On Monday, June 21st, the Department of Labor (“DOL”) issued a Notice of Proposed Rulemaking (“NPRM”) that would alter regulations interpreting who is considered a “tipped employee” under the Fair Labor Standards Act (“FLSA”) yet again. Specifically, the NPRM proposes (1) to withdraw the dual jobs portion of the Final Rule promulgated in December 2020; and (2) a new regulatory framework by which to determine whether an employee is performing work that meets the definition of a tipped occupation and allows the employer to take a tip credit under the FLSA. Specifically, the FLSA allows an employer to pay a tipped employee less than the minimum wage – specifically $2.13 per hour under Federal law – only when the worker is engaged in a tipped occupation because the tips the employee receives should make up for the rest of minimum wage hourly rate. The NPRM creates a revised standard by which an employer would determine who is a “tipped employee” and for what portion of that employee’s work hours the employer can take a tip credit and pay the employee at the lower rate. The standard the DOL proposes to adopt generally reflects the interpretive guidance it maintained for decades before a new standard was established during the Trump Administration – the “80/20 Rule” – along with some other changes that the DOL asserts better define tipped work.
Background of the Dual Jobs Standard for Tipped Employees
Under the FLSA, “tipped employees” are defined as those employees who customarily and regularly receive more than $30 a month in tips. As stated, employers can pay tipped employees a reduced cash wage and claim a “tip credit” to make up the difference between the reduced cash wage and hourly minimum wage. When the DOL first published its regulations on application of the tip credit, it directly addressed the scenario where an employee has “dual jobs” under 29 C.F.R. 531.56(e) – two jobs for the same employer. In that situation, employers can take the tip credit only for the tipped job (i.e., the one routinely satisfying the $30-a-month provision). Later, the DOL revised its Field Operations Handbook (FOH), vastly broadening the scope of its “dual jobs” distinction by applying it to dual tasks. It stated that when “tipped employees spend a substantial amount of time (in excess of 20%) performing preparation work or maintenance, no tip credit may be taken for the time spent in such duties.” This is what’s known as the “80/20 rule.”
As the number of vaccinated individuals continues to increase and we are seeing a significant decrease in COVID-19 cases, the landscape of legal requirements applicable to employers and employees is changing, particularly related to employees who are fully vaccinated. Indeed, in an unexpected update to its guidance last week, the CDC stated that fully vaccinated individuals may resume essentially all indoor and outdoor pre-pandemic activities in almost all circumstances. Although federal agencies such as OSHA and the EEOC have not yet updated their relevant guidance on treatment of vaccinated workers to reflect these changes, they both have stated their intent to address, and in OSHA’s case follow, the CDC guidance, and many states are doing the same.
Accordingly, employers now, more than ever, must understand and may want to take certain actions based on the vaccination status of their workers. However, obtaining information on an employee’s status and using that information to dictate policies and practices in the work environment has legal implications and raises many important questions that could pose difficulties for employers who want to ensure that they proceed in compliance with applicable laws. Below, we provide answers to questions we have received related to employee vaccination status as well as tips to effectively deal with these novel and complex issues.
Question 1: Can employers ask employees about their COVID-19 vaccination status?
Yes, but employers should be mindful of compliance with federal and state laws on disability, privacy and discrimination. If the employer requests confirmation and/or proof that an employee has been fully vaccinated, this should be a simple, straightforward inquiry to determine an employee’s current vaccination status. Such a simple, general inquiry is legitimate and would be considered permissible under applicable employment laws, particularly if it is made to determine whether:
COVID-19 has shifted the National Labor Relations Board’s (“NLRB”) longstanding policy that representation elections should generally be conducted manually. In a recent example of COVID-19’s impact on representation elections, the Acting Regional Director for Region 10 issued a Decision and Direction of Election on January 15, 2020 requiring an election petitioned for by the Retail, Wholesale and Department Store Union (“the Union”) occur by mail-ballot because of the “undeniable presence of COVID-19 both inside and outside the Employer’s facility.” The employer, Amazon.com Services LLC, requested a manual election – still the applicable presumption – while the Union requested an election by mail ballot. In deciding that the election should take place by mail, the Regional Director cited guidance issued by the Centers for Disease Control related to general elections and guidance issued from the Office of the General Counsel as to what protocols should be used for a manual election during the pandemic. But the most significant guidance the Regional Director relied on in mandating a mail-ballot election was the framework developed by the NLRB in the Aspirus Keweenaw case.
Framework Established by NLRB in Aspirus Keweenaw
In Aspirus Keweenaw, the NLRB reviewed a decision from the Regional Director for Region 18 that a mail-ballot election should occur at a hospital in Michigan over a manual ballot election because of “the extraordinary circumstances presented by the COVID-19 pandemic.” The NLRB began its analysis by acknowledging that there is a presumption in favor of manual elections, particularly as statistics show that participation is generally higher for manual elections. However, the NLRB recognized that its approach to elections must evolve based on the unique circumstances created by the COVID-19 pandemic and the need for more defined parameters as to when a mail-ballot election is appropriate based on changing pandemic conditions and in consideration of its preference for manual elections. Specifically, the NLRB laid out six situations that will normally suggest a mail-ballot election:
The Agency officer tasked with conducting the election is operating under “mandatory telework” status;
Either the 14-day trend in the number of new confirmed cases of COVID-19 in the county where the facility is located is increasing or the 14-day testing positivity rate in the county where the facility is located is 5% or higher;
The proposed manual election site cannot be established in a way that avoids violating mandatory state or local health orders relating to maximum gathering size;
The employer fails or refuses to commit to abide by the GC Memo 20-10 protocols;
There is a current COVID-19 outbreak at the facility or the employer refuses to disclose and certify its current status; or
As of July 1, 2020, eligible employees in the District of Columbia (“DC”) will be entitled to paid leave up to a designated period depending on the qualifying leave event. Covered employers should have begun making paid family leave contributions beginning July 1, 2019. Specifically, covered employers must contribute a quarterly payroll tax of 0.62% of covered employees’ total gross wages from the immediate past quarter. In addition to paying the required quarterly payroll tax, there are several other aspects of the law of which employers should be aware. Here, we review and highlight important aspects of DC’s Paid Family Leave law, including the February 1st posting/notice deadline. For additional discussion on the DC Paid Family Leave law and frequently asked questions, please also see our prior post.
Covered Events and Applicable Leave Periods
As you may know, the DC Paid Family Leave law provides leave benefits to eligible employees for three types of leave: (1) parental leave; (2) family leave; and (3) medical leave. “Parental leave” includes events associated with the birth of a child, placement of a child with the employee for adoption or foster care, and placement of a child with an employee who legally assumes and fulfills parental responsibility for the child. “Family leave” is leave taken to care for a family member with a diagnosis or occurrence of a serious health condition. And “medical leave” is leave taken to attend to one’s own diagnosis or occurrence of a serious health condition. Continue reading →
In October 2018, the District of Columbia (“D.C.”) Council passed a law called the “Tipped Wage Workers Fairness Amendment Act of 2018” (the “Act”), which had the immediate impact of repealing legislation (“Ballot Initiative 77”) that eliminated the use of a tip credit in D.C. Because the D.C. Council repealed Ballot Initiative 77 through passage of the Act, employers with tipped employees are still permitted to take a tip credit toward meeting minimum hourly wage requirements. However, the Act also imposes certain training, reporting, and notice requirements for all employers of tipped employees. Some of these requirements have already gone into effect, while others require budgetary approval before they will kick in. We review some of the more significant requirements below.
Under the Act, all employers of tipped employees will have to provide sexual harassment prevention training to employees, as well as managers, owners, and operators of the business. Specifically, the D.C. Office of Human Rights (“OHR”) will make available a sexual harassment training course, or will certify a list of providers to give the training, that covers how to respond to and prevent sexual harassment by co-workers, management, or patrons/guests. The Act mandates that employers provide the training to new hires within 90 days of hire unless they received the training within the last two years. All other workers already employed must receive training within two years. Managers, owners, and operators must then receive training every 2 years and all training should be given in-person or online. If the training is given by a certified provider, the employer must submit a certification to the OHR that the training has been completed. Certification is required within 30 business days after completion. Continue reading →
As we reported back in March, Judge Chutkan of the U.S. District Court for the District of Columbia lifted the stay on the Equal Employment Opportunity Commission’s (“EEOC’s”) 2016 final rule mandating that employers who are required to submit an annual Employer Information Report (“EEO-1”) also submit pay data by sex, ethnicity, and race. This additional piece of the EEO-1 Report has come to be known as “Component 2.” After the Judge lifted the stay, the EEOC responded that it would not be in a position to accept the EEO-1 Component 2 by May 31, 2019 – the deadline to submit the standard data set collected through the EEO-1 Report (“Component 1”) – and adjusted the deadline to submit Component 2 data to September 30, 2019. Judge Chutkan reluctantly accepted this timeline and mandated that two years of data be collected by this date. Accordingly, the EEOC provided notice that it would be requiring employers to submit pay data for calendar years 2017 and 2018 by or before September 30, 2019.
Despite the fact that collecting this data could be very burdensome for employers, the EEOC’s deadline provided only a matter of months in which to gather and submit it. Now, with just over a month to spare, covered employers must ensure they understand what data needs to be submitted, how to tabulate the data for submission, and how to ultimately submit the data to the EEOC. Continue reading →
On Monday, April 22, 2019, the United States Supreme Court granted petitions for certiorari for three cases that center on the question of whether Title VII of the Civil Rights Act of 1964 (“Title VII”) protects LGBT rights. Two of the cases, Altitude Express v. Zarda and Bostock v. Clayton County, Georgia, concern whether, under Title VII, sex discrimination includes discrimination on the basis of an employee’s sexual orientation. The third case, R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC, poses the question of whether the Title VII prohibition against sex discrimination prohibits gender identity discrimination. Due to the similarity of the issues, the Supreme Court has consolidated the Altitude Express and Bostock matters for briefing and oral argument. The Supreme Court’s ultimate decision in each of these three matters is significant because it will settle current Circuit splits, as well as disagreement among Agencies in the Federal government, on the scope of Title VII.
As discussed in a prior blog post, in Altitude Express, the Second Circuit joined the Seventh Circuit in finding that Title VII does protect employees from being discriminated against based on sexual orientation. Specifically, the Second Circuit held that the text of Title VII necessarily includes sexual orientation as “…the most natural reading of [Title VII]’s prohibition on discrimination ‘because of…sex’ is that it extends to sexual orientation discrimination because sex is necessarily a factor in sexual orientation.” The Seventh Circuit in Hively v. Tech CommunityCollege, similarly determined that a reading of Title VII in the current cultural and legal context includes sexual orientation in the scope of Title VII. Continue reading →
Pay inequity, particularly compensation disparity based on sex, has become a very prominent political issue in the last decade and it looks like some additional changes could be on the horizon at the federal level. Democrats expressed that pay equity would be a priority in their labor agenda during the 2018 Congressional election cycle and, in February 2019, a proposal intended to further promote fair pay practices was reintroduced in Congress. In addition, just last week, a federal judge lifted the stay on the changes to the Equal Employment Opportunity Commission’s (“EEOC”) EEO-1 Report. The revised EEO-1 report would require certain employers to provide pay data by sex, race, and ethnicity to the EEOC, allowing it to more easily detect and track impermissible pay differentials. Though at very different stages in their respective lawmaking processes, the proposed law and final regulation are very clearly intended to address pay inequality and provide additional enforcement tools.
Stay Lifted on EEO-1 Report
In August 2017, ahead of the 2018 submission deadline, the Office of Management and Budget (“OMB”) stayed collection of pay data based on race, ethnicity, and sex to allow it to review the regulation related to the lack of public opportunity to comment on the format of submission of the additional data and burden estimates related to the specific data file format provided. However, on March 4, 2019, a Washington, D.C. federal judge ordered the stay be lifted because she determined that OMB’s decision was arbitrary and capricious – citing unexplained inconsistencies based on its prior approval of the rule and failure to adequately support its decision. Continue reading →
In 1997, the U.S. Supreme Court decided the case of Auer v. Robbins, establishing the standard for what has become known as Auer deference (or Seminole Rock Deference from Bowles v. Seminole Rock and Sand Co. (1945)). This decision and the standard it set is significant for employers because it gives substantial latitude to federal agencies, like the Department of Labor, to interpret their own ambiguous standards. Specifically, in Auer, the Supreme Court held that an Agency’s, in this case the Department of Labor, interpretation of its own standards is “controlling unless ‘plainly erroneous or inconsistent with the regulation.’” In other words, if it’s not clear what is required by the plain language of the standard, the Court will generally defer to the Agency’s own reasonable interpretations of its regulations.
However, the Supreme Court will now have the opportunity to reconsider Auer deference in the case of Kisor v. Wilkie. On December 10, 2018, the Court agreed to review Question 1 of the petition for certiorari, which specifically asks “[w]hether the Court should overrule Auer and Seminole Rock.” Continue reading →
Until last week, the US Department of Labor (the “DOL”) had not issued an Opinion Letter regarding the Family and Medical Leave Act (the “FMLA”) since George W. Bush was packing up and preparing to leave the White House in January 2009. On August 28, 2018, Bryan Jarrett, the Acting Administrator of the DOL’s Wage and Hour Division (the “WHD”) issued two Opinion Letters—one addressing an important consideration facing employers with no-fault attendance policies and another that addresses whether organ donation surgery can qualify as a “serious health condition” under the FMLA for the purposes of taking leave. While the answer to the latter question will likely not surprise anyone who regularly deals with employee requests for leave under the FMLA, the WHD’s opinion regarding whether and how points should be removed from an individual’s record while they are on protected leave does indeed provide much needed clarity on that topic.
But first, a bit of background regarding why the mere issuance of these letters is significant. An opinion letter is an official, written opinion issued by the Wage and Hour Division of the DOL explaining how a certain law applies in specific circumstances described by an employer, employee, or other entity requesting the opinion. The DOL noted in a June 2017 press release that the Wage and Hour Division had been issuing opinion letters for more than 70 years until the Obama administration replaced them with general guidance memoranda in 2010. “Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” said Secretary Acosta in the press release. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities,” said Secretary Acosta, explaining that such letters would enable employers to “concentrate on doing what they do best: growing their businesses and creating jobs.”
Turning to the two opinion letters issued on August 28, 2018, we will first address the leave for organ donation, then consider no-fault attendance policy rules. Continue reading →