Category Archives: Wage and Hour

Contingent Commissions Agreements Are Not Required to Be Paid Upon Termination Under the Massachusetts Wage Act.

Lukas, a former employee of Unidine Corporation, believed that sales commission was still owed to her after she voluntary resigned with company.

As the Director of Business Development, Lukas was responsible for identifying, cultivating and enlisting new customers.  Some of these job duties allowed her to earn an annual commission. The wording in the contract between Lukas and her employers, stated as long as she is actively employed and in good standing with the company, she shall be eligible to receive a commission or bonus providing he/she is not been terminated.

Following her departure, Lukas sought payment of approximately $197,000.00 in sales commissions for the new service contracts that she claimed she produced while employed at Unidine. Continue reading Contingent Commissions Agreements Are Not Required to Be Paid Upon Termination Under the Massachusetts Wage Act.

NEW LAW: Daly City, CA Minimum Wage To Increase To $15 By 2021

On January 14, 2019,  the Daly City City Council enacted the Daly City Minimum Wage Ordinance, which incrementally increases the minimum wage in Daly City from $12.00 to $15.00 in accordance with the following schedule:

  • January 1, 2020 — increases to $13.75 per hour
  • January 1, 2021 —increases to $15.00 per hour
  • January 1, 2022 – increase will be based on the Consumer Price Index (CPI).

The minimum wage increase is accompanied by a new posting requirement.  Effective February 13, 2019, all employers in Daly City are required to post the Daly City Minimum Wage Ordinance posting in a conspicuous area where all employees can view it.

It is recommended that all Daly City employers prepare for these increases.

NEW LAW: Fremont, CA Minimum Wage To Increase To $15 By 2020

On January 15, 2019,  the Fremont City Council enacted the Fremont Minimum Wage Ordinance, which incrementally increases the minimum wage in Fremont to $15.00 in accordance with the following schedule:

Small Employers
(25 or fewer employees)
Large Employers
(26+ employees)
July 1, 2019 $11.00 $13.50
July 1, 2020 $13.50 $15.00*
July 1, 2021 $15.00
July 1, 2022 Increase to equal large employer minimum wage

*Increases will correspond to any Consumer Price Index (CPI) increase, up to five percent starting July 1, 2021.

It is recommended that all Fremont employers prepare for these increases.

 

The DOL Strikes Back With Proposed Overtime Rule Version 2.0

The US Department of Labor (DOL) recently released its proposed new overtime regulations, wherein the DOL proposed the following changes to the white collar exemption:

  • The minimum salary threshold for the FLSA “white collar” overtime exemption would increase from $23,660 per year to $35,308 per year (or $679 per week);
  • Employers will be permitted to use an employee’s nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the new standard salary level;
  • The total annual compensation requirement for highly compensated employees would increase from $100,000 per year to $147,414 per year; and
  • The salary threshold will be updated once every three years.

There are no proposed changes to the duties test for the white-collar exemptions (i.e. administrative, executive, or professional exemptions. Continue reading The DOL Strikes Back With Proposed Overtime Rule Version 2.0

NEW CASE: Minneapolis Minimum Wage Ordinance Upheld By Minnesota Court of Appeals

In 2017, the City of Minneapolis enacted a minimum wage ordinance, which increased the minimum wage in the city above Minnesota state minimum wage.

Under that ordinance, minimum wage in Minneapolis is scheduled to increase as follows:

Small Business

(100 or fewer employees)

Large Business

(101 or more employees)

January 1, 2018 $9.65 per hour $10.00 per hour
July 1, 2018 $10.25 per hour $11.25 per hour
July 1, 2019 $11.00 per hour $12.25 per hour
July 1, 2020 $11.75 per hour $13.25 per hour
July 1, 2021 $12.50 per hour $14.25 per hour
July 1, 2022 $13.50 per hour $15.00 per hour*
July 1, 2023 $14.50 per hour
July 1, 2024 Increase to equal large business minimum wage

* minimum wage increases to account for inflation starting January 1, 2023

In November of 2017, several businesses in Minneapolis filed a lawsuit challenging the legality of the Minneapolis Minimum Wage Ordinance and sought to enjoin the Ordinance (or prevent it from going into effect).  The district court denied the injunction and the minimum wage ordinance went into effect on January 1, 2018, as scheduled.

The businesses appealed that ruling and, on March 4, 2019, the Minnesota Court of Appeals upheld the district court’s ruling.

What does this mean for Minneapolis employers?

Simply put, this ruling means that the Minneapolis Minimum Wage Ordinance is still in effect and all employers in Minneapolis must be paying their employees at least the local minimum wage.

NEW CASE: Explaining Compensable Time in California

In a recent case (Sali v. Corona Regional Medical Center), the Ninth Circuit Court of Appeals explained what constituted “compensable working time” in California – helping to clarify a historically “murky” area of California wage and hour law.

In this case, the plaintiffs alleged that their employer’s rounding-time policy resulted in a systematic underpayment of compensable time worked by the RNs. Specifically, they claimed that “the time records are not a reliable indicator of the time RNs actually spent working because the RNs frequently clock-in for work and then perform non-compensable activities; such as waiting in the break room, getting coffee, or chatting with their co-workers, until the start of their scheduled shift.”

The Ninth Circuit recognized that a rounding-time policy is permissible under the California law providing it has been determined; “it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they actually worked.” If the policy remains fair and neutral on average and does not benefit the employer a rounding-time policy is permissible in California.

In this case, the courts did determine two categories for compensable time.

  • the time when an employee is “under the control” of the employer, whether or not the employee is actually engaging in work activities, and
  • the time when an employee “is suffered or permitted to work, whether or not required to do so.”

It was determined that the employer misinterpreted the wording “actually worked” to mean the time employees were engaged in work related activities.

According to the redefined standards, compensable time is when an employee is suffered or permitted to work, whether or not required to do so and anyone under the control of the employer regardless if the employee is actually working.

For example, compensable time is when an employee is working, but is not subject to the employer’s control; such as when an employee works unauthorized overtime.

Another example would be is when the employee is required to stay on the company’s premises while on break or when an employee restricted from their own personal activities.

Take Home for Employers

It is recommended to conduct audits on rounding-time policies on a regular basis to ensure the policy remains neutral. Employers should consider changing policies to a smaller rounding interval system, perhaps to five-minutes to create less time in question or if possible, eliminate rounding-time polices all together.

Just as a reminder, in another recent case (Troester v. Starbucks Corp.) the California Supreme Court had ruled that the federal de minimis doctrine does not apply in California. In short, the Court held that a California employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not escape the obligation to pay employees for that time by invoking the de minimis doctrine.

NEW LAW: Illinois To Incrementally Increase Minimum Wage to $15.00 Per Hour

On February 19, 2019, Illinois Democratic Governor, JB Pritzker, signed the Lifting Up Illinois Working Families Act  (Public Act 101-0001) into law –making New Jersey the latest state to jump on the $15 per hour minimum wage bandwagon.

Under this new law, Illinois’ minimum wage will increase as follows:

  • January 1, 2020 — increases to $9.25 per hour
  • July 1, 2010 — increases to $10.00 per hour
  • January 1, 2021 — increases to $11.00 per hour
  • January 1, 2022 — increases to $12.00 per hour
  • January 1, 2023 — increases to $13.00 per hour
  • January 1, 2024 — increases to $14.00 per hour
  • January 1, 2025 — increases to $15.00 per hour

The minimum wage rate for tipped employees  will also increase as follows:

  • January 1, 2020 — increases to $5.55 per hour
  • July 1, 2020 — increases to $6.00 per hour
  • January 1, 2021 — increases to $6.60 per hour
  • January 1, 2022 — increases to $7.20 per hour
  • January 1, 2023 — increases to $7.80 per hour
  • January 1, 2024 — increases to $8.40 per hour
  • January 1, 2025 — increases to $9.00 per hour

The new law, does, however, provide a small silver lining for small businesses.  The law allows employers with 50 or fewer employees claim a tax credit on the difference between an employee’s wage in the prior year and the increased wage each January 1. That credit, is reduced by 4% each year until it is completely eliminated in 2026 for employers with six or more employees (2027 for employers with five employees or fewer).

It is recommended that all Illinois employers prepare for these increases.

Federal Tip Credit and Tip Pooling Basics

The Fair Labor Standards Act (FLSA) outlines federal tip credit and tip pooling provisions.

What is tip credit and tip pooling under Federal Law?

  • Under a valid tip credit policy, employers are able to pay tipped employees an hourly rate that is less than minimum wage – provided that the tipped employee’s hourly wage plus tips equals or exceeds the required minimum wage.
  • A tip pooling agreement requires tipped employees to deposit a portion of their customer tips into a common “tip pool” to be shared with other employees. A valid Tip Pooling arrangement must meet all the requirements of the FLSA provisions (and any state requirements) for tipped employees.

Continue reading Federal Tip Credit and Tip Pooling Basics

NEW CASE: Major Changes to California’s Reporting Time Pay Requirements

Does your organization require employees to call-in before a scheduled shift to determine if an employee actually needs to report to work that day?  If the answer is yes, then this new California Court of Appeals case imposes new reporting time pay requirements on your organization.

In a recent case (Ward v. Tilly’s Inc.), the California Court of Appeals has held that employers who require employees to call-in prior to a scheduled shift to determine whether the employee is needed that day, is required to pay the employee reporting time pay (at a minimum for 2 hours of work) even if the employee is told that he does not need to work that day.

Background

This case arises from a scheduling policy of a retailer (Tilly’s).  Under the policy, employees were required to call in approximately two hours before the start of a scheduled shift to determine whether they needed to come to work for that shift.  If the employee was told to come into work, the employee was paid for his scheduled shift.  However, if the employee was told not to come into work, the employee received no pay for the day. Continue reading NEW CASE: Major Changes to California’s Reporting Time Pay Requirements

NEW LAW: New Jersey To Incrementally Increase Minimum Wage to $15.00 Per Hour

On February 4, 2019, New Jersey Governor Phil Murphy signed A15 into law –making New Jersey the latest state to jump on the $15 per hour minimum wage bandwagon.

Under this new law, New Jersey’s minimum wage will increase as follows:

  • July 1, 2019 — increases to $10.00 per hour
  • January 1, 2020 — increases to $11.00 per hour
  • January 1, 2021 — increases to $12.00 per hour
  • January 1, 2022 — increases to $13.00 per hour
  • January 1, 2023 — increases to $14.00 per hour
  • January 1, 2024 — increases to $15.00 per hour

The minimum wage rate for tipped employees  will also increase as follows:

  • July 1, 2019 — increases to $2.63 per hour
  • January 1, 2020 — increases to $3.13 per hour
  • January 1, 2021 — increases to $4.13 per hour
  • January 1, 2022 — increases to $5.13 per hour
  • January 1, 2023 — increases to $5.13 per hour
  • January 1, 2024 — increases to $5.13 per hour

It is recommended that all New Jersey employers prepare for these increases.