Earlier this week, on January 12, 2020, the U.S. Department of Labor (DOL) announced the release of its final rule revising and updating its regulations interpreting joint employer status under the Fair Labor Standards Act (FLSA). According to DOL, “The final rule provides updated guidance for determining joint employer status when an employee performs work for his or her employer that simultaneously benefits another individual or entity, including guidance on the identification of certain factors that are not relevant when determining joint employer status.” The DOL published its Notice of Proposed Rulemaking (NPRM) on April 9, 2019, and received over 12,000 comments within the 30-day comment period. The final rule becomes effective on March 16, 2020, 60 days after publication in the Federal Register today, January 16, 2020.
As a threshold matter, under the FLSA, an employee working for one company may be found to be the joint employee of a second, independent company, depending on the nature and extent of control over the employee’s work. Joint employer status is important for numerous reasons, including the fact that a joint employer can be held joint and severally liable for FLSA wage and hour obligations. In 1958, DOL published an interpretive regulation, 29 C.F.R. § 791, explaining that joint employer status depends on whether multiple persons are “not completely disassociated” or “acting entirely independently of each other” with respect to the employee’s employment.
Specifically, the regulation provided three situations where two or more employers are generally considered joint employers: (1) where there is an arrangement between the employers to share the employee’s services (e.g., to interchange employees); (2) where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or (3) where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. The DOL issued its NPRM out of concern that Continue reading
By: Kara M. Maciel and Lindsay A. DiSalvo
After receiving over 116,000 comments on its Proposed Rule to revise the version of the Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees Rule (“Overtime Rule”) promulgated in 2016, the U.S. Department of Labor (“DOL”) has issued a final, revised version of the Overtime Rule. On September 24, 2019, the DOL announced the final Overtime Rule (“revised Overtime Rule”) through a press release touting the impact of the Rule and highlighting its major changes. Notably, the press release reflects the significant impact the change in the threshold salary level for the white-collar exemptions is projected to have on employees – lowering the number of employees likely to become eligible for overtime pay from 4.2 million under the 2016 version of the Overtime Rule to 1.3 million. This is due to the DOL decreasing the salary threshold level from $913.00 per week to $684.00 per week under the revised Overtime Rule.
Significantly, the Rule takes effect on January 1, 2020 – in just under 100 days. This timeline does not provide for a phase-in period as advocated for by many commenters and trade associations, and is a much shorter time period than 192 days employers were given in 2016 when the Overtime Rule was promulgated, and the 120 days given in 2004. As justification for this timeline, the DOL stated that Continue reading
On September 10, 2019, the U.S. Department of Labor (DOL) issued a new Opinion Letter providing clarity on the Fair Labor Standards Act’s (FLSA)’s Section 7(i) retail or service establishment overtime pay exemption that commissions on goods or services represent more than half an employee’s compensation for a representative period of not less than one month.
The FLSA Section 7(i) exempts Continue reading
Hurricane Dorian is approaching the Southeastern United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.
Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.
Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes. In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.
Frequently Asked Questions
If a work site is closed because of the weather or cannot reopen because of damage and/or loss of utilities, am I required to pay affected employees?
The Fair Labor Standards Act requires employers to pay their non-exempt employees only for hours that the employees have actually worked. Therefore, an employer is not required to pay nonexempt employees if it is unable to provide work to those employees due to a natural disaster.
An exception to this general rule exists when there are employees who receive fixed salaries for fluctuating workweeks. These are nonexempt employees who have agreed to work a specified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.
For exempt employees, an employer will be required to pay the employee’s full salary if the work site is closed or unable to reopen due to inclement weather or other disasters for less than a full workweek. However, an employer may require exempt employees to use available leave for this time. Continue reading
On March 22, 2019, the U.S. Department of Labor (DOL) released its proposed rule to raise the annual salary threshold for a worker to qualify as exempt under its “white collar” regulations from $23,660.00 to $35,308.00. The public comment period closed yesterday, May 21, 2019, with almost 60,000 comments from the business and worker communities.
History of the Proposed Rule
The road to a final rule over the salary threshold has been long and bumpy for the DOL. In 2014, President Obama directed the DOL to “update and modernize” the existing Fair Labor Standards Act’s (“FLSA”) white collar exemptions. Two years later, the DOL released its final rule revising the regulations by doubling the salary threshold to $47,476.00.
The final rule dramatically increased the number of workers who would qualify for overtime pay, forcing every employer in the country to carefully assess how to handle the additional financial burden. Continue reading
The U.S. Department of Labor (“DOL”) has officially curtailed another controversial interpretation of its dual jobs regulation that has plagued employers for more than decade – i.e. the 20% rule. This is welcome news for the hospitality industry and other employers who employ tipped employees, as the previous rule effectively forced employers to track and monitor the time that tipped employees spent on non-tipped tasks and “related duties.” Although the DOL issued an opinion letter rescinding its interpretation of the 20% rule in November 2018, the DOL’s recent revisions to its Field Operations Handbook has official dispelled lingering concerns about the DOL’s interpretation of the Fair Labor Standards Act’s dual jobs regulation and potential enforcement of the 20% rule.
The Tip Credit
Under the federal Fair Labor Standards Act (“FLSA”), employers must pay employees a minimum wage of $7.25 per hour. Various state wage and hour laws impose higher minimum wage requirements, but employers covered Continue reading
On November 8, 2018, the Department of Labor (DOL) issued an opinion letter retracting the controversial “80/20 rule” for tipped employees. Under this rule, if a tipped employee spent more than 20% of his or her working time performing “non-tipped” duties, his or her employer could not take a tip credit for time spent performing those non-tipped duties. The rule caused years of confusion, especially among employers. After all, what duties exactly qualified as “non-tipped”? Would folding napkins in between waiting tables count? And were employers expected to track every second of an employee’s day to determine if those non-tipped duties exceeded 20% of the total workday?
Under the DOL’s latest opinion letter on this issue, it has made clear that the it “do[es] 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 [Fair Labor Standards] Act are met.” Accordingly, employers should be able to breathe at least a sigh of relief. So how did we get here, and what should employers be able to expect in the new year?
By way of background, under the Fair Labor Standards Act (FLSA), “tipped employees” are defined as Continue reading