Wage and Hour Defense Blog

by Michael Kun and Aaron Olsen

In recent years, some plaintiffs' counsel bringing wage-hour claims have have made the strategic decision to bring "hybrid" class actions; that is, actions alleging both federal and state wage-hour claims.  These cases can cause logistical nightmares for the courts, and great benefits for plaintiffs, for two primary reasons: (1) the standard for certification of a class is differerent for federal and state claims, and (2) classes in federal claims are "opt in" classes while those for state claims are "opt out" classes.  Indeed, in bringing ...

The New York State Department of Labor recently issued a proposed rule which would combine the current wage orders for the restaurant and hotel industries to form a single Minimum Wage Order for the Hospitality Industry. If adopted, the Wage Order would affect requirements related to the minimum wage, tip credits and pooling, customer service charges, allowances, overtime calculations, and other common issues within the restaurant and hotel industries. Additionally, the Wage Order would provide helpful guidance for traditionally ambiguous wage issues such as the handling of service charges and the definition of an employee uniform for purposes of a laundry allowance.

On October 14, the IRS announced that the Health Care Reform Law's requirement that employers report the cost of health insurance on W-2's along with wages will be delayed by one year.  Now, employers must report health insurance cost on the 2012 W-2s, which in most cases will be issued to employees in January 2013. 

The announcement explained that “the Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting ...

Employers with operations in California continue to await a ruling from the California Supreme Court on the question of whether employers must "ensure" that meal and rest breaks are taken, or merely make them "available."

 

by David W. Garland

During the last year, courts have reached different conclusions as to whether outside sales representatives of pharmaceutical companies are exempt and therefore not entitled to receive overtime under the Fair Labor Standards Act. These cases turned on the specific duties assigned to the sales representatives by their employers and point out that pharmaceutical companies need to review carefully the responsibilities of these employees.

In Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010), decided by the Court of Appeals for the Third Circuit in ...

The healthcare industry continues to be the main target in the onslaught of wage and hour claims asserting violations of unpaid overtime and missed meal periods. These claims often result in millions of dollars being paid out to settle lawsuits and government investigations.

by Michael Kun

The California Supreme Court has announced what can only be considered a major victory for hospitality employers in California.

California Labor Code section 351 probibits employers from taking any tip that customers may leave for employees.  Many hospitality employers have long used tip-sharing policies, whereby tips left by customers are divided among those involved in service.  In recent years, those tip-pooling practices have been challenged under section 351 as part of the wave of wage-hour class actions brought against California hospitality employers.  

In light of the IRS' increased efforts to root out and capture unreported income, one of our hospitality clients recently asked us to provide some clarification regarding: 1) the obligations of employees to report tip income; 2) the obligations of employers to report tip income; and 3) the risks of underreporting of the tip income of its employees.

 On June 16, the Department of Labor issued an “Administrator’s Interpretation” addressing the compensability of time spent by employees changing clothes and equipment before and after work (commonly referred to as “donning and doffing). The Interpretation reversed opinion letters on the subject  issued by the Bush administration in 2002 and 2007, and lowered the standard for employees to seek compensation for such activities.

The Interpretation addressed two issues. First, the advisory notes that Section 203(o) of the Fair Labor Standards Act (FLSA), which ...