Work Knowledge Blog

Work Knowledge Blog

UPDATE: Changes to FLSA Exemptions

Posted in Wage & Hour

As announced by the White House this week, President Obama directed the Department of Labor to update the regulations on the white-collar exemptions.  Specifically, the President instructed the Secretary of Labor Thomas Perez to update the regulations.  The President’s point was that the minimum salary requirements had only been raised once since 1975, and that was in 2004 when the minimum weekly salary was raised from $250 to $455. The directive did not provide any details on what changes would be made.  However, the one page memo said that the regulations have not kept up with the modern economy and that millions of workers therefore lack overtime protections.

This memorandum specifically targets both the amount of compensation paid to the lowest level of exempt employees and the specifics of what constitutes an exempt employee.  While no guidance has been provided as to what President Obama meant, the toneContinue Reading

Obama Proposes Sweeping Changes to FLSA Exemptions

Posted in Wage & Hour

A few weeks ago, President Obama issued an Executive Order raising the minimum wage for workers on new federal contractors from $7.25 an hour to $10.10 an hour. That measure was designed to build momentum for a minimum wage increase for the private sector as well.

Now, President Obama has announced he will direct the Department of Labor to revise the so-called “white-collar” exemptions on executive and professional employees so that many currently exempt employees will not be considered exempt and will therefore be entitled to overtime compensation. These regulations were last revised in 2004 under then President George W. Bush. This directive is expected to be issued on March 13, 2014.

Experts believe that the proposal would both increase the minimum amount paid to salaried, exempt employees and alter the exemptions to be narrower and therefore fewer currently exempt employees wouldContinue Reading

Federal Court Rules Temp-to-Hire Employee’s Hours Before and After Hire Must be Counted in Determining FMLA Eligibility

Posted in FMLA

The interplay between staffing agencies and client companies continues to be a common source of litigation, including an increase in cases under the Family and Medical Leave Act (the “FMLA”).   Following on the heels of a Fifth Circuit ruling clarifying the FMLA obligations allocated to each of the staffing agency and client company, an Oklahoma district court recently evaluated a similar case.  This court considered whether the hours a temp-to-hire employee worked at the client company before being directly hired from the staffing agency count towards the requirement that an eligible employee work 1,250 hours prior to FMLA leave.  In Miller v. The Nordam Group, Inc., the Northern District of Oklahoma concluded that those hours must be counted, and that the contractual agreement between the client company and staffing agency could not control this issue.   No. 12-CV-563 (N.D. Okla., Nov. 19, 2013).

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Fifth Circuit Clarifies FMLA Obligations Relating to Staffing Agency Employees

Posted in FMLA

Companies use temporary or leased employees for many reasons—to assist with seasonal work or temporary projects, to afford flexibility with a workload that might vary by customer demands, and sometimes in an effort to avoid responsibilities or liability that might result from an employment relationship.  This strategy can be effective in some—but not all—situations.  While utilizing a staffing agency to supply employees may avoid some obligations an employer owes its workforce, the client company is typically a joint employer of the leased employees for many employment purposes.  This joint employment relationship requires special attention when the Family and Medical Leave Act is involved.  Failure to fully understand the obligations might expose your company to liability– or may push you towards a business decision you don’t need to make.

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Are You Indemnified? Don’t Be So Sure.

Posted in Policies & Practices

The San Antonio Court of Appeals limits an executive indemnity provision that the parties intended to “provide as broad an indemnity as possible.”

Most executives assume that they won’t be on the hook personally for acts committed in their corporate capacity.  This assumption is based on good reason: executive employment contracts routinely require the company to pay the bill if its executive is sued for acting on the company’s behalf. Or, perhaps more accurately, such contracts appear to require the company to pick up the tab.

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Automatic Tipping: Impact of IRS Rules Change on the Hospitality Industry

Posted in Wage & Hour

By Jessica Glatzer Mason and Tax Partner Michael J. Donohue

In 2014, restaurants and other employers in the hospitality industry will be subject to new IRS reporting and withholding rules relating to automatic tips charged to large groups of patrons.

Background. Employees are required to report cash “tips” of $20 or more to their employer within 10 days after the end of the month when the tips are received. Employers are required to collect income and payroll tax on tips based on tips reported to them by employees. Cash tips include: (i) tips received directly from customers by cash, credit card or debit card; (ii) tips collected and distributed to an employee by an employer; and (iii) tips received through an employee tip sharing arrangement. The employer is not responsible to withhold employee payroll taxes on unreported tipsContinue Reading

5th Circuit Rejects NLRB’s Position on Class/Collective Action Waivers

Posted in Arbitration, NLRB, Policies & Practices, Wage & Hour

On December 3, 2013, in a landmark decision, the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) in D.R. Horton, Inc. v. National Labor Relations Board, rejected the argument that the National Labor Relations Act (“NLRA”) banned class and collective action waivers in employment arbitration agreements.  This decision overturned the National Labor Relations Board’s (“NLRB”) highly publicized, and highly controversial, D.R. Horton decision.  In doing so, the Fifth Circuit paved the way for employers to reconsider prior policies and include such waivers in their arbitration agreements with employees.

The Fifth Circuit noted that it was following the lead of the Second, Eighth and Ninth Circuits which “suggested or expressly stated” that they would not follow the NLRB’s rationale in D.R. Horton.  With that in mind, the Fifth Circuit held that D.R. Horton’s arbitration agreement must be enforced according to its terms. 

In reaching these conclusions, the Fifth Circuit agreed withContinue Reading

Avoid Investigations Through Labor Law Compliance

Posted in Wage & Hour

The U.S. Department of Labor Wage and Hour Division has set its aim – with ample ammunition – on the restaurant industry. Focusing on overtime, minimum wage and record-keeping violations, the enforcement initiative has recovered millions of dollars in back wages and penalties from restaurants throughout the country. In a stated effort to protect the more vulnerable members of the workforce, the DOL has initiated several high-profile enforcement initiatives focused on restaurants.  Restaurants often employ recent immigrants, individuals with limited English language skills and people uninformed about their employment rights. The DOL believes this population can too easily be taken advantage of through unlawful pay practices. As a result, it is likely the restaurant industry will continue to be the focus of the DOL’s efforts for the foreseeable future.

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Football Imitates Employment Law

Posted in Compliance, Policies & Practices

As a big football fan and an employment lawyer, it is not often that the two overlap.  For the past few weeks, however, I have been listening to news and sports programs alike discuss the issues affecting the Miami Dolphins and accusations of bullying. The focus of much of the discussion has been on bullying and hazing in the NFL.  But, that really misses the bigger picture – these issues are no different from claims of harassment in any workplace – they are just highlighted because they allegedly occurred on professional sports team.  While it is easy to ignore locker room issues as atypical to a workplace, that locker room is still a workplace.  If an HR professional or employment lawyer heard these facts – employer knowledge of sexually offensive conduct at a work sponsored charity event (that lead to the employer’s apology) and subsequent promotion of that employee to aContinue Reading

What Employers Should Know About Sexual Orientation Discrimination

Posted in Compliance, Discrimination, Policies & Practices

Yesterday, the Senate approved the Employment NonDiscrimination Act (“ENDA”).  The ENDA would amend Title VII to include sexual orientation and related issues in the definition of protected classes.  Political pundits do not give the ENDA much chance of passing the House.  This is nothing new.  The ENDA has been proposed periodically in Congress since 1994 and has failed to become law each time.  But, here is why employers should take notice - the EEOC’s Strategic Enforcement Plan.

The EEOC has as part of its Strategic Enforcement Plan expansion of Title VII to “address emerging and developing issues.”  According to the Plan, these issues include “coverage of lesbian, gay, bisexual and transgender [LGBT] individuals under Title VII.”  Much as it has done with litigation over the use of criminal convictions, the EEOC is seeking to push the envelope here.  Employers should expect to see the EEOC accepting charges on sex discrimination with the sexual orientation as the issue. And,Continue Reading