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 The letter, however, was withdrawn once President Obama took office.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 →
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 →
In 2016, the U.S. Department of Labor (“DOL”) modified 29 C.F.R. § 541 – which regulates the Fair Labor Standards Act’s (“FLSA”) white-collar exemptions (administrative, executive, professional, computer, and outside sales) – often referred to as the “Overtime Rule.” Among other changes, the new Overtime Rule increased the salary threshold for white-collar employees from $23,660 to $47,476. Before the new Overtime Rule took effect, Judge Amos Mazzant, a federal district judge in Texas, temporarily blocked the rule by entering an injunction in Nevada v. United States Dep’t of Labor, 227 F. Supp. 3d 696 (E.D. Tex. 2017). Rather than appeal Judge Mazzant’s decision and pursue implementation of the revised 2016 rule, the DOL elected, instead, to proceed with a new rulemaking. Continue reading →
On September 14, 2018, the National Labor Relations Board (NLRB) published a Notice of Proposed Rulemaking aiming to clarify the joint-employer standard and, as discussed in the NLRB’s September 13th announcement, “foster predictability, consistency and sustainability in the determination of joint-employer status.” The Proposed Rulemaking would put an end to the dizzying twists and turns of recent decisions on the standard for determining when two businesses are joint-employers. Continue reading →
In most circumstances, the FLSA requires employers to pay non-exempt employees for the time they spend traveling from one work site to another during their work day. This is not breaking news, but, as it is a topic that impacts a large number of employers, it is important for employers to understand the rules surrounding compensable travel time. The U.S. Department of Labor (“DOL”) issued an opinion letter earlier this year on the topic that helps clarify the travel time principles under the FLSA and the multiple DOL regulations that come into play on this issue. The DOL’s opinion letter FLSA2018-18, available at https://www.dol.gov/whd/opinion/FLSA/2018/2018_04_12_01_FLSA.pdf, provides a straightforward guide to some simple rules to follow in this context. Continue reading →