As expected, the U.S. Department of Labor (DOL) has repealed the Trump-era rule regarding classification of independent contractors. As we discussed here, the Trump-era rule codified the “economic realities test” for use when analyzing whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA).
Labor advocates criticized
The U.S. Department of Labor (“DOL”) published a final rule addressing independent contractor status under the Fair Labor Standards Act (“FLSA”). Independent contractor status is a critical question under the FLSA because eligible employees are entitled to the law’s protections (for example, minimum wage and overtime for non-exempt employees) but independent contractors are not. Incorrectly
In Oregon Rest. & Lodging Ass’n v. Perez, the Ninth Circuit ruled this week that federal law restricts a restaurant employer from maintaining a tip pool that includes “back-of-the-house” employees and requires directly tipped employees to share their tips, regardless of whether a tip credit is taken and employees are paid at least minimum wage.
The FLSA permits an employer to count a tipped employee’s tips toward its hourly minimum wage obligation. This is known as a “tip credit.” Section 203(m) of the FLSA requires employers who take a tip credit to give notice to employees and allow employees to retain all of the tips they receive, unless such employees participate in a valid tip pool. Under section 203(m), a tip pool is valid if it is comprised exclusively of employees who are “customarily and regularly” tipped, commonly referred to as “front-of-the-house” employees.
The employers in Oregon Rest. & Lodging Ass’n, however, did not take a tip credit against their minimum wage obligation. (Indeed, Oregon does not permit a “tip credit,” and requires that all employees receive the state-mandated minimum wage.) Rather, the employers in Oregon Rest. & Lodging Ass’n paid their tipped employees at least the federal minimum wage and required their employees to participate in tip pools. Unlike the tip pools contemplated by section 203(m), however, these tip pools included both front- and back-of-the-house employees.Continue Reading Ninth Circuit Declares Tip Pools Invalid Under FLSA Even Where Employers Pay More Than Minimum Wage
As colleges and universities begin new terms, not all students are returning to the classroom. Some students are headed into the “real world,” to work alongside corporate titans, small-business owners, or moms and pops in their shops, while receiving academic credit—and not wages—for their efforts. These students are applying the lessons learned in their prior studies to real-world scenarios to gain valuable experience, build their skills, and make connections to help them succeed upon graduating. Or at least they should be. If they are instead used merely as a source of labor, they must be paid. But many employers mistakenly assume that because these students are getting school credit, they need not be paid. That is a trap into which employers reading this blog will not fall.
The Fair Labor Standards Act (“FLSA”) and state laws require employers to pay all employees for work performed. If students who participate in unpaid internships with private employers do not qualify as “employees,” they need not be paid. Whether those students qualify as “employees” depends on several factors, but the general rule is that these programs are lawful as long as the student, not the employer, is the primary beneficiary of the internship program.Continue Reading It’s a Trap! Students Receiving Credit Need Not Be Paid?
Coming to a store or restaurant near you soon! Supervisors will get overtime!
“Too many Americans are working long days for less pay than they deserve.” —President Obama on overtime pay http://t.co/Y4yThJ1K2g
— Barack Obama (@BarackObama) June 30, 2015
To be exempt from minimum wage and overtime requirements, currently a worker must perform certain duties
The U.S. Supreme Court, in a rare unanimous decision earlier this week in Integrity Staffing Solutions v. Busk, held that time spent by warehouse employees at Amazon.com warehouses waiting to go through security checks at the end of their shifts was “postliminary” activity not compensable under the federal Fair Labor Standards Act (“FLSA”) and its major amendment, the Portal to Portal Act (“PPA”). While Busk may provide welcome clarity for employers who wish to implement such screens, the case probably does little to radically change the analysis of compensability of other pre- and post-shift activities beyond its narrow set of facts.
Amazon.com’s Warehouse Security Checks
Integrity Staffing is a staffing agency that provides employees to Amazon.com. Those employees work in the company’s warehouses pulling products from shelves and getting them packaged for mailing to buyers. Because of concerns related to employee theft, Integrity Staffing required employees to go through security checks before leaving the warehouse at the end of their shift, but did not pay employees for that waiting time. Waiting in line and going through these security checks took about 25 minutes.Continue Reading U.S. Supreme Court Finds Post-Shift Security Checks Noncompensable in Integrity Staffing v. Busk, But Employers Shouldn’t Get Too Excited
Today the US Supreme Court issued its long-awaited opinion in Genesis Healthcare v. Symczk. In the case, the Court held that employers could effectively end collective action lawsuits under the Fair Labor Standards Act (FLSA) by agreeing to pay the named plaintiffs in those lawsuits whatever they claim they are owed. The Court held that because the named plaintiff was made completely whole by the employer’s offer her individual claim was moot, and because the named plaintiff’s claim was moot the entire collective action litigation was dismissed. This decision provides a helpful tactical weapon for employers that face the prospect of long and expensive collective action litigation.
How To “Pick Off” A Big FLSA Collective Action Lawsuit
Laura Symczk was employed as a nurse for Genesis, and was non-exempt under wage laws like the FLSA. She filed an FLSA “collective action” against Genesis claiming that it unlawfully failed to pay her and other nurses for meal breaks in which she had to work (the FLSA requires that employers pay employees for all their work time, including during meal breaks when the employee is not relieved of all work duties). Very early in the litigation, Genesis Healthcare issued what is called an “offer of judgment” under Federal Rule of Civil Procedure (FRCP) 68, offering to pay Symczk everything she claimed she was owed for her own unpaid work time (about $7,500, plus her attorney fees to date). The trial court then dismissed her entire collective action lawsuit, finding that because Symczk was made completely whole by Genesis’ offer and no others had yet joined the collective action, the case was “moot.”Continue Reading US Supreme Court Gives Green Light For Employers To Use Offers Of Judgment To Moot FLSA Collective Actions
It’s that time of year again, here’s our post from last year from Matt Durham on this perennial summer concern for employers . . .
Certain things have become the recognizable signs of spring. Budding leaves. Flowers. Chirping birds. And summer intern resumes. Especially during a slow or recovering economy, HR professionals are likely to
In a highly visual public expression of its commitment to wage-and-hour violations, and to encouraging employees to file wage and hour complaints, the Department of Labor’s Wage and Hour Division entered the world of Smartphone apps when it recently launched its own “DOL-Timesheet” app for the iPad and iPhone. At first glance, the DOL-Timesheet App
Today the U.S. Supreme Court issued another employee-friendly opinion in Kasten v. St. Gobain Performance Plastics Corp., holding by a 6-2 margin that the Fair Labor Standards Act ("FLSA") anti-retaliation provisions protect an employee’s oral complaints to supervisors about wage and hour violations. This is the latest of three opinions this term that have expanded