U.S. Secretary of Labor, Alexander Acosta, recently formed the U.S. Department of Labor’s (“DOL”) new Office of Compliance Initiatives (“OCI”). The stated purpose of the OCI, according to the DOL’s website, is in part to “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.” To this end, the OCI focuses on education to ensure compliance with the Fair Labor Standards Act (“FLSA”). Continue reading
On November 8, 2018, the U.S. Department of Labor (DOL) re-issued an opinion letter abandoning the “80/20 Rule,” which prohibited employers from taking a tip credit if a tipped employee spent more than 20% of his or her working time on non-tipped work.
The opinion letter is a re-issuance of one previously published on January 16, 2009 by the Bush administration. The letter, however, was withdrawn once President Obama took office. The DOL’s new guidance provides restaurant and hospitality employers with clarity and a more practical approach defining when a tip credit can be taken. Continue reading
Austin’s paid sick leave ordinance, which was supposed to go into effect this past October, has been held unconstitutional by the Third Court of Appeals in Austin. The court of appeals held that the ordinance establishes a “wage” and, as such, it is preempted by Texas Minimum Wage Act. The Texas Minimum Wage Act specifically precludes municipalities from regulating the wages paid by employers who are subject to the Fair Labor Standards Act (FLSA) and specifically provides that the Texas Minimum Wage Act supersedes a “wage” established in an ordinance governing wages in private employment. The court of appeals remanded the case back to the district court, instructing the lower court to grant the State’s application for temporary injunction and for further proceedings consistent with its ruling. Continue reading
Executive Summary: In New York, with its robust state New York Labor Law (“NYLL”), one can receive liquidated damages on top of compensatory damages greater than liquidated damages under the Fair Labor Standards Act (“FLSA”). The U.S. Court of Appeals for the Second Circuit has determined, however, that one cannot receive a double recovery under the NYLL and FLSA for liquidated damages. That principle was reaffirmed in early October. Continue reading
Executive Summary: The Fair Labor Standards Act (“FLSA”) requires a covered employer to maintain and preserve certain records for different classifications of employees. See 29 CFR § 516. Many states have similar record keeping requirements. Notwithstanding these statutory record keeping requirements, an employer in compliance can still be subject to sanctions for failure to preserve documents relevant to an employee’s wage and hour claim. Continue reading
Executive Summary: Earlier this week, the Second Circuit Court of Appeals heard oral arguments regarding whether judicial review of a Fair Labor Standards Act (“FLSA”) settlement is required before entry of an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure (“FRCP”). While there is longstanding history mandating court approval of FLSA settlements, the majority of district courts in the Second Circuit—unlike most other Circuits—have allowed Rule 68 settlements absent judicial approval. As such, employers in this Circuit have increasingly tried to use Rule 68 to avoid judicial scrutiny of settlement agreements. After hearing oral arguments in Yu v. Hasaki Restaurant, Inc., 319 F.R.D. 111 (S.D.N.Y. 2017) this week, the Second Circuit appears primed to weigh in on this unsettled and controversial issue—which will determine whether judicial review or a system resembling private party contracting will govern in the Second Circuit. Continue reading
In Clendenen v. Steak N Shake Operations, Inc., Case No. 4:17-cv-01506-JAR, 2018 U.S. Dist. LEXIS 167101 (E.D. Mo. Sept. 28, 2018), the U.S. District Court for the Eastern District of Missouri recently granted conditional class certification under the Fair Labor Standards Act (“FLSA”) to Steak ‘n Shake restaurant managers challenging their classification as overtime-exempt under the FLSA’s executive and administrative exemptions. Conditional certification is the first step toward maintaining an FLSA collective action. The Clendenen court found evidence to support conditional certification, including evidence that the managers’ duties were “largely the same as the non-exempt employees they supervised.” Continue reading