The California Supreme Court issued a decision Monday in a case that is sure to cause headaches for employers when compensating employees through flat sum bonuses. In Alvarado v. Dart Container Corporation of California (S232607) the Court held that for purposes of calculating the regular rate, a flat sum bonus is to be allocated only to the nonovertime hours worked. This holding departs from the calculation methods broadly considered compliant outside of California under the Fair Labor Standards Act (“FLSA”) and regulations issued by the U.S. Department of Labor.
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”).
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.
On November 22, a federal judge in the Eastern District of Texas preliminarily enjoined the Department of Labor’s final overtime rule, which would have expanded overtime eligibility to executive, administrative, and professional employees making less than $47,476 per year, who were previously exempt from the Fair Labor Standards Act’s requirements under its white collar exemption. The final rule was scheduled to go into effect on December 1, 2016.
On November 16, 2016, Judge Amos L. Mazzant, heard more than three hours of oral argument from a group of 21 States (“State Plaintiffs”) challenging the Department of Labor’s new overtime rule. Following the hearing, the motion for a preliminary injunction of the rule was taken under advisement and a ruling is forthcoming on Tuesday, November 22,2016. Judge Mazzant’s pointed criticism of the rule during argument suggests employers may have reason to be optimistic.
Continue Reading Federal Judge in Texas Appears Poised to Grant Injunction Putting Labor Department’s Overtime Rule On Hold
As we previously reported, the Department of Labor (“DOL”) issued a proposed rule expected to significantly increase the number of employees who are eligible for overtime. Most notably, the proposed rule seeks to increase the minimum salary threshold for exempt workers from the current level of $23,660 to $50,440.
In a December 16, 2015 interview with Bloomberg BNA, Secretary of Labor Thomas Perez stated he was “confident” that the final rule would be “out by the spring of next year.” This prediction falls ahead of other recent DOL estimations. In its latest regulatory agenda, released in November, the DOL’s Wage and Hour Division estimated that the final rule would be published in July of 2016. And while speaking on a recent panel at the American Bar Association’s Labor and Employment Law conference in Philadelphia, Solicitor of Labor M. Patricia Smith predicted that the new rule was not likely to appear before “late 2016.”
On July 15, 2015, the Department of Labor (“DOL”) issued guidance which it claims is designed to reduce the misclassification of employees as independent contractors under the Fair Labor Standards Act (“FLSA”). This guidance boldly claims that “most workers are employees under the FLSA’s broad definitions.” Based on this guidance, the DOL will likely aggressively argue that workers are employees subject to the FLSA – not independent contractors.
Yesterday, the Department of Labor (“DOL”) issued a proposed rule that is expected to significantly increase the number of employees who are eligible for overtime. The proposed rule increases the minimum salary threshold for exempt workers from the current level of $23,660 to $50,440. The rule applies to the FLSA’s executive, administrative, professional, and computer employees exemptions, but not the outside sales exemption which does not have a salary basis requirement.
On April 1, 2015, the U.S. Court of Appeals for the Seventh Circuit decided Alvarado v. Corporate Cleaning Serv., Inc., 2015 WL 1456573 (7th Cir. Apr. 1, 2015), an important decision interpreting the Fair Labor Standards Act’s overtime requirements. The plaintiffs in the case were twenty-four (24) window washers employed by a company servicing commercial skyscrapers in the Chicago area. The plaintiffs argued they had not been paid certain overtime wages under the Act. The company, CCS, admitted it had not paid overtime, but argued that an exemption applied in the case to the FLSA’s overtime requirements.
On November 12, 2014, the Ninth Circuit held that sufficient specificity in pleading is required under the Fair Labor Standards Act (FLSA) in Greg Landers v. Quality Communications Inc. The Ninth Circuit affirmed the dismissal of a proposed overtime class action. While this was an issue of first impression for the Ninth Circuit, the decision falls in line with similar rulings made by the First, Second and Third Circuits and disagrees with the Eleventh Circuit holding that conclusory allegations that merely recite the statutory language are adequate.