Tag Archives: US Department of Labor

NEW GUIDANCE: DOL Reminds Employers How To Properly Calculate The Regular Rate Of Pay

The US Department of Labor (DOL) recently issued an opinion letter that reminds employers how to properly calculate an employee’s regular rate of pay for purposes of overtime compensation.

In this letter, the DOL was responding to an inquiry about whether a company’s compensation plan, which pays an average hourly rate that may vary from workweek to workweek, complies with the Fair Labor Standards Act (FLSA).  Specifically, to calculate weekly pay, the company was multiplying an employee’s time with clients by his or her hourly pay rate for such work.  The employer then divided the product by the employee’s total hours worked.  The company then explained that its “standard rate of pay” was $10 per hour and that it paid overtime based on the $10 per hour rate.

According to the DOL, while the employer’s plan likely complied with the FLSA’s minimum wage requirement (that an employee is paid at least minimum wage for every hour worked), it might not comply with the FLSA’s overtime requirement. Continue reading NEW GUIDANCE: DOL Reminds Employers How To Properly Calculate The Regular Rate Of Pay

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 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.

Even Mickey Mouse Isn’t Immune to Wage and Hour Missteps

The Walt Disney Company has learned an expensive lesson about FLSA compliance. It recently settled a wage and hour claim with the US Department of Labor and has agreed to pay $3.8 million in back wages to more than 16,000 of its Florida employees.

What did Disney purportedly do wrong?

According to the Department of Labor, Disney resorts in Florida committed the following major wage and hour errors:

  1. The resorts deducted a uniform or “costume” expense from employees’ wages and, in some cases, that deduction caused some employees’ hourly rates to fall below the federal minimum wage.
  2. The resorts failed to compensate employees performing duties during a pre-shift period before the designated start of their shifts, and during a post-shift period.
  3. The resorts failed to compensate employees performing duties a post-shift period.
  4. The resorts failed to maintain required time and payroll records.

Take Home For Employers

According to the Department of Labor, “These violations are not uncommon and are found in other industries, as well.” Employers must remember that they cannot make deductions that take workers below the minimum wage and must accurately track and pay for all the hours their employees work, including any time they work before or after their scheduled shifts. It is recommended that employers audit their wage and hour practices and verify they are complying with both state and federal laws.

DOL Partnership regarding worker misclassification — 34 States and Counting

Thirty-five states have agreed to “team up” with the US Department of Labor to investigate worker misclassification. Is your state one of them?

In 2015, Department of Labor launched an initiative to combat the misclassification of employees as independent contractors. As a part of this initiative, the Department of Labor sought to partner with the state agencies and agree to share information and conduct joint investigations regarding independent contractor misclassification. To date, 35 states have entered into a memorandum of understanding regarding worker misclassification issues.

These states are:

  • Alabama
  • Alaska
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Florida
  • Hawaii
  • Idaho
  • Illinois
  • Iowa
  • Kentucky
  • Louisiana
  • Maryland
  • Massachusetts
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Hampshire
  • New Mexico
  • New York
  • North Carolina
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Dakota
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

What does this mean for employers in these states?

Employers in the above-listed states should expect collaborative efforts between their state agencies and the Department of Labor during a investigation into potential employee misclassification as the state and the Department of Labor will share information. This could lead to simultaneous, multi-agency investigations into worker classification. It is recommended that companies have qualified legal counsel review any existing independent contractor arrangements. In addition, before entering into an independent contractor relationship, speak with an HR Professional or qualified legal counsel to verify that the worker truly is an independent contractor.

New Employee Polygraph Protection Act Poster

The US Department of Labor recently released a revised version of the Employee Polygraph Protection Act (EPPA) Poster. The new notice is available here:

This new poster must be posted in your workplace starting August 1, 2016.

Federal law requires all employers of employees subject to the Employee Polygraph Protection Act post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it.

At the moment, only the English version of the new poster is available.  According to the DOL, the translated versions will “be available soon.”  It is recommended that employers check the DOL’s poster matrix for the translated posters.

New Fair Labor Standards Act (FLSA) Minimum Wage Poster

The US Department of Labor recently released a revised version of the Fair Labor Standards Act (FLSA) Minimum Wage Poster. The new notice is available here:

This new poster must be posted in your workplace starting August 1, 2016.

Federal law requires all employers of employees subject to the Fair Labor Standards Act’s minimum wage provisions to post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it.

At the moment, only the English version of the new poster is available.  According to the DOL, the translated versions will “be available soon.”  It is recommended that employers check the DOL’s poster matrix for the translated posters.