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

Judge Refuses To Dismiss Domino’s Collective Action Without Seeing Settlement Agreement

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Russell Jackson

On May 17, 2019, Judge Renee Marie Bumb of the United States District Court for the District of New Jersey rejected the parties’ request to dismiss a Fair Labor Standards Act (“FLSA”) lawsuit without the Judge’s review of the settlement agreements.  In doing so, the District Court ordered defendants to submit the settlement agreement reached with the named plaintiff or attest that no agreement covering FLSA claims exists.  The case is Kessler v. Joarder Props., LLC, 2019 U.S. Dist. LEXIS 83571 (D.N.J. May 17, 2019) and is a reminder for employers engaged in FLSA litigation that obtaining court approval is a requirement before dismissal of the action is proper. Continue reading

How Many Benefits are Included in the Calculation of Regular Rate? The World May Never Know

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Louis Britt

On March 28, 2019, the Department of Labor (“DOL”) issued a lengthy and detailed Notice of Proposed Rulemaking (“NPRM”) to revise the regulations governing how employers should calculate “regular rate” under the Fair Labor Standards Act (“FLSA”). Upon release, the DOL set a deadline for public notice and comment of May 28, 2019. However, citing the interest expressed by “law firms, unions, and advocacy organizations,” the DOL extended the period for public comment to June 12, 2019. Continue reading

Ninth Circuit Applies Dynamex Retroactively

Executive Summary: In 2018, the California Supreme Court adopted the “ABC test” for determining whether workers are independent contractors under California wage orders (the Dynamex decision). For a discussion of that decision, please see our May 3, 2018 Alert. The ABC test makes it more difficult in many cases for companies to classify a worker as an independent contractor than under the prior generally-applied common law test. As such, the adoption of the ABC test increases many California employers’ exposure for minimum wage, overtime, meal and rest periods, and other benefits owed to employees but not to independent contractors. On May 2, 2019, in Vasquez v. Jan-Pro Franchising International, Inc., the Ninth Circuit concluded that the ABC test should be applied retroactively to situations that arose before the Dynamex decision came out. Continue reading

Maryland Raises Minimum Wage

Maryland joined the parade of states raising the minimum wage to the magic number of $15 per hour when the state legislature voted to override the veto of Governor Larry Hogan on March 28, 2019. The minimum wage for employers with 15 or more employees will increase annually commencing January 1, 2020 until it reaches the $15 per hour level on January 1, 2025. The minimum wage for smaller employers will increase annually at a slower pace, and reach $15 on July 1, 2026. The initial increase for all employers effective January 1, 2020 raises the minimum wage to $11 per hour from the current $10.10. Continue reading

“Better Ingredients, Better Pay?” – Courts to Consider Legality of Papa John’s Reimbursement Policy for Delivery Drivers

Executive Summary: Employers in the restaurant industry have seen an increasing trend of litigation over reimbursement policies for delivery drivers. For example, on February 12, 2019, three former delivery drivers for Papa John’s filed a putative class action lawsuit in the U.S. District Court for the Western District of Kentucky alleging Papa John’s failed to adequately reimburse its delivery drivers for “vehicular wear and tear, gas and other driving-related expenses.” In Hubbard et al. v. Papa John’s International, Inc., the plaintiffs allege Papa John’s reimbursement policy, which paid a flat fee “per delivery” (rather than the IRS mileage reimbursement rate), resulted in drivers earning less than the minimum wage mandated under Kentucky, Colorado, and Missouri law. Two plaintiffs in this case are also class members in a New York federal class and collective action, Durling et al. v. Papa John’s International, Inc., which alleges, among other claims, similar violations of the Fair Labor Standards Act (FLSA), and New York, Pennsylvania, New Jersey and Delaware law. That case is currently pending. Continue reading