratuity” toward its tip credit and explains the tip credit and overtime calculation for tipped
employees in detail.
Can Golf Pros be Paid as Independent Contractors for Lessons and Paid as Employees for Work in the Pro Shop?
Many clubs employ golf professionals to give lessons to club members and also work in the pro shop. A potential problem facing clubs is how these pros should be compensated.
