Tag Archives: FLSA

NEW LAW: US DOL Increases the Penalties for Violations of Several Laws

It’s that time of the year again …

The Federal Civil Penalties Inflation Adjustment Act of 1990 was amended and is required to annually adjust the civil monetary penalty levels due to inflation ideally no later than January 15 of each year. However due to funding issues the final 2019 ruling was delayed just a bit this year.

But don’t worry, the Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2019 regarding the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA) and for Occupation Safety and Health Association (OSHA) is now available.

FLSA
The DOL has established that employers who repeatedly or willfully violate federal minimum wage or overtime requirements under the FLSA will receive a maximum penalty of $2,014; an increase from $1,964. Continue reading NEW LAW: US DOL Increases the Penalties for Violations of Several Laws

NEW CASE: Failing to Provide Lactation Accommodations Cost One Employer 1.5 Million Dollars

As part of the passage of the Affordable Care Act, the Fair Labor Standards Act (FLSA) was amended in March of 2010 to require most employers to provide nonexempt employees nursing mothers a “reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk.”

Employers are also required to provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.”

As a result, nursing mothers have legal protections that allow them to express breast milk in the workplace.  Employers must comply or face potential consequences which may include liability under Title VII of the Civil Rights Act of 1964 as demonstrated by a recent jury verdict in Delaware. Continue reading NEW CASE: Failing to Provide Lactation Accommodations Cost One Employer 1.5 Million Dollars

What is Your Company’s Definition of Outside Sales?

As you know, the Fair Labor Standards Act (FLSA) requires most employees to be paid minimum wage and overtime, except for those that are exempt outside sales employees.

According to the FLSA, to qualify for the outside sales employee exemption, all of the following tests must be met:

  • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged away from the employer’s place or places of

Sounds simple enough, so why do so many employers miss the mark?

Many employers do not fully understand the outside sales exemption, which can prove to be extremely costly. Continue reading What is Your Company’s Definition of Outside Sales?

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 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

FLSA Requirements for Tip Pooling Quietly Changed

Buried in its 2,232 pages, the 2017 Omnibus Budget Bill contains a short provision making important amendments to the Fair Labor Standards Act as it relates to tip pooling arrangements. These amendments may have immediate and important ramifications for employers and may require changes to existing tip pooling arrangements in order to remain in compliance with the law.

The Long and Short of It

First, the bill makes it unlawful for employers, including managers and supervisors, to keep any portion of tips received by their employees, regardless of whether or not the employer takes a tip credit. Previously, the FLSA was vague on whether an employer could retain a portion of employee tips when the employer did not take a tip credit (i.e., when the employer paid the employee at least minimum wage not including tips). This update to the law brings the FLSA in line with previous Department of Labor (DOL) regulations that prohibited employers from sharing in employee tips at any time.

The second significant change brought about by the bill is that the FLSA now permits employers to require tipped employees to share their tips with back of house employees when the employer does not take a tip credit.  Thus, under the FLSA, employers who pay their tipped employees at least the full federal minimum wage may now require tipped employees such as severs and bartenders to share their tips with employees who are not customarily tipped, such as dishwashers, cooks, and bussers. This amendment invalidates previous DOL regulations prohibiting employers from requiring such tip sharing with non-tipped employees.

DOL Guidance Continue reading FLSA Requirements for Tip Pooling Quietly Changed

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.

Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

While the minimum salary requirements for “white collar” employees (executive, administrative, or professional employees) is not changing in 2018 (at least not until/unless the Department of Labor announces a new Overtime Rule), there are several states where the minimum salary requirements for exempt employees is increasing in 2018 (December 31st for New York employers).

These increases (i.e. in Alaska, California, Colorado, Maine, New York, and Oregon) are occurring because the minimum exempt salary rates for these employees (as established under state law) are scheduled to increase in 2018 (December 31st for New York employers).

Under the Fair Labor Standards Act (FLSA), the minimum salary requirements for white collar employees is as follows:

Payment Schedule Minimum Salary
Weekly $455
Bi-Weekly $910
Semi-Monthly $985.83
Monthly $1,971.66
Annual $23,660

Continue reading Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

Fluctuating Work Week Method Of Compensation Is Permissible For Certain Nevada Employees

In a recently published Advisory Opinion, the Nevada Labor Commissioner has opined that Nevada employers may use the fluctuating workweek method to compensate certain types of nonexempt Nevada employees.

What is the fluctuating workweek method?

The fluctuating workweek method is a accept method of compensation under the Fair Labor Standards Act for nonexempt employees who are paid a fixed salary for all hours worked. Under this method, the employer and employee have come to an understanding that the employee will receive the fixed salary as straight time pay for whatever hours he is called upon to work in a workweek – no matter how few or how many.

If the employee works over 40 hours in a workweek, the employer then pays the employee overtime based on one-half the employee’s regular rate of pay. The regular rate of pay is calculated by dividing the employee’s weekly salary by the total hours the employee worked that week. That number is then divided in half to determine the overtime rate – because the employer and employee previously agreed that the salary compensated the employee for all straight time hours worked.

What did the Nevada Labor Commissioner opine?

The Labor Commissioner found that the fluctuating workweek method of compensation was permissible for fixed salary nonexempt employees. In addition, he also found that fluctuating workweek method of compensation is also permissible where a fixed salary employee is also paid commissions and bonuses provided that those commissioner and/or bonuses are included in the weekly amount of pay when determining the employee’s regular rate of pay.

Take home for employers

While the fluctuating workweek method is a accept method of compensation in Nevada, it is recommended that Nevada employers consult with an HR Professional or legal counsel before using this method of payment with their employees.

The New FLSA Overtime Rule – Challenges Abound

The new FLSA Overtime Rule is scheduled to go into effect on December 1st. This rule, as most employers likely already know, increases the FLSA’s minimum annual salary requirements for exempt employees to $47,476 per year ($913 per week).

In the face of this rapidly approaching deadline, there have been recent efforts to delay, if not entirely prevent, the new overtime regulations from going into effect. While this article will (briefly) discuss these challenges, it remains our recommendation that all employers continue to plan for and implement any necessary changes to ensure compliance with the new FLSA Overtime Rule come December 1st.

What are the challenges?

On September 20, 2016, two separate lawsuits were filed in federal court (the Eastern District of Texas) seeking an injunction to stop the new overtime regulations from going into effect. The first lawsuit was filed by the U.S. Chamber of Commerce in conjunction with a number of other business groups. The second lawsuit was filed by a coalition of 21 states (Nevada, Texas, Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, Wisconsin, Kentucky, Iowa, Maine, New Mexico, Mississippi, and Michigan). Both lawsuits were assigned to a District judge who was nominated by President Obama. As a result, it is not anticipated that the injunction will be granted. Moreover, while both groups have indicated that they will appeal a denial of the injunction, it could take longer than the available time (i.e. time before the December 1st effective date) for the Appellate Court to hear/rule on the appeal.

On September 21, 2016, House Subcommittee on Workforce Protections Chair Tim Walberg proposed legislation (The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094)) that while it does not change the FLSA Overtime Rule, would delay the rule’s effective date by six months. This bill was passed by the House of Representatives on September 28, 2016 and has moved over to the US Senate for consideration.  However, even if Congress passes this legislation before the effective date, it is likely that President Obama will veto this bill.

What should employers do?

As stated above, employers should not rely on these challenges to stop the new FLSA Overtime Rule from going into effect. It is imperative that employers continue to work out their compliance strategy and plan to be in compliance with the new rule by December 1st.