Executive Summary: The Southern District Court of California, in Ruiz v. ParadigmWorks Group, Inc., held that an employer was not at fault for failing to grant an employee’s request for multiple medical leaves of absence where the employee was totally disabled and she could not provide a “finite end date to [her] total disability.”
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.
Who Won? – The New Tip Pool Law
On March 23rd, President Trump signed into law a massive spending bill. Buried on page 2025 of the spending bill, available here, is the following amendment to Section 203(m) of the Fair Labor Standards Act (FLSA), the federal wage-hour law: “An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” The new law also states that any employers who violate this rule will be liable to the employees in the amount of the tips that were taken, “an additional equal amount as liquidated damages,” and “a civil penalty not to exceed $1,100 for each such violation,” as the U.S. Department of Labor (DOL) shall determine. The back story to this change in the wage-hour law is important to understanding its impact on wage-hour enforcement going forward.
New Jersey to Pass Broadest Pay Equity Law in the US
Executive Summary: On March 26, 2018, the New Jersey legislature overwhelmingly passed amendments to the state discrimination law, including additional pay equity protections. The bill now goes to Governor Phil Murphy’s desk, who has indicated he will sign it into law. If signed, it would be one of the broadest equal pay statutes in the country. This legislation would make it unlawful for anyone who is in a “protected class” to receive lower pay or benefits for substantially similar work, unless the employer can demonstrate this differential is based on criteria permitted under the law.
Sixth Circuit Holds Transgender Status Is Protected by Title VII and Rejects Religious Freedom Restoration Act Defense
Executive Summary: The Sixth Circuit Court of Appeals is the latest to weigh in on the heated debate as to whether sexual orientation, gender identity, transgender status and/or gender expression are protected classes under Title VII of the Civil Rights Act of 1964. Following on the heels of the Second Circuit’s February 26, 2018 en banc ruling in Zarda v. Altitude Express that Title VII protects sexual orientation, on March 7, 2018, in EEOC v. R.G., 2018 U.S. App. LEXIS 5720 (6th Cir. March 7, 2018), the Sixth Circuit became the first to hold that Title VII also protects transgender status. In doing so, the Sixth Circuit rejected the employer’s defense under the Religious Freedom Restoration Act (RFRA).
Ninth Circuit Creates More Uncertainty in 80/20 Rule for Tipped Workers
Executive Summary: On February 16, 2018, the United States Court of Appeals for the Ninth Circuit granted en banc review of Marsh v. J. Alexander’s LLC, 869 F.3d 1108, creating a new layer of uncertainty for hospitality employers. The previous decision by a three-judge panel on September 6, 2017, had rejected what is commonly called the “80/20 rule,” which states that hospitality employers may not reduce a tip-earning employee’s hourly pay below the minimum wage when that employee spends more than 20 percent of his or her workweek on non-tip-earning tasks. The case will now be reconsidered by a larger panel of the Ninth Circuit, with oral argument scheduled for the week of March 19, 2018. The grant of en banc review suggests an intention to reconsider the panel’s prior holding or analysis.
Getting “PAID” Just Got Easier: The DOL Rolls out a Pilot Initiative to Streamline the Resolution of Wage and Hour Violations
Executive Summary. On March 6, 2018, the Wage and Hour Division (W&HD) of the U.S. Department of Labor (DOL) rolled out a new nationwide pilot initiative, called the Payroll Audit Independent Determination program—or “PAID.” This initiative is designed to streamline the resolution process of potential overtime and minimum wage violations of the Fair Labor Standards Act (FLSA). Such potential violations as “off-the-clock” work violations, failures to pay overtime wages, or employee misclassification would expressly fall within the ambit of PAID. According to the W&HD, PAID’s objectives are expeditious resolution of FLSA claims without litigation, improved employer compliance with its overtime and minimum wage obligations under the law, and a fast delivery of owed back wages to workers.
Public Accommodation of Service Animals and Emotional Support Animals
Executive Summary: Title III of the Americans with Disabilities Act (ADA) prohibits disability discrimination in places of public accommodation, which includes businesses that are open to the public – like shopping malls, restaurants, movie theaters, medical offices, recreational facilities, etc. As such, these entities are required to modify practices, procedures, and policies that infringe upon disabled individuals’ rights in certain circumstances. Service animal and emotional support animal accommodation has become an issue for businesses – and the media – as an increasing number of individuals have begun using emotional support animals. With that in mind, below is an analysis of the ADA public accommodation requirements for service animals, including general guidance for properly evaluating an individual’s use of service animals on or in the business premises as well as issues of accommodation for emotional support animals.
Have You Properly Prepared for a WPA Audit?
Executive Summary. Audits of compliance with the Wage Parity Act (“WPA”) are on the rise. The NYS Attorney General’s Medicaid Fraud Unit, Medicaid Inspector General (“OMIG”), and Department of Labor (“DOL”) are all auditing home care agencies. Unless you know what will be asked, you are at a serious disadvantage. Unless you know how to prove your compliance with the WPA to an auditor, you are also at a serious disadvantage.
California Supreme Court’s Recent Overtime Ruling Likely to Cause Payroll Problems
Executive Summary: On March 5, 2018, the California Supreme Court issued a ruling clarifying how employers must handle flat-sum bonuses (i.e., additional compensation that does not change depending on the number of hours worked by an employee) in the calculation of overtime. Under this ruling, an employer must calculate a non-exempt employee’s additional overtime by dividing the amount of the flat-sum bonus by the actual number of non-overtime hours worked by the employee; then multiplying that per-hour value by 1.5 (or 2, depending on the applicable multiplier to use) and by the number of overtime hours worked. The ruling clarifies an important technical aspect of overtime calculations and upends many employers’ previous understanding of what the law requires. Although this decision is limited to flat-sum bonuses and does not apply to other forms of non-hourly compensation, employers should promptly have their incentive/bonus compensation plans reviewed for compliance.
Second Circuit Provides Guidance on Intern-Employee Test
Executive Summary: On December 8, 2017, the United States Court of Appeals for the Second Circuit (which has jurisdiction over federal district courts in Connecticut, New York and Vermont) ruled in favor of an employer, holding that six unpaid interns were not “employees” for purposes of the Fair Labor Standards Act (FLSA). See Wang v. Hearst Corp. To reach its conclusion, the court used the flexible “primary beneficiary test” it first promulgated in Glatt v. Fox Searchlight Pictures. The court’s application of the test in Wang created some confusion for employers.
Austin, Texas Mandates Paid Sick Leave
The city of Austin, Texas has become the first Southern city to require virtually all private employers to offer paid sick leave to employees working within Austin’s city limits. This new ordinance goes into effect October 1, 2018, for employers with more than five employees. It goes into effect for employers five or fewer employees (not including family members) on October 1, 2020.
NLRB Joint Employer Whiplash
Executive Summary: The National Labor Relations Board (“NLRB” or “Board”) has vacated its decision in Hy-Brand Industrial Contractors, Ltd., (“Hy-Brand”), thereby reinstating the joint employer standard created by the Obama Board in the Browning-Ferris Industries of California, Inc. (“BFI”) decision. The Board’s reversal was due to an apparent conflict of interest created by Board Member William Emanuel’s participation in the Hy-Brand decision.
Sixth Circuit Holds Telecommuting May Be Reasonable Accommodation
Executive Summary: On February 21, 2018, the Sixth Circuit Court of Appeals held an attorney could perform the essential functions of her job while working remotely for a ten-week period. As a result, when the employer refused to permit the employee’s telecommuting request for the finite period, the employer failed to accommodate the employee in violation of the Americans with Disabilities Act, according to the court.
Second Circuit Finds Title VII Prohibits Discrimination Based on Sexual Orientation
Executive Summary: Overruling prior circuit precedent, the full U.S. Court of Appeals for the Second Circuit held today that sexual orientation discrimination is a subset of sex discrimination under Title VII. In reaching this conclusion, the Second Circuit joins the Seventh Circuit, deepening a split among the federal appeals courts, as the majority of these courts have held that Title VII does not prohibit sexual orientation discrimination