For most of the year, we have been discussing the upcoming FLSA regulations and what employers can expect related to the white collar exemptions. Recently, the DOL delayed the release of proposed rules, potentially for several months. The DOL’s announcement has raised a host of questions, some of which I discussed with SHRM’s legal editor, Allen Smith, this week. The DOL’s own “savage journey to the heart of the American Dream”—at least the part of it that defines how you must be paid while chasing it—continues to raise questions for employers (apologies to Hunter S. Thompson fans…I couldn’t resist). With Election Day upon us, it is a good time to take a deeper look at this issue and review some of the top questions we have received on this topic.
Articles Discussing General Topics Under The FLSA.
Before the election, we talked about minimum wage and paid sick leave initiatives on the rise, including some important ballot issues. With most of the results tallied, it appears that the Republicans weren’t the only big winners in the 2014 midterm elections last night. While the GOP retaking the Senate majority and reaching historic majority margins in the House garnered most of the national headlines, if you look just below the fold, minimum wage and paid sick leave initiatives were the other big winners of the night.
This month marked the opening of the Supreme Court’s new term. For employment law practitioners, this session will be particularly busy with seven cases analyzing a range of employment questions, from the scope of the EEOC’s duty to conciliate discrimination claims (Mach Mining v. EEOC, oral argument set for January 2015 or later) to the applicability of a whistleblower protection law to employees who make disclosures “specifically prohibited by law” (Dep’t of Homeland Security v. MacLean, oral argument November 8). Over at the FMLA Insights blog, my colleague Jeff Nowak discusses Young v. UPS, where the Court will consider whether, and in what circumstances, the Pregnancy Discrimination Act requires an employer that provides work accommodations to non-pregnant employees with work limitations to also provide work accommodations to pregnant employees with similar work limitations.
Back in late May, we told you that the Department of Labor had released its required Semiannual Regulatory Agenda. The Agenda, which is not binding on the DOL, included several FLSA-related items. Most importantly, the DOL listed its plans to address the “white collar” overtime exemption regulations with proposed rules next month, in November 2014. The section, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” appears on page 56 and 57 of the Agenda. At the time, we predicted that “even with a short 30-day comment period and a quick turnaround on a final rule, the DOL is unlikely to have any new regulation in place before spring 2015.”
One of my favorite authors and artists as a kid was Shel Silverstein, and I have loved rediscovering his books and poems with my daughter (“The Giving Tree” is much sadder than I remember as a kid—something about having kids of your own, I imagine).
From time to time, we hear from employers that ask us about the consequence of delaying payroll because of cash flow.
I promise that this post isn’t a bad setup to a joke about The Sopranos, the mafia, or being in “waste
Last year, the DOL announced an eye-popping $2 million Fair Labor Standards Act (FLSA) settlement with Hutco, Inc, a labor services firm, for Hutco’s miscalculation of “per diem” payments to temporary workers and contractors. The DOL found that Hutco “mischaracterized certain wages as ‘per diem’ payments and impermissibly excluded these wages when calculating overtime premiums, thus denying employees earned overtime compensation.” This month, the same New Orleans District Office of the DOL’s Wage and Hour Division announced a $1.6 million settlement with another employment agency, B&D Contracting, for “per diem” violations for employees under the FLSA. The continued virtual “perp walks” highlight the heightened scrutiny that DOL is giving per diem payments.
Members of the House Subcommittee on Workforce Protections held a hearing on Wednesday to discuss the exponential rise in Fair Labor Standards Act (FLSA) litigation, and the Department of Labor’s employer compliance assistance efforts. According to Subcommittee Chairman Tim Walberg (R-MI), the FLSA and its regulations are “exceptionally complex and outdated . . . promot[ing] the interests of trial lawyers” over employees. Moreover, the “patchwork of conflicting interpretations and a complex regulatory structure have created an environment of legal uncertainty.”
If you have been anywhere near a TV or radio over the past few months, you have probably seen or heard the ads for Hotels.com featuring Captain Obvious. If you’re from the Midwest, and Indiana in particular, it has probably crossed your mind whether the Bob and Tom Show’s Mr. Obvious and Captain Obvious are somehow related. Well, maybe
Late last month, the Senate referred the Fiscal Year 2015 Defense Appropriations Act to the Senate Committee on Appropriations for consideration. The House of Representatives passed its version (H.R. 4870) on June 20 with substantial bipartisan support, 340-73, after considering 80 different amendments. Since this is a wage and hour blog, you can safely assume that I am not telling you about this just so I can link to the cool beta version of the bill tracker at Congress.gov. Of course, you also read the headline, so you know the House version of the bill currently contains a scary provision for many federal contractors.
My apologies to Dave Dudley. The song “Six Days on the Road” just doesn’t stand up to the changes we would have to make after the Ninth Circuit’s decision that the state meal and rest break laws are not preempted by federal hours of service laws (though I’m pretty sure that, eyes open wide or not, the “taking little white pills” part wasn’t even legal in 1963).
Those of you who attended our annual Employment Law Conference this past February know that failing to complete Form I-9 for all new hires can lead not only to civil fines and penalties, but to criminal penalties (If you missed the conference, all of the materials and audio are available here). That’s true for wage and hour violations, too. And I don’t just mean for the company; I mean for every manager involved. In the highest profile recent example, federal prosecutors indicted a sitting Congressman, Republican Michael Grimm from Staten Island, in April 2014 for violations of wage and hour-related tax laws, and the Immigration Reform and Control Act of 1986 (the “IRCA”), among other charges related to a fast food restaurant he once owned. He allegedly filed false state and federal tax returns to underreport more than $1 million in sales and wages by concealing gross receipts and off-the-books cash wage payments.
While renewing my license plates online with Indiana’s Bureau of Motor Vehicles (yes, bureau, not department), I saw an advertisement for the Indiana Attorney General’s Unclaimed Property Division, IndianaUnclaimed.gov. On a lark, I went to the site and found over $3,000 that my former company, an Internet service provider, was owed by MCI for a credit balance on one of our interstate data circuits. An unexpected bonus! What does my good fortune have to do with wage and hour issues? Aside from customer funds like my situation, one of the most common reasons that states end up with unclaimed property is money or other property owed to former employees.
Late last week the House of Representatives narrowly approved the inclusion of an amendment in the Department of Defense (DoD) appropriations bill that would prohibit the agency from using contractors that have incurred Fair Labor Standards Act (FLSA) violations within the past five years. Such violations would include a finding of fault and liability in any civil, criminal, or administrative proceeding, including entering into wage and hour conciliation agreements or consent decrees that include a “finding of fault.”