Total Articles: 87
Insurance Company Special Investigators are Exempt Under Federal and State Laws, Ohio District Court Rules
After a trial to the court in September 2011, the United States District Court for the Southern District of Ohio entered judgment on January 5, 2012 in favor of Defendant Nationwide Mutual Insurance Company, on all claims alleged against it by a nationwide class of Special Investigators who claimed they were misclassified as exempt from the overtime requirements of the FLSA and New York and California state wage laws.
Does Lady Gaga Owe Assistant OT?
Imagine you are the personal assistant for the world’s most famous artist, Lady Gaga. You have the opportunity to travel the world, meet famous people and watch your boss hit the button to drop the “ball” in Times Square on New Years Eve. What could be better? Well, apparently, being paid overtime.
Are Pharmaceutical Sales Reps Exempt or Non-Exempt? U.S. Supreme Court Will Decide.
An important employment issue which could impact many businesses has made its way to the U.S. Supreme Court. In Christopher v. SmithKline Beecham Corp., the Court will consider whether pharmaceutical sales representatives are exempt under the Fair Labor Standards Act.1 Several class actions filed throughout the country by sales representatives have challenged the propriety of paying representatives by salary instead of hourly wages. The circuit courts have split. For example, the Christopher case, a Ninth Circuit Court of Appeals' decision, determined sales representatives were exempt under the outside sales exemption.2 The Third Circuit held the representatives were exempt under the administrative exemption as have several district courts:
First Circuit Holds that Banquet Sales Managers Qualify for the Administrative Exemption
The First Circuit Court of Appeals recently held that banquet sales managers qualified for the administrative exemption to the Fair Labor Standards Act (FLSA). The court reached this holding in the case of Hines v. State Room, Inc. even though the banquet sales managers were bound by a price schedule established by their employer and therefore had virtually no authority to make financial decisions.
Supreme Court to Decide Whether Pharmaceutical Sales Representatives are Exempt From FLSA Overtime Requirements
The U.S. Supreme Court has agreed to resolve in Christopher v. SmithKline Beecham Corp. (11-204) whether the Fair Labor Standards Act’s (FLSA) outside sales exemption applies to pharmaceutical sales representatives (PSRs).
Bill Would Broaden FLSA Computer Exemption
A bill introduced in the U.S. Senate (S. 1747) would significantly expand the scope of the current exemption for certain computer employees that is found at Section 13(a)(17) of the federal Fair Labor Standards Act. The proposed "Computer Professional Update" Act (or "CPU" Act) was submitted by North Carolina Senator Kay Hagan and three co-sponsors. It is now pending in the Senate's Committee on Health, Education, Labor, and Pensions.
Pharmaceutical Sales Representative Case Goes to Supreme Court
In a previous post in August, I questioned whether the pharmaceutical companies were losing the exemption battle as it related to pharmaceutical sales representatives and the outside sales exemption.
Are Pharmaceutical Sales Reps Exempt As "Outside Salesmen?" Diagnosis Unclear
Just last August, the U.S. Court of Appeals for the 2nd Circuit issued a ruling that sent shock waves through segments of the healthcare industry. Then, as affected employers began responding to that decision, the 9th Circuit reached an apparently contradictory decision that may have raised more questions than it answered.
Bill Would Update Computer Employee Exemption Under FLSA
Bipartisan legislation introduced in the Senate last week would update the Fair Labor Standards Act’s (FLSA) computer employee exemption. Section 13(a)(17) of the FLSA establishes minimum wage and overtime exemptions for computer systems analysts, computer programmers, software engineers, or other similarly skilled workers provided that these employees’ specific job duties and compensation meet certain requirements. Specifically, to qualify for a computer employee exemption under current law the employee’s “primary duty” must consist of:
What Do You Mean the Job May No Longer Be Considered Exempt?
My last blog entry on travel time only touched on one issue that may arise as we see more employees being asked to take on additional responsibilities and assignments in lieu of hiring new personnel. Indeed, consolidation of jobs or responsibilities can lead to a number of other potential wage and hour issues that can have a significant impact on employers. One such issue arises when an exempt employee takes on additional jobs or duties that are non-exempt. How should an employee be treated for overtime purposes if working both exempt and non-exempt positions?
The FLSA's "Remedial Training" Overtime Exception
Many employers find nowadays that at least some workers are unable to read, write, or do simple arithmetic beyond the lowest levels (if at all). Management wants to give the employees mandatory training in these areas, but not if that means incurring overtime costs when the instructional time causes the employees' hours worked to exceed 40 in a workweek. But, under the right circumstances, there is a little-known way to increase employees' basic academic abilities without having to pay FLSA overtime premium for the time they spend learning.
Bill Aims at Worker Misclassification
Rep. Lynn Woolsey (D-CA) has reintroduced legislation that would create new record-keeping requirements for employers that hire independent contractors, and impose stricter penalties for misclassification.
Exempt Employees, Paid Leave, and Partial Day Absences [Webinar Q&A]
Another in our series of answers to questions from our September 28 webinar on wage and hour law in higher education:
Court: Cable Installers Employees, Not Independent Contractors
A couple of weeks ago, I wrote about an initiative by the U.S. Department of Labor, IRS and various state agencies to launch a coordinated crack-down on employers who misclassify employees as independent contractors. Recently, a U.S. District Court in Ohio issued a ruling that nicely illustrates the problem of misclassifcation and the potential liabilities that employers can face as a result.
Ninth Circuit Interprets Learned Professional Exemption
The State of Washington's Department of Social and Health Services employ social workers, whom the agency classifies as exempt under the Fair Labor Standards Act. The state relies on the "learned professional exemption," which means "an employee whose primary duties require 'knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.'” 29 C.F.R. § 541.300(a)(2)(I).
A Broad Array of College Courses Does Not a Course of Specialized Instruction Make
A social worker required to hold a bachelor’s degree in social or human services, behavioral science or an allied field does not necessarily qualify as a “learned professional,” properly exempt from overtime under the Fair Labor Standards Act, the Ninth Circuit recently held in Solis v. State of Washington DSHS (No. 10-35590 (Sept. 9, 2011).
Can An Employer Pay An Exempt Employee Extra Compensation? [Wage & Hour FAQ]
My Company anticipates embarking on a big project this fall that will have extreme importance to the Company’s future and require extra hours at the office. The Company wants to give a little extra pay to employees who work on this important project. A number of these employees are classified as exempt. May the Company provide extra compensation to exempt employees for their work on this project?
Are Pharmaceutical Companies Losing the Exemption Battle?
Recently, another group of pharmaceutical sales representatives successfully demonstrated that they are not exempt from overtime under the FLSA. Kuzinski, et al., v. Schering Corp Focusing on the administrative exemption, the District Court of Connecticut held that the sales representatives’ work was not directly related to Schering’s management or general business operations and they lacked the necessary exercise of discretion and independent judgment to meet the requirements of the exemption. The sales representatives did not directly sell pharmaceutical products, instead individualizing Schering’s canned sales pitch to promote certain products to identified customers. At the end of the day, the sales representatives simply used the core messages and promotional strategies developed by Schering, rather than developing those messages and strategies themselves.
Efforts To Curtail The FLSA's "Companionship" Exemption Possibly Moving To The Regulatory Arena.
In late June, we noted legislation introduced in the Senate and in the House of Representatives that would essentially repeal the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption in any practical sense. U.S. Labor Department regulations and interpretations elaborate upon how and to whom the exemption may be applied.
Quick Quiz: Paid-Time-Off And The "Salary Basis"
Alice performs work meeting the duties requirements for the federal Fair Labor Standards Act's administrative exemption. She usually works 50 hours in five days each workweek. She is paid a weekly salary of $950. Alice is eligible for five paid days off each year, and she has three days left.
Renewed Attempt To Destroy The FLSA's "Companionship" Exemption
Another effort is afoot to limit the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption to the point of non-existence in any practical sense. Last week, apparently-identical bills (S. 1273 and H.R. 2341 -- see currently available version below) were introduced in the Senate and the House which would have precisely this effect. Similar measures were proposed last year, but the newer ones would impose even-narrower restrictions.
The FLSA Overtime Exemption For Service Writers
Last week, the U.S. Department of Labor published a Final Rule concerning changes to its regulations and interpretations. One portion of the Final Rule's commentary appears to say that the DOL is now taking the position that employees doing the typical work of service writers/service advisors/service salespeople (we'll refer to them all as "service writers") are NOT exempt from overtime under the federal Fair Labor Standards Act.
Recovering Losses From EXEMPT Employees
Our recent Quick Quiz Answer on recovering losses from non-exempt employees has caused some to ask whether the same analysis applies to employees who are treated as exempt under the federal Fair Labor Standards Act's executive, administrative, or professional exemption (including the "computer employee" and "highly compensated employee" versions).
Michigan Jury Finds Mortgage Loan Officers Exempt, Disregarding the Department of Labor’s Interpretive Guidance
On March 17, 2011, a Michigan jury returned a verdict in favor of loan company, Quicken Loans Inc., in a federal class action wage and hour lawsuit. The jury found that the company’s loan officers were properly classified as exempt employees under the Fair Labor Standards Act (FLSA), and as a result, the company did not owe the plaintiffs any overtime.
THE OUTSIDE SALES EXEMPTION TO WAGE-HOUR LAW
Employers and courts have been busy in recent years shaping wage-hour laws that were long dormant. The applicability of several, limited “exemptions” to the rules that entitle employees to minimum wage, overtime, and other wage and hour protections has been the subject of a great deal of litigation.
Quick Quiz Answer: Recovering Losses From Non-Exempt Employees
The answer to our March 14 Quick Quiz is "$110". The federal Fair Labor Standards Act does not prohibit the employer from recouping some of the loss in that workweek, but it does restrict the amount.
Quick Quiz: Recovering Losses From Non-Exempt Employees
Store Associate Alex is paid on an hourly basis at the rate of $10 per hour. On Monday, he accepts a $150 check in payment for merchandise. He was so busy that he forgot to get the necessary customer information, and now the check has been returned because the account is closed. Alex's employer is unable to contact the customer.
SmithKline Beecham Wins On "Outside Salesman" Exemption
The Ninth Circuit U.S. Court of Appeals (Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has added another chapter in the saga of whether pharmaceutical sales representatives (PSRs) qualify for the federal Fair Labor Standards Act's "outside salesman" exemption. The court recently ruled in Christopher v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline that the Glaxo PSRs did fall within the exemption. The decision creates a split in the federal appellate courts by finding that the exemption applied to PSRs performing duties essentially the same as those found to be non-exempt by the Second Circuit in the Novartis case about which we previously reported.
Hot-Button Issue: FLSA's Outside Sales Exemption
Wage-hour lawsuits are (and have been) popping up everywhere, with employers of all sizes defending against various claims. In recent years, popular claims have included failure to pay overtime for all hours worked, requiring workers to work "off the clock" (before they clock in or after they clock out), incorrectly classifying certain workers as being exempt from overtime, and requiring workers to work during their unpaid meal or break time.
Pharmaceutical Sales Reps Not Entitled to Overtime, Ninth Circuit Rules
Pharmaceutical sales representatives are not entitled to overtime pay because they fall within the Fair Labor Standards Act’s “outside salesmen” exemption, the federal appeals court in San Francisco has ruled. Christopher v. SmithKline Beecham Corp. DBA GlaxoSmithKline, No. 10-15257 (9th Cir. Feb. 14, 2011). In so ruling, the Court rejected the Department of Labor’s interpretation of the outside sales exemption, which was accepted by the Second Circuit Court of Appeals in a case also involving pharmaceutical sales representatives in 2010 (see our article, Second Circuit Narrowly Circumscribes FLSA’s Outside Sales and Administrative Exemptions). This split in the circuit courts should significantly increase the likelihood that the U.S. Supreme Court will review the issue.
Ninth Circuit: Pharmaceutical Sales Representatives are Exempt under FLSA
The plaintiffs in Christopher v. SmithKline Beecham Corp. were pharmaceutical sales representatives. They visit doctors on behalf of the company and attempt to persuade the doctors to prescribe their particular drugs to patients. The company argued that these employees were exempt as "outside sales." The employees argued they were not sales persons, primarily because the patients themselves were the buyers, not the doctors.
You Are Hereby Classified: WHD Proposes New Notice Rule
Exempt or nonexempt? That can be a tough question. With wage-and-hour litigation on the rise, wise employers are aware that the classification question is an important one, as well. The U.S. Department of Labor's Wage and Hour Division (WHD), has announced a proposed rule that, if adopted, would have significant impact on the process employed by companies in determining whether or not an employee should be classified as exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act.
Quick Quiz Answer: FLSA "Salary Basis" Of Pay
The answer to our January 31 Quick Quiz is "No": Furniture World's policy does not destroy the "salary basis" required for Robin's exempt status under the federal Fair Labor Standards Act. This will be true even if management disciplines or discharges Robin for refusing to make-up the time she missed.
Quick Quiz: FLSA "Salary Basis" of Pay
Robin is in charge of the 50-employee Shipping Department at Furniture World. She is treated as an exempt "executive" employee under the federal Fair Labor Standards Act, including that she is paid a salary of $950 per week. Furniture World adopts a policy that all supervisory employees:
A Ray of Sanity in the FLSA Collective Action Morass: Half-pay in Misclassification Cases.
Given the overwhelming number of FLSA collective actions that continue to be filed, it is hard to find very much encouraging news, but one ray of sanity is the 4th Circuit's opinion in Desmond v. PNGI Charles Town Gaming, (4th Cir. 1/18/11) [pdf].
USWHD Memo Addresses FLSA "Motor Carrier" Exemption.
The federal Fair Labor Standards Act's Section 13(b)(1) provides an overtime exemption for "any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to" a specific section in Title 49 of the U.S. Code dealing with federal motor-carrier law. Employers who have relied upon or followed this so-called "motor-carrier" exemption will remember that an inconspicuous 2005 amendment to Title 49 substantially narrowed its scope. A further revision in 2008 introduced yet other questions and uncertainties.
Wage & Hour Insights: Salary Deductions of Exempt Employees.
If you missed our webinar, Are You Ready For A Wage & Hour Audit, earlier this month a recording of the program is available here.
Court Clarifies Overtime Damages For Misclassified Employees
Courts and litigants have struggled over how to figure overtime due to employees who were misclassified as exempt and who were paid a fixed salary for their hours worked. The federal Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid 1.5 times their regular hourly rates for hours worked over 40 in a workweek. But for a misclassified salaried employee, satisfying this requirement necessitates a couple of threshold determinations.
Court Holds Motor Carrier Act Exemption Applies to Van Drivers Who Do Not Cross State Lines
Even though airport shuttle drivers did not transport passengers to or from locations outside the state of Florida, their activity was sufficiently tied to interstate commerce to qualify them for the motor carrier exemption and make them ineligible for overtime pay under the Fair Labor Standards Act, the federal appeals court in Atlanta has ruled. Abel v. Southern Shuttle Services, Inc., No. 10-10659 (11th Cir. Sept. 21, 2010). The Eleventh Circuit has jurisdiction over Alabama, Florida, and Georgia.
Federal Appeals Court Finds Newspaper Reporters Not Exempt as FLSA Creative Professionals
In a case of first impression for the circuit, the federal appeals court in San Francisco has held that a newspapers reporters were non-exempt employees and entitled to overtime pay. Wang v. Chinese Daily News, Inc., No. 08-55483 (9th Cir. Sept. 27, 2010). The Court rejected the newspapers contention that its reporters were exempt creative professionals under the Fair Labor Standards Act because the newspapers articles lacked the sophistication of the national level papers. Furthermore, the Court found the reporters daily workload prevented them from conducting detailed news analysis or investigative journalism tasks that were essential for the exemption to apply. The Ninth Circuit has jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.
Pharmaceutical Sales Reps Join White-Collar Quest for Overtime Pay (pdf).
Pharmaceutical sales representatives, historically viewed as exempt from federal wage
and hour law requiring overtime compensation, are joining the ranks of highly compensated
white-collar workers seeking overtime pay, attorneys Staci Ketay Rotman and Mark
S. Wilkinson write in this BNA Insights article. A number of large companies are targets of
sales reps overtime class actions, the attorneys, of Franczek Radelet in Chicago, write.
Motor Carrier Exemption Applies to Staffing Company and Its Truck Drivers, Fifth Circuit Holds
A staff leasing company stands in the shoes of its trucking-company clients for application of the Motor Carrier Act (MCA) exemption from Fair Labor Standards Act (FLSA) overtime, the federal appeals court in New Orleans has ruled. Songer v. Dillon Resources, Inc., No. 09-10803 (5th Cir. Sept. 3, 2010). The Court also held that the exemption applies to truck drivers who have not yet driven across state lines, but may be assigned to do so. Accordingly, the Court affirmed summary judgment for the employers.
Second Circuit Strips Pharmaceutical Sales Reps Of Their Exempt Status.
A federal appellate court recently held that pharmaceutical sales representatives did not fall under either the "outside sales" or "administrative" exemptions to the Fair Labor Standards Act (FLSA), and that, accordingly, they had been misclassified and are entitled to unpaid overtime. The overtime to which the workers could be entitled is significant, because they typically work 12-hour days, travel for their jobs, and attend after-hours events as part of their marketing efforts. In re Novartis Wage and Hour Litigation, 09-0437-cv, Second Circuit Court of Appeals (July 6, 2010
Pharmaceutical Company Outside Sales Representatives Deemed Nonexempt Employees.
In a recent decision, the federal Second Circuit Court of Appeals decided that outside pharmaceutical sales representatives were nonexempt employees, and therefore were entitled to overtime and subject to other nonexempt requirements. The court found that: (a) these sales representatives did not qualify under the outside salesperson exemption to the overtime laws because they did not actually "sell" pharmaceutical products to anyone, including the physicians they called on, and (b) they did not qualify under the administrative exemption to the overtime laws because they did not exercise the requisite level of discretion and independent judgment. This decision is especially important for pharmaceutical companies, and other employers in regulated industries that do not allow their outside representatives to actually sell products to customers. It suggests that such employers should evaluate their exempt classifications for all employees in positions similar to pharmaceutical sales representatives.
Pharmaceutical Company Outside Sales Representatives Deemed Nonexempt Employees.
In a recent decision, the federal Second Circuit Court of Appeals decided that outside pharmaceutical sales representatives were nonexempt employees, and therefore were entitled to overtime and subject to other nonexempt requirements. The court found that: (a) these sales representatives did not qualify under the outside salesperson exemption to the overtime laws because they did not actually "sell" pharmaceutical products to anyone, including the physicians they called on, and (b) they did not qualify under the administrative exemption to the overtime laws because they did not exercise the requisite level of discretion and independent judgment. This decision is especially important for pharmaceutical companies, and other employers in regulated industries that do not allow their outside representatives to actually sell products to customers. It suggests that such employers should evaluate their exempt classifications for all employees in positions similar to pharmaceutical sales representatives.
Decision Against Novartis Has Implications Beyond Pharmaceutical Industry.
In a major decision with possible relevance outside of the pharmaceutical industry, the Second Circuit U.S. Court of Appeals (Connecticut, New York, and Vermont) gave strong deference to a U.S. Labor Department legal brief and overruled a lower court in deciding that Novartis's pharmaceutical sales reps were not exempt from overtime as outside salespersons or as administrative employees under the federal Fair Labor Standards Act or applicable state laws. On the same day, the Second Circuit also summarily ruled against Schering in a similar case.
Using The Duck Test For Professional Employees.
When classifying their employees for overtime purposes under federal and state wage-hour laws, employers often rely on the equivalent of the "Duck Test": the job's title sounds professional and its duties require expertise and a high degree of skill it sounds and looks like a professional job, and so it must qualify for the professional exemption even if most of its occupants lack advanced degrees. In other words, they assume that when a high degree of skill and years of experience are needed to perform the position's essential tasks, and the position requires either advanced education or long years of experience, the occupants can be treated as exempt professionals under the Fair Labor Standards Act (FLSA).
DOL Wage & Hour Division Changes Course: Mortgage Loan Officers are Typically Not Exempt.
In its first piece of written guidance since President Obama took office, the U.S. Department of Labor's Wage and Hour Division released a new form of guidance document on March 24, which it refers to as an "Administrator's Interpretation." According to the Wage and Hour Division, it will no longer issue familiar "Opinion Letter" guidance documents, addressing specific facts related to specific questions and situations. Instead, the Division has indicated that it will offer an "Administrator's Interpretation" when it deems further clarification is needed on an issue that has general application to a broad group of affected parties. If the first release of this new type of guidance document is any indication of what is to come, employers may have reason for concern.
DOL Finds Mortgage Loan Officers are not Exempt Administrative Employees.
The U.S. Department of Labor (DOL) recently issued an Administrator Interpretation stating that employees who perform the usual duties of mortgage loan officers are not exempt from the Fair Labor Standards Act's (FLSA) minimum wage and overtime requirements. The DOL determined that these employees do not meet the requirements of the administrative employee exemption because their primary duty is selling mortgage loan products, which does not relate to the internal management or general business operations of the employer. According to the DOL, mortgage loan officers' duties involve the day-to-day carrying out of a financial service company's marketplace offerings and, "thus, fall squarely on the production [rather than administrative] side of the business."
Employee Misclassification: $25 Million Reasons Why Your Company May Be At Risk
When President Obama revealed his proposed $3.8 trillion budget for fiscal year 2011, it provided $117 billion to the Department of Labor (DOL) for worker protection programs. The Wage and Hour Division would receive $244 million, a $20 million increase over last years budget. The Division plans to allocate $25 million to its new Misclassification Initiative. The initiative is a joint effort between the DOL and the U.S. Department of the Treasury to eliminate incentives for employers to misclassify employees and to impose sanctions and penalties on employers who do not properly classify workers. A key area of enforcement will be on employees who are misclassified as independent contractors. As an employer, do you know how to determine if someone legally is an independent contractor or if they should be classified as an employee?
Sales Rep Falls Within FLSAs Administrative Exemption Because of Independent Strategic Planning Responsibilities.
Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours a week are entitled to overtime pay unless they fall under one of the Acts enumerated exemptions. The 3d U.S. Circuit Court of Appeal found that a Johnson & Johnson sales representative fell within the administrative exemption, based upon that persons high level of planning and foresight, along with her exercise of discretion and independent judgment with respect to matters of significance and, therefore, was not entitled to overtime pay.
Do Exempt Employees Have to Be Paid for Snow Days?
With the weather forecast predicting record-setting snowfall in the Northeast, many employers are preparing to close operations again tomorrow. But how to handle snow days when it comes to calculating payroll? Here's the run-down.
Sales rep falls within FLSA's "administrative" exemption because of independent strategic planning responsibilities.
Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours a week are entitled to overtime pay unless they fall under one of the Acts enumerated exemptions. The 3d U.S. Circuit Court of Appeal found that a Johnson & Johnson sales representative fell within the administrative exemption, based upon that persons high level of planning and foresight, along with her exercise of discretion and independent judgment with respect to matters of significance and, therefore, was not entitled to overtime pay. Smith v. Johnson & Johnson, 3d Cir., No. 09-1223, February 2, 2010.
U.S. DOL to Ramp Up Enforcement Against Misclassified Workers.
President Obamas administration will seek more funding for the U.S. Department of Labor (DOL), including more funds to enforce wage and hour laws and pursue employers who misclassify employees as independent contractors. In a press release yesterday, Secretary of Labor Hilda L. Solis outlined the president's fiscal year (FY) 2011 budget request for the DOL, which is built around the vision of "good jobs for everyone."
Shutdowns May Have an Impact on Employees FLSA-Exempt Status.
Many companies affected by the current economic downturn are searching for ways to help weather that storm. Occasional reduction in work hours, implementing mandatory vacations, or instituting short-term furloughs can help an employer to retain experienced employees, while allowing the company to achieve cost savings in this time of economic crisis. The Department of Labor (DOL) recently released three opinion letters written in January of this year in response to employer inquiries about the effect of such short-term shut-downs on employees exempt status under the Fair Labor Standards Act (FLSA).
The Vacation Nobody Wants.
The difficult financial environment is causing many employers to consider cost-savings in the area of employee compensation. The ideas sometimes include a temporary or intermittent scheduling of unpaid days off for employees whom the employer classifies as exempt executive, administrative, or professional employees under the federal Fair Labor Standards Act.
Retail Industry: How Did They Manage? Part One.
The jury said Family Dollar store managers did not "manage" the stores. A federal appeals court affirmed the $35.5 million overtime verdict. Take steps now to minimize the risk of this happening to your business.
Misclassifying Employees Proves to Be an Expensive Mistake.
A Massachusetts temporary-services company specializing in technical and manufacturing staff has learned a $1.8M lesson about the perils of erroneously classifying employees as exempt under the federal Fair Labor Standards Act.
Computer Employees - The Next Wage and Hour Thorn for Employers?
Does your Company classify all
its Information Technology (IT)
employees as exempt under the
Fair Labor Standards Acts
computer employee exemption?
If the answer is yes, then your
organization likely operates
under what a federal appellate
court judge called the common
misperception that all jobs
involving computers are
necessarily highly complex and
require exceptional expertise.
Congress Amends Motor Carrier Exemption: Both Helps and Hurts Employers.
Recent legislation appears to have narrowed the scope of the federal Fair Labor Standards Act's "motor carrier" overtime exemption yet again. The "SAFETEA-LU Technical Corrections Act of 2008" (TCA) further restricts the classes of employees who might qualify for that exemption. A moderate positive is that TCA also limits liability with respect to certain overtime violations occurring before August 10, 2006 that resulted from exemption changes caused by the earlier "Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users" (SAFETEA-LU).
Exempt or Non-Exempt? The Answer Isn't Always Easy.
Since 2001, the Labor Department's Wage and Hour Division has recovered over $1.25 billion in back wages. That's not a typo. Last year alone, the Department recovered $220,613,703 in back wages, a record, which represented a nearly 70% increase in back wage recovery since 2001.
Education Labor Letter: A Primer on the "Salary Basis" for Schools.
Anyone who has ever undertaken the task of analyzing the applicability and implications of "white collar" exemptions under the federal Fair Labor Standards Act (FLSA) knows that it usually requires a multi-tiered, multi-page flow chart, not to mention a great deal of patience. But there is some good news for schools: the exemption analysis for teachers is less complicated because there is no requirement to the meet the "salary basis" test under the FLSA.
Pro-Ration of Minimum Salary for Part-Time Exempt Employees Disallowed.
The U.S. Department of Labor recently issued an opinion letter on the topic of pro-rated salaries for exempt employees.
When Do Managers, Assistant Managers and Supervisors Qualify as Exempt.
We wish there were an easy and certain answer to the above question, but the reality is that court decisions in this area differ in both analysis and results even given similar factual scenarios. For some time now we have been talking about the huge increase in overtime cases and other actions being filed under the Fair Labor Standards Act (FLSA) and similar state wage and hour laws. No area of employment litigation has been more active recently than wage and hour litigation. In 2007 the steep increase in FLSA lawsuits filed continued as did payouts, collectively totaling over a billion dollars.
Misclassifying A Chef Can Cook Up Trouble.
The number of wage-hour claims has skyrocketed in recent years. As a result, a hospitality employers are more likely than ever before to be the target of a wage-hour lawsuit or a government compliance audit. One thing this means is that industry employers should be sure they have correctly classified everyone they treat as being exempt from the federal Fair Labor Standards Acts minimum-wage, overtime, and timekeeping requirements.
Update: DOL To Begin Enforcing Narrowed Motor-Carrier Exemption.
We previously reported that under-the-radar Congressional action in 2005 substantially limited the federal Fair Labor Standards Act's Section 13(b)(1) "motor carrier" overtime exemption. This exemption applies to drivers, driver's helpers, loaders, and mechanics for whom the U.S. Transportation Secretary can set qualifications and maximum service hours.
FLSA Status of "Financial Services Industry" Employees Still Issue Despite Helpful DOL Opinion Ltrs (pdf).
Are financial advisors, stock brokers and mortgage loan officers fall FLSA exempt employees? or non-exempt inside-sales employees? The difference can cost employers big bucks.
Opinion Letter Finds IT Support Specialist Not Exempt from FLSA's Requirements.
The Department of Labor (DOL) has issued an opinion letter addressing an issue that many employers have faced - whether an employee who provides computer help desk support is exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). In this opinion letter (FLSA 2006-42, dated October 26, 2006), the DOL stated that, based upon the information submitted by the employer requesting the opinion, the position does not qualify for the administrative or computer employee exemption.
Physical Presence Not Required To Satisfy "Duties" Test (pdf).
DOL opinion letter finds store manager qualified for executive exemption.
Delivery Person Driving Small Vehicle Not Covered by Motor Carrier Exemption.
In an example of what can be described as an "unintended consequence" of the revisions made to the federal Motor Carrier Act in 2005, a federal court in Georgia recently held that an employee whose primary duties involve picking up and delivering documents for his employer in a personal vehicle is not exempt from the Fair Labor Standard Act's (FLSA) overtime requirements because he does not qualify for the motor carrier exemption. See Dell'Orfano v. IKON (August 29, 2006).
Things Dont Always Go Better With Coke! (pdf).
On August 31, 2006, the Second Circuit Court of Appeals in New York stunned the home care
industry once again, by affirming its 2004 decision in Coke v. Long Island Care at Home. The
court's earlier decision had been vacated by the Supreme Court and remanded for further review
in light of a Department of Labor (DOL) Memorandum on the companionship exemptions
coverage of agency-employed home care workers under the Fair Labor Standards Act ("FLSA").
New administrative exemption what's in and what's out
Nearly two years have passed since the DOL revised the regulations interpreting the
white-collar exemptions from the overtime provisions of the Fair Labor Standards Act
(FLSA). The regulations primarily focused on administrative, executive, and professional
employees. Based on the revised regulations, many companies tweaked their exempt
classifications.
Salary Deductions to Recover the Cost of Lost or Damaged Company Property Could Backfire (pdf).
Your employee leaves his company-provided
BlackBerry on the roof of his car and drives away.
Another employee accidentally downloads a virus
while surfi ng the Internet and corrupts the hard
drive of her company laptop. Do you deduct the
cost of repair or replacement of these items from the
employees salaries? If you do, a March 10, 2006
opinion letter from the U.S. Department of Labor says
those deductions could cause the affected employees
and others in their job classifi cations to lose their
exempt status, subjecting you to liability for unpaid
overtime and liquidated damages.
Beware the Salary Basis Requirement for Exempt Employees (pdf).
Most employers know that an employee must
meet certain duties tests to qualify for the white
collar exemptionsexecutive, administrative and
professional. It is important not to overlook another
requirement for these exemptions: the employee must
be paid on a salary basis. This means that the employee
generally must receive the same fi xed amount of salary
regardless of the quantity or quality of work performed
in the workweek. The salary basis requirement can be
understood as a general rule with seven exceptions.
"White Collars" Do Not Guarantee Exempt Status (pdf).
Over the past nine months, Merrill Lynch, Morgan
Stanley and UBS have settled Fair Labor Standards Act
and state law overtime lawsuits for a combined total of
more than $160 million. Plaintiffs in the lawsuits claimed
that the companies stock brokers and financial advisors
were incorrectly classified as exempt white collar
employees and thus were due overtime pay. Copycat
suits have been filed against other brokerage companies,
including A.G. Edwards, Wachovia, Prudential, J.P.
Morgan Chase and Bear Stearns. Given the success
plaintiffs attorneys are having with these cases, more
lawsuits can be expected.
U.S. Department of Labor Issues Opinion on Salary Deductions for Absences Due to Inclement Weather (pdf).
In an October 2005 opinion letter, the U.S. Department
of Labor (DOL) provides guidance to private employers
regarding permissible deductions from exempt employee
salaries for absences caused by inclement weather such
as heavy snow or other types of disasters.
DOL Opinion Letters Provide Employers With Guidance (pdf).
In August of last year, the revised
federal regulations for the white collar
overtime pay exemptions under the
Fair Labor Standards Act (FLSA) took
effect. The final rule, which is now
commonly referred to as the Part 541
regulations, resulted in scores of employers
scrambling to ensure that their
exempt employees were properly classified.
More than one year later, employers
continue to seek clarification on the
new Part 541 regulations and other
common wage and hour issues.
Computer Support Specialist Entitled to Overtime and Liquidated Damages (pdf).
Many employers continue to struggle with the proper
classification of computer support personnel under the
FLSA. One recent case highlights common mistakes
employers make and the consequences that arise from
misclassification.
DOL Issues Opinion Letter Rulings Addressing New White-Collar Exemption Regulations (pdf).
The U.S. Department of Labor (DOL) has issued
several new administrative letter rulings discussing the
recently revised Fair Labor Standards Act (FLSA)
white-collar exemption regulations that took effect
August 23, 2004. Several other letters address longstanding,
but often-confusing FLSA issues.
Exempt Professionals' Overtime Suit Fails (pdf).
Court Finds Employer May Reduce Pay Without Jeopardizing Exemption.
Making sense of the new wage and hour regulations (pdf)
The U.S. Department of Labor's (DOL) new "whitecollar" regulations went into effect
August 23, 2004. While the regulations are more of a cosmetic touch-up as opposed to an
extreme makeover, many of you have questions about their implementation and effect on your
full-time and part-time employees. Were here to shed some light on some of the most frequently
asked questions regarding the new regulations.
Flsa White-Collar Exemption Regs In Effect; Legislative Amendments In Limbo (pdf).
As most employers now know, final regulations pertaining
to the Fair Labor Standards Act white-collar exemptions for
overtime eligibility went into effect on August 23, 2004.
New DOL Overtime Regulations: Are You Ready? (pdf).
On April 23, 2004, the Department of Labor ("DOL") issued its final version of the regulations governing which employees are entitled to overtime. These rules go into effect on August 23, 2004. There are some significant changes with regard to the overtime regulations covering executive, administrative, professional, outside sales, and computer employees, typically known as "white collar" employees.
Employers Must Comply With New Federal Wage Regulations.
The federal Department of Labor recently issued new regulations governing the so-called "white collar exemptions" under the Fair Labor Standards Act (FLSA). The regulations take effect August 23, 2004.
The Federal Department of Labor Issues New Regulations Governing Exempt Employees (pdf).
The DOL recently issued new regulations governing the so-called "white collar exemptions" under the FLSA.
Overtime Regulations: Employers Should be Ready to Comply by August 23, 2004 (pdf).
The House of Representatives voted 222 to 205 on Wednesday, May 12, to table a procedural motion by Rep. George Miller (D-CA), which could have resulted in a vote, preventing the implementation of the new overtime regulations.
Changes to "Exempt" Status May Be Effective Soon.
Employers may soon need to review the "exempt" and "non-exempt" classification of employees under the federal Fair Labor Standards Act (FLSA) to determine whether they are correctly paying them.
