Yesterday, the Ninth Circuit issued its opinion in cases involving the Department of Labor’s (“DOL”) “80/20 Rule” regarding what is commonly referred to as “sidework” in the restaurant industry. Agreeing with the arguments made by our new colleague Paul DeCamp, among others, the Ninth Circuit issued a decidedly employer-friendly decision. In so doing, it disagreed with the Eighth Circuit, potentially setting the issue up for resolution by the United States Supreme Court.
As those in the restaurant industry are aware, restaurant workers and other tipped ...
Earlier today, the Ninth Circuit issued its opinion in cases involving the Department of Labor’s (“DOL”) “80/20 Rule” regarding what is commonly referred to as “sidework” in the restaurant industry. Agreeing with the arguments made by our new colleague Paul DeCamp, among others, the Ninth Circuit issued a decidedly employer-friendly decision. In so doing, it disagreed with the Eighth Circuit, potentially setting the issue up for resolution by the United States Supreme Court.
As those in the restaurant industry are aware, restaurant workers and other tipped ...
Since last November, much of the discussion regarding the Obama-era overtime regulations that, among other things, more than doubled the minimum salary threshold for executive, administrative, and professional employees under the Fair Labor Standards Act (“FLSA”) has focused on the Department of Labor’s appeal of the nationwide preliminary injunction barring implementation and enforcement of the rule.
While everyone is awaiting the oral argument before the Fifth Circuit, currently scheduled for October 3, 2017, Judge Amos Mazzant of the Eastern District of Texas ...
In Moon et al v. Breathless, Inc., the Third Circuit reviewed the dismissal of a class and collective action under the Fair Labor Standards Act, the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law. The District Court for the District of New Jersey had dismissed the named plaintiff’s claims based on an arbitration clause in the written agreement between the her and Breathless, the club where she worked as a dancer.
In her lawsuit, the plaintiff alleged that she and other dancers were misclassified as independent contractors, and that Breathless unlawfully failed to pay ...
In a much anticipated filing with the Fifth Circuit Court of Appeal in State of Nevada, et a. v. United States Department of Labor, et al, the United States Department of Labor has made clear that it is not defending the Obama Administration’s overtime rule that would more than double the threshold for employees to qualify for most overtime exemptions. However, the Department has taken up the appeal filed by the previous Administration to reverse the preliminary injunction issued blocking implementation of the rule, requesting that the Court overturn as erroneous the Eastern ...
Chipotle recently obtained decertification of a conditionally certified collective action of salaried “apprentices” under Section 216(b) of the Fair Labor Standards Act (“FLSA”) in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017), a case in New York federal court involving claims of unpaid overtime based on misclassification. In that case, Chipotle effectively leveraged disparities between the job duties and activities of putative class and collective action members across six states to show that they were not ...
In a move likely to impact employers in a variety of industries, U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department of Labor has withdrawn the Administrator’s Interpretations (“AIs”) on independent contractor status and joint employment, which had been issued in 2015 and 2016, respectively, during the tenure of former President Barack Obama.
The DOL advised that the withdrawal of the two AIs “does not change the legal responsibilities of employers under the Fair Labor Standards Act . . . , as reflected in the department’s long-standing ...
A new “comp time” bill that would dramatically change when and how overtime is paid to private sector employees in many, if not most, jurisdictions has passed the House of Representatives. And unlike similar bills that have been considered over the years, this one might actually have a chance of passing. If it can get past an expected Democratic filibuster in the Senate, that is.
“Comp time” – short for “compensatory time” – is generally defined as paid time off that is earned and accrued by an employee instead of immediate cash payment for working overtime hours.
Since 2000, the number of wage and hour cases filed under the Fair Labor Standards Act (“FLSA”) has increased by more than 450 percent, with the vast majority of those cases being filed as putative collective actions. Under 29 U.S.C. § 216(b), employees may pursue FLSA claims on behalf of “themselves and other employees similarly situated,” provided that “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” Despite the prevalence of FLSA ...
In In re: Chipotle Mexican Grill, Inc., Case No. 17-1028 (10th Cir. March 27, 2017), the Tenth Circuit Court of Appeals reiterated its holding in Theissen v. GE Capital Corp., 267 F.3d 1055 (10th Cir. 2001), that a district court may utilize a variety of approaches to identify similarly situated workers for purposes of authorizing facilitated notice in FLSA collective actions.
The Tenth Circuit reaffirmed its position when denying Chipotle’s petition for a writ of mandamus. There, the district court issued an order in Turner v. Chipotle Mexican Grill, Inc., 123 F. Supp. 3d 1300 (D ...
Our colleague Adriana S. Kosovych, associate at Epstein Becker Green, has a post on the Hospitality Employment and Labor blog that will be of interest to many of our readers: “Chipotle Exploits Wide Variation Among Plaintiffs to Defeat Class and Collective Certification.”
Following is an excerpt:
A New York federal court recently declined to certify under Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”) six classes of salaried “apprentices” at Chipotle restaurants asserting claims for overtime pay under New York Labor Law (“NYLL”) and parallel state ...
A New York federal court recently declined to certify under Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”) six classes of salaried “apprentices” at Chipotle restaurants asserting claims for overtime pay under New York Labor Law (“NYLL”) and parallel state laws in Missouri, Colorado, Washington, Illinois, and North Carolina, on the theory that they were misclassified as exempt executives in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017). The Court also granted Chipotle’s motion to decertify the ...
In Romero v. Top-Tier Colorado LLC, the Tenth Circuit Court of Appeals ruled that tips received by a restaurant server for hours in which she did not qualify as a tipped employee were not “wages” under the FLSA, and therefore should not be considered in determining whether she was paid the minimum wage.
Tipped Employees & the FLSA
The FLSA provides that employers may take a “tip credit” and pay employees as little as $2.13 per hour if: (i) the tip credit is applied to employees who customarily and regularly receive tips; (ii) the employee’s wages and tips are at least equal to the ...
Berger v. National Collegiate Athletic Association,
No. 14-cv-1710 (7th Cir. Dec. 5, 2016)
Colleges and universities, at least in the jurisdiction of the Seventh Circuit Court of Appeals, surely breathed a collective sigh of relief earlier this month when the Court held that student athletes were not employees under the Fair Labor Standards Act ("FLSA") and thus were not entitled to minimum wage.
Former student athletes at the University of Pennsylvania sued Penn, the National Collegiate Athletic Association (“NCAA”) and over 120 other colleges and universities that have ...
Even employers who were opposed to the new overtime regulations are in a quandary after the District Court for the Eastern District of Texas enjoined the Department of Labor from implementing new salary thresholds for the FLSA’s “white collar” exemptions.
Will the injunction become permanent? Will it be upheld by the Fifth Circuit?
Will the Department of Labor continue to defend the case when the Trump Administration is in place?
What does the rationale behind the District Court’s injunction (that the language of the FLSA suggests exempt status should be determined based ...
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new overtime exemption rule that would ...
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the technology industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new ...
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the financial services industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new ...
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the hospitality industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new ...
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the retail industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new overtime ...
Perhaps in response to protests brought by employees and their advocates in recent years, states, counties, and cities across America have been increasing their minimum wage in piecemeal fashion. Few employers are fortunate enough to need worry about only one minimum wage—the federal minimum wage that is the floor below which employers may not go (unless an employer is not covered under the FLSA). Most large employers that operate in multiple states must now navigate a minimum-wage patchwork in which the hourly rate varies from state to state and, sometimes, between counties and ...
Over the past year, there has been an increased discussion of Fair Labor Standards Act (“FLSA”) requirements for tipped employees. The courts have focused on a number of issues related to tipped employees, including addressing who can participate in tip pools and whether certain deductions may be made from tips. While the FLSA requires employers to pay a minimum wage of $7.25 per hour in most cases, Section 203(m) of the FLSA provides that employers may take a “tip credit” and pay as little as $2.13 per hour to employees who customarily and regularly receive tips, so long as two ...
A group of 21 states ("the States") has filed a Complaint in the Eastern District of Texas challenging the new regulations from U.S. Department of Labor that re-define the white collar exemptions to the overtime requirements of the FLSA. The States argue the DOL overstepped its authority by, among other things, establishing a new minimum salary threshold for those exemptions.
Pursuant to the new regulations from the U.S. Department of Labor, effective December 1, 2016:
- the salary threshold for the executive, administrative, and professional exemption will effectively double ...
Retail employers should take note that the U.S. Department of Labor (“DOL”) updated its mandatory posters notifying employees of their rights under the Fair Labor Standards Act (“FLSA”) and Employee Polygraph Protection Act (“EPPA”). The FLSA and EPPA posters no longer identify the civil monetary penalties that may be assessed for violations. The FLSA poster also provides information regarding the rights of nursing mothers under the FLSA. Employers are required to post the revised mandatory posters as of August 1, 2016, and may download the revised posters from the ...
[caption id="attachment_2734" align="alignright" width="113"] Julie Badel[/caption]
Addressing an unusual set of facts, the U.S. District Court for the Northern District of Georgia has dismissed a suit challenging an employer’s practice of retaining tips that customers give to valets. The plaintiff in Malivuk v. Ameripark, No. 1:15:cv-2570 WSD (N.D. Ga. 2016), alleged that she was promised an hourly wage plus tips but that her employer, who provided valet parking services, retained a portion of the tips.
The defendant moved to dismiss the case because the plaintiff did not ...
The top story on Employment Law This Week: Casino trainees could be entitled to minimum wage.
The U.S. Court of Appeals for the Fourth Circuit recently revived a class action suit from a group of trainees at a casino in Maryland. Applicants who wanted to work the casino's new table games were expected to attend a 12-week “dealer school,” during which they went mostly unpaid. Several of the trainees sued, alleging that the practice violated the Fair Labor Standards Act. Though the district court dismissed the case, the Fourth Circuit ruled that the company could be found to be the ...
Our colleague Nathaniel M. Glasser, a Member of the Firm at Epstein Becker Green, has a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers: “Fourth Circuit Decision Highlights Need for Employers to Assess Whether Training Time Should Be Compensated."
Whether time spent in training is compensable time under the Fair Labor Standards Act (“FLSA”) is an issue that the courts have addressed in a variety of contexts. A new Fourth Circuit decision – Harbourt v. PPE Casino Resorts Maryland, LLC – addressed that issue in the ...
Whether time spent in training is compensable time under the Fair Labor Standards Act (“FLSA”) is an issue that the courts have addressed in a variety of contexts. A new Fourth Circuit decision – Harbourt v. PPE Casino Resorts Maryland, LLC – addressed that issue in the context of pre-hire training provided to some casino workers in Maryland and concluded that the casino workers alleged sufficient facts to proceed with their claims that they should have been paid for pre-hire training.
After Maryland legalized full-fledged casino gambling in November 2012, the state had a ...
The DOL has been steadfast in expanding worker coverage under the Fair Labor Standards Act (“FLSA”), and the financial services industry, like most, will be affected. The DOL’s initiative began on July 6, 2015, when it published a Notice of Proposed Rulemaking (“NPR”) that is expected to extend overtime protection to almost five million white-collar workers who are currently not entitled to overtime pay because they are classified as exempt. The NPR, which is expected to be finalized in July 2016, will likely more than double the salary threshold to qualify for FLSA ...
Brian W. Steinbach, attorney at Epstein Becker Green, has a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers: “Southern District of New York’s Rejection of FLSA Settlement Highlights Need to Settle on Terms That Will Pass Judicial Muster.”
Following is an excerpt:
In rejecting the terms of a collective action settlement in Yun v. Ippudo USA Holdings, No. 14-CV-8706 (S.D.N.Y. March 24, 2016) the United States District Court for the Southern District of New York has confirmed the significance of last year’s Second Circuit ...
[caption id="attachment_2941" align="alignright" width="113"] Brian W. Steinbach[/caption]
In rejecting the terms of a collective action settlement in Yun v. Ippudo USA Holdings, No. 14-CV-8706 (S.D.N.Y. March 24, 2016) the United States District Court for the Southern District of New York has confirmed the significance of last year’s Second Circuit Court of Appeals decision in Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2015). Cheeks held that parties cannot enter into an enforceable private settlement of Fair Labor Standards Act (“FLSA”) claims without ...
The Fair Labor Standards Act (“FLSA”) permits employers to use “tip credits” to satisfy minimum wage obligations to tipped employees. Some employers use those “tip credits” to satisfy the minimum wage obligations; some do not. (And in some states, like California, they cannot do so without running afoul of state minimum wage laws.)
Many hospitality employers use “tip pools” to divide customer tips among staff. Those “tip pools” normally provide for tips to be divided among “front of the house” employees who are involved in serving customers – servers ...
The Third Circuit Court of Appeals recently joined the chorus of Circuits adopting the pro-employer “predominant benefit test” when weighing the compensability of meal periods under the Fair Labor Standards Act (“FLSA”). As a result, the Ninth Circuit is the lone Circuit to apply a different standard, opting to follow the U.S. Department of Labor regulations providing that an “employee must be completely relieved from duty” in order for a meal period to be deemed bona fide and thus not compensable.
In Babcock v. Butler County, a putative class action lawsuit, employees ...
Following recent precedent by the Second and Eleventh Circuits, the U.S. District Court for the Northern District of California dismissed the claims of cosmetology and haircutting students who claimed they acted primarily as workers rather than students.
In Benjamin v. B&H Education, Inc., the plaintiffs sought to represent a putative class of students seeking wages from their schools under the federal Fair Labor Standards Act ("FLSA") and the wage hour laws of California and Nevada.
The District Court held that the putative class representatives had not established that ...
Our colleagues Jeffrey H. Ruzal, Steven M. Swirsky, Joshua A. Stein, Brandon C. Ge, Adam C. Solander, and Valerie Butera contributed to Epstein Becker Green’s recent Take 5 newsletter. In this edition, we address important employment, labor, and workforce management issues in the hospitality industry:
In Naylor v. Securiguard, Inc., the Fifth Circuit Court of Appeals held that an employer may be required to compensate employees for meal breaks if the employees are required to spend a significant portion of that period traveling to a required break area.
Facts
Securiguard employees guarded several gates to a Naval air station. During their shifts, the guards received two scheduled thirty-minute meal breaks. The guards expressed a desire to eat at their posts, but Securiguard prohibited them from doing so (out of concern that the customer would think they were shirking their ...
On September 11, 2015 the U.S. Court of Appeals for the Eleventh Circuit announced that it joined the Second Circuit in rejecting the U.S. Department of Labor’s (“DOL”) rigid six part test for determining whether unpaid interns were employees and should have been paid minimum wages and overtime for their services. Schumann and Abraham et al v Collier Anesthesia, P.A., Wolford College, LLC, Thomas Cook and Lynda Waterhouse, No. 14-13169, 2015 BL 294459 (11th Cir. Sept. 11, 2015), citing to Glatt v. Fox Searchlight Pictures, Inc., Nos. 13-4478-cv, 13-4481-cv (2d Cir. July 2 ...
Under the Federal Fair Labor Standards Act (and state wage hour laws) certain hourly paid employees must be paid time and one-half their regular rate of pay for all hours worked over 40 in a regular work week.
But certain employees (for example many general managers and lead managers) are exempt from this requirement if they satisfy three qualifications imposed by federal regulations:
- The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
- the amount of salary paid must be at least $455 ...
On August 7, 2015 the Second Circuit held that parties cannot enter into private settlements of Fair Labor Standards Act (“FLSA” or the “Act”) claims without the approval of either the district court or the Department of Labor. Cheeks v. Freeport Pancake House, Inc., No. 14-299 (2nd Cir. 2015).
Although other circuits are split on the issue of whether pre-suit agreements to settle FLSA claims are enforceable, this is the first appellate decision to address the issue of whether judicial approval is required to terminate an FLSA lawsuit once it has been filed. See Lynn's Food ...
More than a year after its efforts were first announced, the U.S. Department of Labor (“DOL”) has finally announced its proposed new rule pertaining to overtime.
And that rule, if implemented, will result in a great many “white collar” employees previously treated as exempt becoming eligible for overtime pay for work performed beyond 40 hours in a workweek – or receiving salary increases in order that their exempt status will continue.
In 2014, President Obama directed the DOL to enhance the “white collar” exemptions to the Fair Labor Standards Act (“FLSA”), which currently exempt from overtime some employees who earn $455 per week, or $23,660 per year. The DOL’s proposed rule would more than double the salary threshold for an executive, administrative or professional exemption to apply, increasing it to $970 per week, or $50,440 per year. In addition, the highly compensated employee exemption would increase from $100,000 to $122,148. Not unimportantly, pursuant to the proposed rule, These salary figures would automatically adjust for annual inflation.
In Resch v. Krapf’s Coaches, Inc., the Third Circuit Court of Appeals ruled that drivers who “rarely or never crossed state lines” were nevertheless covered by the motor carrier exemption to the FLSA because they worked in safety-affecting jobs and reasonably could have been expected to drive interstate routes.
The FLSA’s motor carrier exemption creates an overtime exemption for employees who are covered by the Secretary of Transportation’s authority to regulate the safe operation of motor vehicles in interstate or foreign commerce. To fall under the Secretary of ...
In a case that has strategic implications for employers’ use of arbitration agreements in response to collective claims brought under the Fair Labor Standards Act (“FLSA”), the Eighth Circuit has held that former servers at an Arkansas pizzeria chain lack standing to challenge the pizzeria’s enforcement of an arbitration agreement that bars current employees from joining the FLSA collective action. Conners v. Gusano’s Chi. Style Pizzeria, No. 14-1829 (8th Cir. Mar. 9, 2015).
In Conners, the plaintiff filed a proposed collective action lawsuit on behalf of herself and ...
In a case that has strategic implications for employers’ use of arbitration agreements in response to collective claims brought under the Fair Labor Standards Act (“FLSA”), the Eighth Circuit has held that former servers at an Arkansas pizzeria chain lack standing to challenge the pizzeria’s enforcement of an arbitration agreement that bars current employees from joining the FLSA collective action. Conners v. Gusano’s Chi. Style Pizzeria, No. 14-1829 (8th Cir. Mar. 9, 2015).
In Conners, the plaintiff filed a proposed collective action lawsuit on behalf of herself and ...
The United States Supreme Court has upheld an Administrator’s Opinion issued by the United States Department of Labor stating that “typical” mortgage-loan officers are not covered by the Administrative exemption to the FLSA’s overtime requirements.
The Supreme Court’s decision in Perez v. Mortg. Bankers Ass'n reversed a Circuit Court decision vacating the Opinion for failure to comply with the procedural requirements of the Administrative Procedure Act (“APA”). Specifically, the Supreme Court ruled that the APA expressly exempts the Department of Labor ...
In Jones-Turner v. Yellow Enterprise Systems, LLC, the Sixth Circuit recently upheld summary judgment in favor of an ambulance company in a collective action filed by three EMTs, finding that the plaintiffs’ meal and rest breaks were not compensable under the Fair Labor Standards Act (“FLSA”) and Kentucky law. The Court analyzed whether the ambulance company’s policy of having “on-call” lunch periods required EMTs to be compensated for that time.
According to the “on-call” lunch period policy, EMTs in the field were not allotted a specific time period for lunch ...
In Ruffin v. MotorCity Casino, the Sixth Circuit Court of Appeals considered whether casino security guards were entitled to be paid for meal periods during which they were required to remain on casino property, monitor two-way radios and respond to emergencies if called to do so.
The District Court for the Eastern District of Michigan had granted summary judgment to the employer based on the conclusion that no reasonable jury could have found the meal periods to be compensable work time.
In affirming the ruling of the District Court, the Sixth Circuit relied on its earlier decision in ...
Several years ago, I received a kind note around the holidays from my opposing counsel in a wage-hour class action, thanking me and my firm for being their “partners” in addressing employment issues.
Maybe the word he used wasn’t “partners,” but it was something close to it.
At first, I must admit that I thought he was joking.
Then I realized that this attorney, for whom I have great respect, got it.
He got that employers are not looking to violate employment laws, and that the attorneys who represent them are not trying to help them violate the laws.
He got that the opposite is true ...
Regarding the Supreme Court’s Integrity Staffing Solutions v. Busk opinion, issued yesterday, our colleague Michael Kun at Epstein Becker Green has posted “Supreme Court Holds That Time Spent in Security Screening Is Not Compensable Time” on one of our sister blogs, Wage & Hour Defense.
Following is an excerpt:
In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with ...
In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with valuable merchandise being removed in bags, purses or jacket pockets.
Often in the context of high-stakes class actions and collective actions, parties have litigated whether time spent undergoing a security screening must be compensated under the Fair Labor Standards Act (“FLSA”). On December 9, 2014, a unanimous ...
Regarding the Supreme Court’s Integrity Staffing Solutions v. Busk opinion, issued today, our colleague Michael Kun at Epstein Becker Green has posted “Supreme Court Holds That Time Spent in Security Screening Is Not Compensable Time” on one of our sister blogs, Wage & Hour Defense.
Following is an excerpt:
In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with ...
Regarding the Supreme Court’s Integrity Staffing Solutions v. Busk opinion, issued today, our colleague Michael Kun at Epstein Becker Green has posted “Supreme Court Holds That Time Spent in Security Screening Is Not Compensable Time” on one of our sister blogs, Wage & Hour Defense.
Following is an excerpt:
In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with ...
For retail and hospitality industries especially, it is turning out to be a long, hot summer as franchises continue to be in the employment law spotlight.
On July 29, 2014 the NLRB’s General Counsel announced a decision to treat McDonald’s, USA, LLC as a joint employer, along with its franchisees, of workers 43 McDonald’s franchised restaurants with regard to unfair labor practices charges filed by unions on behalf of the workers and authorized charges against of both the franchisees and McDonalds. (See our July 30 blog post and Aug. 14 blog ...
Our colleague Jeffrey H. Ruzal recently wrote an article entitled “Offset as Defense to FLSA Suit May Mitigate Unpaid Wage Claims,” which appears in the June 2014 issue of Hospitality Law.
Following is an excerpt:
A federal district court in Michigan recently preserved for trial the question of whether a defendant employer may mitigate its back wage liability by offsetting paid break time, which would effectively extinguish plaintiff employees’ claims under the Fair Labor Standards Act.
In Hayes, et al., v. Greektown Casino, LLC, et al., No. 12-1552 (E.D. Mich. 03/31/14), a ...
Our colleague Jeffrey H. Ruzal recently wrote an article entitled “Offset as Defense to FLSA Suit May Mitigate Unpaid Wage Claims,” which appears in the June 2014 issue of Hospitality Law.
Following is an excerpt:
A federal district court in Michigan recently preserved for trial the question of whether a defendant employer may mitigate its back wage liability by offsetting paid break time, which would effectively extinguish plaintiff employees’ claims under the Fair Labor Standards Act.
In Hayes, et al., v. Greektown Casino, LLC, et al., No. 12-1552 (E.D. Mich. 03/31/14 ...
Our colleague Kara Maciel, the editor of Hospitality Labor and Employment Law Blog, was quoted in an article titled "Six Tips on Not Getting Tripped Up by FLSA's Tipped Employee Rules" that was recently published in Thompson's HR Compliance Expert.
Following is an excerpt:
Employers need to make sure they are following both federal Fair Labor Standards Act requirements and state laws regarding tipped employees, said Kara Maciel of the firm Epstein Becker Green during a recent seminar focused on tipped employees. …
However, every state has its own set of rules regarding tipped ...
By: Kara Maciel, Adam Solander and Lindsay Smith
As the Employer Mandate compliance deadline looms for employers under the Affordable Care Act (“ACA”) and employers are closely monitoring employee hours, it is critical that employers take appropriate and lawful steps to record all hours worked by an employee. If employers try to play games and manipulate how time records are maintained, they could find themselves in hot water under both the ACA and the Fair Labor Standards Act (“FLSA”).
In what appears to be one of the first lawsuits challenging how hours are recorded under the ACA, an employee filed a putative collective action against Sun Holdings, LLC, a fast food franchisee. The employee, a busboy at a Golden Corral restaurant, alleged that his managers required him to work under his real name and an alter ego to avoid paying him for all hours worked. This set-up allegedly was designed to avoid having to pay overtime compensation under the FLSA and to count him as a full-time employee eligible to receive health benefits under the ACA.
Accurate calculation and recording of the total number of hours worked by an employee is essential to compliance with the provisions of both the FLSA and the ACA. Under the FLSA, an employer must pay an employee at least the minimum wage for all hours worked. An employer must also provide overtime compensation at one and a half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week, unless that employee is classified as exempt. Therefore, if an employer attributes some amount of time worked by one employee to an alter ego through which the employee cannot claim his time, the employee may be deprived of the overtime compensation he has earned.
Additionally, the ACA only provides benefits to employees who reach a certain amount of hours and binds employers with a certain amount of employees meeting that hour threshold. The ACA applies to employers with 50 or more employees working 30 or more hours per week. Only those employees working 30 hours or more per week are entitled to the health care coverage required by the ACA. Therefore, an employee may lose the benefits to which he would otherwise be entitled if a portion of his hours worked is attributed to someone else, causing him to fall below the 30-hour minimum. Furthermore, an employer may avoid the obligations of the ACA if it records 30 hours or more of work time for less than 50 of its employees. Although the Employer Mandate, which puts the employer-provided coverage into effect, does not kick in for large employers until January 1, 2015, applicability of the ACA depends upon the size of the affected workforce during the prior calendar year.
A claim of this kind could be very costly for an employer because, as is the case here, such claims are often brought as collective actions. In this case, the employee filed his claim on behalf of himself and all others similarly situated. Although the amount of unpaid wages and liquidated damages he seeks only amounts to approximately $15,000.00, the franchisee owns roughly 400 restaurants in Texas and Florida. Thus, a court award, or even a settlement, could be quite significant.
These allegations demonstrate the importance of correctly tracking employee hours and ensuring that an employee receives compensation and benefits in accordance with the total amount of hours worked. Often times, this may mean training your managers as to the correct protocol for recording and compensating hours worked and monitoring to ensure managers are following that protocol.
Importantly, this case forecasts what could be an emerging and growing area of litigation under the ACA, so employers must be ever vigilant about putting into practice protocols that ensure they are complying with the ACA and not manipulating hours to avoid the Employer Mandate’s requirements. Considering that an analysis under the Employer Mandate’s look-back methodologies should be done this year, any changes to employees’ hours should be closely reviewed with legal counsel. Although overtime compensation and benefits coverage can create increased financial burdens on employers, the cost of not complying can be even greater.
By Aaron Olsen
President Obama’s announcement last week that he was ordering the Labor Department to revise the regulations concerning who can be classified as “executive or professional” employees has created a buzz about what this will mean for both employers and employees. The fact that the President specifically identified concerns about managers in the fast-food industry suggests that the Department of Labor will be looking for ways to change how employees in the hospitality industry are classified.
However, there have been very few details about what any of this will ...
The U.S. Supreme Court has agreed to resolve a split among the federal circuits regarding whether time spent in security screenings is compensable under the Fair Labor Standards Act (FLSA), as amended in 1947 by the Portal-to-Portal Act. The outcome of the case, Integrity Staffing Solutions v. Busk, could have a significant economic impact on employers who require employees to submit to security searches before or after they begin their workday if employers are required to pay for the time employees spend doing so.
The case arises from claims filed by two former ...
On December 19, 2013, the U.S. District Court for the Southern District of New York denied the defendant’s motion for discovery regarding the plaintiffs’ immigration status in Colon v. Major Perry St., Inc., No. 1:12-cv 03788 (S.D.N.Y. 2013).
In Colon, several workers, some of whom are undocumented aliens, sued under the Fair Labor Standards Act (“FLSA”) to recover minimum and overtime wages that the employer refused to pay. The defendant argued that under the Second Circuit’s decision in Palma v. NLRB, 723 F.3d 176 (2nd Cir. 2013), the plaintiffs ...
Virtually all hospitality employers are aware that pursuant to the Fair Labor Standards Act (“FLSA”), they are required to compensate employees for all hours worked. What is not as clear, however, is whether the time an employee spends at training programs, lectures, meetings, and other similar activities should be considered hours worked. As a result, our clients in the hospitality industry often ask whether they are required to compensate employees for time spent in such training activities.
The short answer to this question is that an employee’s ...
Our colleagues Kara Maciel and Jordan Schwartz, both of Epstein Becker Green, recently cowrote an article for PLC titled "Tipped Employees Under the FLSA."
Following is an excerpt:
Wage and hour lawsuits certainly are not new phenomena, but in recent years, service industry employees have increasingly made claims regarding tips and service charges. In particular, employers in states such as Massachusetts, New York and California have seen a surge in class actions involving compulsory tip pools and distributions of service charges to employees. Commonly targeted employers ...
Our colleagues Kara Maciel and Jordan Schwartz, both of Epstein Becker Green, recently cowrote an article for PLC titled "Tipped Employees Under the FLSA."
Following is an excerpt:
Wage and hour lawsuits certainly are not new phenomena, but in recent years, service industry employees have increasingly made claims regarding tips and service charges. In particular, employers in states such as Massachusetts, New York and California have seen a surge in class actions involving compulsory tip pools and distributions of service charges to employees. Commonly targeted employers ...
By: Kara M. Maciel
The following is a selection from the Firm's October Take 5 Views You Can Use which discusses recent developments in wage hour law affecting the hospitality industry.
IRS Will Begin Taxing a Restaurant’s Automatic Gratuities as Service Charges
Many restaurants include automatic gratuities on the checks of guests with large parties to ensure that servers get fair tips. This method allows the restaurant to calculate an amount into the total bill, but it takes away a customer’s discretion in choosing whether and/or how much to tip the server. As a result of this ...
Our colleague Kara M. Maciel of Epstein Becker Green wrote a wage and hour update in this month’s Take 5 labor and employment newsletter.
Here’s a preview of the five items:
1. IRS Will Begin Taxing a Restaurant's Automatic Gratuities as Service Charges
2. The New DOL Secretary, Tom Perez, Spells Out the WHD's Enforcement Agenda
3. DOL Investigates Health Care Provider and Obtains $4 Million Settlement for Overtime Payments
4. Federal Court Strikes Down DOL Tip Pooling Rule
5. Take Preventative Steps When Facing WHD Audits
Read the full article here.
Our colleague Kara M. Maciel of Epstein Becker Green wrote a wage and hour update in this month’s Take 5 labor and employment newsletter.
Here’s a preview of the five items:
1. IRS Will Begin Taxing a Restaurant's Automatic Gratuities as Service Charges
2. The New DOL Secretary, Tom Perez, Spells Out the WHD's Enforcement Agenda
3. DOL Investigates Health Care Provider and Obtains $4 Million Settlement for Overtime Payments
4. Federal Court Strikes Down DOL Tip Pooling Rule
5. Take Preventative Steps When Facing WHD Audits
Read the full article here.
* * * *
If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
On September 17, 2013, the U.S. Department of Labor (“DOL”) issued a final rule extending the federal minimum wage and overtime pay protection under the Fair Labor Standards Act (the “FLSA”) to many direct care or domestic service workers, including home health aides, personal care aides and nursing assistants. The rule will take effect on January 1, 2015.
For almost 40 years, an exemption from the minimum wage and overtime requirements of the FLSA has applied to domestic service workers employed to provide “companionship services” for an ...
By: Kara M. Maciel
Many restaurants include automatic gratuities on guests’ checks with large parties to ensure servers get fair tips. This method allows the restaurant to calculate an automatic gratuity or tip into the total bill, but it takes away the customer’s discretion in choosing whether and/or how much to tip the server. As a result of this removal of a customer’s voluntary act, the IRS has decided that it will separately tax automatic gratuities.
In 2012, the IRS issued a ruling to clarify earlier tax guidance on tips, particularly automatic gratuities, but ...
Demonstrating the importance for employers to review their FMLA practices, an investigation by the U.S. Department of Labor’s Wage and Hour Division (DOL) revealed that T.G.I. Fridays’ FMLA policy and notification practices did not comply with the law. Specifically, the policy did not include information on the FMLA’s military family leave provisions, information on the right to take FMLA-covered leave on an intermittent or reduced schedule basis, and misstated the 12-month employment requirement for FMLA eligibility as being 12 continuous months.
By: Kara Maciel and Jordan Schwartz
As discussed in prior blogs, due to confusion surrounding FLSA tip pool requirements, the U.S. Department of Labor (“DOL”) Wage and Hour Division enacted a strict rule in 2011 related to proper tip pooling and service charge practices. This rule was met with swift legal challenges, and earlier this week the U.S. District Court for the District of Oregon concluded that the DOL had exceeded its authority when implementing its final rule. See Oregon Rest. and Lodging Assn. v. Solis, No. 3:12-cv-01261 (D. Or. June 7, 2013).
Inconsistent ...
By: Kara Maciel and Jordan Schwartz
As discussed in prior blogs, due to confusion surrounding FLSA tip pool requirements, the U.S. Department of Labor (“DOL”) Wage and Hour Division enacted a strict rule in 2011 related to proper tip pooling and service charge practices. This rule was met with swift legal challenges, and earlier this week the U.S. District Court for the District of Oregon concluded that the DOL had exceeded its authority when implementing its final rule. See Oregon Rest. and Lodging Assn. v. Solis, No. 3:12-cv-01261 (D. Or. June 7, 2013).
Inconsistent ...
By Michael Kun
“Hybrid” wage-hour class actions are by no means a new concept.
In a “hybrid” class action, the named plaintiff files suit seeking to represent classes under both the federal Fair Labor Standards Act (“FLSA”) and state wage-hour laws. As the potential recovery and limitations periods for these claims are often very different, so, too, are the mechanisms used for each.
In FLSA claims, where classes can be “conditionally certified” if a plaintiff satisfies a relatively low burden of establishing that class members are “similarly situated” – a ...
Wage-hour lawsuits filed under the federal Fair Labor Standards Act (FLSA) represent one of the fastest growing and most problematic areas of litigation facing employers today, especially when such cases are brought as collective actions. A recent Supreme Court case based in class action analysis provides a potentially-useful analog for employers to stave off such collective actions.
Class action criteria are set forth in Fed. R. Civ. P. 23, and they allow for one or more individual named plaintiffs to sue on behalf of a large – sometimes very large – group of ...
From restaurants in New York to childcare providers in Arkansas to the garment industry in Southern California, Department of Labor investigators continue to uncover FLSA violations by conducting unannounced workplace inspections.
Accordingly, in January, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.
We previously blogged about how to prepare ...
The prohibition against private settlements of FLSA claims was scrutinized again last week, when U.S. District Court for the Eastern District of New York held that parties could voluntarily dismiss an FLSA lawsuit without obtaining approval of the settlement agreement from the court. Picerni v. Bilingual SEIT & Preschool Inc.
Courts in FLSA cases have historically expressed the concern that individual waivers of FLSA rights would enable employers to use their superior bargaining power to extract individual waivers from their employees and “thwart ...
Epstein Becker Green is pleased to announce the availability of a Wage and Hour Division Investigation Checklist, which provides hospitality employers with valuable information about wage and hour investigations and audits conducted by the U.S. Department of Labor (DOL). Like EBG’s first-of-its kind Wage and Hour App, which provides detailed information about federal and state laws, the Checklist is a free resource offered by EBG.
The Checklist provides step-by-step guidance on the following issues: preparation before a Wage and Hour Division investigation of the DOL; ...
By Douglas Weiner and Kara Maciel
“There’s a new sheriff in town.” With those words in 2009, Secretary Hilda Solis initiated a policy at the Department of Labor that emphasized increased investigations and prosecutions of violators rather than the prior administration’s emphasis on providing compliance assistance.
Her departure – announced yesterday – is unlikely, however, to have much effect on the Department’s current aggressive enforcement policy, as the top enforcement officer of the Department remains Solicitor of Labor M. Patricia Smith. Solicitor ...
In recent years employees have asserted claims for time allegedly worked away from their normal worksites, on their Blackberries, iPhones or personal home computers. Until now, employers have been faced with the nearly impossible task of proving that their employees did not perform the alleged work. The US Department of Labor and plaintiffs’ attorneys have taken advantage of the well-established obligation of employers to make and maintain accurate records of the hours worked by their non-exempt employees, and to pay for all work “suffered or ...
By Michael Kun and Aaron Olsen
Agreeing with the recent federal district court opinion in our case Alonzo v. MAXIMUS, Inc., 832 F.Supp.2d 1122, 1126 (2011), the California Court of Appeals has confirmed in a case against See’s Candy that California employers may round employees’ time entries so long as the employer’s rounding policy does not consistently result in a failure to pay employees for time worked.
In Alonzo, a federal district court granted summary judgment in favor of our client MAXIMUS, Inc. on the plaintiffs’ time rounding claims. The Alonzo Court explained that ...
The U.S. Court of Appeals for the Eighth Circuit recently confirmed that the Fair Labor Standards Act (“FLSA”) does not prohibit an employer from modifying its workweek in order to avoid overtime costs. The Court’s ruling in Redline Energy confirms that employers are permitted to modify their workweeks as long as the change is intended to be permanent. Employers are not required to set forth a legitimate business reason for making the change and are permitted to do so solely for the purpose of reducing their overtime costs. The only requirement on ...
By: Kara M. Maciel
Hurricane Sandy is approaching this weekend, so employers along the East Coast should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.
A few brief points that all employers should be mindful of under the FLSA:
- A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if the employer has a collective bargaining agreement or handbook policies, the ...
By: Kara Maciel
Hurricane Sandy is approaching this weekend, so hospitality employers along the East Coast should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.
A few brief points that all employers should be mindful of under the FLSA:
- A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if the employer has a collective bargaining agreement or handbook ...
On September 19, 2012, several members of EBG’s Wage and Hour practice group will be presenting a briefing and webinar on FLSA compliance. In 2012, a record number of federal wage and hour lawsuits were filed under the Fair Labor Standards Act (FLSA), demonstrating that there is no end in sight to the number of class and collective actions filed against employers. Claims continue to be filed, raising issues of misclassification of employees, alleged uncompensated "work" performed off the clock, and miscalculation of overtime pay for non-exempt workers.
In this interactive ...
By: Greta Ravitsky and Jordan Schwartz
On July 24, 2012, the Fifth Circuit became the first federal appellate court in over thirty years to enforce a private settlement of a wage and hour dispute arising under the Fair Labor Standards Act (“FLSA”) in Martin v. Spring Break ’83 Productions LLC.
For decades, federal courts have consistently held that FLSA wage and hour disputes may not be settled privately without approval from either the Department of Labor (“DOL”) or a federal district court. This apparently “settled” area of law was based exclusively on the Eleventh ...
By: Kara M. Maciel
In April of 2011, the U.S. Department of Labor (“DOL”) changed its rule defining the general characteristics of tips in an attempt to overrule the U.S. Court of Appeals for the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc. ruling that the FLSA does not impose any restrictions on the kinds of employees who may participate in a valid tip pool where the employer does not claim the “tip credit.”
DOL’s Recent Position on Tip Pool Participation
The DOL’s amended rule provides that tips are the property of the employees, and may not be used by the employer ...
By: Kara M. Maciel
In April of 2011, the U.S. Department of Labor (“DOL”) changed its rule defining the general characteristics of tips in an attempt to overrule the U.S. Court of Appeals for the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc. ruling that the FLSA does not impose any restrictions on the kinds of employees who may participate in a valid tip pool where the employer does not claim the “tip credit.”
DOL’s Recent Position on Tip Pool Participation
The DOL’s amended rule provides that tips are the property of the employees, and may not be used by the employer ...
By Amy Traub and Desiree Busching
Just as designers must be cognizant of copycat fashions, employers must be cognizant of copycat lawsuits. In February of this year, Xuedan “Diana” Wang filed a lawsuit against her former employer, Hearst Corporation, on behalf of herself and others similarly situated, alleging that the company violated federal and state wage and hour laws by failing to pay minimum wage and overtime to interns working for Harper’s Bazaar. Wang had worked for Harper’s Bazaar during the fall of 2011. Her lawsuit was filed in February 2012, only five months ...
By Amy Traub, Michael Kun, and Anna Kolontyrsky
As employers know, not only are FLSA collective actions more prevalent than ever, but they can be costly to defend or resolve. In an attempt to bring quick closure to such cases, somedefendants have attempted to settle such claims with the individual plaintiff alone through a Rule 68 offer of judgment before a class has been conditionally certified.
This strategy has come under attack. And the United States Supreme Court will now determine whether it is permissible.
The United States Supreme Court has elected to review a Third Circuit ...
By: Michael Thompson
The United States Supreme Court has ruled that pharmaceutical sales representatives (PSRs) are “outside salesmen” who are not entitled to overtime under the Fair Labor Standards Act (FLSA). The high court’s ruling was predicated on its finding that, in the pharmaceutical industry’s “unique regulatory environment,” the commitments obtained by PSRs equate to traditional sales. Furthermore, the Supreme Court rebuked the Department of Labor (DOL) for “unfairly surprising” the industry by filing amicus briefs arguing that PSRs were ...
The Seventh Circuit has ruled that pharmaceutical sales representatives are covered by the Administrative exemption to the FLSA because “the core function of the representatives’ duties, the physician office visits,” requires significant discretion and independent judgment. While other courts have applied a case specific analysis to determine the applicability of the Administrative exemption in this context, the Seventh Circuit’s analysis appears to be applicable to virtually all sales representatives in the pharmaceutical ...
On May 16, I co-hosted a small roundtable discussion here at the firm entitled “Employee Misclassification Issues in the Financial Services Industry: Preventive Maintenance and Proactive Strategies.” The topics included proper application of the administrative exemption from federal and state overtime laws; the nettlesome employee v. independent contractor question; and contingent workforce issues. In attendance was a healthy mix of in-house employment counsel, human resources professionals, management consultants and outside counsel. ...
By: Anna Kolontyrsky and Jeffrey Landes
As summer internship season approaches, financial service employers should confirm that their internship programs comply with all relevant laws, including the requirements of the Fair Labor Standards Act (“FLSA”) and applicable state laws. Ascribing the term “intern” to a college or postgraduate student working for an employer for a short duration during the summer months does not automatically exempt the employer from federal and state minimum wage and overtime requirements. Unless the position meets certain statutory and ...
By Douglas Weiner and Meg Thering
In one of the many “wrinkles” in Fair Labor Standards Act (“FLSA”) litigation, settlements of wage and hour disputes between an employer and its employees are only enforceable if supervised by the U.S. Department of Labor or approved by a court. Courts will approve settlements if they are “fair”; however, as demonstrated in a recent decision arising out of New Jersey - Brumley v. Camin Cargo Control - courts may need to be reminded that employers also have rights and legitimate interests. The Brumley Court took what was a bargained-for ...
Recent Updates
- Watch: Change Is Coming from the EEOC—but When? - Employment Law This Week
- The EEOC Moves to End EEO Reporting – Comments Invited Through August 24
- Watch: New York Employers Face New Restrictions on Severance, Tuition Repayment, and Sick Time - Employment Law This Week
- Attention Connecticut Warehouse Employers: Deadline for New Quota Notices Approaching
- New Jersey Department of Labor’s Guidance Clarifies Expanded Job Protected Leave Rights for Employees