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Total Articles: 20

Hair Today, Gone Tomorrow: Seventh Circuit Rejects Claim That Cosmetology Trainees Were Employees

Former cosmetology students are not employees entitled to pay under the FLSA and various state laws, the Seventh Circuit holds, rejecting the Department of Labor’s six-factor test but declining to adopt any bright-line test. Hollins v. Regency Corporation, 2017 U.S. App. LEXIS 15076 (7th Cir. Aug. 14, 2017).

House Introduces Bipartisan Bill Designed to Ease Joint Employer Uncertainty

On July 27, 2017, House Republicans unveiled a bill, entitled the Save Local Business Act, that would amend two labor and employment statutes to clarify when an entity can be deemed a “joint employer.” At a press conference debuting the legislation, several of its sponsors, along with supporters from the business community, spoke about the need for the legislation.

The Fourth Circuit’s New Test for Joint Employment Under the FLSA and Why You Should Care

The Fourth Circuit Court of Appeals’ recent articulation of a new test for joint employment under the Fair Labor Standards Act (FLSA) sets a challenging standard for general contractors and others that seek to minimize labor costs by subcontracting out work, and highlights the importance of carefully choosing business partners and subcontractors in order to avoid wandering into wage and hour violations. In formulating the test, the court relied upon Congressional intent to define “employer” expansively under the FLSA and set aside decades of precedent from sister circuits and their progeny. Salinas v. Commercial Interiors, Inc., No. 15-1915 (January 25, 2017).

Fourth Circuit Panel Establishes Joint Employer Test

In a decision published January 25, 2017, a Fourth Circuit Court of Appeals panel revived a collective action in which a group of drywall installers sought overtime wages from the contractor who hired their employer – the subcontractor. The outcome is a new circuit wide test for determining whether a joint employer relationship exists.

Fourth Circuit Creates New Joint Employment Test under the Fair Labor Standards Act

Executive Summary: The United States Court of Appeals for the Fourth Circuit recently issued a decision which clarifies and expands the circumstances under which entities may be held liable as joint employers under the Fair Labor Standards Act (FLSA). The Court emphasized that the proper focus should be on the relationship between the alleged joint employers and not on an analysis of the economic dependency between the worker and the entities. The Court concluded that “joint employment exists when the facts establish that employment by one employer is not completely disassociated from employment by the other employer.” See Salinas v. J.I. General Contractors (4th Cir. January 25, 2017).

Fourth Circuit Decision Establishes New Six-Factor Test for Determining Joint Employment under the FLSA

On January 25, 2017, the U.S. Court of Appeals for the Fourth Circuit established a new six-factor test to determine whether two or more entities are joint employers for purposes of the Fair Labor Standards Act (“FLSA”). Salinas v. Commercial Interiors Inc., No. 15-1915, ___ F.3d ___, 2017 WL 360542 (4th Cir. Jan. 25. 2017). The resulting standard is unique from other circuits and appears to expand joint employer liability under the FLSA.

Fourth Circuit Pronounces Joint Employer Test Under FLSA

On Jan. 25, 2017, the Fourth Circuit Court of Appeals, which has jurisdiction over North and South Carolina, issued an opinion in a collective action wage and hour case setting forth a six-factor test for determining whether two persons or entities constitute joint employers under the Fair Labor Standards Act (FLSA). Salinas v. Commercial Interiors Inc., Opinion No. 15-1915. On the same day, the court also issued another opinion in two consolidated wage and hour cases under the FLSA, applying the six-factor test and reversing the district court’s dismissal of the cases. Hall v. DirectTV, LLC, Opinion Nos. 15-1857 and 15-1858. These opinions resolve some uncertainty regarding joint employment determinations under the FLSA that had been created by the varying tests used by district courts within the Fourth Circuit and set forth a broader, more expansive approach to joint employment determinations under the FLSA than under Title VII. A discussion of the Fourth Circuit’s joint employment test under Title VII can be found here.

NCAA Sacks Sackos Suit: Why NCAA Student-Athletes Are Not Employees Under the FLSA

An Indiana federal court has dismissed Berger v. NCAA et al, a suit brought under the Fair Labor Standards Act by former student-athletes from the University of Pennsylvania (Penn). More commonly known as Sackos, the case was filed against the National Collegiate Athletic Association (NCAA) and more than one hundred Division I schools by Samantha Sackos, a former women’s soccer player and student-athlete from the University of Houston, on October 14, 2014. The complaint argued that Sackos and other student-athletes were in an employer-employee relationship with their institutions and therefore entitled to payment under the wage and hour provisions of the FLSA. Sackos withdrew as the representative plaintiff and was replaced by Lauren Anderson, Gillian Berger, and Taylor Hennig, three present and former participants in women’s track and field at Penn. According to their amended complaint, the student-athletes’ participation in NCAA-sanctioned sports made them employees entitled to payment under the wage and hour provisions of the FLSA.

Practical effect of DOL’s recent expansion of its “joint employer” analysis remains to be seen.

In a marked deviation from current regulatory standards and judicially accepted parameters of “joint employment,” the Wage and Hour Division (WHD) of the Department of Labor (DOL) issued – through Administrator David Weil – Administrator’s Interpretation (AI) No. 2016-1, setting forth its “guidance” for determining employees’ rights and employers’ obligations under the Fair Labor Standards Act. (The AI also addresses joint employment under the Migrant and Seasonal Agricultural Worker Protection Act. The MSPA and the FLSA differ substantively, but share the same definition of “employ.”)

Think Using a Temp Firm Solves Your FLSA Compliance Problems? Think Again, Says the DOL

On January 20, 2016, the Wage and Hour Division of the U.S. Department of Labor issued a new Administrator's Interpretation ("AI") on the issue of joint employment under the FLSA. What is joint employment?

eLABORate: DOL Announces Broad Interpretation of Joint Employer Liability for Wage and Hour Claims

This week, another regulatory agency staked a position on the emerging issue of joint employer liability. In a January 20, 2016 Administrator’s Interpretation, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued a very broad interpretation of joint employment for the purposes of the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The Interpretation also links more directly the factors under the two statutes for determining joint employer status.

USDOL Releases Broad "Joint Employment" Interpretation

The U.S. Labor Department has taken the next step in its nearly-six-year-old "fissured industries" initiative by releasing Administrator Interpretation No. 2016-1, dealing with concepts of "joint employment" under the federal Fair Labor Standards Act and the federal Migrant and Seasonal Agricultural Worker Protection Act.

Are You a Joint Employer? WHD Issues Guidance in the Form of an Administrator’s Interpretation

On January 20, 2016, the Wage and Hour Division (WHD) of the U.S. Department of Labor released an Administrator’s Interpretation (AI) on joint employment under the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). Continuing its quest to regulate changes in the traditional employee-employer relationship due to market, technology, specialization, and other drivers, the AI addresses the situation in which employees may have two or more employers to create a joint employment relationship. The WHD’s goal is to aggregate employees’ hours of work for joint employers for determining whether overtime compensation is due and to hold multiple employers jointly and severally liable for compliance with the FLSA and MSPA. Just as with the AI issued in 2015 on the misclassification of employees as independent contractors, WHD will use this AI to increase aggressive enforcement of joint employment status in its investigations. Only time will tell the extent to which courts may defer, if at all, to this AI.

NCAA Play for Pay? Ninth Circuit Rules Antitrust Rule of Reason Does Not Require Payments for ‘Name, Image, or Likeness’

On September 30, 2015, the Ninth Circuit Court of Appeals upheld a lower court’s ruling that the amateurism rules of the National Collegiate Athletic Association (NCAA) violate federal antitrust laws. The Ninth Circuit panel considering the NCAA’s appeal rejected one dramatic change that had been ordered by U.S. District Judge Claudia Wilken. O’Bannon v. National Collegiate Athletic Association, Ninth Circuit Court of Appeals, Nos. 14-16601 and 14-17068 (September 30, 2015).

Not Every Employee is Covered by the FLSA, But You're Not Off the Hook Just Yet

If you read this blog, attend presentations on wage and hour issues, or just shudder every time you read about another overtime or minimum wage lawsuit, you might assume that all employees are covered by the federal Fair Labor Standards Act (FLSA) and its regulations. However, in some rare circumstances, the FLSA may not cover very small and, importantly, local businesses, meaning that those businesses’ employees may not be entitled to the minimum wage or overtime pay under the FLSA. A quick warning before we start: as we have highlighted in the past, though, most states and an increasing number of local governments do not provide exemptions from state and local minimum wage laws, even for small businesses. With a very few exceptions, the fact that the FLSA does not apply only resolves one half of the question; you almost certainly still have to contend (and comply) with state and local laws, that may have different standards and penalties.

eLABORate: Fifth Circuit Block's Franchisee Employee's Effort to Treat Franchisor As His "Employer" Under The FLSA

The Fifth Circuit Court of Appeal recently held in Orozco v. Plackis that a franchisor was not liable to a franchisee employee for alleged minimum wage and overtime violations because the franchisor was not an “employer” under the Fair Labor Standards Act (“FLSA”). No. 13-50632, 2014 WL 3037943 (5th Cir. July 3, 2014). Under the FLSA, an employer is broadly defined as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). Relying on the economic reality test, the Fifth Circuit examined the employer?employee relationship by examining whether the franchisor: (1) possessed the power to hire and fire the employee, (2) supervised and controlled the employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. After examining the evidence, the Fifth Circuit held that the franchisor was not an employer under the FLSA because the employee lacked legally sufficient evidence to establish any of the elements of the economic reality test.

You Load 16 Tons, What Do You Get: A Worthless Franchise!

Despite the focus in recent years on the misclassification of employees as contractors, unfortunately, we continue to see numerous companies ranging from the Fortune 500 to startups make mistakes, albeit mostly unintentional, with their use of “contractors.”

NFL Cheerleader Cries Foul Over Compensation

Standard contracts that sports franchises, such as the National Football League (NFL), use for independent contractors should be closely scrutinized in the wake of a newly filed class action lawsuit that is shining the spotlight on their enforceability and legality.

Unauthorized Alien Workers Recover FLSA Wages

Two federal appellate courts have ruled this year that, as one of them put it, "aliens, authorized to work or not, may recover unpaid and underpaid wages under the [federal Fair Labor Standards Act]." This was the July 29 conclusion of the Eighth Circuit U.S. Court of Appeals (with jurisdiction over Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) in Lucas v. Jerusalem Cafe, LLC.

Legal Alert: Eleventh Circuit Finds DHL Express Not a Joint Employer under FLSA

Executive Summary: On July 9, 2012, a federal appeals court in Georgia affirmed the dismissal of DHL Express, Inc., from a lawsuit brought by a class of current and former delivery drivers alleging overtime violations under the Fair Labor Standards Act ("FLSA"). According to the court, an assessment of the economic realities of the case did not reveal an employment relationship between DHL and the drivers.