Workforce Bulletin

 By Anna A. Cohen

In its Agency Rule List for Spring 2014, the U.S. Department of Labor (DOL) has proposed to amend the Regulations implementing the Family and Medical Leave Act (FMLA) by revising the definition of "spouse" in light of the United States Supreme Court's decision in United States v. Windsor, No. 12-307 (U.S. June 26, 2013).   In Windsor, the Supreme Court struck down the provisions of the Defense of Marriage Act (DOMA) that denied federal benefits to legally married, same-sex couples.  The FMLA entitles eligible employees of covered employers to take unpaid, job-protected ...

Our colleagues Kara Maciel and Jordan Schwartz, both of Epstein Becker Green, recently cowrote an article for PLC titled "Tipped Employees Under the FLSA."

Following is an excerpt:

Wage and hour lawsuits certainly are not new phenomena, but in recent years, service industry employees have increasingly made claims regarding tips and service charges. In particular, employers in states such as Massachusetts, New York and California have seen a surge in class actions involving compulsory tip pools and distributions of service charges to employees. Commonly targeted employers ...

Our colleagues Kara Maciel and Jordan Schwartz, both of Epstein Becker Green, recently cowrote an article for PLC titled "Tipped Employees Under the FLSA."

Following is an excerpt:

Wage and hour lawsuits certainly are not new phenomena, but in recent years, service industry employees have increasingly made claims regarding tips and service charges. In particular, employers in states such as Massachusetts, New York and California have seen a surge in class actions involving compulsory tip pools and distributions of service charges to employees. Commonly targeted employers ...

Our colleagues have issued a new client advisory: “New York State Department of Labor Adopts Wage Deduction Regulations,” by William J. Milani, Dean L. Silverberg, Jeffrey M. Landes, Susan Gross Sholinsky, Anna A. Cohen, and Jennifer A. Goldman.

Following is an excerpt:

The New York State Department of Labor (“DOL”) has adopted wage deduction regulations (“Final Regulations”) pertaining to the expanded categories of permissible wage deductions in the New York Labor Law, effective October 9, 2013.  As we previously reported (see the Act Now Advisory entitled “New ...

by Jeffrey H. Ruzal

On September 17, 2013, the U.S. Department of Labor (“DOL”) issued a final rule extending the federal minimum wage and overtime pay protection under the Fair Labor Standards Act (the “FLSA”) to many direct care or domestic service workers, including home health aides, personal care aides and nursing assistants. The rule will take effect on January 1, 2015.

For almost 40 years, an exemption from the minimum wage and overtime requirements of the FLSA has applied to domestic service workers employed to provide “companionship services” for an ...

By Anna A. Cohen

Demonstrating the importance for employers to review their FMLA practices, an investigation by the U.S. Department of Labor’s Wage and Hour Division (DOL) revealed that T.G.I. Fridays’ FMLA policy and notification practices did not comply with the law. Specifically, the policy did not include information on the FMLA’s military family leave provisions, information on the right to take FMLA-covered leave on an intermittent or reduced schedule basis, and misstated the 12-month employment requirement for FMLA eligibility as being 12 continuous months. 

By: Kara Maciel and Jordan Schwartz

As discussed in prior blogs, due to confusion surrounding FLSA tip pool requirements, the U.S. Department of Labor (“DOL”) Wage and Hour Division enacted a strict rule in 2011 related to proper tip pooling and service charge practices. This rule was met with swift legal challenges, and earlier this week the U.S. District Court for the District of Oregon concluded that the DOL had exceeded its authority when implementing its final rule. See Oregon Rest. and Lodging Assn. v. Solis, No. 3:12-cv-01261 (D. Or. June 7, 2013).

Inconsistent ...

By:      Kara Maciel and Jordan Schwartz
As discussed in prior blogs, due to confusion surrounding FLSA tip pool requirements, the U.S. Department of Labor (“DOL”) Wage and Hour Division enacted a strict rule in 2011 related to proper tip pooling and service charge practices. This rule was met with swift legal challenges, and earlier this week the U.S. District Court for the District of Oregon concluded that the DOL had exceeded its authority when implementing its final rule. See Oregon Rest. and Lodging Assn. v. Solis, No. 3:12-cv-01261 (D. Or. June 7, 2013).

Inconsistent ...

By Jordan B. Schwartz and Eric J. Conn

On March 18, 2013, President Obama nominated Thomas E. Perez, a Harvard Law School graduate and current federal prosecutor with a long track record of defending civil rights and vulnerable workers, to become the next U.S. Secretary of Labor.  Perez would replace Seth Harris, the Acting Secretary of Labor and former Deputy Secretary of Labor, who has been filling the role since Secretary Hilda Solis resigned from the post in January.

Thomas Perez’s Background 

Since October 2009, Perez has served as the Assistant Attorney General for the Civil Rights Division at the U.S. Department of Justice.  From 2006 to 2009, Perez served as Maryland’s Secretary of Labor.  In that capacity, he led efforts to target Maryland companies who were engaging in workplace fraud by imposing new restrictions on employees who had been misclassified as independent contractors.  Perez’s efforts led to the implementation of Maryland’s Workplace Fraud Act of 2009, with him stating that the Act would “ensure that employers who attempt to cheat the system, their workers, and their competitors, will pay a steep price for their actions.”

During his tenure as Maryland’s Secretary of Labor, where his jurisdiction included Maryland’s Occupational Safety and Health Division, Perez distinguished himself as a strong and vocal defender of safety protections for Maryland workers.  According to Fred Mason, the president of the Maryland State and District of Columbia AFL-CIO, Perez fought to increase funding for the state occupational safety and health plan, which had been underfunded under Governor Robert Ehrlich.  Specifically, Mason stated that “that department went for a couple years with essentially no money to hire people to enforce laws that were already on the books.”  After Perez took office, “we began to make a comeback of sorts, in terms of having the necessary workers to do the inspections.”  Similarly, Peg Seminario, safety and health director at AFL-CIO, said she considered Perez “an excellent choice” to head the Labor Department.

The Nomination of Thomas Perez 

At a time when the President has promised to create more jobs and overhaul immigration policy, Mr. Obama has presented Mr. Perez, who would be the only Hispanic in the cabinet, as an American immigration success story, whose own history would help him tackle important current controversial issues.  At the White House on March 18, Obama called Perez a “consensus builder” who “understands that our economy works best when the middle class and those working to get into the middle class have the security they need on the job, a democratic voice in the workplace, everybody playing by the same set of rules.”  At the same press conference, Perez stated that:

“as you well know, our nation still faces critical economic challenges, and the department’s mission is as important as ever. . . . I am confident that together with our partners in organized labor, the business community, grass-roots communities, Republicans, Democrats, and independents alike, we can keep making progress for all working families.”

Not surprisingly, this nomination has drawn praise from worker advocates, and most Democrats have expressed a great deal of enthusiasm for this nomination.  Senator Patrick Leahy said in a statement that as a former Secretary of Labor in Maryland “and a fierce defender of workers’ rights and civil rights, [Perez] is uniquely situated to serve in this important post at a critical time when Congress will be considering issues like immigration reform, reducing unemployment, and continuing our economic recovery.”

Congressional Republicans, however, have indicated a potentially rocky confirmation process and voiced their concern that Perez is the “wrong man for this job.”  In particular, Senator Jeff Sessions (R-Ala.) has stated that “this is an unfortunate and needlessly divisive nomination” as “Mr. Perez has aggressively sought ways to allow the hiring of more illegal workers.”  Additionally, Representative John Kline (R-MN), chairman of the Education and the Workforce Committee and thus a key house Republican on worker safety issues, has stated that “our country needs a labor secretary who will put America’s jobs before his own” and cited “troubling allegations in the media and an independent investigation” about Perez.

The Confirmation Hearing 

During the April 18, 2013 confirmation hearing, Mr. Perez stated that he would seek a balance of protecting worker safety while also encouraging economic growth.  Specifically, Mr. Perez told the Senate, Health, Education, Labor and Pensions Committee that “job safety and job growth are not mutually exclusive” and thus “it is not necessary to choose between one and the other.”  When asked what his top priority would be as labor secretary, he responded “jobs, jobs, jobs.”  He also testified that other priorities would be reauthorizing the Workplace Investment Act with bipartisan support, pension security, enforcement of wage and hour laws, job safety and equal opportunity in the workplace.

By Elizabeth Bradley

This on-going series of blog posts flows from EBG’s publication of its Wage and Hour Division Investigation Checklist for employers. The Checklist, along with this series, is aimed at guiding employers through DOL Wage and Hour Division Investigations.

We have previously blogged our way through How to Prepare for a Wage and Hour Inspection, What to Do When a Wage and Hour Investigation Team Arrives to Start Auditing, and What Records Must be Provided to the DOL. In this post, we discuss what to expect during the “walk around” inspection portion of the ...

By Michael D. Thompson

From restaurants in New York to childcare providers in Arkansas to the garment industry in Southern California, Department of Labor investigators continue to uncover FLSA violations by conducting unannounced workplace inspections.

Accordingly, in January, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

We previously blogged about how to prepare ...

By Michael D. Thompson

The prohibition against private settlements of FLSA claims was scrutinized again last week, when U.S. District Court for the Eastern District of New York held that parties could voluntarily dismiss an FLSA lawsuit without obtaining approval of the settlement agreement from the court.  Picerni v. Bilingual SEIT & Preschool Inc. 

Courts in FLSA cases have historically expressed the concern that individual waivers of FLSA rights would enable employers to use their superior bargaining power to extract individual waivers from their employees and “thwart ...

By Douglas Weiner

Last month, we released our Wage and Hour Division Investigation Checklist for employers and have received terrific feedback with additional questions. Following up on your questions, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address an increasingly common issue that many employers are facing in light of aggressive government enforcement at the state and federal level from the Department of Labor.

QUESTION: If a DOL team of Wage Hour Investigators arrive unannounced demanding the immediate production ...

By: Kara M. Maciel

Earlier this month, we released our Wage and Hour Division Investigation Checklist for employers and have received a lot of great feedback with additional questions. Following up on that feedback, we will be regularly posting FAQs as a regular feature of our Wage & Hour Defense Blog.

In this post, we address a common issue that many employers are facing in light of increased government enforcement at the state and federal level from the Department of Labor.

QUESTION: “I am aware that my industry is being targeted by the DOL for audits and several of my ...

By Douglas Weiner and Kara Maciel

“There’s a new sheriff in town.”  With those words in 2009, Secretary Hilda Solis initiated a policy at the Department of Labor that emphasized increased investigations and prosecutions of violators rather than the prior administration’s emphasis on providing compliance assistance.

Her departure – announced yesterday – is unlikely, however, to have much effect on the Department’s current aggressive enforcement policy, as the top enforcement officer of the Department remains Solicitor of Labor M. Patricia Smith.  Solicitor ...

By Frederick Dawkins and Douglas Weiner

Earlier this month, at the ABA Labor and Employment Law Conference, Solicitor of Labor M. Patricia Smith reaffirmed that investigating independent contractors as misclassified remains a top priority of the U.S. Department of Labor’s (“DOL”) enforcement initiatives.  The DOL will continue to work with other federal and state agencies, including the IRS, to share information and jointly investigate claims of worker misclassification.  The joint enforcement effort is certainly driven by, among other things, an interest in ...

On September 19, 2012, several members of EBG’s Wage and Hour practice group will be presenting a briefing and webinar on FLSA compliance.  In 2012, a record number of federal wage and hour lawsuits were filed under the Fair Labor Standards Act (FLSA), demonstrating that there is no end in sight to the number of class and collective actions filed against employers. Claims continue to be filed, raising issues of misclassification of employees, alleged uncompensated "work" performed off the clock, and miscalculation of overtime pay for non-exempt workers.

In this interactive ...

By: Greta Ravitsky and Jordan Schwartz

On July 24, 2012, the Fifth Circuit became the first federal appellate court in over thirty years to enforce a private settlement of a wage and hour dispute arising under the Fair Labor Standards Act (“FLSA”) in Martin v. Spring Break ’83 Productions LLC.

For decades, federal courts have consistently held that FLSA wage and hour disputes may not be settled privately without approval from either the Department of Labor (“DOL”) or a federal district court.  This apparently “settled” area of law was based exclusively on the Eleventh ...

By:  Kara M. Maciel

In April of 2011, the U.S. Department of Labor (“DOL”) changed its rule defining the general characteristics of tips in an attempt to overrule the U.S. Court of Appeals for the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc. ruling that the FLSA does not impose any restrictions on the kinds of employees who may participate in a valid tip pool where the employer does not claim the “tip credit.” 

DOL’s Recent Position on Tip Pool Participation

The DOL’s amended rule provides that tips are the property of the employees, and may not be used by the employer ...

By:  Kara M. Maciel

In April of 2011, the U.S. Department of Labor (“DOL”) changed its rule defining the general characteristics of tips in an attempt to overrule the U.S. Court of Appeals for the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc. ruling that the FLSA does not impose any restrictions on the kinds of employees who may participate in a valid tip pool where the employer does not claim the “tip credit.”

DOL’s Recent Position on Tip Pool Participation

The DOL’s amended rule provides that tips are the property of the employees, and may not be used by the employer ...

By: Michael Thompson

The United States Supreme Court has ruled that pharmaceutical sales representatives (PSRs) are “outside salesmen” who are not entitled to overtime under the Fair Labor Standards Act (FLSA). The high court’s ruling was predicated on its finding that, in the pharmaceutical industry’s “unique regulatory environment,” the commitments obtained by PSRs equate to traditional sales. Furthermore, the Supreme Court rebuked the Department of Labor (DOL) for “unfairly surprising” the industry by filing amicus briefs arguing that PSRs were ...

By:  Kara Maciel

On March 15, 2012, the U.S. Department of Justice (“DOJ”) had temporarily postponed compliance with the 2010 ADA Standards as it relates to providing accessible entries and exits to pools and spas.  That day was set to expire later this month, on May 21, 2012, but the DOJ has announced that it will extend that compliance date to January 31, 2013 – a nine month extension from the original compliance date of March 15, 2012.

This extension to January 31, 2013, however, does not change the substance of the DOJ’s requirement that lifts be “fixed.”  The DOJ failed to ...

By Amy Traub and Desiree Busching

On February 1, 2012, a former intern of the Hearst Corporations’ Harper’s Bazaar filed a class action lawsuit on behalf of herself and others similarly situated. The lawsuit alleges that the company violated the Fair Labor Standards Act (“FLSA”) and applicable state laws by failing to pay minimum wage and overtime to interns. The use of unpaid interns is a widespread practice, especially in the retail, publication, and real estate industries, as well as in Hollywood. In fact, in September 2011, a similar lawsuit was filed against Fox ...

By Michael Kun

Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors.  http://www.dol.gov/opa/media/press/whd/WHD20120257.htm

The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers.  Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue.  And California has ...

By Dean Silverberg, Evan Spelfogel, Peter Panken, Douglas Weiner, and Donald Krueger

Reversing its prior stance, the U.S. Department of Labor (“DOL”) proposes to extend the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) to domestic workers who provide in-home care services to the elderly and infirm. See Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. In 1974, when domestic service workers were first included in FLSA coverage, the DOL published regulations that provided an exemption for such ...

By David Garland and Douglas Weiner

In February 2011, the U.S. Court of Appeals for the Ninth Circuit gave a resounding victory to employers in the pharmaceutical industry by finding that pharmaceutical sales representatives are covered by the outside sales exemption of the Fair Labor Standards Act (“FLSA”). Christopher v. SmithKline Beecham, No. 10-15257 (9th Cir. Feb. 14, 2011). Plaintiffs, and the U.S. Department of Labor (“DOL”) in an amicus brief, had argued the exemption did not apply because sales reps are prohibited from making the final sale. Prescription ...

By:  Casey Cosentino

There is an on-going trend by the U.S. Department of Labor (“DOL”) to leverage popular technology to increase public and consumer awareness of the laws and regulations it enforces. Indeed, the DOL is continually exploring creative ways to share information with the public using the fastest and most-wide reaching means available. Through technology, the DOL is intentionally providing employees and consumers with enforcement data about companies, particularly hotels and restaurants, so that they can make informed employment and patronage ...

By:  Ana S. Salper

With the recent surge in class action wage and hour lawsuits, hospitality employers have developed a heightened sensitivity to tip pooling arrangements, distributions of service charges to employees, and application of the “tip credit.” A case before the U.S. Supreme Court this month, Applebee’s International Inc. v. Gerald A. Fast et al., is likely to add further fuel to the fiery “tip credit” world,  as the high court will have to decide whether tipped employees should be paid minimum wage for nontipped tasks employees perform.

Under the Fair Labor ...

By:  Kara M. Maciel

The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:

·         ...

By:  Kara M. Maciel

The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:

·         ...