On December 21, 2017, the U.S. District Court for the Eastern District of Pennsylvania in Moore v. Rite Aid Headquarters Corp., 2:13-cv-01515, dismissed a class action lawsuit alleging a violation of the pre-adverse action notice requirements in section 1681b(b)(3) of the Fair Credit Reporting Act (“FCRA”). Moore is significant in the body of criminal background check precedent because it is a post-Spokeo ruling dismissing a pre-adverse action notice claim (as opposed to a 1681b(b)(2) Disclosure claim) on standing grounds after the parties participated in discovery and developed a factual record.
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.
The new year brings new laws for California employers to grapple with. Below we highlight the most significant new employment laws affecting California employers as of January 1, 2018. Companies based in California or with operations in California are encouraged to review their policies and procedures in light of these developments.
On Friday, January 5, 2018, the U.S. Department of Labor (“DOL”) posted a brief statement and updated its Fact Sheet on Internship Programs Under the Fair Labor Standards Act to clarify that going forward, it will use the “primary beneficiary” seven factor test for distinguishing bona fide interns from employees under the FLSA. The DOL’s approach is consistent with the test adopted by appellate courts such as the Second and Ninth Circuits.
The 2017 Tax Act (the “Act”) imposes a 21 percent excise tax on compensation in excess of $1 million and “excess” severance paid by covered tax exempt organizations to certain employees starting in 2018. As reflected in the Act’s legislative history, the general intent behind this excise tax is to put tax exempt organizations (which are generally exempt from income taxation) in roughly the same position tax-wise as publicly held and other for-profit companies which cannot deduct excess compensation and “golden parachute” payments paid to their covered employees. However, unlike the changes made in the Act to the excess compensation rules for publicly traded companies, there is no transition relief for existing tax exempt organization compensation arrangements. This means that the new excise tax will apply to all compensation paid by a covered organization to a covered employee in tax years beginning after 2017.
Set out below is an overview of the scope and application of the new excise tax provision.
If 2017 is any indication, the new year will bring a fresh cascade of changes – both announced and unannounced, anticipated and unanticipated – in the business immigration landscape. Few, if any, of these changes are expected to be good news for U.S. businesses and the foreign workers they employ.
Raytheon Network Centric Systems, 365 NLRB No. 161 (Dec. 15, 2017) (“Raytheon”), is one of several decisions issued this month by the National Labor Relations Board’s (the “Board”) new Republican majority which reverse Obama-era precedent. Raytheon overrules the Board’s decision E.I. du Pont de Nemours, 364 NLRB No. 113 (2016) (“DuPont”), which limited the changes employers can make unilaterally in a union environment. Raytheon clarifies the degree to which employers may rely on past practice to make unilateral changes to terms of employment once a collective bargaining agreement has expired, and, more specifically, offers welcome guidance to employers with regard to continuation of health benefits under those circumstances.
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.
During a week that brought several notable decisions, the National Labor Relations Board issued a ruling on Friday, December 15, 2017, overturning its controversial 2011 Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”) decision, which held that in order for employees to be included in a collective bargaining unit, employers had to prove the employees shared an “overwhelming community of interest” with one another. The unions argued that the “overwhelming community of interest” burden was all but impossible to meet and effectively allowed unions to create “micro-units” of any number, group, or sub-group of employees the unions saw fit. This in turn meant that an employer could be faced with negotiating collective bargaining agreements with multiple groups of employees who often shared the same schedule, workplace, and general terms and conditions of employment, but nonetheless were represented by different locals or divisions of the same or multiple unions. In one particularly glaring example, the Board approved a union’s request for separate bargaining units in each of nine different graduate student departments at Yale University despite the fact that the union already represented existing, university-wide bargaining units.