Tag Archives: DOL

Proposed Changes to the Department of Labor’s Tip Pooling Rules

Yesterday, the U.S. Department of Labor published a Notice of Proposed Rule Making (“NPRM”) to alter limitations on tip pooling when an employer does not take a tip credit and pays the tipped employees a direct cash wage of at least the federal minimum wage. According to a DOL fact sheet on the NPRM:

As the NPRM explains, since 2011, there has been a significant amount of litigation involving the tip pooling and tip retention practices of employers that pay a direct cash wage of at least the federal minimum wage and do not claim a Fair Labor Standards Act tip credit. There has also been litigation directly challenging the department’s authority to promulgate the provisions of the 2011 regulations that restrict an employer’s use of tips received by its employees when the employer pays a direct cash wage of at least the federal minimum wage and does not take a tip credit. Moreover, in the past several years, several states have changed their laws to require employers to pay tipped employees a direct cash wage that is at least the federal minimum wage. This means that fewer employers can take the FLSA tip credit. The department is issuing this NPRM in part because of these developments and the department’s serious concerns that it incorrectly construed the statute when promulgating the 2011 regulations.

The proposed rule would allow employers to distribute customer tips to larger tip pools that include non-tipped workers, such as cooks and dishwashers. This would likely increase the earnings of those employees who are newly added to the tip pool and further incentivize them to provide good customer service. The proposed rule would additionally provide employers greater flexibility in determining pay practices for tipped and non-tipped workers. It also may allow for a reduction in wage disparities among employees who all contribute to the customers’ experience.

This proposed change does not impact tip pooling when an employer takes a tip credit toward the minimum wage requirement. Employers impacted by this proposed rule have until January 4, 2018, to provide comment on the rule. Comments may be submitted electronically at regulations.gov.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Should I Pay Exempt Employees Who Miss Work Due to Bad Weather Conditions?

As Florida prepares for a potential direct hit by Hurricane Irma, employers have many concerns. At some point, when decisions have been made about if a business will stay open and if goods or people need to be moved out of harm’s way, the following question will most likely be asked: “Should I pay exempt employees who miss work due to bad weather conditions?”

When it comes to deductions from exempt employees’ salaries it is easy to get into trouble.  The general rule is that an exempt employee is entitled to receive his or her entire salary for any workweek he or she performed work. This means, if the worksite closes for a partial week due to bad weather conditions (such as a hurricane), and the exempt employee has worked during that workweek, the employee is entitled to his or her full salary. However, if the employer has a leave benefit, such as PTO, and the employee has leave remaining, the employer can require the employee to use paid time off for this time away from work. If the employee does not have any remaining leave benefit, he or she must be paid.

If the work site remains open during inclement weather and an employee is absent (even if due to transportation issues), the employee can be required to use paid time off.  If the employee does not have any paid time off remaining, the employer may deduct a full-day’s absence from the employee’s salary. For a more detailed explanation see this opinion letter from the U.S. Department of Labor.

As for non-exempt employees, the FLSA only requires that employees be paid for the hours they actually work. However, those non-exempt employees on fixed salaries for fluctuating workweeks, must be paid their full weekly salary in any week for which work was performed.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

BREAKING NEWS: Overtime Rules Overruled

Employers, the wait is over. You finally have an answer regarding the 2016 overtime regulations. Yesterday afternoon, a Texas federal judge issued an order invalidating the U.S. Department of Labor’s overtime rules that had been set for implementation on December 1, 2016, but preliminarily stopped nationwide only days before by that same judge.

As noted in our earlier blog posts (“Breaking News: Federal Judge Halts Implementation of the DOL’s New Overtime Regulations” from November 23, 2016 and “2016 Overtime Regulations: They Are Still Out There” from June 13, 2017), the DOL had issued a final rule that was predicted to affect over 4.2 million workers, with Florida as the third most effected state. Those workers would no longer be exempt from overtime compensation due to increases in the minimum salary level for “white collar” exemptions from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) and highly compensated employees from $100,000 to $134,000 annually.

The DOL quickly appealed the preliminary injunction to the Fifth Circuit Court of Appeals, which left employers wondering whether the hold would be lifted by the appellate court or the appeal withdrawn. The uncertainty increased on July 25, 2017, when the DOL published a formal Request for Information so the DOL could issue a new proposal related to overtime regulations.

In the order, the court granted summary judgment to the business group and other plaintiffs who had challenged the new overtime rules and issued a final judgment on their behalf. The court held that the white collar exemptions were intended to apply to employees who perform “bona fide executive, administrative, or professional capacity” duties, and that the DOL does not have the authority to use a salary-level test that will effectively eliminate the duties test or exclude those who perform the duties based on salary level alone.  Because the new overtime rules would have “exclude[d] so many employees who perform exempt duties” and are “not based on a permissible construction of [the law]”, the DOL did not carry out Congress’s unambiguous intent, exceeded its authority, and has “gone too far” with the rules.  In sum, the overtime rules have been overruled, and may be disregarded by employers.

Read the full order here.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

2016 Overtime Regulations: They Are Still Out There

Like a science fiction television show from the 90s, the 2016 overtime regulations are still out there, as is the injunction preventing their implementation. To bring those that may just be returning from Close Encounters of the Third Kind up to date, in the latter part of 2016 employers rushed to get ready for December 1, 2016, the effective date for the regulations. On November 22, 2016, just days before the effective date and as employers scrambled to make their final preparations for the changes, a federal judge blocked the implementation. With the speed of Quicksilver, the Obama administration initiated an appeal. The Fifth Circuit Court of Appeals granted expedited review of the injunction, and many anticipated witnessing The War of the Worlds play out during oral argument. Then, as if a spacecraft had landed in Roswell and this time everyone stopped to watch the aliens disembark, the momentum came to a crashing halt just like a hirsute alien spacecraft piloted by Jeff Goldblum.

Shortly after President Trump took office, the U.S. Department of Labor (“DOL”) requested a postponement of its deadline to submit a reply brief. This request was granted. Just as that deadline was filed, the DOL again requested a postponement. Currently, the DOL’s reply brief is due on June 30, 2017. Although the new Administration could have withdrawn the appeal, it has not. Therefore, there still may be a chance for a strategic showdown such as that seen in Pixels.

Going into Overtime in the Search for a Secretary of Labor: What is Next for the 2016 Overtime Rule?

For weeks now, rumors have been circulating that the President’s nominee for Secretary of Labor, Andrew Puzder, would withdraw his name. As his confirmation hearing was delayed over and over again (five times), he repeatedly issued statements that he was fully committed to becoming Secretary of Labor and looking forward to his confirmation hearing. However, yesterday, on the eve of his scheduled appearance for questioning before the Senate Committee on Health, Education, Labor & Pensions, he issued a statement withdrawing his name for consideration.

As detailed in a previous blog post, Mr. Puzder is a fast-food executive who many believed would run the Department of Labor in a pro-business manner. Thus, labor organizations were greatly opposed to the President’s nominee and view his withdrawal as a win for workers.

This afternoon, it was announced that the President has selected former U.S. Attorney R. Alexander Acosta to serve as Secretary of Labor. Acosta is a former U.S. Attorney for the Southern District of Florida, a former member of the National Labor Relations Board, and a former assistant attorney general in the Department of Justice’s Civil Rights Division. He currently serves as the dean of Florida International University College of Law. Acosta has a very different background from the prior nominee.

If confirmed, it is not yet clear what approach Acosta will take in handing the pending appeal of the stay imposed on the 2016 overtime rules. The original briefing deadline on appeal was delayed as a result of the DOL’s request for additional time “to allow incoming leadership personnel adequate time to consider the issues.” The existing briefing deadline is currently March 2, 2017. It is possible that the administration will request additional time from the 5th Circuit Court of Appeals now that Puzder has withdrawn his name and Acosta is the new nominee. Oral argument has not been set.

Even though oral argument has not been set in the appeal, Washington is not taking a break from focusing on this issue. Today, a subcommittee of the House Education and the Workforce Committee is holding a hearing on “Federal Wage and Hour Policies in the Twenty-First Century Economy.” It is anticipated that the stayed overtime rule will take center stage at this hearing.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Predicting the Unpredictable: Labor and Employment Law in 2017 (Part Two)

This post is part two of a two-part series. Catch up on part one here.

Several of the biggest employment law matters in 2016 were the Department of Labor’s overtime regulations, Florida’s medical marijuana law, LGBT rights, and changes to the joint employer relationship. It is expected that each of these issues will continue to hold the limelight in 2017.

DOL’s Overtime Regulations – Since March 2014, when President Obama issued a Memorandum to the Secretary of Labor directing the Secretary to “modernize and streamline existing overtime regulations,” this has been a hot topic. The discussion has moved from what the regulations will be, to what will happen with the Department of Labor’s appeal of the temporary injunction prohibiting the implementation of the rule.  Oral argument has not yet been set. Thus, the new administration could withdraw its appeal of the temporary injunction, leaving the lower court’s decision intact. If Puzder does take the reins of the DOL, it is likely that this will occur, as he is on record stating that the 2016 overtime regulations diminish opportunities for workers.

Florida’s Medical Marijuana Law – This past election Florida’s voters approved medical marijuana for treatment of certain health conditions.  Although the state has already issued seven licenses for growing marijuana and some of the businesses with licenses are already starting to plant crops, it will not be until summer 2017 that regulations implementing the voters’ directive will be released. Many counties and cities in the state, including Sarasota County, Manatee County, Hillsborough County, Pasco County, and the City of Bradenton, have or are considering instituting temporary bans of the drug until the state’s regulations are issued and/or local zoning and building regulations are implemented.

Even though it is clear from the text of the constitutional amendment that employers will not be required to allow employees to use marijuana at the workplace, there will still be questions regarding zero tolerance policies, Florida specific drug testing, and reasonable accommodation under the Florida Civil Rights Act (arguably the ADA, a federal law, would not require an accommodation that involves a federally prohibited substance). Further, although marijuana (and CBD/hemp oil) may be approved for limited use in Florida, what the voters approved this past election is in direct conflict with the federal Controlled Substances Act. In addition, on January 13, 2017, the Florida’s legislature’s 2014 approval of limited use of CBD will be in direct conflict with the Drug Enforcement Administration’s new rule making CBD a schedule one controlled substance.

State laws will not protect businesses, including those licensed by the state to grow marijuana, from federal prosecution. If Sessions takes over the DOJ, he could overrule the 2009 directive to U.S. Attorneys not to prosecute violations of the federal drug laws when the acts being prosecuted are legal under state law. If this occurs, the federal government could thwart business opportunities in the marijuana industry and put many people in jail.

LGBT Rights in the Workplace and in Places of Public Accommodation – In the last few years, both the Equal Employment Opportunity Commission and the DOJ have taken serious efforts to expand protections afforded to members of the LGBT community. The EEOC’s 2017 Strategic Enforcement Plan indicates that providing this group protections under Title VII will remain a priority. However, depending on who is chosen to lead the EEOC, this focus could change and this aspect of the strategic plan could be ignored. Similarly, with Sessions in charge of the DOJ, a roll back in efforts to use public accommodation laws to provide greater protections to transgender persons is likely to occur.

Joint Employer Status – Recently both the EEOC and the National Labor Relations Board have broken with their own long-standing standards of what constitutes a joint employer, with both agencies expanding their standards to cover a greater number of relationships. The NLRB went as far as to redefine the joint employment test in place for over 30 years. In the past, a joint employer relationship existed when two entities shared or codetermined the essential terms and conditions of the workforce. Thus, for two entities to be considered joint employers, both had to exercise some control over employees’ terms and conditions of employment. However, with the 2015 Browning-Ferris decision, the NLRB removed the actual exercise of control as a requirement and instead focused on whether each entity has a “right to control” regardless of whether that right is ever used. Because of the five-year staggered terms of board members and the fact that a change at the Board level is made through interpretations of the NLRA, the impact of the new administration on this standard will most likely not be immediate. Instead, the NLRB’s new joint employer standard is already being challenged by Congress, and if a bill is passed overriding the NLRB’s new standard, it is likely that the new President will sign the bill.

Aside from the foregoing issues, there are also several other matters that will probably be of interest in 2017: Will Obama’s executive orders for federal contractors regarding minimum wage and paid sick leave stand? Will the new administration continue to push for fair pay? Will we see an increase in INS investigations of undocumented workers? Will the new administration attempt to undo the NLRB’s quickie election rules?

If only we had Dr. Who’s Tardis so we could travel to the future and see for ourselves. Whether the changes will ultimately be positive or negative for employers in 2017 is yet to be seen. Regardless, we are guaranteed a year full of activity in the employment law arena.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Predicting the Unpredictable: Labor and Employment Law in 2017

This post is part one of a two-part series.

Since Santa did not leave the Wicked Witch of the West’s crystal ball under my tree, Emmett Lathrup “Doc” Brown’s DeLorean parked outside my house, or provide me with access to Bill and Ted’s telephone booth, I am unable say with certainty what 2017 will hold for employers. However, I am confident that several labor and employment issues will take, or remain, on center stage, as the President-Elect has indicated that once he takes office, he plans to repeal many of the executive orders and regulations implemented by the Obama administration that businesses have generally criticized as burdensome. Further, two nominations for leadership positions made by the President-Elect that will influence the employment arena are the nominations of Jeff Sessions to lead the Department of Justice and Andrew Puzder to lead the Department of Labor.

Jeff Sessions is known for taking positions contrary to those advocated by civil rights organizations, especially those supporting LGBT rights, and he is on record opposing the legalization of marijuana. This will be interesting because under the Obama administration the DOJ has been actively working to expand LGBT rights (think North Carolina), and has not been actively enforcing federal marijuana prohibitions in states where the drug is legal (think Colorado).

As for Andrew Puzder, he is an executive whose businesses have been investigated for wage and hour violations by the DOL. He is on record stating that American workers are overprotected. He is generally opposed to minimum wage increases, and he finds paid sick leave requirements burdensome. As Secretary of Labor, Puzder will be responsible for the agency that enforces many of the employment laws that businesses deal with on a regular basis, including the FLSA, the FMLA and OSHA.

If these two nominations are confirmed by the Senate and their past statements are indicative of how they will manage their agencies, businesses may see regulations curtailed and less aggressive enforcement of employment laws. As a business owner, such changes may equate to fewer regulations, less time dedicated to dealing with government agency investigations, and possibly lower labor expenses.

If some predictions on how Sessions and Puzder will lead their agencies under a Trump presidency come to pass, worker protections may be greatly diminished. If protections are impacted to the extent that workers feel that neither their employers nor their government has their best interests in mind, they may seek advocates to assist in improving the terms and conditions of employment. Think Sally Field in her Oscar willing performance in Norma Rae. If employees seek to unionize, the result may be more burdensome for employers than the existing regulatory framework.

Only time will tell how the new administration will impact the labor and employment arena. If employee protections do begin to decline, employers that value employees and treat them well are less likely to see the involvement of outside advocates.

Part two of this post will specifically address several of the issues mentioned above, including the DOL’s overtime regulations and Florida’s Medical Marijuana Law. Stay tuned.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Florida and Several of Its Cities will Ride the 2017 Wave of Minimum Wage Hikes

During the course of 2017, 21 states including Florida, plus the District of Columbia (D.C.), are increasing their minimum wage rates for nonexempt employees. Florida, along with 18 other states, increased its minimum wage as of January 1, 2017. As discussed here, Florida increased its minimum wage to $8.10. Maryland, Oregon and D.C. are set to raise their respective minimum rates in July 2017.

Several cities in Florida are also set to raise minimum wages above Florida’s minimum wage. For example, as of October 1, 2017, the City of West Palm Beach’s minimum wage rises by $1.00 per hour to a new minimum of $14.25, and then to $15 in fiscal year 2018-2019. On January 1, 2018, the City of Miami Beach’s minimum wage is set to increase to $10.31 and ultimately to $13.31 over a four-year cycle. There are other cities in Florida that either have approved or are also contemplating similar increases.

This is an important juncture for Florida employers, especially those who employ low-wage workers affected by the new minimum wage changes, to carefully audit their pay practices to ensure legal compliance. In addition to federal, state and even local minimum wage laws, many Florida counties and cities (for example Miami-Dade, West Palm Beach, and St. Petersburg) have wage theft ordinances designed to protect employees wages. Employee claims alleging violations of local, state, or federal wage and hour laws can be costly and significantly affect a company’s bottom line. Despite minimum wage increases at the state and local level, the federal minimum wage has remained stagnant at $7.25 per hour since 2009. Employers should be aware that where several different minimum wages may apply, the employer must pay the higher wage rate.

2.2% of Florida wage earners, or approximately 187,000 employees, are expected to receive pay raises due to the state minimum wage adjustment. About 4.4 million employees are expected to benefit from state minimum wage increases nationwide.

The states’ minimum wage increases and resultant minimums vary quite dramatically when compared on a national scale. At the low-end, for example, is Florida’s five cents ($0.05) per hour increase which raises the state minimum wage from $8.05 to $8.10. This matches the five cent increase in Alaska (to $9.80), in Ohio (to $8.15 ) and in Missouri (to $7.70). By contrast, at the high-end of the spectrum is Arizona with a $1.95 per hour increase to a new minimum wage rate of $10.00, followed by Maine with a $1.50 per hour increase to a new minimum of $9.00, Washington state with a $1.53 per hour increase to a new minimum of $11, and Massachusetts with a $1.00 per hour increase to a new minimum of $11 per hour.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

BREAKING NEWS: Federal Judge Halts Implementation of the DOL’s New Overtime Regulations

On Tuesday evening, just days before the U.S. Department of Labor’s new overtime regulations were set to go into effect, a Texas federal judge blocked the December 1, 2016 implementation of the regulations, issuing a temporary injunction with nationwide applicability. The regulations blocked by this order not only provided for a substantial increase in the salary threshold required for the “white collar” exemptions, but also provided for automatic increases in the salary threshold every three years. The judge stated that, in drafting these rules, the DOL exceeded its authority and ignored congressional intent.

This order is not a final order, but merely a finding by the court that the plaintiffs have established they will likely succeed in their challenge to the rules. What happens next is yet to be determined. The DOL may appeal to the 5th Circuit Court of Appeals, Congress could pass one of the two pending bills drafted to alter the DOL’s regulations or draft a compromise bill, or the case is litigated absent a DOL appeal.  For now, the walk away for employers is that the rule will not take effect on December 1, 2016.

For employers that were not quite ready for the new rules, this decision will provide some additional time to evaluate and plan, just in case the temporary injunction is overturned. For employers that have already made changes to employees’ pay structures, there is no legal requirement or prohibition that such changes be maintained.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

The Clock Is Ticking…Private Sector Employers Face June 30 Deadline to Avoid New Reporting Requirements

The Department of Labor recently issued a rule imposing new reporting requirements on private sector employers who engage attorneys or consultants to persuade employees concerning the right to organize and collectively bargain. Employers who have entered into an agreement for labor relations services before July 1, 2016 are exempt from the reporting requirement, even if the need for services arises after July 1.

The prior “persuader” rule requires both employers and labor relations consultants (including attorneys) to report to the DOL only when they engage in persuasive communications directly with employees regarding the right to organize a union or bargain collectively. The rule’s long-standing “advice exemption” has generally exempted consultants and attorneys from the reporting requirements when they have simply provided “behind the scenes” guidance to employers (e.g., drafting speeches and letters directed to employees by management to dissuade employees from unionizing).

In the new rule, which takes effect July 1, 2016, the DOL narrows the “advice exemption” by broadening the reporting requirements to include activities undertaken by a consultant or attorney, even when there is no direct contact or communication with employees, where the object of the activity is to persuade employees concerning the right to organize and collectively bargain.

The new DOL rule has triggered numerous legal challenges throughout the country by employers and business associations. One of the principal objections is that the new reporting requirements essentially eviscerate the attorney-client privilege between the employer and its labor relations attorney.

Contact any of our labor and employment attorneys to discuss this time-sensitive issue.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557