Workplace Need to Know: Latest On Wage and Hour Law

“Under Title VII, the top six most frequently challenged [employment] practices [in 2012] were discharge/constructive discharge, harassment/intimidation, terms and condition of employment, discipline, promotion, and wages. Even though the number of charges dipped, the EEOC obtained a historic amount of money from private employers through its administrative process – $365.4 million.” (Littler)

According to statistics recently released by the Equal Employment Opportunity Commission, employee wage and hour claims were among the top charges filed with the agency against employers over the past year.

How to ensure that your business doesn’t become an EEOC statistic? Start here, with this roundup of recent advisories on the subject:

Wage and Hour Division Unveils Plans to Survey Workers’ Knowledge of Their Classification as Employees or Independent Contractors; May Signal Plan to Reactivate “Right to Know” Rulemaking (Schnader Harrison Segal & Lewis LLP):

“As part of [its] strategy, the Department’s Wage and Hour Division (WHD) hired hundreds more investigators and conducted more worksite investigations; imposed harsher penalties, which it widely publicized using ‘name-and-shame’ tactics; and even sponsored the development of smart phone applications, e.g., to help workers track their hours of work and alert consumers of businesses cited for wage and hour violations, among others.” Read on>>

Dept. of Labor Wage & Hour Enforcement to Focus on Shale Employers (Spilman Thomas & Battle, PLLC):

“The federal wage/hour law under the Fair Labor Standards Act (‘FLSA’) includes the requirement to pay ‘non-exempt’ employees time and one half of their ‘regular rate’ for work in excess of 40 hours in a work week. The shale gas industry in the tri-state region (e.g., Ohio, Pennsylvania and West Virginia) can generate complex wage/hour issues due to the around-the-clock nature of certain of its operations and the variety of skills and occupations providing services. Therefore, prudent employers will exercise extra measures of diligence to ensure compliance with wage and hour matters.” Read on>>

California Court of Appeal Denies Wage-and-Hour Class Claims and Enforces Arbitration Agreement under Concepcion (Orrick):

“A California Court of Appeal recently held that under Concepcion, a trial court’s dismissal of class claims and an order compelling arbitration in a putative wage-and-hour class action were proper. The Court of Appeal, First District, in Outland v. Macy’s, Inc., refused to revive the class claims brought by a former employee of Macy’s, Inc. Plaintiff Jennifer Outland, a former group sales manager, filed suit in 2009, claiming that Macy’s improperly classified her and other group sales managers in California as exempt. Macy’s filed a motion to compel arbitration based on its employee dispute resolution program which contained a class action waiver provision.” Read on>>

Rite Aid Settles Class Action Overtime Lawsuit For $20.9 Million (XpertHR):

“Retail employers should take note that improperly classifying employees and failing to pay overtime wages can lead to significant employer liability. A federal judge on January 7, 2013, approved a $20.9 million dollar settlement against well-known drug store chain Rite Aid for allegedly violating the Fair Labor Standards Act (FLSA) and state wage and hour laws by improperly designating assistant store managers and co-managers as exempt employees and, therefore, ineligible for overtime pay.” Read on>>

Payment Required: New York Court Finds No Violation Of New York Labor Law Section 193 Where Unpaid Interns Did Not Receive Wages From Employer (Sheppard Mullin Richter & Hampton LLP):

“In Wang, et al. v. The Hearst Corporation, , Judge Harold Baer of the United States District Court for the Southern District of New York granted the Hearst Corporation’s motion for partial judgment on the pleadings, finding that requiring unpaid interns to purchase college credit does not constitute an improper wage deduction under Section 193 of the New York Labor Law. In reaching this decision, the Court unequivocally held that “there can be no ‘deduction’ within the meaning of [Section 193] when . . . plaintiff did not receive any payment – or anything arguably close – that could constitute “wages” under Section 193.’” Read on>>

The Devil Is in the Details: General Releases from Employees That Fail to Specifically Refer to Mass. Wage Act Are Insufficient to Release Wage Act Claims (Duane Morris LLP):

“In Crocker v. Townsend Oil Co. Inc., the Massachusetts Supreme Judicial Court held that a general release from an employee in favor of an employer that purports to release all possible existing claims will be enforceable as to the rights and remedies conferred by the Massachusetts Wage Act … only if the agreement is stated in clear and unmistakable terms, and specifically refers to the rights and claims under the Wage Act that the employee is waiving. General releases contained in settlement or termination agreements that do not explicitly include the release of Wage Act claims will fail to waive those claims.” Read on>>

New Law Prohibits Agreements That Pay Nonexempt Employees A Fixed Salary For Fixed Regular And Overtime Hours (Manatt, Phelps & Phillips, LLP):

“On January 1, 2013, AB 2103 went into effect, explicitly overturning the case of Arechiga v. Delores Press, Inc., and prohibiting compensation agreements that guarantee nonexempt employees a fixed salary for a guaranteed number of regular and overtime hours per week. The new law amends California Labor Code Section 515(d).” Read on>>

California’s Wage Orders: Landmines and Goldmines (Snell & Wilmer L.L.P.):

“Employers who violate the Wage Orders face a range of penalties, including being required to pay $50 for each employee for every pay period during which there is a violation, actions brought under the Private Attorneys General Act of 2004, and even a misdemeanor criminal conviction.” Read on>>

Top Ten Wage and Hour Developments in 2012 for Pennsylvania Employers (McNees Wallace & Nurick LLC):

“For employers in Pennsylvania, 2012 was another eventful year in the world of wage and hour law. Even in the absence of new federal legislation, a number of noteworthy developments occurred at both the federal and state levels. These developments confirm that wage and hour compliance remains a moving target for employers. A number of these developments also reinforce the often ignored principle that the requirements of the federal Fair Labor Standards Act and Pennsylvania’s own wage and hour laws are not identical.” Read on>>

Applying Wage and Hour Laws to the 21st Century Series: Concerns Involving Exempt Employees (Ogletree, Deakins, Nash, Smoak & Stewart, P.C.):

“Smartphones and electronic remote access are creating new problems for employers when it comes to exempt employees. Under the Fair Labor Standards Act, white collar exempt employees must be paid a guaranteed weekly salary in excess of $455 per week. The guaranteed salary must be paid during any week in which the employee performs any compensable work, and the salary is not subject to deductions based on quality or quantity of work. The regulations to the FLSA recognize five specific situations where deductions can be made from an exempt employee’s pay.” Read on>>

Workplace Policy Institute: Regulatory Agenda Update (Littler):

“[The Right to Know] rule would amend the recordkeeping regulations under the FLSA by requiring that employers disclose workers’ status (e.g., independent contractor or employee) and, for employees, to disclose the manner in which compensation is calculated. The rule would also ‘clarify that the mandatory manual preparation of “homeworker” handbooks applies only to employers of employees performing homework in the restricted industries.’” Read on>>

2013 Employment Law Update – New Developments in Employment Law 2013 (Hopkins & Carley):

“California courts issued several important decisions during 2012 in cases involving wage and hour issues, highlighted by the California Supreme Court’s long-awaited opinion in Brinker Restaurant Corp. v. Superior Court. In a departure from recent trends, all of the decisions represented victories for employers. While the Court decisions were beneficial to employers, newly enacted wage and hour laws create more burdens for employers in 2013.” Read on>>

Minimum Wages Increase in 10 States (Ogletree, Deakins, Nash, Smoak & Stewart, P.C.):

“Although the federal minimum wage remains at $7.25 per hour, minimum wages increased in 10 states effective January 1, 2013. In nine of the 10 states, the increases are linked to cost of living adjustments based on a consumer price index. In Rhode Island, the increase is the result of legislation passed in 2012.” Read on>>

Maryland Court Grants Summary Judgment In Unpaid Leave Policy Case (BakerHostetler):

“The employer in Kulish did provide paid leave, and also permitted pharmacists to take unpaid leave so long as they did so in full-day increments. The Kulish plaintiffs argued that there were many instances in which a pharmacist who had no paid leave available only needed part of a day and was left with the choice either of taking the entire day off or, as the employer noted, trading shifts with another pharmacist. Given the clear directive of the [FLSA], however, and the common sense notion that a different policy would discourage employers from granting any leave at all, the court granted summary judgment in favor of the employer.” Read on>>

Employment Law Commentary — Volume 24, No. 12 (Morrison & Foerster LLP):

[The Department of Labor’s Wage and Hour Division (WHD)] is … expected to finalize two regulatory efforts in the first months of President Obama’s new term. First, it is likely that WHD will finalize efforts to eliminate the “companionship services” exemption for third parties. The proposed regulation relates to a 1974 amendment to the FLSA that created an exemption from the minimum wage and overtime requirements for individuals who are engaged in providing “companionship services” to the elderly or infirm.” Read on>>

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