Articles Posted in Department of Labor

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By Owen H. Laird, Esq., and Edgar M. Rivera, Esq.

Recognizing the unequal bargaining power between employees and employers, employment laws such as the Fair Labor Standards Act (FLSA) create rights and protections for employees. And, while identifying whether a worker is an employee or not may seem relatively straightforward at first glance, the question can, in reality, be surprisingly complicated. Between traditional employees, independent contractors, and paid and unpaid interns, modern workplaces include a variety of different types of workers, only some of whom are entitled to the rights and protections created by laws like the FLSA.

A recent decision by the U.S. Department of Labor (DOL) changed the standard by which the DOL determines whether interns qualify as employees under the FLSA for the purposes of minimum wage and overtime rights. In 2010, the DOL adopted a six-factor conjunctive test for interns, whereby a legitimate internship relationship would exist only if all six factors were met. Those factors were:

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Owen H. Laird

If you are a regular reader of this blog, you are undoubtedly aware of the multi-year effort to raise the salary threshold for the purposes of overtime exemption under the Fair Labor Standards Act. If you are not a regular reader, then the previous sentence may not have made much sense.

To refresh: the Fair Labor Standards Act (FLSA) is the federal law that provides for minimum wage, overtime pay, and other wage-and-hour rights. The FLSA requires employers to pay their employees overtime pay – that is, pay at one-and-a-half times their normal rate – for all hours worked above forty (40) per workweek. However, the FLSA creates a number of exemptions to the overtime pay requirement: categories of workers who are not entitled to overtime pay, even if they work more than forty hours in a workweek. For example, employers are not required to provide overtime pay to certain “exempt” employees: people with professional degrees, managers, executives, artists, administrators, and many tech workers, to name a few. However, in order to qualify as exempt, an employee needs to earn as much or more than the “salary threshold,” which is currently $455 per week, or $23,660 per year. In other words, a manager who earns less than $455 a week would be entitled to overtime pay, while a manager who earns more than $455 a week would not, even if their job duties are identical.

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Edgar M. Rivera, Esq.

The Immigration Reform and Control Act of 1990 created the H-1B nonimmigrant classification, which provides a vehicle by which a qualified alien may seek admission to the United States on a temporary basis to work in his or her field of expertise. An alien may file a H-1B petition to perform (i) services in a specialty occupation, (ii) services relating to a Department of Defense cooperative research and development project or coproduction project, or (iii) services of distinguished merit and ability in the field of fashion modeling. Prior to employing an H-1B temporary worker, the U.S. employer must first file a Labor Condition Application (LCA) with the Department of Labor (DOL) and then file an H-1B petition. The LCA specifies the job, salary, length, and geographic location of employment. The employer must agree to pay the alien either the actual or prevailing wage for the position, whichever is greater.

In Palmer v. Trump Model Management, LLC, Alexia Palmer, a Jamaican fashion model, brought a putative class action against Trump Model Management, LLC (Trump Model Management), for allegedly violating the Immigration and Nationality Act (INA), a federal statute governing U.S. immigration-related matters, including employment of immigrants. Palmer claimed that, for years, Trump Model Management had engaged in a fraudulent scheme whereby the company lures foreign models to the United States with false promises of “a life of glamour in Soho clubs and on catwalks,” lies to the federal government in order to obtain H-1B visas for the models, and then cheats the models out of their pay.  Trump Model Management moved to dismiss the complaint for failure to state a cause of action.

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Last week, a Texas federal district court granted a temporary injunction in State of Nevada v. U.S. Department of Labor, blocking the implementation of a new Department of Labor (DOL) overtime regulation that was previously scheduled to go into effect today, December 1, 2016.

The new regulation was developed in response to a 2014 directive from President Obama to the Secretary of Labor, instructing the DOL to revise federal regulations for executive, administrative, and professional overtime exemptions, aiming to ensure that the salary threshold for these exemptions—i.e., the minimum annual salary an employee must make before they could possibly be considered “exempt” from overtime requirements—more accurately reflected current income distribution.

On May 18, 2016, the DOL announced the final version of the rule. The new regulation would more than double the annual salary threshold for overtime exemptions, raising it from $23,660—the current minimum, which was set in 2004—to $47,476, the 40th percentile of earnings of full-time salaried employees in the South, the lowest-income U.S. Census Region. In addition, the regulation mandated that the overtime salary threshold be automatically updated every three years to allow for inflation and wage growth. The new salary level would entitle over four million additional employees to overtime pay for hours worked in excess of 40 in a work week, which, the DOL stated, would lead to better wages for workers, more reasonable hours, and improved work-life balance and productivity, among other benefits.

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Shelby Krzastek

On September 7, 2016, the New York State Department of Labor (“NYDOL”) enacted a regulation setting the conditions by which employers in New York State can pay wages to their employees. The final regulation details the four permissible methods for paying employee wages—cash, check, direct deposit, and payroll debit cards—and outlines the strict notice and consent requirements for paying wages by direct deposit or payroll debit cards. The regulation addressing payroll debit cards are especially important, as this payment method has until now been less regulated than more traditional payment methods, like cash and check. The regulation will be implemented March 7, 2017, and incorporates most of the provisions that the NYDOL initially proposed on June 5, 2016.

The regulation requires an employee to provide “consent” to receive wages by direct deposit or payroll debit card, prohibits employers from taking adverse employment actions against employees who decline to accept wage payments by direct deposit or payroll debit card, mandates that employers provide notice to employees naming other available ways of paying wages, and applies many conditions that limit an employer’s ability to pay employees’ wages by payroll debit card.

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Owen H. Laird, Esq.

This should not come as a surprise: tomorrow is Election Day.   Coverage of the presidential race started over a year ago and has been inescapable for the last several months.  Putting aside the vitriol, nonsense, and mudslinging, the outcome of this election will have a significant impact on the employment of millions of Americans, and not just in terms of the candidates’ claims about job creation.  Should Hillary Clinton win the presidency, Americans will likely see a continuation of the worker-friendly policies instituted under President Obama.  However, should Donald Trump win, we will likely see a Republican administration roll back much of the progress of the past eight years, to the detriment of workers and the benefit of employers.

The Obama administration has influenced employment law policy through three main avenues: (1) executive order, (2) administrative agencies, and (3) appointment.

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Yarelyn Mena

Employers are often hostile to employees who must leave their job for extended periods of time, sometimes even terminating employees while they are on leave or upon their return to work. Such conduct, if permissible, would significantly impact military personnel, as members of the Armed Forces—particularly members of the Active Reserve and of the National Guard— are frequently required to leave their civilian jobs for service. To assure service members that their jobs will be secure, in 1994, Congress enacted the Uniformed Services Employment and Reemployment Rights Act (USERRA). The USERRA prohibits discrimination against service members in all employment decisions and requires employers to reemploy service members without losing their seniority.

As Elaine Chao, former Secretary of Labor explains:

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Lucie Riviere and Owen H. Laird, Esq.

On February 16, 2016, U.S. District Judge William T. Lawrence of the Southern District of Indiana held that the Fair Labor Standards Act (“FLSA”), the federal labor law that prohibits employers from paying their employees less than minimum wage, did not cover college athletes.

In Berger v. National Collegiate Athletic Association, the three plaintiffs, members of the University of Pennsylvania (“Penn”) women’s track and field team, alleged that they were entitled to be paid at least the minimum wage for the work they performed as student athletes (e.g. practicing, playing in games, appearing at events, etc.). They argued that, by virtue of being on the team, they were Penn’s employees for purposes of the FLSA because they performed work for their universities for no academic credit, like students participants in work-study program. The plaintiffs sought an order from the Court allowing a collective action with a class of “[a]ll current and former National Collegiate Athletic Association (“NCAA”) Division I student athletes on NCAA women’s and men’s sports rosters for the [Defendant schools] . . . from academic year 2012-13 to the present” against Penn as well as the NCAA and the 123 NCAA Division I Member Schools.

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Jennifer Melendez

On September 22, 2015, Texas-based oil and gas services provider Halliburton agreed to pay over $18 million to 1,000 of its nationwide employees following an investigation by the U.S. Department of Labor (DOL). The DOL is a  federal agency tasked with enforcing the Fair Labor Standards Act (FLSA). The FLSA requires that covered employees receive overtime pay for all hours worked above 40 hours in the workweek.

Halliburton is one of the largest oil and gas providers in the energy industry and employs over 70,000 employees. In an investigation intended to crack down on oil and gas companies that are non compliant with the FLSA, the DOL discovered that Halliburton misclassfied 1,000 of its employees as exempt from overtime pay. These employees included field service representatives, pipe recovery specialists, drilling tech advisors, perforating specialists and reliability tech specialists. Halliburton also neglected to keep records of hours worked by those employees. Failing to keep accurate records of employees’ hours and misclassifying employees as exempt from overtime are violations of the FLSA.  According to the DOL, in order to be exempt from overtime, a position generally must meet specific job criteria and have a salary of no less than $455 a week. Secretary of Labor, Thomas Perez, stated:

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Owen H. Laird, Esq.

The most publicized labor and employment disputes in America are those that take place between athletes and the entities that they play for. An unfathomable amount of ink has been spilled discussing Tom Brady’s four-game suspension from the NFL and the federal lawsuit that overturned it, NBA and NHL lockouts, and Major League Baseball’s steroid suspensions. While all these events are coated in the sheen of sport and celebrity, they are essentially labor and employment issues faced by workers everyday: workplace discipline, collective bargaining, and drug testing.

The most recent athletics-related employment issue to grab headlines was the 9th Circuit Court’s decision regarding compensation for college athletes. Currently, rules promulgated by the NCAA – the governing body overseeing the vast majority of intercollegiate athletics – prohibit athlete compensation outside of scholarships. That is, colleges and universities are only allowed to pay for their athletes’ tuition and accompanying academic expenses; they cannot provide wages or other financial benefits. NCAA athletics, particularly college football and college basketball, generate billions of dollars of revenue each year, which is divided between broadcasters, coaches – most notably the head football and basketball coaches who are often the highest paid public employees in their respective states, videogame companies, and academic institutions, to name a few, but not – apart from scholarships – to the athletes themselves. The NCAA argues that amateurism is fundamental to its product; if college athletes were paid, it would irrevocably harm the marketability of college sport. The NCAA rests its arguments on the ideal of the “student-athlete” who is a student first and an athlete second, and whose primary concern is receiving an education. This contention is belied by colleges’ and universities’ efforts to ensure that their athletes remain eligible to compete – for example, arranging for star athletes to receive passing grades with minimal to academic work – avoiding the academic hurdles faced by the rest of the student body.

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