Department of Labor Deflates the 80/20 Rule & Inflates the Tip Pool

Executive Summary: On Monday, October 7, 2019, the Department of Labor (DOL) proposed a new 80/20 rule and tip pooling regulation. First, the proposed regulation, if finalized, will permit employers to take a tip credit regardless of the amount of non-tip generating work (such as cleaning tables or folding napkins) a tipped employee performs as long as it is performed contemporaneously with his/her tipped duties, or within a reasonable time immediately before or after performing tipped duties. Second, the proposed regulation eliminates some regulatory restrictions regarding tip pooling when the employer does not take a tip credit. If the proposed rule is finalized, employers who do not take a tip credit will be permitted to include “back-of-the-house” employees who usually do not receive tips (such as cooks and dishwashers) as part of a tip pool. Lastly, the existing rule prohibiting employers from keeping employees’ tips or participating in tip-pooling arrangements will remain. Continue reading

DOL Reveals Long-Awaited Final Rule Governing Overtime Exemptions

Todaythe U.S. Department of Labor (“DOL”) announced its Final Rule updating the salary thresholds for the executive, administrative, and professional exemptions, as well as the highly compensated employees exemption, under the Fair Labor Standards Act (“FLSA”). Continue reading

Non-Exempt Employees Traveling for Work: How to Manage the Time Clock

Douglas, Jeff - 300dpi
Jeffrey Douglas

There may be instances where non-exempt employees are required to travel for business.  This is a common practice in the fashion industry where regular trips to factories throughout the world are a regular part of the business.  Non-exempt employees traveling for business can create serious wage and hour implications that, if not addressed properly, can lead to unaccounted for compensable time and overtime liability.  Continue reading

Employers Should be Prepared for the Challenges of the 2019 Hurricane Season

Executive Summary: As Hurricane Dorian, the first hurricane of the 2019 Atlantic season, bears down on Florida, the approaching storm serves as a reminder that employers should be prepared to address storm-related issues if they are required to close their businesses and as they prepare to resume normal operations. For example, employers need to determine whether closing the office means having to pay workers who stay home, being on the hook for unemployment compensation, and whether workers’ compensation applies to weather-related injuries. Continue reading

New Jersey Passes the Broadest Wage Theft Law in Country With Dire Consequences for Employers

Introduction: On the heels of the broadest Pay Equity law in the country, New Jersey has just passed the broadest wage theft law in the country, which is certain to lead to increased litigation. Unwary employers may not only be facing insurmountable fines and penalties, but potentially jail time for even minor violations of the new law. The new law establishes treble damages and criminal penalties for non-payment of wages to New Jersey employees. More importantly, there is a presumption of retaliation for any adverse employment action that occurs for months after an employee complains about their wages. The presumption is rebuttable, but only if the employer produces clear and convincing evidence. The law further extends the statute of limitations to six years and allows for reinstatement of employees. Continue reading

Non-Kosher Provisions in FLSA Settlements in the Second Circuit

Shooman, Jeff - 300dpi
Jeffrey Shooman

I came across a short court order a few days ago that admonished settling parties in an FLSA suit for including an impermissible provision in the settlement.  Vasquez v. T&W Rest., Inc., 2019 U.S. Dist. LEXIS 121129 (S.D.N.Y. July 19, 2019).  In the opinion, Magistrate Judge Pitman reminded the parties that “provision[s] prohibiting the re-employment of plaintiff . . . are not permissible in an FLSA settlement.”  Continue reading

DOL Pivots, Providing Guidance Likely To Mitigate Recent Blitz of Minimum Wage Class Actions Related to Sleep Time And Off Duty Time Spent In Vehicles

Executive Summary: Almost all long-haul drivers are exempt from overtime under the motor carrier exemption to the Fair Labor Standards Act (FLSA). However, these same drivers are not exempt from the FLSA’s minimum wage requirements. Due to the ongoing driver shortage, drivers’ rates far exceed the minimum wage, especially when considering the Motor Carrier Safety Act limits on-duty hours to 60 per week. So it’s no surprise that many motor carriers were caught off guard when federal courts found them liable for not paying minimum wage because they failed to count the time drivers spent sleeping as hours worked. In guidance issued July 22, 2019 the United States Department of Labor (DOL) addressed the circumstances when time in the sleeper berth is compensable and shifted the burden to drivers to prove they were performing compensable work in the berth, providing “straightforward” guidance for the motor carrier industry and a defense to the minimum wage claims. Continue reading