A single paragraph in an otherwise routine opinion could have reverberations in FLSA exemption cases for years to come.

Earlier this week, in a 5-4 decision, the Supreme Court held in Encino Motorcars LLC v. Navarro et al. that auto service advisors are exempt under the FLSA’s overtime pay requirement.  While the case resolved a circuit split for a discrete exemption, the Court’s decision has broad implications for all employers.

Continue Reading Supreme Court Rejects Notion That FLSA Exemptions Should Be “Narrowly Construed”

The practice of “tip-pooling,” which refers to the sharing of tips between “front-of-house” staff (servers, waiters, bartenders) and “back-of-house” staff (chefs and dishwashers), has been in the news recently as the Trump Department of Labor (“DOL”) seeks to roll back a 2011 Obama-era rule limiting the practice under the Fair Labor Standards Act (“FLSA”).

Continue Reading DOL Expresses Interest in Banning “Tip-Skimming”

Say an employee slips $20 from the register and even admits to it when you show the camera footage.  Or, more innocently, say an employee is overpaid $20 entirely by accident.  If the employee refuses to give it back, should you deduct the $20 from the employee’s paycheck?

It depends.  Here are four questions to ask yourself.  Continue Reading Employee Theft: Can Employers Deduct Suspected or Known Theft from an Employee’s Paycheck?

Under a new DOL pilot program, employers can self-report wage violations and potentially avoid costly litigation.

Last week, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) launched a six-month pilot program to resolve FLSA violations.  Under the Payroll Audit Independent Determination (PAID) program, employers may self-report potential overtime or minimum wage violations to the WHD, which will then resolve the matter by supervising payments to employees if the employees accept the settlement.  Importantly, the WHD will not impose penalties or liquidated damages on employers that participate in the program and proactively work with the WHD to resolve the compensation errors.  Further, if an employee accepts a supervised settlement through PAID, s/he waives his or her right to file an action to recover damages and fees for the violations and time period identified by the employer.  To participate in the PAID program, an employer must identify: (1) the wage violation(s); (2) the impacted employee(s); (3) the time period(s) in which the violation(s) occurred; and (4) the amount of back wages owed to the impacted employee(s).  However, employers may not participate if they are in litigation or under investigation by the WHD for the practices at issue, or to repeatedly resolve the same potential violations.

Continue Reading DOL Launches Pilot Program for Self-Reporting FLSA Violations

The Sixth Circuit recently affirmed a district court’s summary judgment decision finding that an employer, Plastipak Holdings, Inc., Plastipak Packaging, Inc., Plastipak Technologies, LLC, Plastipak, and William C. Young (collectively, “Plastipak”) properly had paid employees using the “fluctuating workweek” method and dismissing plaintiffs’ claims for underpayment of wages under the Fair Labor Standards Act (“FLSA”).

Continue Reading Sixth Circuit Affirms Employer’s Use of Fluctuating Workweek

On February 1, 2018, the United States District Court for the Eastern District of Pennsylvania dismissed an overtime class action suit brought on behalf of a group of former democratic campaign workers for their work during the 2016 presidential election.  See Katz v. DNC Services Corp., Civil Action No. 16-5800 (E.D. Pa. Feb. 1, 2018).  In dismissing the overtime suit, the Court relied on an often-overlooked defense to the Fair Labor Standard Act (“FLSA”) – namely, that the FLSA only covers employees engaged in interstate commerce as opposed to employees engaged in purely local activities.

Continue Reading Campaign Workers’ Overtime Suit Dismissed Based on Purely Local Activities

With the wave of wage and hour litigation showing no signs of receding, employers often have questions about whether they should consider insurance coverage for these claims. In the first of this two-part interview, Hunton & Williams partners Emily Burkhardt Vicente and Walter Andrews discuss what employers need to understand about insurance coverage for state and federal wage and hour claims. View the 5-minute video here.

On January 8, 2018, the United States Supreme Court denied a petition for certiorari seeking to overturn the Fourth Circuit’s new joint employer test under the Fair Labor Standards Act.  As a result, employers will continue to be faced with differing joint employer standards in the various federal circuits.

Continue Reading Supreme Court Leaves Fourth Circuit’s New FLSA Joint Employer Standard Untouched

Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers.  Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage.  By way of background, the FLSA requires employers to pay employees a minimum wage (currently $7.25 per hour) plus overtime for all hours worked over 40 in a single workweek.  Employees who “customarily and regularly receive tips” must still receive the minimum wage, but employers may elect to take a “tip credit” by counting up to $5.12 per hour of those employees’ tips toward the minimum wage, meaning employers may pay a reduced wage of $2.13 to tipped employees.  Historically, employers that take the tip credit have been prohibited from sharing money from a tip-pooling system to employees who do not traditionally receive direct tips (cooks, dish washers, etc.).  In 2011, the DOL extended the tip-pooling prohibition to apply to employers even if they do not take the tip credit and pay their employees the full federal minimum wage.

Continue Reading Department of Labor Makes It Easier for Employees to Share Tips – Rolls Back Prior Restrictions

Much has been written about the National Labor Relations Board’s controversial Browning-Ferris decision that significantly expanded the scope of joint employer liability under the National Labor Relations Act. But virtually no attention has been given to the Fourth Circuit Court of Appeals’ recent panel decision in Salinas v. Commercial Interiors, Inc., No. 15-1915 (4th Cir. 2017), which creates an altogether new and incredibly broad joint employment standard under the Fair Labor Standards Act that makes the NLRB’s Browning-Ferris joint employment standard seem temperate at best. Absent a successful appeal to the US Supreme Court or Department of Labor intervention, the Salinas decision could open the floodgates to joint employment FLSA litigation and liability within the Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina and South Carolina) and beyond.

Continue Reading