Earlier this year, the United States Department of Labor (“USDOL”) issued new regulations regarding joint employment under the Fair Labor Standards Act (“FLSA”). Seventeen states (including New York) and the District of Columbia subsequently filed suit in the U.S. District Court for the Southern District of New York to challenge the USDOL’s adoption of its new joint employment regulations. The Court recently issued a decision in that lawsuit, holding that the USDOL's joint employment regulations relating to vertical joint employer liability should be vacated because they conflict with the definitions contained in the FLSA and are arbitrary and capricious.
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.
The COVID-19 pandemic has already caused severe disruption to many businesses across the country. Employers will be required to continue to monitor developments and adjust to changing circumstances in the coming weeks and possibly months. We provide the following recommendations for employers in dealing with the many employment-related issues that will inevitably arise.
On January 16, 2020, the Wage and Hour Division of the United States Department of Labor (“DOL”) published its final rule to revise and update its regulations regarding joint employer status. The final rule largely adopts the proposed rule the DOL published in April of 2019, which we wrote about here. The final regulations become effective March 16, 2020, and mark the first significant revision since they were enacted in 1958. Employers should take note of these new regulations because if an employee is found to be jointly employed by two employers, both employers are jointly and severally liable for all wages owed to that employee, including overtime wages.
The U.S. Department of Labor ("DOL") recently issued updated regulations which clarify what types of compensation provided by employers can properly be excluded from the regular rate for overtime computation purposes. The DOL's stated purpose in updating its regular rate regulations (which had not been significantly revised in more than 50 years) is to better reflect the 21st century workplace and to encourage employers to provide additional and innovative benefits to employees without fear that those forms of compensation might result in additional overtime obligations. The updated regulations became effective on January 15, 2020.
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.
New York has for many years had a law on the books that prohibits employers from retaliating against an employee because the employee has complained about an alleged violation of the wage and hour laws. Specifically, New York Labor Law Section 215 states that an employer may not "discharge, threaten, penalize, or in any other manner discriminate or retaliate against any employee" because the employee complained of an alleged violation of the Labor Law or otherwise cooperated with a Department of Labor or Attorney General investigation regarding an alleged violation of the Labor Law.
On July 29, 2019, Governor Cuomo signed legislation amending the statute to specify that the phrase "threaten, penalize, or in any manner discriminate or retaliate against any employee" includes threatening to contact or contacting United States immigration authorities or otherwise reporting or threatening to report the citizenship or suspected immigration status of an employee or an employee's family member. The legislation is effective 90 days after the date on which the Governor signed it.
On April 1, 2019, the Wage and Hour Division of the U.S. Department of Labor ("DOL") announced a proposed update to its joint employment regulations, which is the first significant revision to the DOL's joint employment rules since their promulgation in 1958. The proposed updates to the regulations attempt to clarify joint employer status for purposes of wage liability under the Fair Labor Standards Act ("FLSA").
On March 26, 2019, the New York State Court of Appeals issued a ruling that will have a significant positive impact on home care agencies across the state. In a five-to-two decision, the Court upheld the validity of the New York State Department of Labor’s “13 Hour Rule” for cases involving 24-hour live-in care. Under the “13 Hour Rule,” a residential employee assigned to work a 24-hour shift need only be paid for 13 of those hours, so long as he or she is provided with an 8-hour sleep break and three hours of meal breaks. (If the employee’s meal breaks are interrupted, or if the employee does not get five uninterrupted hours of sleep, the employer must pay for the entire break.) Bond, Schoeneck & King, PLLC, participated in the case, representing amicus curiae (“friend of the court”) Consumer Directed Personal Assistance Association of New York State.