On May 6, the U.S. Department of Labor (USDOL) withdrew its final regulations that would have revised the standard for determining whether a worker is an employee covered under the Fair Labor Standards Act (FLSA) or an independent contractor who is not subject to the FLSA’s minimum wage and overtime requirements. According to the USDOL, the independent contractor rule that was withdrawn “is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent.”
Everybody knows that the statute of limitations for claims under the Fair Labor Standards Act (FLSA) is two years, unless the claim is for a willful FLSA violation, in which case the statute of limitations is three years. Okay, maybe everybody doesn’t know that—but attorneys who regularly bring or defend wage-and-hour claims certainly do (and if you’re reading this blog, you probably do as well). So an FLSA claim filed in 2021 based on allegations from 2017 can be easily dismissed at the outset of litigation, because such a claim is clearly beyond the longest possible statute of limitations of three years. Now, consider this: what if a plaintiff files a claim in May 2021, alleging an FLSA violation from June 2018? In that case, the only way the plaintiff can bring a valid FLSA claim is if the claim is willful, because then the plaintiff could utilize the three-year statute of limitations.
In the wake of the social justice movements and a nationwide push towards greater equality, transparency, diversity and accountability, it is expected that pay equity will be a focus for the Biden administration in the coming year. Pay equity issues are gaining the attention of employees and, in turn, becoming of increasing concern for employers.
On February 23, 2021, the U.S. Department of Labor (DOL) sent a proposed new regulation on joint employment status under the Fair Labor Standards Act (FLSA) to the White House for regulatory review. This action is indicative that new guidance will follow for determining joint employer status when an employee performs work that benefits more than one employer.
On Jan. 7, 2021, the U.S. Department of Labor (DOL) published its final rule to revise and update its regulations regarding classification of employees vs. independent contractors. This determination of independent contractor status is critical to wage liability, as employees are generally guaranteed minimum wage and overtime under the Fair Labor Standards Act—absent some exemption—while independent contractors are not.
On August 24, 2020, the United States Department of Labor (DOL) issued guidance to assist employers in complying with their obligation to track compensable hours of employees working in remote or telework arrangements. While this guidance was issued in response to the increase in remote work due to the COVID-19 pandemic, it applies to all employees working remotely for any reason.
On June 8, the U.S. Department of Labor issued its final rule to provide some clarity for employers seeking to use the fluctuating workweek method of computing overtime compensation under the Fair Labor Standards Act. The final rule, which is essentially the same as the proposed rule that was issued on November 5, 2019, lists each of the five requirements for using the fluctuating workweek method separately and explicitly states that bonuses, premium payments, and other additional payments of any kind are compatible with the use of the fluctuating workweek method. The final rule becomes effective on August 7.
About one week after the USDOL's fluctuating workweek rule was issued, the Second Circuit Court of Appeals (the Federal appellate court with jurisdiction over employers in New York) issued a decision in the case of Thomas et al. v. Bed Bath & Beyond Inc. In the Bed Bath & Beyond case, the Second Circuit affirmed the dismissal of a collective action filed by a group of Department Managers who alleged that Bed Bath & Beyond had improperly used the fluctuating workweek method to pay them overtime.
Employers in New York will be required to comply with the new state minimum wage rates and the new state salary thresholds to qualify for the executive and administrative exemptions, effective December 31, 2019.
On November 5, the U.S. Department of Labor published a proposed rule in the Federal Register to provide some clarity for employers that seek to use the fluctuating workweek method of overtime compensation under the Fair Labor Standards Act. The proposed amendment lists each of the five requirements for using the fluctuating workweek method separately, instead of including all of the requirements in paragraph form as the current regulation does. The proposed amendment also includes additional language not currently contained in the regulation, explicitly stating that bonuses, premium payments, and other additional payments of any kind are not incompatible with the use of the fluctuating workweek method of computing overtime.
On September 27, 2019, the U.S. Department of Labor published its final regulations in the Federal Register to increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $455 per week ($23,660 per year) to $684 per week ($35,568 per year). These new regulations become effective on January 1, 2020.
On March 7, 2019, the U.S. Department of Labor issued proposed regulations that would increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $455 per week ($23,660 per year) to $679 per week ($35,308 per year). These new proposed regulations are intended to replace the USDOL's 2016 regulations raising the minimum weekly salary to $913 per week ($47,476 per year), which were held by the U.S. District Court for the Eastern District of Texas to be invalid approximately one week before those regulations were set to take effect.
On February 5, 2019, the Second Circuit Court of Appeals held that students at a for-profit cosmetology school who provided cosmetology services to the general public at the school's salon as part of the requirements to qualify for taking the New York cosmetology licensing exam were not employees who were entitled to compensation under the Fair Labor Standards Act or the New York Labor Law. In Velarde v. GW GJ, Inc., the Court applied the "primary beneficiary" test established in its previous decision in Glatt v. Fox Searchlight Pictures, and concluded that the students were the primary beneficiaries of the relationship because the practical experience they gained at the salon was a necessary prerequisite to becoming licensed cosmetologists.