The Employer’s Wage and Hour Advisor

Wonder Bread, Butterscotch Krimpets, and Jumbo Honey Buns were featured in a recent unanimous decision by the Supreme Court of the United States. But delicious baked goods were not the order of the day—rather, the Court held that a transportation worker does not need to work in the transportation industry in order to be exempt from arbitrating their disputes under the Federal Arbitration Act (FAA). So, a distributor who transports Wonder Bread, Butterscotch Krimpets, and Jumbo Honey Buns also cannot be compelled to arbitrate their claims under the FAA. 

All employers—and not just union employers—beware: On August 2, 2023, in the long-awaited Stericycle Inc. decision, the National Labor Relations Board (the “NLRB” or the “Board”) announced a return to the detailed analysis of work rules on August 2, 2023. This decision has significant impact on all employee handbooks and other workplace rules as the Board returns to the Obama-era standard set forth in Lutheran Heritage, with a slight modification. The Stericycle standard now asks whether “a challenged rule has a reasonable tendency to chill employees from exercising  their Section 7 rights,” looking at the rule from the perspective of an employee who is not only subject to the rule, but also economically depending on the employer. If so, the rule is considered presumptively unlawful.

Posting a job without a pay scale in California?  Think again. 

California is the latest state poised to enact a pay transparency law that impacts not only information provided in job postings but also information provided to candidates upon request.  The existing pay transparency law prohibited employers from relying on salary history when making employment decisions (including compensation decisions) and required employers to provide applicants who completed an interview the pay scale (which is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position”) upon request. Under the new law, employers must provide all applicants that pay scale upon a reasonable request, regardless of whether they have been interviewed or not.

Think that tips have to stay with front-of-house staff?

Well, it may be time to think again.

On December 22, 2020, the Department of Labor (DOL) issued a final rule allowing employers who do not take a tip credit against their minimum wage obligations to implement mandatory tip pools in which employees who traditionally have not been able to participate in tip pools—such as cooks and dishwashers—may now receive a portion of the tips left by guests.  However, employers, managers, and supervisors still cannot participate in the tip pool, regardless of whether the employer takes a tip credit. 

The Department of Labor (DOL) recently announced a final rule regarding the Fair Labor Standards Act’s (FLSA) overtime exemption for certain employees in retail and service industries who are paid primarily on commissions.  Issued without the typical notice-and-comment rulemaking, the final rule withdraws two provisions from the regulations about the “retail concept.”  These provisions listed industries that the DOL viewed as either having “no retail concept” or “may be recognized as retail,” impacting whether certain industries asserted whether they had a retail concept and had workers that were subject to the exemption.  By eliminating the lists, certain industries and businesses have more flexibility in determining whether they qualify as an establishment with a retail concept.

The holiday season is the perfect time to reflect on the prior year and plan for the upcoming one.  In 2018, a spotlight was directed at sexual harassment issues, leading to significant upcoming changes in some states’ employment laws.  Likewise, mandatory paid sick leave became a major 2018 issue that has led to changes for many employers.

On Friday, December 14, 2018, Governor Rick Snyder signed legislation revising the Earned Sick Time Act, which the Michigan legislature adopted in response to a ballot initiative. Governor Snyder also signed a bill softening planned increases to the state’s minimum wage. We previously reported on the original versions of these bills here.

Recently, the U.S. Supreme Court issued a ruling concluding that service advisors at car dealerships are exempt from overtime pay under the Fair Labor Standards Act (FLSA). In doing so, the Court abandoned 70 years of precedent, construing FLSA exemptions fairly rather than under the historic narrow standard. This change may signal a more level playing field for employers when courts interpret FLSA exemptions.

On December 4, 2017, the U.S. Department of Labor (“DOL”) announced proposed changes that could have a large impact on many businesses that employ tipped workers. Citing changes in state laws and significant litigation involving tip pooling, the DOL is considering rescinding certain restrictions on tip pooling for employers who do not claim a tip credit against the federal minimum wage. A Notice of Proposed Rulemaking regarding these potential changes was published on December 5, 2017 for public comment.

On November 6, 2017, a federal appellate court granted the U.S. Department of Labor’s (DOL) motion to halt the litigation surrounding its 2016 overtime rule. The 2016 rule would have more than doubled the salary thresholds for exempt employees under the administrative, executive, and professional exemptions.

On September 5, 2017, the U.S. Department of Justice (DOJ) dropped its appeal in support of the U.S. Department of Labor’s (DOL) intended increases to the Fair Labor Standards Act’s (FLSA) salary-basis test for the white-collar overtime exemptions. The appeal stemmed from a preliminary injunction issued by a federal district court in Texas, which halted the nationwide implementation of the DOL’s 2016 amendments to the FLSA. The DOJ’s request to dismiss the appeal comes just days after the same federal judge permanently struck down those amendments.

Today, in a return to pre-Obama era standards, the U.S. Department of Labor (DOL) announced the withdrawal of two informal guidance letters impacting the “joint employer” doctrine.

In a surprising turn of events, a federal court in Texas issued a preliminary injunction yesterday halting the nationwide implementation of the Department of Labor’s new overtime rule increasing the salary threshold for exempt employees to $47,476 per year (for additional information on the rule, see Honigman’s prior blog posts.)