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Total Articles: 190

Qdoba Restaurants Fined More Than $400K for Child Labor Violations

The Massachusetts attorney general has levied about $400,000 in penalties against the 22 corporate-owned Qdoba restaurants in the state for more than 1,000 child labor law violations. The fines followed more than a year of investigation that revealed minors routinely worked in violation of the law.

WPI Wage Watch: Minimum Wage, Tip, and Overtime Developments (July Edition)

While most parts of the country were heating up in July, developments concerning the minimum wage, tips, and overtime were cooling off. Many state legislatures have adjourned or are in recess, leaving it mainly to federal and local officials to keep things interesting.

Truck Drivers’ Sleeper Berth Time Is Presumptively Not Compensable Under the FLSA, DOL Concludes

In a welcome reversal of its prior guidance, on July 22, 2019, the U.S. Department of Labor (DOL) concluded that if a truck driver, or driver’s assistant or helper, is completely relieved of duty and is provided with adequate sleeping facilities (including the truck’s sleeping berth), the individual is not “working while riding” and therefore is not entitled to compensation for that time – regardless of how many hours a particular trip lasts or how much duty-free time is provided on that trip.

New FLSA Opinion Letters Address Rounding, Bonuses and Paralegals

The US Department of Labor (DOL) has issued three new Fair Labor Standards Act (FLSA) opinion letters, which address:

Supreme Court Refuses To Extend State Wage-Hour Law To Offshore Drilling

By a unanimous 9-0 decision, the U.S. Supreme Court today declined to extend California’s wage-and-hour laws to employees working on offshore drilling platforms subject to the Outer Continental Shelf Lands Act (Parker Drilling Management Services Ltd. v. Newton). Although this decision represents a victory for the employer involved in the dispute, you should check with your legal counsel to ensure you are in compliance with the correct legal standard given the nuanced nature of this ruling.

WPI Wage Watch: Minimum Wage, Tip, and Overtime Developments (May Edition)

This month, we provide a rates-only update detailing state- and local-level minimum wage (and exempt employee pay) increases scheduled to occur on July 1, 2019, plus other developments concerning the minimum wage, tips, and overtime that occurred in May.

Manager Misclassification Costs Steak 'n Shake $7.7 Million

A federal judge has ordered Steak 'n Shake to pay $7.7 million in back pay and liquidated damages for misclassifying store managers as exempt employees and failing to pay overtime. To be exempt from overtime pay under the Fair Labor Standards Act (FLSA), an employee's primary duties must involve tasks related to managing the business and directing the work of other employees. The managers claimed that they worked 50- to 70-hour weeks, often performing duties typically assigned to hourly workers, but did not receive any overtime pay.

Gig Economy Virtual Marketplace Company Gets FLSA Nod in DOL Opinion Letter

The Department of Labor’s (DOL) Opinion Letter FLSA2019-6 issued April 29, 2019, was welcomed by virtual marketplace companies (VMCs) in particular, as well as traditional businesses that treat freelancers as independent contractors. At a minimum, this letter gives the business community insight on how the DOL regards the VMC business model.

Department of Labor Proposes Updated Interpretation of Joint Employer Standard Under the FLSA

Since 1939, regulations interpreting the Fair Labor Standards Act (FLSA) have recognized that two or more “employers” can be jointly and severally liable for a single employee’s hours worked under the Act. However, the U.S. Department of Labor (DOL) has not meaningfully updated its joint employer regulation in more than 60 years. That soon may change. On April 1, the DOL issued a Notice of Proposed Rulemaking (NPRM) to update its interpretation of the standard for establishing joint-employer liability under the FLSA.

Proposed USDOL Interpretations: The Regular Rate Is Anything But "Regular"

The USDOL has proposed to update guidance (for the most part not regulations), regarding the "regular rate" for purposes of calculating FLSA overtime pay. The NPRM is intended to update and clarify the FLSA’s requirements regarding the "regular rate" and the (rarely used) alternative "basic rate" as briefly summarized below.

Contractors, Your Subcontractors’ Wage and Hour Practices are Your Business

A prime or general contractor may be held jointly and severally liable for any violations, including wage and hour violations, by its subcontractors if the contractor is found to be a joint employer with the subcontractor under applicable federal or state law.

WHD Issues New Opinion Letter: Compensability of Time Spent in Employer-Sponsored Community Service Program

On March 14, 2019, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) issued two new opinion letters addressing compliance under the Fair Labor Standards Act (FLSA). The first opinion letter addresses wage and recordkeeping requirements for residential janitors. The second opinion letter addresses the compensability of time spent by employees participating in an employer-sponsored community service program. This opinion letter (FLSA 2019-2) addresses whether time spent by an employee participating in an employer’s voluntary charitable program constitutes hours worked under the FLSA.

February Forecast for Healthcare Employers: Expect Flurry of FLSA Wage and Hour Suits

Healthcare employers can expect the rise of class action lawsuits to continue, as 2019 has seen a steady influx of class actions against healthcare employers under the Fair Labor Standards Act (FLSA) and various state wage-and-hour counterparts.

Failure to Provide Employee With Adequate Pumping Breaks and Accommodations Led to $1.5 Million Verdict

In March 2010, as part of the passage of the Affordable Care Act, the Fair Labor Standards Act (FLSA) was amended to require most employers to provide nonexempt employees:

Federal Paycheck Fairness Act Reintroduction in House and Senate

First introduced in Congress in 1997, and several times since, the Paycheck Fairness Act is again under consideration by Congress (S. 270/H.R. 7).

WPI Wage Watch: Minimum Wage, Tip, and Overtime Developments (January Edition)

2019 marks the start of Wage Watch’s third year of publication, which we will celebrate the only way we (sadly) know how: by recapping federal, state, and local developments concerning the minimum wage, tips, and overtime.

Wage and Hour Developments 2018: A Year in Review

The law regulating the payment of wages and work hours is a vibrant area: the “fight for $15.00”; battles over who can receive tips (and whether the tip credit should be eliminated entirely); whether workers should be given additional pay when employers cancel shifts and fail to provide “predictive schedules”; and what should happen to that pesky overtime rule. These are just some of the hot button issues addressed in 2018. As 2019 begins, we take a look back at notable wage and hour developments on the federal and state level in 2018.

A Cost Of Getting "Caught" - FLSA Civil Money Penalties

This week the U.S. Department of Labor published increases in the civil money penalties (CMPs) it can impose for certain violations of the federal Fair Labor Standards Act. These new levels apply to any penalties assessed after the effective date of January 23, 2019, including with respect to predicate violations that already have occurred.

Next Shot Fired: We’ve Read Grubhub’s 71-Page Appellate Response Brief So You Don’t Have To

The next shot has been fired in the long-running misclassification dispute between plaintiff Raef Lawson and gig economy giant Grubhub, as the company filed its Answering Brief with the 9th Circuit Court of Appeals late last night. As regular readers of this blog know, Lawson and Grubhub squared off in the nation’s first-ever gig economy misclassification trial in late 2017, leading to a victory for Grubhub in February 2018. Things took a turn for the worse in April 2018 when the California Supreme Court dropped a bombshell and changed the misclassification standard with its infamous Dynamex decision, which ushered in the notorious ABC test, and Lawson’s attorneys quickly pounced and argued that he should now be declared the victor given the new standard. Lawson filed an appeal with the 9th Circuit Court of Appeals and filed his opening brief in November 2018. Now, it’s Grubhub’s turn.

U.S. Department of Labor’s Investigation of Arizona Hospital Highlights Need for Awareness of Workplace Lactation Accommodation Laws and Policies

As the result of an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), a hospital in Arizona was recently ordered to comply with the Fair Labor Standards Act (FLSA) requirement that employers must provide nursing mothers adequate time and space to express breast milk. The WHD announced on December 11 that it entered into a compliance agreement with Yuma Regional Medical Center requiring the employer to provide training to all supervisors, and to provide all employees returning from maternity leave with information about their right to express milk in the workplace. The investigation revealed that the hospital previously denied requests for breaks from nursing employees and failed to provide a private location in which to express breast milk in violation of the FLSA.

No Snow Days for Wage and Hour Issues

With winter on the way, it is a good time for employers to review the relevant wage and hour laws that can be triggered by inclement weather. Likewise, it is also a good time for employers to ensure their policies comply with these laws when weather causes a temporary workplace interruption.

You May Not Have to Pay Attorney’s Fees in Some FLSA Cases

If you have ever had to defend against a lawsuit under the FLSA, you probably know that attorney’s fees awards often far exceed the value of your employee’s claims. This is especially true in collective action cases, which often involve extensive litigation resulting in a higher fee award. Unlike the general presumption in the United States that each party to a lawsuit pays its own attorney’s fees, the FLSA provides for a mandatory award of attorney’s fees to an employee who prevails on his or her claim. This mandatory fee-shifting provision sometimes results in employers deciding to settle a case early in the litigation to avoid increased fees in the event of a judgment in favor of the employee.

U.S. Department of Labor Releases Four New Opinion Letters

The U.S. Department of Labor (DOL) announced that it has issued four new opinion letters. DOL opinion letters are designed to interpret and provide clarity to federal labor laws, and these four new letters target issues under the Fair Labor Standards Act (FLSA).

WPI Wage Watch: Minimum Wage & Overtime Developments (October Edition)

If you procrastinated on finding a costume for the office Halloween party, never fear—just put "hipster" or "zombie" before any person, profession, or thing, and you're set. After indulging in too much sugar and embarrassing group photos, relax and unwind with our always cool and very much alive update on minimum wage, tip, and overtime developments.

WPI Wage Watch: Minimum Wage & Overtime Developments (September Edition)

The past month was full of minimum wage, tip, and overtime activity: amendments; annual rate adjustments; ballot measure battles; legal challenges; and new bills. It was a September to remember.

Hurricane Florence and the FLSA

With Hurricane Florence threatening the Carolinas, this is a good time for employers to review their inclement weather policies and to make sure they properly compensate employees who miss work because of adverse weather.

Department of Labor Issues Additional FLSA Opinion Letters, Acknowledges New “Fair Reading” Standard for Overtime Exemptions

In furtherance of a practice reinstituted earlier this year, on August 28, 2018 the DOL’s Wage Hour Division (WHD) issued four new opinion letters covering FLSA topics. The current administration began that practice when, in January of this year, it reinstated seventeen opinion letters originally issued during the George W. Bush administration but subsequently withdrawn during the Obama administration. The WHD then issued three new letters in April, prior to last week’s issuance. “Opinion letters help provide greater clarity for American job creators and employees,” commented Acting Wage and Hour Division Administrator Bryan Jarrett, and “show the ongoing efforts of the Department to provide the tools employers need to comply with the law and protect workers.”

Labor Department Offers Hint It May Be Supportive Of Gig Companies In Misclassification Situations

Although the document itself is fairly dense and complex, specifically focusing on the home-care registry industry, the Labor Department’s latest field assistance bulletin could provide a helpful clue to gig economy companies about how the agency could regulate the concept of misclassification on a broader scale. The July 13 document tilts the scales back towards an even playing field, which should be music to the ears of gig economy businesses across the country.

Back to Basics: FLSA Coverage Quick Quiz

It's that time of year when families (yes, already) are making back-to-school preparations for the upcoming school year, and employers (ideally, already) are evaluating potential pay and policy changes for the upcoming calendar year. For a student who is a little rusty, this is the time to cram with one of those summer workbooks. For an employer that is a little rusty, cramming the FLSA's numerous nuances is just not possible. Nonetheless, when tackling a complex FLSA issue, oftentimes the best approach is to get back to the basics.

The FLSA After 80 Years, Part II: Eight Decades of the Fair Labor Standards Act

As the Fair Labor Standards Act (FLSA) turns 80, it presents a timely opportunity to acknowledge its impact and call for its modernization. Signed into law on June 25, 1938, the FLSA was part of the New Deal championed by President Franklin D. Roosevelt and Secretary of Labor Frances Perkins, among many others. The law, which took effect on October 24, 1938, established a federal minimum wage of 25 cents per hour, provided for a maximum workweek of 44 hours before overtime pay was required, and prohibited oppressive child labor. This initial legislation called for reducing the workweek by two hours per week over the following two years to 40 hours before overtime pay was due. It also increased the federal minimum wage from 25 cents per hour to 40 cents per hour through annual increases over a three-year period.

The FLSA After 80 Years, Part I: Major Changes, Current Compliance Concerns, and Possible Revisions

Since its passage in 1938, the Fair Labor Standards Act (FLSA) has had—and continues to have—a remarkable impact on the workplace through requirements that most employees are entitled to at least a minimum wage for all hours worked and overtime premium pay for hours worked in excess of 40 hours in a workweek. This year marks the 80th anniversary of the enactment of the FLSA, and there’s a lot that has changed in the last eight decades. This article will address some of those changes, current areas of concern for employers, and revisions that are likely to be made in the near future.

Who-When-What: State Law Basics on Summer Hiring

Here we are - the school year is coming to a close and you are eager to get your business staffed with forward-thinking, millennial summer hires. Don’t move too fast though, because in addition to the federal Fair Labor Standards Act’s restrictions we discussed earlier this month, there are numerous states that provide even more rigorous limitations on the employment of minors.

The Advent of FLSA Guidance

It has been a busy month for the U.S. Department of Labor (USDOL) with respect to, among other things, the federal Fair Labor Standards Act (FLSA). From enforcement programs to compliance resources, the agency has stepped up and provided timely guidance that ultimately can benefit everyone, if employers understand what the various materials do and do not say.

Florida Federal Court Provides Path for Employer Recovery of Attorney’s Fees in FLSA Cases

In most lawsuits filed under the Fair Labor Standards Act (FLSA), an employer’s ability to recover any attorney’s fees under the prevailing standard – that a plaintiff filed the case in “bad faith, vexatiously or wantonly” – is much too difficult to satisfy. A recent decision from the U.S. District Court for the Middle District of Florida, however, provides an avenue for recovery of such fees – at least in part. Aralar v. Scott-McRae Automotive Group, LLLP, 2018 U.S. Dist. LEXIS 64045 (M.D. Fla. Apr. 17, 2018).

DOL Publishes New Fact Sheet Regarding Overtime Regulations for Higher Education Employees

On April 12, 2018, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued a new fact sheet concerning “the applicability of [the white collar] exemptions [of the Fair Labor Standards Act] to jobs that are common in higher education institutions.” In contrast to other recent DOL direction, Fact Sheet #17S largely echoes previous guidance from the Obama-era DOL. Specifically, it summarizes points from the DOL’s May 2016 Guidance for Higher Education Institutions on Paying Overtime under the Fair Labor Standards Act, a publication anticipating the never-implemented DOL’s revised overtime regulations, which would have raised the salary threshold for previously-exempt employees at institutions of higher education.

Do Good Audits Exist? Minimizing Damages in FLSA Cases

It's tax time, and perhaps the only thing worse than completing your tax returns is finding out that you're being audited. Common responses to undergoing an audit may involve gnashing of teeth, pulling of hair, and other forms of self-inflicted minor violence.

The Timekeeper - A Quarterly Guide to Developments in Wage/Hour Law - Spring 2018 | Issue 1

Welcome to the inaugural issue of FordHarrison's newest publication, The Timekeeper - A Quarterly Guide to Developments in Wage/Hour Law, brought to you by the Wage/Hour Practice Group. Each quarter, FordHarrison's Wage/Hour Practice Group members will provide subscribers with updates on the DOL, the latest in case law, and insight into wage and hour developments.

WPI Wage Watch: Minimum Wage & Overtime Updates (March Edition)

Never mind the Ides of March, for employers with tipped employees: beware the federal budget process. Presumably no one’s March Madness bracket had federal Fair Labor Standards Act (FLSA) amendments going to, let alone winning, D.C.’s “big dance.” How this Cinderella story plays out remains to be seen, so, during federal legislative half-time, we’ll take a quick look at the scores from other minimum wage, tips, and overtime games around the country.

USDOL Self-Report PAID Program: Benefits TBD

Last week the U.S. Department of Labor (USDOL) announced its Payroll Audit Independent Determination (PAID) pilot program to mixed reactions. The PAID program is meant to provide a framework for employers to proactively resolve potential federal Fair Labor Standards Act (FLSA) claims. In a nutshell, an employer will be able to self-report potential violations to USDOL and attempt to resolve the issues efficiently and under the agency's "supervision," as outlined on its website.

DOL to Roll Out Payroll Audit Independent Determination (PAID) Program

Earlier this month, the U.S. Department of Labor (DOL) announced the Payroll Audit Independent Determination (PAID) Program. PAID will be rolled out in April 2018 as a six-month pilot program to incentivize employers to address any wage and hour underpayments under the Fair Labor Standard Act (FLSA).

WPI Wage Watch: Minimum Wage & Overtime Updates (February Edition)

February may be the shortest month of the year, but what it lacked in days it made up with minimum wage and overtime developments at the federal, state, and local levels.

You're Gonna Need A Bigger Boat: Pay Equity Initiatives Flood the State Legislatures

In 2017, legislatures in more than 40 jurisdictions across the United States considered more than 100 bills intended to narrow the lingering pay gap between men and women. While only a handful of those proposals ultimately became law, this wave shows no signs of subsiding. Most state legislatures are back in session, and lawmakers are quickly picking up where they left off.

Discovery In FLSA Cases May Soon Hit The Fast-Track

Early discovery in cases brought under the Fair Labor Standards Act (“FLSA”) may be changing significantly if courts begin to adopt the new Initial Discovery Protocols For Fair Labor Standards Act Cases Not Pleaded As Collective Actions. The Federal Judicial Center’s FLSA Protocols Committee, which includes judges as well as lawyers engaged in FLSA matters, has developed discovery protocols that seek to change a party’s initial disclosure requirements to include additional documents and information specifically relevant to FLSA cases.

"Daily Pay" and Cryptocurrency: Will Advances in Technology Change How Wages Are Paid?

Technology seems to be advancing faster than we can keep up. These advances impact the employer community as well—even regarding basic things such as how, when, and in what manner wages are paid.

2018 Withholding Tables Reflect Tax Reform Law

The IRS issued the 2018 income tax withholding tables reflecting the changes made by the tax reform law enacted by President Donald Trump in December, 2017. The withholding tables reflect changes in the tax rates and brackets, the repeal of personal deductions and the increase in the standard deduction. Employers may begin incorporating the changes into their payroll systems while they wait for the IRS to issue IRS Publication 15, Circular E, Employer's Tax Guide, for 2018.

New Year – New Wage Hour Opinions (Sort Of)

Executive Summary: In a change from the prior administration, the U.S. Department of Labor (DOL) on Friday reinstated nearly 20 “opinion letters” previously published under the Bush administration, but withdrawn prior to implementation by the Obama administration. The U.S. DOL also issued field bulletins providing new guidance on enforcement positions. The reissued letters predominately focus on specific industries; however, three of opinions generally apply to all employers. Below is a brief summary of each opinion.

DOL Revives Opinion Letters, Providing Employers Potential Defense to FLSA Claims

The US Department of Labor (DOL) has reissued several Fair Labor Standards Act (FLSA) opinion letters that had been issued in the waning days of the Bush administration before being withdrawn by the Obama administration in 2009.

An Early Groundhog Day: DOL Reissues 17 Opinion Letters That Had Been Withdrawn in 2009

On January 5, 2018, the U.S. Department of Labor (DOL) reissued 17 previously withdrawn opinion letters addressing a wide range of topics under the Fair Labor Standards Act (FLSA). The former acting administrator of the DOL’s Wage and Hour Division (WHD) signed 15 of the 17 opinion letters in January of 2009, during the final days of the Bush administration. The Team Leader of what was then the Fair Labor Standards Team of the Office of Enforcement Policy of WHD signed the remaining two opinion letters. Three other withdrawn 2009 opinion letters—FLSA 2009-22, FLSA 2009-23, and FLSA 2009-24—remain withdrawn.

FLSA Penalties Increase

This week the U.S. Department of Labor published increases in the civil money penalties it can impose for certain violations of the federal Fair Labor Standards Act.

Exempt Employee Pay Minimums Will Increase in 2018 in Various States

As employers wait to see whether – and to what extent – the U.S. Department of Labor will revise the minimum amount they must pay to executive, administrative, and professionals for exemption from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements, state-law rates for these employees are scheduled to increase in 2018 (and on New Year’s Eve in New York).

Holiday Season Brings Wage and Hour Challenges

As if the holiday season weren’t stressful enough with all the shopping and cooking to be done, HR professionals also must deal with a variety of wage and hour challenges. Be sure to check these five considerations off your list so that the holidays are nice, not naughty, for you and your employer this year.

Heads-Up for Public Contractors: Prevailing Wage Trends and Potential Exposure

Russ McEwan, significantly experienced in construction and prevailing wage requirements, discusses key issues facing government contractors with fellow Littler attorney Kurt Rose. Russ addresses the expansion of prevailing wage obligations in public construction work and common employer compliance hurdles. Russ and Kurt also review the typical life cycle of a prevailing wage dispute and potential risks for employers and individuals – including liability for subcontractor misconduct.

Restaurant Supply Driver’s Federal FLSA Claims Shown the Exit Ramp on MSJ Ruling

Finding not a “scintilla” of evidence to support claims of minimum wage violations, a New York federal district court in Yu Sen Chen et al v. MG Wholesale Distribution Inc. et al, 16-cv-04439 (E.D.N.Y.) dismissed a proposed collective action (and refused to exercise supplemental jurisdiction of the corresponding state law claims). In doing so, the district court relied on simple arithmetic and the plaintiff’s own admissions.

Timing Is Everything: FMLA Claim Survives Summary Judgment Where Employer Began Auditing Employee’s Records The Day After FMLA Leave Request

Employees requesting, currently taking, or just returning from leave under the Family and Medical Leave Act (“FMLA”) can be terminated for legitimate reasons that are unrelated to their FMLA leave. This point is exemplified by Jennings v. Univ. of N.C., N.C. Ct. App., Case No. COA16-1031 (July 5, 2017), which was the subject of a prior post on this Blog. In Jennings, the North Carolina Court of Appeals ruled that an employer did not violate the FMLA by proceeding with a disciplinary hearing and termination of an employee because of allegations of misconduct that arose prior to her FMLA leave.

Wage and Hour Dilemmas for Construction Industry Employers

Littler’s Russ McEwan and Lindsay Sorin discuss some of the most common wage and hour issues that our construction industry clients face, and offers practical solutions to minimize risk.

FLSA Questions After Hurricane Harvey

Affected employers will have a variety of wage-hour questions in the aftermath of Hurricane Harvey. The number and scope of the issues raised might well be practically endless. Here we address in very general ways the federal Fair Labor Standards Act topics that experience suggests will be among the most-pressing.

4 Key Steps to Recouping Wage Overpayments

An overpayment of wages can occur for many different reasons, such as inaccurate or delayed payroll processing, inaccurate accruals upon an employee’s termination, payroll system failure or simple clerical error. Regardless of why the overpayment occurred, the employee is not entitled to keep the extra cash, and the employer is legally entitled to recoup the amount in full.

WPI Wage Watch: Minimum Wage and Overtime Updates (July Edition)

It’s summertime, but the living is anything but easy for employers trying to track minimum wage and overtime developments. The U.S. Department of Labor is defending legal challenges to various rules the Obama administration adopted, while simultaneously working to revise those rules. States continue to battle with local jurisdictions over who dictates minimum wage rates, and are themselves generally amending minimum wage and/or overtime standards. Additionally, where unencumbered, cities and counties are proposing, enacting, or amending minimum wage ordinances.

Opinion Letters Are Good For Everybody

The U.S. Department of Labor's announcement that it would resume issuing opinion letters has re-invigorated criticism that recently surfaced at the mere suggestion that this might be done.

The FLSA and Your CBA: 3rd Circuit Finds Claims Were Not Subject to Dispute Resolution Provisions

In Jones v. SCO Silver Care Operations LLC, No. 16-1101 (May 18, 2017), the Third Circuit Court of Appeals addressed whether several certified nursing assistant plaintiffs were entitled to pursue their claims for violations of the Fair Labor Standards Act (FLSA) in court or were required to submit the claims to an arbitrator in accordance with the collective bargaining agreement (CBA) between their union and their employer. The Third Circuit held that the certified nursing assistants’ overtime claims did not depend upon an interpretation of the CBA, and accordingly, rejected the employers’ contention that the plaintiffs were first required to present their claims to arbitration.

IRS Provides Guidance to Employers Using Payroll Service Providers

These days, the majority of mid-to-large employers use payroll service providers for ease of payroll recordkeeping and administration. These third party providers help ease the burden of calculating taxes and withholding, and filing timely returns with state and federal administrative agencies. But while they are increasingly relying on third parties, employers ultimately are responsible for the payment of income tax withheld and the employer and employee portions of Social Security and Medicare taxes, notwithstanding third party negligence or even malfeasance.

Employer’s Guide to Preliminary and/or De Minimis Activities Under the FLSA: Booting Up Before Clocking In

Security apps, passwords, and slow computers can delay the start of the workday for many of us by one to six minutes. For non-exempt employees, this can become an issue. Office employees who clock in using their work computers may not be able to do so until after they boot up the machine, and they may clock out before certain programs are closed and they have logged out. In light of this daily routine, is an employer required to compensate the employee for this “boot up” or “shut down” time?

It's Time To Authorize Private FLSA Releases

Employers sometimes discover that, due to mistake, inadvertence, misunderstanding, or a lack of knowledge, they have not paid all of the wages required under the federal Fair Labor Standards Act. In many instances, this does not occur in the context of a lawsuit or a U.S. Department of Labor compliance audit. Instead, management learns this as the result of, for example, an internal review.

Be Careful About Signing USDOL Back-Wage Summaries

When U.S. Department of Labor Wage and Hour Division investigators conclude that back-wages are due under the federal Fair Labor Standards Act or another law the Division enforces, typically they present to the employer a completed Form WH-56, called a "Summary of Unpaid Wages". This document reflects a variety of information, including the names of each individual the investigator believes should receive a payment and the gross amount of this payment.

A Partial FLSA Wish List

Presidential elections have typically sparked speculation about possible changes in employment laws and enforcement policies. But this seems to be especially true now, due in part to the discussion already occurring about revisions in the compensation requirements for the federal Fair Labor Standards Act's "white collar" exemptions.

USDOL "Fact Sheets" Are Not The Law

Some employers are apparently referring mainly (or even only) to U.S. Labor Department "Fact Sheets" in deciding what they should do to prepare for the coming changes in the federal Fair Labor Standards Act's so-called "white collar" exemptions.

FLSA's Civil Money Penalties To Increase

The U.S. Labor Department has issued an Interim Final Rule that will substantially increase the civil money penalties it can impose for certain violations of the federal Fair Labor Standards Act and related regulations.

HR Intel – The Calm before the Wage and Hour Storm

By now you’ve undoubtedly heard about monumental changes to the Fair Labor Standards Act (FLSA) taking effect in December 2016, but the actual impact of those changes on your business and the potential consequences if the transition isn’t handled properly remain firmly on the horizon.

EEOC To Revise Controversial Proposed Pay Data Collection Rules

In a positive development for employers, the U.S. Equal Employment Opportunity Commission (EEOC) recently announced that it would revisit its controversial proposed pay data collection rules, essentially acknowledging that its initial proposal would have been unduly burdensome for businesses.

Can A Salary "Build-In" Overtime Pay?

One approach to the coming changes in the federal Fair Labor Standards Act's Section 13(a)(1) exemptions would be to abandon exempt status for at least some employees.

"It Must Be OK – Everybody Does It!"

It's time for a reminder: Long-held conventional wisdom that might be questionable or even mistaken under the federal Fair Labor Standards Act (or the analogous laws of other jurisdictions) continues to face unprecedented scrutiny.

The Dear Departed: Making Final Wage Payments for Deceased Employees

The death of an employee is an unfortunate fact of life for businesses. Nonetheless, employers may be ill-prepared for the inevitable issues that arise from the sad event.

Why Leap Year Presents Payroll Challenges

You probably know that today is Leap Day and that 2016 is a leap year, which occurs every four years. According to 5th century Irish tradition, leap year is a good year for women to make marriage proposals to men. However, according to the ancient Greeks, it is unlucky for couples to marry during a leap year. And, while ancient Chinese tradition claims that leap year babies – “leaplings” – are unlucky and poorly behaved, other cultures believe exactly the opposite.

Paying "Current" Versus "In Arrears"

Some employers use the colloquialisms "current" and "in arrears" to describe the timing of employees' wage payments.

Fifth Circuit: Employer Has Right to Mandate Employee Compliance with Overtime Reporting Procedures And Is Not Liable When Employee Fails to Follow Procedures

Overtime claims based on alleged “off the clock” work often turn on the question of whether the employer has “suffered or permitted” the employee to work uncompensated hours in excess of forty in the workweek. The Court of Appeals for the Fifth Circuit has affirmed a Mississippi district court’s finding that an employer did not violate the FLSA where the Plaintiff failed to record overtime hours in contravention of employer’s timekeeping policy. Fairchild v. All Am. Check Cashing, 2016 U.S. App. LEXIS 1298 (5th Cir. Jan. 27, 2016).

DOL Issues Administrator's Interpretation Expanding the Definition of Joint Employment

Executive Summary: Under the Obama administration, the U.S. Department of Labor (DOL) has aggressively enforced and interpreted the federal wage and hour laws. Consistent with that approach, on Wednesday January 20, 2016, the Department of Labor's Wage & Hour Division (WHD) issued an Administrator's Interpretation (AI) that explains and expands its definition of "joint employment." The AI suggests that the WHD will again increase its enforcement efforts, placing more companies under even greater scrutiny and potential liability for compliance with wage and hour laws.

U.S. DOL Issues Guidance on Joint Employment under the FLSA and MSPA

On January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued an Administrator’s Interpretation (AI) on joint employment under the Fair Labor Standards Act (FLSA) and Migrant Seasonal Agricultural Worker Protection Act (MSPA). This sub-regulatory guidance largely reflects existing WHD policy. However, it confirms how broad the DOL’s view of the concept of joint employment is, and it signals that the DOL will aggressively enforce the FLSA and MSPA against those it believes to be joint employers.

If Winter Storms Bring Workplace Closures, Don’t Forget Wage and Hour Requirements

With a major winter storm threatening to hit much of the East Coast, now is a great time to review wage and hour requirements for paying employees should it become necessary to close a work site.

Omnibus Tax, Spending Bill Impacts Payroll Administration

President Obama has signed an omnibus appropriations bill (H.R. 2029) that will significantly impact payroll operations. The Protecting Americans From Tax Hikes Act of 2015 (PATH Act), which represents half of the bill, permanently extends parity between qualified (tax-free) employer-provided parking and commuter benefits and substantially revises the rules for filing Forms W-2, Wage and Tax Statement, and 1099-MISC, Miscellaneous Income. The Consolidated Appropriations Act of 2016, which is the other half of the omnibus bill, amends the Affordable Care Act.

Still No NCAA Pay for Play–9th Circuit Denies O’Bannon v. NCAA Rehearing En Banc

On December 16, 2015, the Ninth Circuit Court of Appeals decided that it would not rehear its earlier decision in a high-profile case on payments that can be made to student-athletes.

HR Director's Lack of Compliance Responsibility Protected Her From Retaliation Under FLSA, 9th Cir. Rules

HR directors can take comfort in a new federal appeals court ruling that protects them from being fired in retaliation for reporting about their employer's failures to comply with the Fair Labor Standards Act (FLSA) - but only if they are not actually responsible for ensuring compliance with the FLSA.

Jail Time for Overtime Violations Sends Message: New York Is Serious About Wage Theft

The owner of a chain of Papa John's franchises in New York City who failed to pay overtime to his employees has been sentenced to 60 days in jail.

Launching a Paycard Program? Five Tips For Success

Paying employees via paycard is a relatively new electronic method of wage payment that many employers have gradually embraced. The main reason for the growing popularity of these pre-loaded debit cards is that they fill the need for an electronic wage payment alternative to costly and inefficient paper paychecks for employees who are either unable, or hesitant, to obtain a bank account that can accept direct deposits.

Can a Prevailing Plaintiff Recover Expert Fees? The Second Circuit Says “No”

The Second Circuit Court of Appeals recently ruled that expert witness fees are not recoverable under the Fair Labor Standards Act (FLSA). In Gortat v. Capala Brothers, Inc., No. 14-3304-cv (July 29, 2015), the Second Circuit ruled in a class action case filed by five former employees who sought unpaid wages and overtime compensation. In May of 2013, a jury found for the workers. In pertinent part, the district court ordered the employer to reimburse the workers for more than $10,000 that they had spent to retain an accounting expert used during trial.

Sixth Circuit Holds That Worm Farmers Exempt from Overtime Requirements of FLSA

The Fair Labor Standards Act exempts “employee[s] employed in agriculture” from its overtime requirement. Recently, the Court of Appeals for the Sixth Circuit applied this exemption to the operations of an employer who “moved to the United States from his native France in 1992 to grow worms,” and affirmed the district court’s decision holding that workers at Defendant’s Silver Bait worm farming operation were exempt from overtime under 29 U.S.C. § 213(b)(12). Barks v. Silver Bait, LLC, 2015 U.S. App. LEXIS 17310 (6th Cir. 2015).

Attempted self-help via internet leads to employer liability under the FLSA.

Ongoing activity by the Department of Labor (DOL) regarding overtime regulations, coupled with recent federal court decisions regarding compliance with the Fair Labor Standards Act (FLSA), have raised the level of attention to wage payment issues — and have increased the risk of employer liability — to new heights. A recent decision by the 5th U.S. Circuit Court of Appeals provides a clear illustration of the type of action that triggers that risk. Miles v. HSC-Hopson Services Company, Incorporated, 5th Cir., No. 14-11237 (September 8, 2015).

Second Circuit: $350/Hour Sufficient Fee For Plaintiffs’ Counsel in FLSA Cases

One common impediment to resolution of FLSA claims is the amount of attorneys’ fees sought by the claimant’s attorney. One important factor in assessing an appropriate fee is the rate likely to be awarded by the Court should Plaintiff prevail in that jurisdiction. A new appeals court decision approves fixing that rate at $350/hour for experienced counsel in the Eastern District of New York. Encalada v. Baybridge Enters., 2015 U.S. App. LEXIS 15985 (2d Cir. 2015).

Another Study Urges Restricting Employers' Scheduling Options

As we anticipated, another report – this one from DC Jobs With Justice, the Jobs With Justice Education Fund, the DC Fiscal Policy Institute, and the Georgetown University Department of Government – asserts that District of Columbia employers are imposing "erratic and unpredictable hours" for their workers in an effort to "boost corporate profits and keep labor costs low."

eLABORate: Fifth Circuit Reaffirms the Use Of, But Limits, Private Unsupervised FLSA Settlements

In 2012, the Fifth Circuit decided Martin v Spring Break ’83, LLC, 688 F.3d 247 (5th Cir. 2012), holding that private settlements of FLSA claims involving bona fide disputes over hours worked or compensation owed are enforceable absent court supervision.

Fifth Circuit Reaffirms that Private Settlements of FLSA Claims May Be Enforceable When There is a Bona Fide Liability Dispute

On June 1, 2015, in Bodle v. TXL Mortgage Corporation, the U.S. Court of Appeals for the Fifth Circuit recognized established precedent1 that parties may privately settle and release wage claims that include a bona fide dispute as to liability (e.g., hours worked or compensation owed). But, the court also refused to find a prior state court settlement agreement enforceable as to overtime claims brought under the Fair Labor Standards Act (FLSA) because there was no mention or factual development of any claim of unpaid overtime or a bona fide dispute as to hours worked or compensation owed under the FLSA in the prior state court case and its settlement negotiations.

Predictable Scheduling: An Undiscovered FLSA "Right"?

U.S. Wage and Hour Division Administrator David Weil reportedly has said that the Division is “looking very actively at” the question of whether workers should be legally entitled to “predictable scheduling.” In recounting Mr. Weil’s statements in a recent interview, Daily Labor Report characterized his remarks as having to do with whether an employee has an enforceable right to a predictable, stable work schedule or to some sort of advance notice of that schedule.

New FLSA Regulations Imminent

Get ready, employers. New Fair Labor Standards Act (FLSA) regulations are coming soon.

"Predictable Scheduling" Concept Gaining Momentum

In late January, we reported on U.S. Wage and Hour Division Administrator David Weil's comments that the agency is considering whether the federal Fair Labor Standards Act somehow entitles employees to "predictable scheduling". His remarks related to whether there is an enforceable right to a stable work schedule and to advance notice of that schedule.

"No Opinion Letters" Policy Reaffirmed

From the federal Fair Labor Standards Act's inception in 1938, employers sought, and officials of the U.S. Labor Department's Wage and Hour Division provided, official written explanations of how that law works in particular situations. These "opinion letters" served as an important means by which the public could develop a clearer understanding of what FLSA compliance entailed.

What Does the Start of Daylight Saving Time Mean to Employers?

At 2 a.m. on Sunday, March 8, 2015, people all across the United States will set their clocks forward one hour to begin Daylight Saving Time (DST). The change is intended to place more sunlight into “daytime” hours in order to seemingly stretch the day longer and conserve energy. In fact, 2015 marks the ninth year DST was expanded by four weeks pursuant to the Energy Policy Act of 2005.

Look Out Below

The U.S. Labor Department (DOL) often sets its sights up the food chain, focusing enforcement efforts on general contractors (GCs) for the wage violations of their subcontractors. In recent years, federal district courts and the DOL have been putting pressure on GCs to insist on and monitor Fair Labor Standards Act (FLSA) compliance by others with whom they share a business relationship by terming them “joint employers.”

"Predictable Scheduling": An Undiscovered FLSA "Right"?

U.S. Wage and Hour Division Administrator David Weil reportedly has said that the Division is "looking very actively at" the question of whether workers should be legally entitled to "predictable scheduling". In recounting Mr. Weil's statements in a recent interview, Daily Labor Report characterized his remarks as having to do with whether an employee has an enforceable right to a predictable, stable work schedule or to some sort of advance notice of that schedule.

eLABORate: Florida Department of Revenue and U.S. Department of Labor Join Forces to Reduce Misclassification of Employees

On January 13, 2015, the Florida Department of Revenue and the U.S. Department of Labor entered into a Memorandum of Understanding (“MOU”) whereby these agencies will work together to reduce the misclassification of employees as independent contractors. While the MOU has not yet been made public, the Department of Labor issued a press release discussing the agreement. At the core of the MOU is the agreement that the state and federal agencies share information and coordinate law enforcement in investigation and litigation of misclassification claims. According to the agencies, the MOU will further the dual purposes of protecting the rights of employees and leveling the playing field for employers who properly classify employees.

U.S. District Court Blocks U.S. DOL's New Definition of Companionship Services Under FLSA

Executive Summary: The U.S. District Court for the District of Columbia has issued a Temporary Restraining Order ("TRO") blocking the U.S. Department of Labor ("DOL") from enforcing the new definition of Companionship Services in its Final Rule on the Application of the Fair Labor Standards Act to Domestic Service Order ("Final Rule"), which was set to take effect, January 1, 2015. On December 22, 2014, this same court had vacated the Final Rule's differing treatment of home care agencies versus direct-hire employers, such as individuals, families, and households, stating that both should benefit similarly from the "companionship services" and "live-in" exemptions under the Fair Labor Standards Act ("FLSA"). To determine whether a Preliminary Injunction should issue, the court will hold a hearing on January 9, 2015.

Interesting Comments From U.S. Labor Solicitor Smith

Solicitor of Labor M. Patricia Smith spoke at a December continuing-legal-education conference in Atlanta. Her remarks in a couple of areas were especially interesting.

Interim "Contractor Minimum Wage" Acquisition Rules To Be Released (Updated 12 15 14)

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration have announced that they will soon publish interim Federal Acquisition Regulation amendments designed to implement President Obama's directive to raise the minimum-wage rate for workers on federal contracts to $10.10 per hour beginning January 1, 2015.

Will The President's Immigration Initiative Spur FLSA Claims?

Lurking among the numerous considerations raised by President Obama's "immigration accountability" initiative are the prospects that this action will result in more allegations by or on behalf of the affected individuals that they have not been paid in compliance with the federal Fair Labor Standards Act.

FLSA Exemptions And "Fighting Poverty"

We have written previously about President Obama's directive to change the requirements for who falls within the federal Fair Labor Standards Act's Section 13(a)(1) "white collar" exemptions for executive, administrative, and professional employees (as well as for outside-sales employees and other, derivative categories included at 29 C.F.R. Part 541). The virtually-certain outcome will be U.S. Labor Department regulatory proposals that are intended to reduce the number of employees who can meet the tests for exempt status.

Don't Fall Into The Gap: Wage and Hour Lawsuit Highlights Risks For Employers

In August, the U.S. Circuit Court of Appeals for the 3rd Circuit affirmed dismissal of five purported class or collective actions brought against a number of healthcare systems and their affiliates. Although favorable for the employers, this decision illustrates that plaintiffs’ lawyers remain eager to challenge various aspects of timekeeping practices that arise frequently in hospitals and other healthcare settings.

Shift Worker Rules Warrant Special Attention

The long-term-care industry depends on shift workers to provide patient care 24 hours per day, seven days per week. But even experienced and sophisticated employers can find the application of state and federal labor and employment laws particularly challenging in a shift-work setting. This article will identify a few common pitfalls and provide strategies for avoiding them.

NCAA’s Limits on Athletes’ Compensation for Use of Their Names or Likenesses Violates Antitrust Laws

The National Collegiate Athletic Association’s (NCAA) fundamental beliefs about the role of student-athletes and its economic model just received a partial rebuke from the courts. On August 8, 2014, a federal judge ruled that the NCAA’s rule prohibiting student-athletes from being compensated for the use of their names, images, and likenesses violated federal antitrust laws.

Here We Go Again—Significant Threat of Automatic Debarment from Government Contracts Slipping in Under the Wire!

Two weeks ago, the U.S. House of Representatives passed, by voice vote, a little-understood and little-noticed amendment to the Fiscal Year 2015 Energy and Water Development and Related Agencies Appropriations Act (H.R. 4923) that would debar large federal contractors that have been found to have violated the Fair Labor Standards Act (FLSA) within the past five years. “Debarment” is a sanction imposed for violations of law that prohibits cited contractors from doing business with the federal government for a length of time.

FLSA "Per Diem" Claims On The Rise

A recent U.S. Labor Department press release highlights a growing area of scrutiny under the federal Fair Labor Standards Act: Paying "per diem" amounts to non-exempt employees.

The Death of "De Minimis" Is Greatly Exaggerated

The "de minimis" worktime concept is a common-sense, court-recognized notion dating from the federal Fair Labor Standards Act's earliest days. It has been articulated by the U.S. Labor Department this way:

FLSA Violations Provoke Criminal Referral

As we observed last October, there is reason to wonder whether the U.S. Labor Department has become more inclined than in the past to view criminal prosecution as being an appropriate course of action when it finds violations of the federal Fair Labor Standards Act. This possible predisposition has again surfaced, this time in an especially noteworthy way.


During his February 2014 State of the Union address, President Obama pledged to rely on his own executive authority to take action on behalf of American workers. He has taken this commitment to heart, and over the past several months has flexed his presidential muscle through executive orders and presidential memoranda. Specifically, Obama has increased the minimum wage payable by federal contractors, directed the Department of Labor to loosen overtime pay requirements, and prohibited retaliation against federal contractor employees who discuss their compensation.

Pay My Back Wages: Auto Shop Featured on MTV Settles FLSA Lawsuit

Employers, take note: The U.S. Department of Labor is watching your adherence to the Fair Labor Standards Act (FLSA), so be cautious — especially if you are on TV.

Third Circuit Addresses FLSA "Successor" Liability

Federal courts continue to embrace a broad view in evaluating the question of whether federal Fair Labor Standards Act liability may be imposed upon a successor company in particular situations.

USDOL Guidance Released On "Adult Foster Care", "Shared Living Arrangements"

We reported earlier that the U.S. Labor Department has issued a Final Rule re-stating the requirements for and limitations upon the federal Fair Labor Standards Act's Section 13(a)(15) "companionship exemption". The changes are effective in January 2015. As has been widely discussed, this exemption will then no longer be available to third-party employers under the new regulations.

Looking into My Crystal Ball at the Future of FLSA Regulations

Last month, I wrote about the Obama Administration’s Presidential Memorandum to the U.S. Department of Labor (DOL) instructing its Secretary to update regulations regarding overtime protection for workers under the Fair Labor Standards Act (FLSA), the federal law that establishes minimum wage and overtime pay requirements. Since then, DOL Secretary Perez has spoken publicly about the possible scope of the changes. I’ve also spoken at a couple of events on this issue, and have gotten three questions: Can the president really do this? What do you think DOL will do? How soon could this happen? I wanted to share my thoughts on these three questions and give you a sense of what I think about the direction the DOL will take when it does propose new rules.

Supreme Court Lets Two FLSA Rulings Stand: Yes on Personal Liability and Undocumented Workers’ Standing to Sue

Last week, the Supreme Court of the United States decided that it would not review two wage and hour cases. The first, Catsimatidis v. Irizarry, which was resolved through a settlement agreement, considered whether an individual could be held personally liable as an “employer” for violations of the Fair Labor Standards Act (FLSA). In the second, Jerusalem Cafe, LLC v. Lucas, the Court declined to consider whether undocumented workers have standing under the FLSA to sue for unpaid wages.

Fast-Food Chain Employers: Take Steps Now to Avoid Being the Next FLSA Headline

On almost a daily basis, we read articles about class action lawsuits and settlements against fast-food chains. Almost all chains have had them. Fisher & Phillips has defended many of these lawsuits for different chains in all parts of the country.

Preventing A Messy "Failed Exemption" Lawsuit

In recent years employers have become all too familiar with lawsuits alleging violations of the federal Fair Labor Standards Act (FLSA). According to the Administrative Office of the United States Courts, there were more than 7,000 FLSA federal lawsuits filed in 2012, and 2013 was similar. Many of these lawsuits include claims that the employee was “misclassified” as exempt from the FLSA’s overtime-pay requirements.

Wage-Hour News Notes

Recent headline items touch upon matters of continuing concern.

"Lawsuits -- I Get It! But What Should We DO?"

"Wage-hour lawsuits are booming," trumpets one recent report after another, and this is certainly true. The risk of high-exposure wage claims against an employer is greater than ever.

Hotels, Motels Still Drawing USDOL Attention (Updated 11 21 13)

One of the U.S. Labor Department's continuing federal Fair Labor Standards Act enforcement initiatives targets hotels and motels. Officials are following-through on their 2010 warning that they see the hospitality industry as presenting a "high risk" for non-compliance.

"Right to Know" Initiative Apparently Expanded

The U.S. Labor Department has announced another proposal to conduct a survey relating to "worker classification issues" under the federal Fair Labor Standards Act.

Arbitration Agreement Awarding Fees to Prevailing Party in FLSA Case Held Not Enforceable by Florida’s Second DCA

Florida’s Second District Court of Appeal recently held that an arbitration agreement was unenforceable in the context of a claim brought under the federal Fair Labor Standards Act (FLSA) when the agreement provides for an award of attorneys’ fees and costs to the prevailing party, contrary to the FLSA’s provision that only a prevailing plaintiff is entitled to an award of attorneys’ fees.

FLSA Investigations Result In Criminal Convictions

A U.S. Labor Department press release serves as a reminder that violations of the federal Fair Labor Standards Act can result in more than just back-wage payments and other civil remedies.

"Naughty Or Nice?" App Bogs Down

We reported in July that the U.S. Labor Department had launched a "Fair Labor Data Challenge" asking application developers to create "an innovative tool that lets an informed consumer find out if a business is obeying the law when it comes to paying workers properly." As we said then, the actual solicitation goes well beyond information relating to "paying workers properly" and indeed expressly mentions providing access to information maintained by state licensing agencies and health boards, as well as unspecified environmental data.

Are You Paying More Than You Must?

Employers sometimes pay workers more than the federal Fair Labor Standards Act requires. Of course, some do so as a matter of choice.

Much Ado About Payroll Cards

In my last blog post, “To Fee or Not to Fee—The Pros and Cons of Payroll Cards,” I discussed the growing popularity of payroll cards and several U.S. senators’ plea for guidance on this burgeoning pay practice. Perhaps in response to that letter, the Consumer Financial Protection Bureau (CFPB), on September 12, 2013, issued a bulletin, CFPB Bulletin 2013-10, regarding payroll cards and the effect that the Electronic Fund Transfer Act (EFTA) has on them. So, just what does this bulletin that has caused so much buzz say? Surprisingly, the answer is—nothing new. In fact, the CFPB explicitly states that it is issuing the bulletin to “reiterate” the application of Regulation E of the EFTA to payroll cards. This bulletin does not change the current state of federal law regarding payroll cards, and it does not have any effect on state laws.

Federal Warning to Food Service Employers who Pay Employees Using Payroll/ATM Cards

The Consumer Financial Protection Bureau (CFPB) has published a bulletin reminding employers that they cannot require their employees to receive wages on a payroll card. The bulletin also explains some of the federal consumer protections that apply to payroll cards, such as fee disclosure, access to account history, limited liability for unauthorized use, and error resolution rights.

Legal Alert: Consumer Financial Protection Bureau Issues Bulletin about Federal Regulation of Payroll Cards

Executive Summary: Many employers are using or considering using payroll cards to pay employees. A number of states have wage payment laws restricting employers' use of such cards. On September 12, 2013, the Consumer Financial Protection Bureau (CFPB) issued a bulletin stating that under federal law employers cannot mandate that their employees receive wages on a payroll card. Employees who choose to receive wages on a payroll card are entitled to certain federal protections.

CFPB Bulletin Addresses "Payroll Card Accounts"

A statement of some federal-law limitations and requirements relating to the increasingly popular practice of compensating employees via the use of "pay cards" came from an atypical direction on September 12.

Court Rejects "Al Capone Defense" To FLSA Violations

On July 29, a federal appeals court addressed the question of whether the Fair Labor Standards Act’s minimum wage and overtime protections apply to undocumented aliens working illegally for an employer. Drawing on an analogy to the unlawful practices of a lawful immigrant, Al Capone, the U.S. Court of Appeals for the 8th Circuit firmly concluded that the FLSA’s protections apply, stating:

Put It On My Card? Not So Fast!

In the age of technology and convenience, some businesses, particularly those with multi-state operations, are turning away from issuing paychecks to employees or paying them by direct deposit. Instead, some are opting to pay employees using payroll debit cards. Just like the debit card most people already carry in their wallet, many employers are issuing these cards to employees and depositing their wages on the card each pay period. The cards can be used like debit cards: the individual can use it to make purchases or withdraw money from an ATM. Some cards even allow employees to pay bills.

Second Circuit Continues to Apply Heightened Pleading Standard in Overtime Claims Under the FLSA

Nakahata v. New York-Presbyterian Healthcare Sys., Inc., No. 11-0734 (2d Cir. July 11, 2013); Dejesus v. HF Management Services, LLC, No. 12-4565, 2013 WL 3970049 (2d Cir. Aug. 5, 2013): In a continuing trend in the Second Circuit Court of Appeals, plaintiffs alleging claims for unpaid overtime under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) must provide sufficient factual detail as to their claims to survive Twombly/Iqbal challenges. The Second Circuit first set forth this pleading standard in Lundy v. Catholic Health Sys. of Long Island, 711 F.3d 106 (2d Cir. 2013), in March 2013. In Lundy, the Second Circuit held that, in order to survive a motion to dismiss, a plaintiff must, at a minimum, sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in excess of the 40 hours. The Second Circuit declined to set any approximation of the total number of uncompensated hours in a given workweek a necessity in all cases, but noted that an approximation may help bring a plaintiff’s claim closer to plausibility. Otherwise, a plaintiff’s allegations “supply nothing but low-octane fuel for speculation, not the plausible claim that is required” under Twombly/Iqbal.

Second Circuit Enhances Employers’ Ability to Avoid FLSA Collective Actions Through Arbitration Agreements

Sutherland v. Ernst & Young LLP, No. 12-304 (2d Cir. Aug. 9, 2013): In a significant victory for employers, the Second Circuit Court of Appeals endorsed class waivers of Fair Labor Standards Act (FLSA) claims even if such waiver removes the financial incentive to pursue individual wage and hour claims. The holding reversed the U.S. District Court for the Southern District of New York and was consistent with the recent decision by the U.S. Supreme Court in American Express Co. v. Italian Colors Restaurant, which held that the Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal claim exceeds the potential recovery

USDOL's "Naughty or Nice?" App

The U.S. Labor Department has signaled for some time now that it considers shame and ostracism to be enforcement tools. USDOL's Wage and Hour Division has taken another step in this direction by seeking entries in a contest to develop a smartphone application providing "consumers with information . . . about which businesses have treated their workers fairly and lawfully . . .."

How Franchise Systems Can Minimize Risks of Labor Violations

No one enjoys being the center of attention when that attention is coming from federal regulators. Yet that’s where franchise systems have found themselves of late – especially in the hospitality sector, which accounts for roughly one-third of franchise systems. The Wage and Hour Division of the U.S. Department of Labor (DOL) has focused increasingly on hospitality-related businesses such as restaurants and hotels, looking specifically for violations of the Fair Labor Standards Act (FLSA).

Pay Cards - Federal Standard Might Be Helpful

Although employers are often ambivalent, if not negative, about federal involvement in the workplace, there are time when it is beneficial.

FLSA Famous Last Words . . .

There has always been a great deal of mistaken conventional wisdom afoot where the federal Fair Labor Standards Act is concerned. We have blogged previously about the common misconception that one pay practice or another has just got to be lawful, because "everybody does it" that way.

Quick Quiz Answer: Day-Rate Pay Plans

The best answer to our May 8, 2013 Quick Quiz is, "$110.00". In declining percentage order, the responses were:

Quick Quiz: Day-Rate Pay Plans

The Big Corporation decides that it will start paying its Field Service Technicians on a day-rate basis, instead of on an hourly basis. Under the day-rate plan, a Technician will now receive a fixed amount of money for each workday in which he or she performs any work, regardless of the number of hours the Technician works in the workday. The day-rate payments represent compensation for all hours worked in a workday and in a workweek.

Asset Purchaser Also Bought FLSA Liability

A decision from the Seventh Circuit U.S. Court of Appeals (with jurisdiction over Illinois, Indiana, and Wisconsin) offers an important reminder to employers about the potential for successor liability under the federal Fair Labor Standards Act.

No USDOL Response To Request For Worker "Survey"

Readers will recall our January post concerning the U.S. Labor Department's announced intention to "to collect information about employment experiences and workers' knowledge of basic employment laws and rules so as to better understand employees' experience with worker misclassification." As we said then, this is likely to be a precursor to a renewed "Right to Know" initiative.

"Right to Know" Back On The Table?

As we speculated in November, the U.S. Labor Department apparently does intend to reinvigorate its so-called "Right to Know" initiative. This vague and ambiguous proposal first surfaced in 2010 but was eventually shelved. USDOL has now announced its intention to conduct a survey "to collect information about employment experiences and workers' knowledge of basic employment laws and rules so as to better understand employees' experience with worker misclassification."

Quick Quiz Answer: Recovering Loans Or Advances

The best answer to our January 9 Quick Quiz is, "$200". In declining percentage order, the responses were:

Quick Quiz: Recovering Loans Or Advances

Gloria is a stock clerk for The Warehouse Company. She is paid on an hourly basis at the rate of $8.00 per hour.

Input Might Still Be Possible On Proposed "Companionship" Restrictions

Readers will recall our earlier posts (accessible here) relating to the U.S. Labor Department's proposed regulatory revisions that would significantly limit the application of the federal Fair Labor Standards Act's Section 13(a)(15) exemption for companions. While the period for public comment on these proposals closed in March, a letter from an organization representing the interests of the disabled community, the National Council on Disability, demonstrates that it might not be too late to influence the outcome through other avenues.

The Post-Election Wage-Hour Landscape

Now that the election is behind us, employers should consider what they might anticipate in the field of wage-hour law, which is already one of the largest sources of employment-law claims. While the nature and number of the possible developments are practically unlimited, some of the foreseeable ones include these:

What Does the End of Daylight Saving Time Mean to Employers?

At 2:00 a.m. on Sunday, November 4, 2012, people all across the United States turn their clocks back one hour to end Daylight Saving Time (DST). Daylight Saving Time is intended to place more sunlight into “daytime” hours in order to seemingly stretch the day longer and conserve energy. In fact, 2012 marks the sixth year DST was expanded by four weeks pursuant to the Energy Policy Act of 2005.

More Challenges From Hurricane Sandy: Wage-Hour Issues And Related Matters

In thinking-through and implementing their recovery plans in the wake of Hurricane Sandy, employers will want to review our August post summarizing a number of federal Fair Labor Standards Act issues that typically arise following a natural disaster.

"Fissured Industry" Enforcement Initiative Continues

Readers will recall that, in 2010, the U.S. Labor Department announced that it would pay particular attention to multi-party business arrangements that it sees as obscuring or diluting responsibility for complying with the federal Fair Labor Standards Act. USDOL's "fissured industry" enforcement effort seeks to tie together all of the participants, including subcontractors, vendors, suppliers, and the like.

FLSA Questions In Wake Of Hurricane Isaac

Recurring wage-hour issues tend to arise during the recovery from a natural disaster. We posted the following item last year in connection with Hurricane Irene, and the points are equally relevant this time around:

Should You Use Online Exemption "Advisors" Or Checklists?

Various websites now provide questionnaires, checklists, programs, decision-trees, and so on to guide an employer in trying to decide who qualifies as an exempt executive, administrative, professional, or outside-sales employee under the defining federal Fair Labor Standards Act regulations. These tools are fine as far as they go, but their usefulness is normally very limited.

Limited "Insurance Adjuster" Exemption Proposed

Recently introduced legislation proposes to exempt "any employee employed in insurance claims adjusting" from the federal Fair Labor Standards Act's overtime requirements under certain circumstances. Under H.R. 6346 (link to available version below), introduced by Representative Denny Rehberg (R-MT) and Representatives Jo Bonner (R-AL) and Alcee Hastings (D-FL), these adjusters would be exempt while performing specified insurance-claims work under particular conditions following a "major disaster", including natural catastrophes (such as a hurricane, tornado, earthquake, or blizzard) or fires, floods, or explosions.

More FLSA Common Sense from the 5th Circuit - Settlement Without Supervision OK

After lamenting for some time the direction which FLSA law has been heading, it may be too soon to say that the inevitable swing back to the middle has begun, but there are encouraging signs and last week's decision in Martin, et al v. Spring Break '83 Prodn, L.L.C (5th Cir. 7.24.12) is yet another step.

Quick Quiz Answer: Piece-Rate Pay Under The FLSA

The correct answer to our July 1 Quick Quiz is "$25".

Quick Quiz: Piece-Rate Pay Under The FLSA

Anne is paid $1.50 for each remote-control device she assembles. This is her straight-time compensation for all of her hours worked in a workweek.

How Is 2012 Like 1947?

Once upon a time, a seriously-alarmed legislative body concluded that wage-hour claims and litigation had gotten out-of-hand.

What Is A "9/80" Pay Plan?

A compressed schedule colloquially called a "9/80" pay plan seems to be making a comeback. Under this arrangement, the federal Fair Labor Standards Act "workweek" and the schedule for non-exempt employees are set so that the employees work:

Proposed Rule Could Dictate Service Contractor Hires

Under regulations proposed by the Federal Acquisition Regulatory Council ("FARC"), a federal contractor taking on a new service contract would be required to offer jobs to the qualified employees of its predecessor in that work. The proposal would implement Executive Order 13495 on "Nondisplacement of Qualified Workers Under Service Contracts". This Executive Order mandates that, when a service contract expires and a follow-on contract is awarded for the same or similar services at the same location, the newly-awarded contract must include a clause obligating the contractor to make these job offers to the predecessor's workers.

More Tips On Labor Costs And The FLSA

Readers of our earlier post have asked whether there are additional ways to control or even reduce labor costs consistently with the federal Fair Labor Standards Act. There are, and we will again divide our discussion between mistaken beliefs and possible opportunities.

Wrong Response To Pay Complaint Can Pose Big Risks

Betty works for The Big Store as a non-exempt Accounts-Payable Clerk. She is assigned to help with taking a merchandise inventory over one weekend, and she works a total of 60 hours in that workweek.

Hurricane Irene Leaves Wage/Hour Questions In Her Wake

Affected employers will no doubt have a variety of wage-hour questions in the aftermath of any major disaster, such as Hurricane Irene. The number and scope of the issues raised might well be practically endless. In this article, we'll address in very general ways the federal Fair Labor Standards Act topics that experience suggests will be among the most pressing.

Fact Checking Me -- Congressional Rollbacks of Pro-employee Legislation

Three times a year, my good friend Connie Cornell and I give a presentation called Essential Employment Law for our law school alma mater's continuing legal education program.

Hurricane Irene Likely To Spur Wage Questions

Affected employers will no doubt have a variety of wage-hour questions in the aftermath of Hurricane Irene. The number and scope of the issues raised might well be practically endless. In this post, we address in very general ways the federal Fair Labor Standards Act topics that experience suggests will be among the most-pressing.

Are Your Loan Officers Properly Classified Under the FLSA?

Are Your Loan Officers Properly Classified Under the FLSA?

Now an iPhone App for Wage and Hour Litigation

This is clearly a first for this blog. A link to the apple app store.

DOL "Updates" Mangle Longstanding FLSA Principles

Earlier this week, the U.S. Labor Department's Wage and Hour Division published a "Final Rule" entitled, "Updating Regulations Issued Under the Fair Labor Standards Act." This document (which affects not only "regulations" but also interpretative provisions of lesser status), addresses a number of subjects. These topics include (among others) fluctuating-workweek pay plans, the impact of previous changes in the minimum wage, the tip credit available for tipped employees, and the exemption status of certain employees in automobile dealerships. The "Final Rule" is effective on May 5, 2011.

The Department of Labor's update to FLSA regulations is a missed opportunity.

In July 2008, the Department of Labor’s Wage and Hour Division (WHD) published proposed rules that would change several regulations issued under the Fair Labor Standards Act (FLSA) and the Portal-to-Portal Act, including tip credit, fluctuating workweek, compensatory time, commuting, and other provisions. The proposed rules were not finalized during the previous Administration; however, a final rule was published in the Federal Register on April 5, 2011, and will take effect in 30 days.


With the recent winter storms that blanketed the Carolinas – and with more likely to come – this is a good time for employers to review their inclement weather policies and to make sure they properly compensate all employees who miss work because of adverse weather.

"What's My Rate Of Pay?" The Answer May be Trickier Than You Think

The first question often asked by new employees or job applicants is "what is my rate of pay?" In this economy, more than ever, your response is critical to employees and may be closely scrutinized. For legal and practical reasons, employers should obviously be accurate and careful in responding, especially where various differentials, specialty pay, on-call pay, clinical ladders, special pool rates, bonuses, and other bells and whistles could potentially give rise to legal claims. Setting and tracking the regular rate of pay for non-exempt employees forms the foundation for establishing lawful payroll practices.

"Everybody Does It" Is A Bad Bet.

The boom in wage-hour complaints and lawsuits continues unabated. Long-held conventional wisdom that might be questionable or even mistaken under the federal Fair Labor Standards Act or analogous laws now faces unprecedented scrutiny. It is tempting to take comfort in platitudes like, "The whole industry pays employees that way," "Everybody I know of treats those positions as exempt," "All of my competitors classify these kinds of workers as independent contractors," and so on.

DOL Releases Lactation-Break "Preliminary Interpretations", Seeks Comment.

The U.S. Labor Department has now published what it calls its "preliminary interpretations" and a request for information regarding the federal Fair Labor Standards Act lactation-break amendment we wrote about in April and July. The deadline for submitting information and comments is February 22, 2011. Employers should give serious consideration to weighing-in on these "preliminary interpretations".

DOL/ABA Lawyer-Referral Program Threatens More FLSA Litigation.

One might think that the risk of a wage-hour lawsuit can't get any higher, but it will soon increase even more. Vice President Biden and the American Bar Association recently announced that, starting December 13, the U.S. Labor Department will provide a toll-free number to connect people who have made federal Fair Labor Standards Act complaints with an ABA-approved attorney-referral service to help them find a qualified lawyer to handle their claims. It appears that the Labor Department will do this on matters it concludes it cannot pursue given its limited resources.

Care In Drafting Pay Documents Is Essential.

In all her 20 years in human resources, Janice has never seen anything like it. Bigtime Electronics fired its Production Manager Fred Smith last week, and now his lawyer has sent Janice a letter demanding that Fred be paid more than $20,000 for overtime worked during his employment. Fred clearly met the requirements for exemption from overtime under federal and state wage-hour laws.

mployer Beware: Employees Might Be Keeping Secret Records At DOL's Recommendation

Tucked away in a recent U.S. Labor Department e-newsletter was the announcement of a new "Work Hours Calendar." It is a time-tracking document that the Wage and Hour Division urges workers to maintain separately from the employer's official records. According to the newsletter:

Support Grows For Overhauling FLSA's Principles

The federal Fair Labor Standards Act turns 72 years old this year. Even though today's working world is radically different from that of 1938, the FLSA's principles remain largely unchanged and have become increasingly counterproductive in a global economy. Many believe that it is imperative to harmonize this strict, unforgiving law with modern realities, including by making it more flexible, more adaptable, and better-attuned to the practical concerns and preferences of present-day employers and employees.

"Flexible Work Terms and Conditions" Proposal: Yet Another Burden for Employers

At the same time human-resources professionals are wondering how they can keep up with the work necessitated by existing employment laws, Senators Bob Casey (D. PA). and Tom Harkin (D. IA) have introduced S. 3840 to "permit employees to request, and to ensure employers consider requests for, flexible work terms and conditions . . .." This objective sounds benign enough; as usual, the devil is in the details, many of which would be supplied by what would no doubt be extensive regulations prepared by the U.S. Labor Department.

Be Careful About Signing Official Back-Wage Summaries.

When U.S. Wage and Hour Division investigators conclude that back-wages are due under the federal Fair Labor Standards Act, at some point they present the employer with a completed Form WH-56, called a "Summary of Unpaid Wages". This document reflects a variety of information, including the names of each individual the investigator believes should receive a payment and the amount of this payment.

CBA-FLSA-State Law? Is It Like Rock-Paper-Scissors?

Unfortunately for companies that operate in more than one state or are intently focused on the Fair Labor Standards Act, the answer is no.

DOL Publishes Guidance On FLSA Lactation-Break Requirement.

The U.S. Labor Department has released its general views about the meaning of the federal Fair Labor Standards Act's new lactation-break requirement that was the subject of our April 1, 2010 post. You will recall that FLSA-covered employers must now grant breaktime to a worker for the purpose of expressing breastmilk for her nursing child.

DOL Publishes Guidance On FLSA Lactation-Break Requirement.

The U.S. Labor Department has released its general views about the meaning of the federal Fair Labor Standards Act's new lactation-break requirement that was the subject of our April 1, 2010 post. You will recall that FLSA-covered employers must now grant breaktime to a worker for the purpose of expressing breastmilk for her nursing child.

Employers Must Provide "Reasonable Breaks" For Nursing Mothers.

A new amendment to the Fair Labor Standards Act (FLSA) contained in Section 4207 of the Patient Protection and Affordable Care Act of 2010 (PPACA) provides that employers must offer "reasonable breaks" for nursing mothers. Under the new law, an employer must provide "a reasonable break time for an employee to express breast milk for her nursing child for [one] year after the child's birth each time such employee has need to express the milk."

LEGISLATIVE ALERT: Bills Threaten More FLSA Penalties.

Lurking in Senate and House "misclassification" bills are expansive changes in the Fair Labor Standards Act's civil money penalties. The impact of these revisions would extend far beyond U.S. Labor Department investigations involving independent-contractor status.

Compliance Plans -- Showing How You Are Not Breaking the Law.

Seth Harris, the number two person in the Department of Labor, has announced the intention of the DOL to require employers to adopt compliance plans "aimed at ensuring they do not violate wage, job safety and equal employment laws," according to Steve Greenhouse's report in yesterday's New York Times, U.S. Outlines Plan to Curb Violations of Labor Law.

Wage-Hour Pitfalls Rise In Fallen Economy.

Employees are working longer and harder to ensure that they keep the jobs they have. With unemployment hovering around 9.5% nationally and up to 13% in states such as Michigan, employees are doing what they can to stand out and avoid being cut in unfortunate, but sometimes necessary layoffs.

Labor Department Update... Minimum Wage, Civil Penalties Increase.

Employers should be aware of two key developments in the wage and hour arena - a federal minimum wage hike (effective July 24, 2008) and an increase in civil penalties for child labor law violations (effective May 21, 2008). Below is a brief summary of each of these developments.

Preparing for FLSA Investigations (Video).

Preparing for FLSA Investigations.

Hospitals Again Accused Of Conspiring To Suppress Nurses’ Wages.

As hospitals compete for an ever-tighter supply of registered nurses (RNs), they carefully track compensation practices in their markets. Despite bonuses, creative pay plans, flexible schedules and in-house staffing pools, however, most hospitals have also had to use high-priced nursing agencies at one time or another. These agencies temporarily lease nurses to hospitals that are unable to meet all of their staffing needs with their own employees.

$800 per inch?

It may not seem obvious, but statistically speaking, the height of an average American male is usually reported as 5’9". Do most people seem taller than that? According to various studies, only 15% of all American men are 6’ tall or more. Yet 42% of all American presidents have been 6’ or over, 58% of CEOs are over six feet tall, and a whopping 90% of CEOs are at least above average height.

Hospitality: Are Your Employees’ Records A Ticking Time Bomb?

Many hospitality employers are building up potentially enormous wage-hour liability day-by-day without even knowing it, because they are not aware of or misunderstand the rules on identifying and recording employee work time.
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