Fair Labor Standards Act

The current prominence of the multi-entity workplace—where so-called “host” employers rely on third-party staffing agencies to perform various functions—makes a clear determination of statutory “employer” status critical in a variety of contexts.  Oftentimes, a host employer will argue that a worker is an independent contractor rather than employee.  This approach typically leaves the staffing agency responsible for classification decisions under the Fair Labor Standards Act and for Occupational Safety and Health Act compliance.

In April 2021, the Texas Supreme Court greatly expanded the responsibility of host employers in the context of workplace injuries.  Specifically, in Waste Management of Texas, Inc. v. Stevenson, the Court held that a worker who was injured on the job while employed by a temporary staffing agency was the host employer’s employee for workers’ compensation purposes, notwithstanding a contract between the host employer and staffing agency that expressly stated workers were independent contractors.

In Waste Management, the plaintiff, Robert Stevenson, was hired by Taylor Smith Consulting, LLC and assigned to work for Waste Management of Texas, Inc. on a temporary basis.  No. 19-0282, 2021 Tex. LEXIS 348, at *3 (Apr. 30, 2021).  In May 2014, Stevenson was working on a Waste Management garbage truck on a garbage-collection route when the driver of the truck accidentally backed over Stevenson’s leg and foot.  Both Waste Management and Stevenson’s staffing agency employer carried workers’ compensation insurance.  Stevenson applied for benefits under the staffing agency’s policy and separately filed suit against Waste Management and the driver, alleging common-law negligence.  Waste Management won summary judgment, successfully arguing that, because it was Stevenson’s employer, the Texas Workers’ Compensation Act barred Stevenson’s claims against it and the driver.  Stevenson unsuccessfully argued that the staffing contract, which expressly stated that temporary workers like Stevenson “shall be independent contractors in respect of Waste Management”, should govern.  The Fourteenth Court of Appeals reversed and remanded, holding there was a genuine fact issue as to whether Stevenson was Waste Management’s employee.
Continue Reading Texas Supreme Court finds injured contract worker was an employee for workers’ compensation purposes

Federal law, as well as many state and local laws, require employers to display notices and posters in the workplace advising employees of their rights.  With many employers operating remotely due to COVID-19, however, questions regarding these statutory posting requirements have arisen.  In response, on December 29, 2020, the United States Department of Labor released guidance addressing the permissibility of providing the required postings through electronic means.

By way of background, no less than 15 federal laws, including the Fair Labor Standards Act, the Family and Medical Leave Act, and the Employee Polygraph Protection Act, require employers to display notices or posters in the workplace advising workers of their rights under such laws.  Generally speaking, the notices or posters must be physically displayed in a conspicuous location that can be easily accessed by all employees (break rooms and cafeterias, for instance, are common locations for this).
Continue Reading Pandemic or not, employers must still comply with notice-posting requirements under federal law

On November 8, 2018, the U.S. Department of Labor (DOL) re-issued an opinion letter rescinding the “80/20 Rule,” which prohibited employers from taking a tip credit if a tipped employee spent more than 20% of his or her working time on non-tipped work. The DOL’s new guidance provides restaurant and hospitality employers with clarity and a more practical approach regarding when a tip credit can be taken.

Under the Fair Labor Standards Act (FLSA), the tip credit allows employers to pay tipped employees not less than $2.13 per hour and to take a tip credit equal to the difference between that amount and the federal minimum wage. So, before an employer can take the tip credit, it must determine whether the employee is working in a tipped job.

If an employee works in separate jobs, one of which is tipped and the other of which is not, the employee has “dual jobs,” and the employer can only take the tip credit when the employee is working in the tipped job. For example, if an employee works at times as a waiter and at other times as a maintenance worker, the employer can take the tip credit only for the time the employee spends working as a waiter and must pay the full minimum wage for the time the employee spends working as a maintenance worker.Continue Reading Here’s a tip for you: DOL offers new tip credit guidance rescinding 80/20 rule

Q:        What is easiest way to get rid of a wage and hour class action?  

A:        Making an offer of judgment to moot the named plaintiff’s claim by proposing to pay him or her an amount that will fully satisfy his or her entire individual claim.

This is exactly the strategy that the employer utilized and which, at first blush, the U.S. Supreme Court approved in Genesis Healthcare Corp v. Symczyk. But don’t get too excited, a quick review of Genesis establishes that its utility will likely be limited. Continue Reading U.S. Supreme Court Limits Use of Offers of Judgment to Avoid Class Actions