The FLSA allows joint employer situations where an employer and a joint employer are jointly responsible for the employee’s wages. This issue frequently arises when a business obtains temporary workers through a staffing agency—creating a question of which entity qualifies as the temporary worker’s employer or whether both companies may be deemed as joint employers. If a joint employer relationship is found to be present, both employers must meet labor requirements and, therefore, both may be held liable for alleged labor practice violations.
By Bobbie M. James
According to the ILO, “Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and 499 more hours per year than French workers.” Employees working long hours can experience numerous mental, physical and social effects. With the private sector showing no sign of reducing the work hours of its employees on its own and technology making it easier than ever to reach anyone anywhere at any time, it is no surprise that policymakers are seeking to improve work-life balance through legislation. Countries such as Germany, Italy, and, most recently, France and the Philippines, have enacted “right-to-disconnect” policies, which prohibit contacting employees during non-work hours. Now, the so-called “Do-Not-Disturb” movement is spreading across North America to Canada and the United States.
In March of 2018, New York City Council members introduced a proposed law prohibiting private employers with more than 10 employees from requiring their employees to check and respond to their work emails, or any other work-related communications, during non-work hours. Two exceptions to this proposed rule are employees working overtime and emergency matters. Employers who break this law would be subject to fines of $250 per violation. As of January 17, 2019, the law is currently with the Committee on Consumer Affairs and Business Licensing.
On April 2, 2018, the U.S. Supreme Court held in Encino Motorcars, LLC v. Navarro that an auto dealership’s service advisors were exempt from overtime under the Fair Labor Standards Act (FLSA), which excludes “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles” from the FLSA’s overtime provisions. While the case turned on this fairly specific overtime exemption question, however, the Court’s decision has much greater implications, laying out a new standard for analyzing overtime exemptions under the FLSA and rejecting the longstanding precedent that FLSA exemptions be “narrowly construed” in favor of a broader “fair reading” standard.
The FLSA is a federal wage-and-hour statute which establishes, among other things, minimum wage and overtime requirements for covered employers. Under the FLSA, most employees are entitled to overtime premium pay—pay at one-and-a-half times the regular hourly rate for hours worked in excess of 40 in a given work week. Some workers, however, are exempt from the FLSA’s overtime provisions, including executives, administrative employees, learned professionals (such as doctors and lawyers), and creative professionals (such as musicians and actors), among a number of others. Encino Motorcars dealt with a less common, more obscure FLSA exemption, set forth in § 213(b)(10)(A) of the FLSA, which states that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements” is exempt from overtime under the FLSA.
In Encino Motorcars, a group of current and former service advisors at an auto dealership brought suit under the FLSA, alleging that they were owed back pay because their employer had misclassified them as exempt from overtime under the FLSA. The defendant then successfully moved to dismiss on the grounds that the plaintiffs fell within the “selling or servicing automobiles” FLSA exemption, which decision plaintiffs appealed to the U.S. Circuit Court of Appeals for the Ninth Circuit. The Ninth Circuit reversed the district court’s ruling, finding the language of the FLSA “ambiguous” and the legislative history “inconclusive.” Encino Motorcars then appealed the Ninth Circuit’s holding to the U.S. Supreme Court, which reversed and remanded in a 5-4 decision.
Owen Laird, Esq.
Today is Opening Day for the 2018 Major League Baseball season. Spring training is over, and while the Major Leaguers head back to their stadiums, the Minor League players who didn’t make the cut are headed back to work as well. Those Minor Leaguers might be a little worse off this year because of the sweeping $1.3 trillion budget bill that President Trump signed last week. One of the more nuanced aspects of the bill is an amendment to the Fair Labor Standards Act (“FLSA”) known as the “Save America’s Pastime Act.” This amendment aims to “save” baseball by suppressing the wages that minor league teams pay to their players.
While major league baseball players enjoy a minimum annual salary—which amounts to hundreds of thousands of dollars per year, with top players earning tens of millions of dollars a year—minor league baseball players are a different story. Not only do minor league players significantly outnumber major league players, but, unlike major league players, minor leaguers are not unionized. As a result, baseball’s minor leagues are populated with thousands of players, many of whom are barely squeaking by.
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:
On Tuesday, December 5, the Department of Labor (DOL) sent out a Notice of Proposed Rule Making (NPRM) regarding tip regulations under the Fair Labor Standards Act (FLSA). The DOL seeks to rescind an Obama-era regulation that prohibited restaurants and other service-industry employers, specifically those who pay their employees minimum wage and do not take a tip credit, from enforcing a tip-sharing system between tipped and non-tipped employees.
While tips are considered the sole property of the tipped employee under the FLSA, tip-pooling (sharing tips equally among staff) is allowed. There are, however, specific requirements for valid tip-pooling arrangements. When an employer takes a tip credit to satisfy a portion of the minimum wage, the tip pool can only include workers who “customarily and regularly receive tips”, prohibiting the sharing of tips with “back of the house” employees (such as cooks and dishwashers), who do not usually earn tips. Section §203(m) of the FLSA outlines the rules and regulations for tip credits, permitting employers to take a tip credit toward the minimum wage obligation for tipped employees equal to the difference between the required cash wage and the minimum wage. For example, the federal minimum wage is currently set at $7.25 per hour. Under section § 203(m) of the FLSA, an employer can pay his or her tipped employee a minimum cash wage of $2.13 per hour and claim a maximum credit of $5.12 per hour. The employer is obligated to pay the employee if the tips do not amount to the mandatory feral minimum wage. (These are the federal rules for tip credits. Fortunately, the tip credit regulations in New York are better for employees: The minimum cash wage is higher and the maximum tip credit allowed is lower.)
Owen H. Laird, Esq.
We regularly write about overtime issues for employers and employees. The Fair Labor Standards Act (FLSA) creates a baseline right to overtime for millions of employees, and many states have enacted their own labor laws to enhance those rights.
However, the FLSA and its state counterparts do not require employers to pay all employees overtime; these statutes include large swaths of workers who are “exempt” from the overtime pay requirements. For example, the FLSA includes exemptions for “professional” employees, which includes individuals such as doctors, teachers, architects, and most employees who need to have an advanced degree; “executive” employees, which includes many individuals who have managerial or supervisory responsibilities; “administrative” employees, which includes individuals who, roughly, perform office work related to the employer’s business operations and can function autonomously; and more specific exemptions for certain industries, such as outside salespeople and agricultural workers. These exemptions are complex, and the single-sentence summary above does not do justice to the millions of hours that thousands of attorneys have spent litigating these issues. In short, lawyers, judges, and administrators must look at an employee’s specific job responsibilities to determine whether they are exempt or not.
Owen H. Laird, Esq.
The U.S. Supreme Court recently agreed to hear two cases that will have major ramifications for workers across the country. One case threatens one of organized labor’s most important rights, and the other impacts employees of car dealerships nationwide.
The Court agreed to hear arguments on Janus v. American Federation of State, County and Municipal Employees, which concerns a union’s right to take dues from non-members who are in the same bargaining unit as members the union represents. This issue of union dues has been long, and corporate interests have been successful in gradually rolling back organized labor’s ability to raise funds.
Last week, on September 13, 2017, the U.S. District Court for the Eastern District of Pennsylvania denied Uber’s motion for partial summary judgment in Razak v. Uber Technologies, Inc. This decision allows a putative class of Philadelphia-based Uber drivers to move forward with claims against Uber for failing to compensate them for “on-call” time they spent logged into the Uber app, but not driving customers.
The Fair Labor Standards Act (FLSA) requires employers to compensate employees for all hours worked, including on-call time: hours worked where “the employee is required to remain on the employer’s premises, or […] although not required to remain on the employer’s premises, finds his time on call away from the employer’s premises is so restricted that it interferes with personal pursuits.” The recent rise of gig economy work— individual projects and tasks picked up at a worker’s discretion, often using apps like Uber and TaskRabbit—has presented a challenge to the existing model of on-call time, as courts are asked to consider what constitutes compensable on-call time for workers who may never report to a central place of employment or who are, at least to some degree, able to work whenever they choose.
In Razak, a group of Uber drivers alleged that their time spent logged into the Uber driver app and waiting for ride requests, but not actually driving customers, qualified as on-call time under the FLSA and that Uber’s failure to compensate them for such time had led to minimum wage and overtime violations. Uber moved to dismiss the drivers’ complaint; the court denied Uber’s motion to dismiss and ordered expedited discovery on the issue of whether the drivers’ time spent online qualified as compensable on-call time under the FLSA. After the parties completed expedited discovery, Uber moved for partial summary judgment. The court denied this motion as well, determining that it could not find that this on-call time was not compensable under the FLSA.
In McKeen-Chaplin v. Provident Savings Bank, FSB, the Ninth Circuit ruled that mortgage underwriters employed by a bank were entitled to overtime compensation for hours worked in excess of 40 in a work week. The Ninth Circuit held that, because the mortgage underwriters’ primary job duty did not relate to the bank’s management or general business operations, they did not fall under the administrative exemption to the overtime requirements of the Fair Labor Standards Act (FLSA).
To show that an employee qualifies for the FLSA’s administrative exemption, an employer must demonstrate that the employee’s primary duty involves office or “non-manual work directly related to the management policies or general business operations” of the employer or its customers. This requirement is met if the employee engages in “running the business itself or determining its overall course or policies,” not just in the day-to-day carrying out of the business’ affairs. Said otherwise, “an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.”