California’s Expansion of Dynamex’s ABC Test Severely Restricts When Employers May Properly Classify Workers as Independent Contractors

Last month, California Governor Gavin Newsom signed Assembly Bill 5 into law.  This lengthy bill generally codifies and expands the applicability of the three-part ABC test from the Dynamex decision in determining whether a worker is an employee or independent contractor for purposes of California Labor Code, Unemployment Insurance Code, and the Wage Orders.

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The Final Overtime Rule Explained:  What Every Employer Must Do Next

By: Kara M. Maciel and Lindsay A. DiSalvo

shutterstock_losing moneyAfter 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

DOL Opinion Letter Clarifies One-Month Representative Period under Section 7(i) Overtime Exemption for Retail and Service Industry Employees

stack of moneyOn 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

Third Circuit Rebuffs Pension Fund’s Attempt to Assess Partial Withdrawal Liability

Under the Multiemployer Pension Plan Amendments Act (“MPPAA”), an employer can be liable to a multiemployer pension fund if it partially withdraws from that fund either by reducing its contributions by 70 percent over a three-year period, or where “there is a partial cessation of the employer’s contribution obligation.” 29 U.S.C. § 1385(a).

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A “partial cessation” can occur in two different ways. The first is through a so-called “CBA take-out,” where the employer ceases to have an obligation to contribute under one or more, but fewer than all, of its collective bargaining agreements (“CBA”)s. The second is a “facility take-out,” where the employer ceases its obligation to contribute with respect to work performed at one or more, but fewer than all, of its facilities. In either case, the employer must continue to perform the work for which contributions were previously required. See 29 U.S.C. § 1385(b)(2)(A).

In a recent case, the Third Circuit Court of Appeals rebuffed a multiemployer plan’s attempt to broaden the application of the CBA take-out provision. Instead, in Caesar’s Entertainment Corp. v. International Union of Operating Engineers Local 68 Pension Fund, Case No. 18-2465 (3d Cir. Aug. 1, 2019), the Court Continue reading

[Webinar] Strategies for Success in Collective Bargaining

On Wednesday, September 18, 2019 at 1:00 PM Eastern, Kara M. Maciel and Mark M. Trapp of Conn Maciel Carey will present a complimentary webinar regarding “Strategies for Success in Collective Bargaining.”

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This webinar will focus on strategies for success in your company’s next contract negotiations. Specifically, we will discuss how to effectively prepare for collective bargaining, as well as successful execution of the company’s strategy at the table, with particular emphasis on “big ticket” items such as withdrawal liability and ongoing participation in a multiemployer fund, maximizing savings on wages and benefits and regaining flexibility in the workforce.

Participants will learn about the following: Continue reading

Hurricane Headaches: HR Tips for Employers

Hurricane.jpgHurricane 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

Seventh Circuit Hits the Brakes on Pension Fund’s “Deceleration” Attempt

In a rare win for employers, the Seventh Circuit recently held that ERISA’s six-year statute of limitations barred a multiemployer pension fund’s claim for withdrawal liability against the withdrawn employer.

The case, Bauwens v. Revcon Tech. Group, Inc., No. 18-3306 (7th Cir. 2019), involved an increasingly common scenario, namely, where a pension fund holds a withdrawn employer in “default” for missing an installment payment of its withdrawal liability and failing to cure for sixty days after notice.

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In such an instance, the Multiemployer Pension Plan Amendment Act (“MPPAA”) allows the fund to “require immediate payment of the outstanding amount” of the employer’s withdrawal liability. See 29 U.S.C. § 1399(c)(5).

In Bauwens, the company fell into default five separate times over the course of twelve years; but each time entered into a settlement agreement with the fund to resume installment payments in exchange for the fund dropping its collection suit seeking the entire accelerated amount. Finally, on the sixth such default, the fund again brought a collection suit, to which the employer asserted ERISA’s six-year statute of limitations. The court held Continue reading