Fair Labor Standards Act (FLSA)

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Shortly after the U.S. Department of Labor’s new overtime rule was finalized, the Pennsylvania Department of Labor and Industry (L&I) followed suit and finalized its own proposed overtime rule. Regulation 12-106 was set to exceed the new federal rule regarding the minimum salary to be paid to employees who are exempt from overtime. The new federal threshold of $684 per week ($35,568 per year) goes into effect on January 1, 2020. Regulation 12-106 would have phased Pennsylvanians in executive, administrative, and professional roles into a new minimum salary requirement of $875 per week ($45,500 per year) by 2022. The threshold would have adjusted automatically every three years beginning in 2023.

The Independent Regulatory Review Commission was set to consider Regulation 12-206 yesterday, November 21, 2019. But about an hour before the meeting was to begin, the regulation was withdrawn. L&I advised in a brief letter that “legislation could be passed before the end of this year that would invalidate portions of this regulation.”Continue Reading Pennsylvania wage rules: Changes on the horizon

The Fifth Circuit Court of Appeals issued an opinion last week holding for the first time that a “day rate” in excess of $455 paid to a highly compensated employee meets the requirements of the “salary basis” test under the Fair Labor Standards Act (FLSA).

Specifically, in Faludi v. U.S. Shale Solutions, No. 17-20808, 2019 WL 3940878 (5th Cir. Aug. 21, 2019), the plaintiff, a consultant, brought suit alleging that his former client and employer[1] owed him overtime under the FLSA because the plaintiff had not been paid on a salary basis. Instead, the plaintiff received $1,000 per day for any day on which he performed any amount of work in Houston and $1,350 per day for any day in which he performed any amount of work outside of Houston. However, under the plaintiff’s arrangement with the defendant-employer, if he worked more than 40 hours in a week, he did not receive any overtime premiums. In the district court, the defendant-employer argued, and the district court found, that the plaintiff’s claims failed as a matter of law because he fell within the FLSA’s “highly compensated employee” exemption.

On appeal, the plaintiff argued that he did not qualify for the “highly compensated employee” exemption because the day rate payment system used by his employer did not satisfy the “salary basis” test. In support of his claim, the plaintiff argued: (1) the day rate system did not calculate pay “on a weekly, or less frequent basis” in violation of 29 C.F.R. § 541.602(a); (2) the plaintiff voluntarily reduced some of his day rate payments on invoices he submitted to the defendant-employer for days that he performed less than a full day’s work; and (3) the day rate system did not satisfy the “reasonable relationship” test articulated in 29 C.F.R. § 541.604(b).
Continue Reading Fifth Circuit approves day rates for some highly compensated employees

The National Labor Relations Board (the Board) issued a 3–1 decision in Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019), on Wednesday that provides significant new guidance regarding the intersection of arbitration agreements and the National Labor Relations Act (NLRA). The Board’s decision expressly authorizes employers to implement arbitration agreements that include collective waivers in direct response to employees filing a Fair Labor Standards Act (FLSA) collective action. Further, the Board held that warning employees that they will be discharged if they do not accept such an agreement — even with FLSA litigation pending — does not constitute a violation of the NLRA.

In January 2015, seven employees filed an FLSA collective action against Cordúa Restaurants, Inc., a Houston-based restaurant group, in the United States District Court for the Southern District of Texas. Subsequently, 13 additional employees opted into the lawsuit. In response to the lawsuit, Cordúa implemented a revised mandatory arbitration agreement that was to be executed by all employees. The new agreement expressly required employees to waive FLSA collective rights and arbitrate FLSA claims on an individual basis. Though Cordúa had previously required employees to execute an arbitration agreement that waived class action rights, the new agreement marked the first time that employees were asked to waive collective rights. When the new agreement was presented to employees, managers informed employees that they would not be scheduled for any additional shifts unless and until they executed the new arbitration agreement. The charging parties asserted that both implementing the arbitration agreement because of the litigation and threatening to constructively terminate those who refused to sign the agreement constituted violations of the NLRA.Continue Reading NLRB offers new guidance on mandatory arbitration agreements following last year’s Epic decision

The Acting Administrator for the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued two new opinion letters on Friday, December 21, 2018.

The first opines on whether a home health aide service’s compensation plan, which pays an average hourly rate that may vary from workweek to workweek, complies with the Fair Labor Standards Act (FLSA)., The employer stated that its home health aides travel between client locations during the workday and that the employer calculates weekly pay as follows: it multiplies an employee’s time with clients by the employee’s hourly pay rate, then divides the product by the employee’s total hours worked – including both client time and travel time. Using this calculation, the employer stated that a typical standard rate of pay is $10.00 per hour and that it paid overtime based on that same regular rate of $10.00. The WHD opined that, while the employer’s compensation plan complies with the FLSA’s minimum wage requirements, it might not comply with the FLSA’s overtime requirements if the actual regular rate of pay exceeds $10.00 an hour. The WHD emphasized that the regular rate of pay may not be arbitrarily chosen by an employer or employee, but rather is an “actual fact” based on “mathematical computation.” The WHD further explained, however, that the compensation plan would comply with the FLSA’s overtime requirements for employees with an actual regular rate less than $10.00 per hour as an employer may choose to pay an overtime premium in excess of what is required by law.Continue Reading U.S. Department of Labor issues new opinion letters on overtime compliance with varying average hourly rates and on volunteerism

This post was written by Cindy S. Minniti and Mark S. Goldstein.

Today’s New York employment law landscape is increasingly dynamic, with a constant stream of newly issued legislation and judicial opinions. To keep our readers current on the latest developments, we will share regular summaries of recent developments affecting Empire State employers. Here’s what happened in March and April 2015:

Minimum Wage Hike Suffers a Setback

New York lawmakers recently dealt a significant, but not necessarily fatal, blow to Gov. Cuomo’s plan to raise the minimum wage to $10.50 per hour (and to $11.50 in NYC). In late March, state legislators surprisingly omitted the proposed wage hike from the state’s upcoming annual budget. The debate over whether to yet again raise the state’s minimum wage – which is already slated to increase to $9.00/hour on December 31, 2015 – is now left to unfold in the State Assembly and Senate over the next six weeks, until the 2015 legislative session ends on June 17.

State Assembly Passes “Family Care” Leave Bill

On March 17, the State Assembly passed a bill that would provide up to 12 weeks of partially paid “family care” leave to employees statewide. Under the bill, employees would be able to take a leave of absence, and receive up to one-half of their regular wages: (i) to participate in providing care for a family member’s serious health condition; (ii) to bond with a newly born or newly adopted child; or (iii) because of any qualifying exigency, as interpreted under the Family and Medical Leave Act (FMLA), arising out of the active duty of certain family members. Like FMLA leave, the proposed state family care leave law would allow employees to take family care leave on an intermittent or reduced schedule basis.

The family care leave bill is now under consideration by the Republican-controlled Senate, which earlier this year recommended its own family leave law. That proposal would have provided employees with up to six weeks of leave, with partial pay, for certain qualifying exigencies, but would have required the state to fund the program, at least in the first year. Passage of a family care leave bill – in any form – is hardly a certainty and will likely take a backseat to other initiatives that Gov. Cuomo is supporting, such as the minimum wage increase and the Women’s Equality Act.Continue Reading New York Employment Roundup: March & April 2015

As previously reported, the Fifth Circuit recently enforced a private settlement of certain FLSA claims. More recently, however, Judge Christopher Conner of the U.S. District Court for the Middle District of Pennsylvania reached the opposite conclusion and agreed with the majority view of courts that unsupervised FLSA settlements are not enforceable.Continue Reading Pennsylvania Requires Court Approval for Enforcement of Wage/Hour Settlements Under FLSA

Recently, the Fifth Circuit created a crack in a thirty-year old doctrine, based on the Eleventh Circuit’s Lynn’s Food Stores, Inc. v. United States decision and followed by nearly all federal courts, that wage and hour claims brought by individuals under the Fair Labor Standards Act (“FLSA”) can be settled only with the signoff of…

On June 18, 2012, the U.S. Supreme Court resolved a split among the U.S. Circuit Courts of Appeals, holding that pharmaceutical sales representatives are exempt outside sales employees under the Fair Labor Standards Act (“FLSA”). Thus, such employees are not entitled to overtime protection.Continue Reading Close Counts in Horseshoes, Hand Grenades and Sales: Supreme Court Holds Pharmaceutical Representatives Exempt Under FLSA

The United States Supreme Court has held that under the Fair Labor Standards Act (“FLSA”), the federal law that requires proper payment of wages and overtime pay, an employer cannot retaliate against an employee who complains about a possible violation of that law, even where the complaint is oral rather than in writing. Kasten v. …