Recent Blog Posts
- U.S. Department of Labor Rescinds Guidance Regarding “Side Work” and the FLSA’s Tip Credit in Restaurants Continue Reading… Under the Fair Labor Standards Act (“FLSA”), employers can satisfy their minimum wage obligations to tipped employees by paying them a tipped wage of as low as $2.13 per hour, so long as the employees earn enough in tips to make up the difference between the tipped wage and the full minimum wage. (Other conditions apply that are not important here.) Back in 1988, the U.S. Department of Labor’s Wage and Hour Division amended its Field Operations Handbook, the agency’s... More
- DOL Announces “Listening Sessions” As It Mulls Changing White Collar Exemption Regulations Continue Reading… Changes to the white collar exemptions under the Fair Labor Standards Act (“FLSA”) are coming slowly. Very, very slowly. Back in May 2016, under the Obama Administration, the Department of Labor issued a Final Rule updating the regulations for the FLSA’s minimum wage and overtime executive, administrative, and professional exemptions. That rule would, among other things, have increased the minimum salary required for most employees within these exemptions from $455 a week ($23,660 a year) to $913 a week ($47,476... More
- Sixth Circuit Rejects Argument That FLSA Bars Individual Arbitration Agreements Continue Reading… Three months ago, the United States Supreme Court issued its decision in Epic Systems Corp. v. Lewis, holding that the National Labor Relations Act (“NLRA”) does not prevent the use of arbitration agreements with class and collective action waivers covered by the Federal Arbitration Act (“FAA”). (See our discussion of Epic here.) The Court of Appeals for the Sixth Circuit has now similarly concluded in Gaffers v. Kelly Services, Inc., that the Fair Labor Standards Act (“FLSA”) does not bar such... More
- Supreme Court Prevents Successive Class Actions from Reviving Time-Barred Claims Continue Reading… In most wage and hour cases, each workweek gives rise to a separate claim, at least for statute of limitations purposes. Thus, an employee seeking payment for alleged off-the-clock work or an independent contractor claiming misclassification and entitlement to overtime ordinarily may seek back wages and related recovery only for work performed within a set amount of time—usually two to six years preceding the filing of the complaint, depending on the jurisdiction—preceding the filing of the complaint. But what happens... More
- Supreme Court Rejects Longstanding “Narrow Construction” Rule for FLSA Exemptions Continue Reading… For more than 70 years, the Supreme Court has construed exemptions to the Fair Labor Standards Act (“FLSA”) narrowly. In A.H. Phillips, Inc. v. Walling, for example, the Court stated that “[t]o extend an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretative process and to frustrate the announced will of the people.” 324 U.S. 490, 493 (1945). The Supreme Court has restated this rule many times in the intervening years,... More
- U.S. DOL Adopts “Primary Beneficiary” Test to Determine Whether Unpaid Interns Are Employees Continue Reading… In a move allowing increased flexibility for employers and greater opportunity for unpaid interns to gain valuable industry experience, the United States Department of Labor (“DOL”) recently issued Field Assistance Bulletin No. 2018-2, adopting the “primary beneficiary” test used by several federal appellate courts to determine whether unpaid interns at for-profit employers are employees for purposes of the Fair Labor Standards Act. If interns are, indeed, deemed employees, they must be paid minimum wage and overtime, and cannot serve as... More
- Department of Labor Appeals Ruling Striking the 2016 Overtime Rule, Then Obtains Stay Halting Its Appeal Continue Reading… As we have discussed previously, in early September the U.S. Department of Labor (“DOL”) withdrew its appeal of last November’s ruling from the Eastern District of Texas preliminarily enjoining the Department’s 2016 Final Rule that, among other things, more than doubled the minimum salary required to satisfy the Fair Labor Standards Act’s executive, administrative, and professional exemptions from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The DOL abandoned its appeal in light of the... More
- Sixth Circuit (Mostly) Approves Commission Plan With Recoverable Draw Continue Reading… In many industries, sales are subject to ebbs and flows. Sometimes the fish are biting; sometimes they aren’t.
A common device that employers with commissioned salespeople use to take the edge off of the slow weeks and to ensure compliance with minimum wage and overtime laws is the recoverable draw. Under such a system, an employee who earns below a certain amount in commissions for a given period of time, often a week, receives an advance of as-yet unearned commissions to... More
- Court Green Lights Immediate Appeal of Chipotle Collective Action Decertification Order Continue Reading… As noted in earlier postings, in March of this year, a federal judge in New York handed Chipotle Mexican Grill a significant victory, denying a request by salaried management apprentices alleging misclassification as exempt from overtime to certify claims for class action treatment under the laws of six states, as well as granting Chipotle’s motion to decertify an opt-in class of 516 apprentices under the Fair Labor Standards Act (“FLSA”). The plaintiffs then sought—and in July 2017 the U.S. Court... More
- DOL Withdraws Overtime Rule Appeal Continue Reading… On September 5, 2017, the Department of Labor filed with the Fifth Circuit an unopposed motion asking the court to dismiss its appeal of the nationwide preliminary injunction ruling issued last November by a Judge Amos Mazzant in the Eastern District of Texas. The motion states that DOL’s appeal is moot in light of Judge Mazzant’s entry of final judgment on August 31, 2017. Barring any unusual further developments, we anticipate that the Fifth Circuit will dismiss the appeal promptly.