The Employer’s Wage and Hour Advisor

While courts often interpret Michigan's Elliott-Larsen Civil Rights Act to track Title VII of the federal Civil Rights Act, the ELCRA protects more than just employment.

The ELCRA protects against discrimination in employment, housing, real estate, public service, and places of public accommodation, including restaurants, hotels, event venues, and all other businesses and facilities open to the public.

Recently, the Wage and Hour Division of the Department Labor (“DOL”) proposed regulations designed to implement President Biden’s Executive Order 14055, concerning the nondisplacement of qualified workers under federal service contracts (the “Order”).  The Order requires federal contractors and subcontractors to offer qualified service employees working on a contract the right of first refusal of employment under a successor contract when a service contract expires and a follow-on contract is awarded for the same or similar services.  The Order is intended to reduce disruption and offer a seamless transition for experienced employees already familiar with the Federal Government’s personnel and requirements.

A growing number of states have passed pay equity laws giving employees new rights to request wage information and openly discuss and disclose their wages with other employees and the public.  Some of these states include California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington.  Other states and localities have now enacted pay transparency laws requiring employers to proactively disclose pay ranges for positions (e.g., as part of a job posting or as part of internal communications around a promotion). 

On May 9, 2022, the Fifth Circuit Court of Appeals heard arguments regarding the Department of Labor’s (“DOL”) Dual Jobs Final Rule (the “New Rule”), which regulates when employers may take a tip credit against their employees’ wages under federal law.  Under the Fair Labor Standards Act, employees who “regularly and customarily” receive tips need not be paid the full minimum wage in the form of hourly wage payments.  Instead, employers may take a “tip credit” against their minimum wage obligations, and pay tipped employees an hourly rate as low as $2.13 per hour (under federal law).  Whether the tip credit applies depends on the amount of time employees spend performing “tipped work” versus “non-tipped work.”  The 80/20 rule is a historic DOL guideline to assist employers in making such determinations; however, it has been hotly debated over recent years.

As companies continue to struggle with staffing shortages, many employers may consider offering bonuses or other incentives to employees as a means of attracting talent to their workforce.  While this may be a prudent and effective means of hiring and retaining employees, companies should be aware of the potential overtime implications arising from awarding certain bonuses to nonexempt employees.

The White House Task Force on Worker Organizing and Empowerment recently released a report to the President listing policy recommendations intended to promote unionization in both public and private sectors.

As the COVID-19 pandemic drags into its third year, and many employees continue to work remotely, a spike of wage and hour class actions has emerged regarding claims for unpaid business expenses.  During the early days of the pandemic, employers scrambled to comply with the wave of stay-in-place orders that swept the country.  This required the transfer of millions of employees to remote work settings.  Sometimes these changes occurred without fully considering what expenses an employer must cover for remote work.  The answer to that question is not a simple one.  Both federal and state laws must be considered, and the legal obligation may be determined by the location of your employee’s home or other remote work site.

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.

On January 13, 2020, the U.S. Department of Labor (DOL) announced the final rule that will be used to determine joint employer status under the Fair Labor Standards Act (FLSA). The final rule is expected to become effective on March 16, 2020.