Category Archives: Department of Labor

NEW RULE: DOL Eliminates “80/20” Tip Credit Rule

On November 8, 2018, the US Department of Labor issued a new Opinion letter (Opinion Letter FLSA 2018-27) wherein the DOL rescinded the 80/20 tip credit rule.  Under this rule, employers were not able to use the tip credit for tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties.

In lieu of this rule, the DOL has stated that ““We do not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the Act are met.”

NEW LAW: Federal Contractor Minimum Wage to Increase in 2019

In a 2014 Executive Order (“Establishing A Minimum Wage for Contractors” Executive Order 13658), President Obama required the US Department of Labor to annually increase the minimum wage rate for federal contractors.

In compliance with that Order, the U.S. Labor Department has published the 2019 minimum wage rates for federal contractors.   Under the new regulations, the minimum wage rate for federal contractors will increase as follows:

  • January 1, 2019 — $10.60 per hour for hourly federal contractors
  • January 1, 2019 — $7.40 per hour for tipped workers performing on or in connection with a federal contract

These new minimum wage rates go into effect on January 1, 2019.   At that time, affected employers will also be required to post the updated E.O. 13658 Worker Rights poster.

It is recommended that companies who contract with the federal government review the hourly wage rate paid to their employees who perform work under those contracts and prepare to make any necessary adjustments.

NEW GUIDANCE: Department of Labor Releases New Websites for Workers and Employers and Creates Office of Compliance Initiatives

The US Department of Labor recently announced the creation of a new agency — the Office of Compliance Initiatives (OCI) – and its launching of two new websites (www.worker.gov and www.employer.gov).

According to the DOL, the OCI is will “promote greater understanding of federal labor laws and regulations, allowing job creators to prevent violations and protect Americans’ wages, workplace safety and health, retirement security, and other rights and benefits.”

The OCI is intended to “provide leadership and support to the [DOL’s] enforcement agencies, advancing the expansion and development of innovative approaches to compliance assistance and enforcement.” The OCI’s work will include:

  • Facilitating and encouraging a culture that promotes compliance assistance within the DOL
  • Providing employers and workers with access to high-quality, up-to-date information about their obligations and rights under federal labor laws and regulations
  • Assisting enforcement agencies in developing new strategies to use data for more impactful compliance and enforcement strategies
  • Enhancing outreach to stakeholders for the DOL’s enforcement agencies

The new websites are designed to assist workers and employers that have compliance questions. Worker.gov “provides a centralized base of information focused on worker protections” under various federal laws. Employer.gov provides employers with easy-to-understand information about their responsibilities under federal laws and regulations and includes a resource section specifically designed for small business owners.

NEW GUIDANCE: Department of Labor Publishes 6 New Opinion Letters

The US Department of Labor has certainly been busy as of late.  In addition to creating a new agency and developing two new websites, the DOL has also issued six new opinion letters, which interpret various issues under the federal Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA).

FMLA Opinion Letters

#1.  Can organ-donation surgery qualify as a “serious health condition” under the FMLA?

In the first letter, the DOL addressed the question of whether an organ donor qualifies as an individual with a serious health condition for purposes of the FMLA.

The DOL concluded that organ donation does qualify as a serious health condition because the donor often will often require an overnight stay in the hospital.

#2.  Does this employer’s no-fault attendance policy violate the FMLA?

In the second letter, the DOL addressed the question of whether a no-fault attendance policy that “freezes” during an employee’s FMLA leave (i.e. remains at the number of attendance points that the employee accrued prior to taking FMLA leave) violates the FMLA. Continue reading NEW GUIDANCE: Department of Labor Publishes 6 New Opinion Letters

NEW FORMS: Department of Labor Publishes New FMLA Forms

The US Department of Labor recently published new model FMLA notices and medical certification forms on their website.

The newly updated forms are as follows:

Notices

Certification forms

It is recommended that all FMLA-employers download these new forms as soon as possible

NEW GUIDANCE — DOL Issues New Guidelines Regarding Intern vs. Employee Question

On January 8, 2018, the US Department of Labor issued a revised Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act, which sets forth an employer-friendly standard for determining whether an intern is considered an employee for purposes of the FLSA.

The new guidance materials were issued in response to the federal courts’ widespread rejection of the DOL’s former guidelines on this issue where the DOL had set forth 6 required factors that must be met before an unpaid intern could be categorized as such and excluded from pay requirements of the FLSA.  These old guidelines also emphasized that internships in the “for-profit” private sector “will most often be viewed as employment” unless all 6 required factors were met.

With the revised Fact Sheet #71, the DOL’s position now aligns with that of the Courts who had previously rejected the DOL’s more stringent 6-factor test.  Under these new guidelines, the DOL now instructs employers to consider the following 7 factors when determining whether an intern is an employee for purposes of the FLSA:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The DOL has clarified that “no single factor is determinative” and the ultimate answer depends on the “unique circumstances of each case.”

Take home for employers

With this new test, the DOL has made it easier for a private employer to create an unpaid internship program that is lawful under the FLSA provided that an analysis of the 7 factors shows that, on balance, the intern benefits more from the relationship than the employer does.  This means that employers need to try to structure their internship programs in such a way that all 7 factors lean toward an internship—rather than an employer-employee relationship.

PENALTY INCREASE — STOP Before Violating These Laws

The US Department of Labor recently announced that it is increasing the penalties associated with violations of several employment laws.  The penalty increase applies to all penalties assessed after January 2, 2018 for violations that took place after November 2, 2015.

The increase in penalties applies to the following violations, among others:

Law Violation Type Old Maximum Penalty New Maximum Penalty
Family Medical Leave Act Failure to post required FMLA notices $166 $169
Fair Labor Standards Act Willful or repeated violations the FLSA minimum wage and/or overtime provisions $1,925 $1,964
Violations of the FLSA child labor law provisions $12,278 $12,529
Violations of the FLSA child labor law provisions that result in serious injury or death $55,808 $56,947
Willful or repeated violations of the FLSA child labor law provisions that result in serious injury or death $111,616 $113,894
Occupational Safety and Health Act Violations of the OSHA provisions $12,675 $12,934
Willful or repeated violations of the OSHA provisions $126,749 $129,336
Failure to post required OSHA notices $12,675 $12,934
Failure-to-abate violations of the OSHA provisions $12,675 $12,934

In addition to the above-listed laws, the DOL also increased the penalties for violations of several other laws, including the Employee Retirement Income Security Act, the Immigration and Nationality Act, and the Employee Polygraph Protection Act, among others.

For a complete table of the increased penalties, click here.

Trick or Treat! DOL Treats Employers with the promise of a new Overtime Rule

On October 30, 2017, the US Department of Labor announced that it will soon “undertake new rulemaking with regard to overtime.”   This announcement comes after the public comment period on the DOL’s Request for Information (RFI) regarding the Overtime Final Rule (where the DOL was seeking public input on what changes should be made to the overtime rule) closed.

In addition to this announcement, the Department of Justice, on behalf of the Department of Labor, filed a notice to appeal the Court’s ruling on the motion for summary judgment challenging the Overtime Rule.  In this ruling (which was issued on August 31, 2017), the Court held that the Overtime Rule’s salary level exceeded the DOL’s authority, and concluded that the Final Rule is invalid.  The DOJ does not, however, intend to proceed with this appeal until the DOL determines what the new exempt salary level should be.

At this time, the DOL has not released any further information regarding the release of a New Overtime Rule.  However based on previous comments made by Secretary Acosta, it is expected the new salary level will be in the low $30,000 range.

The next step in the rulemaking process will be for the DOL to issue a proposed rule.  Once that proposed rule is published, there will be a public comment period followed by the issuance of a final rule.

It is recommended that all employers keep on the lookout for this new rule.  In addition, we will continue to report developments here.

FEDERAL CONTRACTOR MINIMUM WAGE TO INCREASE IN 2018

In a 2014 Executive Order (“Establishing A Minimum Wage for Contractors” Executive Order 13658), President Obama required the US Department of Labor to annually increase the minimum wage rate for federal contractors.

In compliance with that Order, the U.S. Labor Department has published the 2018 minimum wage rates for federal contractors.   Under the new regulations, the minimum wage rate for federal contractors will increase as follows:

  • January 1, 2017 — $10.35 per hour for hourly federal contractors
  • January 1, 2017 — $7.25 per hour for tipped workers performing on or in connection with a federal contract

These new minimum wage rates go into effect on January 1, 2018.  It is recommended that companies who contract with the federal government review the hourly wage rate paid to their employees who perform work under those contracts and prepare to make any necessary adjustments.

UPDATE: The DOL Overtime Rule Is Officially Dead!

Employers across the country can breathe a collective sigh of relief.  On August 31, 2017, the US District Court for the Eastern District of Texas issued a final ruling that officially invalidates (or kills) the DOL Overtime rule.  In short, the Court found that the DOL had “overstepped its bounds” by setting such a high salary level for the executive, administrative, and professional exemptions.

What does this mean for employers?

In short, this ruling means that the exempt salary threshold for executive, administrative, and professional employees remains at $23,600 per year (or at the established state level, if the employer is in a state that has implemented a higher exempt salary threshold).

Final thoughts

One thing of note, the Court clarified that its ruling did not mean that the DOL could not set any minimum salary level as one of the tests for determining whether an individual is exempt from overtime under these exemptions.  With this in mind, there remains a possibility that the DOL may attempt to increase the minimum salary level in the future.  However, if that increase were to occur, it would most likely be a much less drastic increase (and not a doubling of the existing salary level).

At the present time, the DOL has not announced any intention to seek an increase of the salary level.  That being said, employers should prepare for an eventual increase to the exempt salary threshold, even though it isn’t clear what the final number will be.