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Total Articles: 31

Day Rate Satisfies FLSA’s Highly Compensated Employee Salary Requirement, Fifth Circuit Rules

Paying an employee a day rate of $1,000 per day satisfies the salary basis test for purposes of the overtime exemption applicable to a “highly compensated employee” (HCE) under the Fair Labor Standards Act (FLSA), the U.S. Court of Appeals for the Fifth Circuit has ruled (2-1). Faludi v. U.S. Shale Solutions, L.L.C., No. 17-20808 (Aug. 21, 2019).

Not All Deductions Are "Uniform" Under The FLSA

The federal Fair Labor Standards Act (FLSA) establishes minimum wage and overtime requirements, period. The FLSA does not explicitly require that employers cover all work-related costs, nor, does it do so by specifically prohibiting employers from imposing work-related costs on employees. Indeed, the FLSA permits an employer to impose these costs in their entirety on non-exempt employees. In other words, at least for FLSA purposes, it is not a matter of whether the employer can impose a cost, but the extent to which it can be imposed at one time depending on an employee's wages.

Transitioning To The New "Highly Compensated" Threshold

When the revised requirements for the federal Fair Labor Standards Act's "white collar" exemptions take effect on December 1, the total-annual-compensation threshold for the "highly compensated employee" (HCE) versions will increase from $100,000 to $134,004. This raises the question of what actual total annual dollar amount will be necessary for the transition period, that is, for the timeframe in which the change occurs.

Court Finds Commissioned Jewelry Salesman Qualifies For Outside Sales Exemption Based On His Own Complaint’s Allegations

Because most FLSA exemptions are affirmative defenses, their applicability is not often established by the Plaintiff’s Complaint, of which s/he is “master” and can shape to avoid addressing exemption-triggering duties. There are exceptions. In a recent opinion, a Manhattan federal district judge ruled that a commissioned salesman who traveled from his home office to conduct jewelry sales at customers’ places of business qualified as an exempt outside salesperson under the FLSA and New York Labor Law based on his own Complaint’s allegations. Cangelosi v. Gabriel Bros, Inc., 15-cv-3736 (JMF), 2015 U.S. Dist. LEXIS 140579 (S.D.N.Y. Oct. 15, 2015).

Firm Critiques USDOL's Exemption Initiative

Last Thursday, Fisher & Phillips filed its own extensive comments on the U.S. Labor Department's proposals and requests relating to the federal Fair Labor Standards Act's Section 13(a)(1) exemptions.

New York Federal Court: Employee at Parts Company Is Exempt Outside Salesperson

An employee for an automotive and truck parts company is an exempt outside salesperson under the FLSA and the New York Labor Law, despite allegations that he was only a service technician, the Court for the Eastern District of New York rules. Domenech v. Parts Auth., Inc., 2015 U.S. Dist. LEXIS 101214 (E.D.N.Y. Aug. 3, 2015).

Ninth Circuit Holds Service Advisors Non-Exempt Under FLSA Dealership "Salesman" Exemption; Section 7(i) Exemption Is Still Available

The Ninth Circuit U.S. Court of Appeals (with jurisdiction over the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has ruled in Navarro v. Encino Motorcars, LLC that Service Advisors employed by automobile dealerships do not qualify for the Section 13(b)(10)(A) overtime exemption under the federal Fair Labor Standards Act. It is the first court to have held this way

Don’t Be Bulldozed by Snow Days: What to Consider Before Docking Pay for Weather-Related Absences

With thanks likely to the polar vortex, states across the nation are experiencing record low temperatures this winter. The bitterly cold winter has caused employees to call off work (or show up late) and employers to voluntarily close down for a day or more. In these situations, employers are often left wondering whether they must pay employees who have taken time off for reasons related to bad weather. Under the federal Fair Labor Standards Act (FLSA), the answer depends on a couple of factors.

FLSA Regulations: The Impact of Improper Salary Deductions

In this second part of our series, we explain how to avoid improper salary deductions that could destroy the overtime exemption of an employee who otherwise meets the applicable “duties test” for one of the so-called “white collar” exemptions.

Are Summer Camp Staff Exempt? [Lesser Known Exemptions]

Most regular readers of this blog will be familiar with the most common exemptions to the overtime requirements of the Fair Labor Standards Act, those being the "white collar" exemptions for executive, administrative, and professional employees. However, the FLSA also contains a number of less well-known exemptions covering specific establishments or industries. In this post, we take a look at the exemption for seasonal amusement and recreational establishments.

Pharma Happy With Supreme Court Rx: "No Overtime Pay For Pharma Sales Reps"

In an important wage-hour decision with potential relevance beyond the pharmaceutical industry, the Supreme Court held on June 18, 2012, that pharmaceutical sales reps at GlaxoSmithKline (GSK) were exempt from overtime pay under the Fair Labor Standards Act's exemption for "outside salesmen," resolving a split among the courts.

Supreme Court Finds Pharmaceutical Representatives Exempt From Overtime

This morning the U.S. Supreme Court ruled 5-4 that pharmaceutical representatives are "outside salesmen" exempt from the overtime requirements of the Fair Labor Standards Act. Christopher v. Smithkline Beecham Corp. (.pdf).

Function Over Form: The Supreme Court's Realistic View of the FLSA

For those who think that one of the travesties of the recent history of employment law has been the explosion of FLSA collective action litigation, today's 5-4 decision by the Supreme Court holding that pharmaceutical representatives are in fact exempt employees under the outside sales exemption is a re-affirmation that common sense can in fact prevail. Christopher v. SmithklineBeacham Corp. (6/18/12).

High Court Rules Pharmaceutical Sales Reps Are Exempt From FLSA's Overtime Requirements

On June 18, 2012, with Justice Samuel Alito writing for a 5-4 majority, the U.S. Supreme Court considered whether the term "outside salesman," as defined by Department of Labor (DOL) regulations, encompasses pharmaceutical sales representatives. The Court ruled that these sales representatives qualify as outside salesmen and thus, are exempt from the overtime compensation requirements of the Fair Labor Standards Act (FLSA). Given "the industry's decades-long practice of classifying pharmaceutical detailers as exempt employees" and the DOL's failure to initiate any enforcement actions with respect to sales representatives, the Court found that a decision to the contrary "would result in precisely the kind of ‘unfair surprise’ against which our cases have long warned." Although a critical decision for the pharmaceutical industry in its own right, the case generally has been viewed more importantly for its insight as to the weight the Supreme Court would give to agency views of the laws they enforce. Christopher v. SmithKline Beecham Corp., DBA GlaxoSmithKline, No. 11–204, U.S. Supreme Court (June 18, 2012).

Big Supreme Court Win For Pharmaceutical Industry

The U.S. Supreme Court ruled today that pharmaceutical sales representatives employed by GlaxoSmithKline were exempt from overtime pay under the federal Fair Labor Standards Act's "outside salesman" exemption. The Court's decision in Christopher v. Smithkline Beecham Corp. resolves conflicting views expressed by a number of federal courts.

Supreme Court Finds Pharmaceutical Representatives Exempt From Overtime

This morning the U.S. Supreme Court ruled 5-4 that pharmaceutical representatives are "outside salesmen" exempt from the overtime requirements of the Fair Labor Standards Act. Christopher v. Smithkline Beecham Corp. (.pdf).

Legal Alert: Supreme Court Finds Pharmaceutical Sales Reps Exempt

The U.S. Supreme Court held today that pharmaceutical sales representatives qualify as "outside salesmen" and, accordingly, are exempt from the overtime requirements of the federal Fair Labor Standards Act (FLSA). See Christopher v. SmithKline Beecham Corp. (No. 11-204, U.S. June 18, 2012). Importantly, the Court also refused to give controlling deference to the Department of Labor's (DOL) change of position in interpreting the regulation to exclude these employees, which was first announced in amicus briefs filed in court litigation. The Court noted that where, as here, an agency's announcement of its interpretation is preceded by a lengthy period of conspicuous inaction, "the potential for unfair surprise is acute."

Retail Industry: A Tale Of Two Stores.

Most small box retailers treat the manager of each individual location as an exempt employee under the "managerial exemption" of the Fair Labor Standards Act. As such, the store managers are not paid for hours worked over 40 in a workweek. Many small retailers, those with stores typically between 7,000 and 10,000 square feet, have been assaulted with litigation from current and former store managers claiming they are not exempt employees. This article takes a closer look at two cases that came to diametrically different results based on very similar facts.

More Participants Join USDOL "Misclassification" Pact

The U.S. Labor Department continues to expand the number of jurisdictions and agencies with which it is collaborating to end what it has called "the business practice of misclassifying employees [as independent contractors] in order to avoid providing employment protections." The most recent additions are the Colorado Department of Labor and Employment and the Louisiana Workforce Commission.

Can We Suspend An Exempt Employee Without Pay? [Wage & Hour FAQ]

One of our salaried exempt employees appears to have violated our sexual harassment policy. We would like to suspend him without pay for 3 days. Is this allowed under the FLSA?

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:

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.

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.

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.

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].

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.

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.
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