Employment Law Observer

In the spirit of the season, we are using our annual "12 days of the holidays" blog series to address new California laws and their impact on California employers. On this third day of the holidays, my labor and employment attorney gave to me: three French hens and SB 657.

In Nisei Farmers League vs. California Labor and Workforce Development Agency, California’s Fifth Appellate District confirmed the constitutional validity of Labor Code section 226.2, a recently enacted law providing that employees paid on a piece-rate basis must be paid at least minimum wage, and must be paid for rest and recovery periods and “other nonproductive time” separate from any piece-rate compensation. Under a piece-rate system, employees are not paid by the hour, but rather based on activities, task or units of production completed. For example, employees are paid by the number of widgets they produce. The goal of the statute was to make sure employers who pay under a piece-rate system also comply with all minimum wage law requirements that apply to hourly workers.

The federal Department of Labor’s Wage and Hour Division (WHD) provided updated guidance on its application of the “tip credit” rule for tipped employees who perform non-tip-generating tasks.

In Lawless v. Steward Health Care System, LLC, the First Circuit Court of Appeals recently considered a novel question: whether an employee suing for violation of, M.G.L. c. 149, §§ 148, 150 (the “Wage Act”), could recover under the statute despite filing her lawsuit before receiving permission from the Attorney General or waiting 90 days after notifying the Attorney General of her claims. It answered the question yes, rejecting the employer’s position that the Wage Act provided for a grace period of up to 90 days.

In  AHMC  Healthcare,  Inc.  v.  Letona,  decided  earlier  this  week,  a  California  state  of  appeals  court  considered  an  employer's  use  of  a  time  clock  rounding  system  and  whether  it  violated  California  Labor  Law.  While  it  is  a  California  case,  it  rests  on  the  federal  regulation  governing  time  rounding  found  in  29  CFR  §  785.48  and  is  thus  an  instructive  case  for  all  employers  who  use  or  are  thinking  about  adopting  a  rounding  policy. 

The Labor Department, Wage & Hour Division, issued an Opinion Letter earlier this week answering questions about the compensability of travel time for hourly technicians under the Fair Labor Standards Act (FLSA). The technicians did not work at a fixed location or a fixed daily schedule. They worked 8 to 16 hours per day at various locations. Sometimes they stayed in hotels overnight or traveled out of town for training courses. The employer provided technicians company vehicles, which they could use for both work and personal purposes.

Recently, the Massachusetts Attorney General, Maura Healey, issued guidance to assist employers in complying with the state’s Equal Pay Act (“MEPA”), which goes into effect on July 1, 2018. The 30-page guidance is comprehensive, offering an overview of the law, responses to frequently asked questions, a self-evaluation for employers, and a sample checklist of policies and practices. Due to its length and breadth, the guidance should be reviewed by employers in full. However, we note the following important aspects:

Over the last month, we have seen a number of significant restorations of status quo antes. These have come in the form of reverting to earlier precedent, regulations, or guidance. Without further ado, we present some of the more notable developments:

While advocates across the country continue to demand states increase their minimum wage to $15.00 per hour, Florida decided to forgo large scale reform and increase its minimum wage by only two percent.  Effective January 1, 2018, Florida’s minimum wage will increase by 15 cents from $8.10 to $8.25 per hour.  Florida’s minimum wage for tipped employees will also increase by 15 cents from $5.08 to $5.23 per hour. To put this in perspective, a year earlier, Florida increased its minimum wage by five cents from $8.05 to $8.10 per hour, while tipped employees received an increase from $5.03 to $5.08 per hour.

On May 4, 2017, New York City Mayor Bill de Blasio signed into law, Intro No. 1253-2016, amending the New York City Human Rights Law to restrict an employer’s ability to ask job applicants about their compensation history during the hiring process. The law will take effect on October 31, 2017.

On Monday, with the signing of the Philadelphia Wage Equity Ordinance, the city's Fair Practices Ordinance was amended to prohibit employers from asking about an applicant's wage history at any point during the hiring process, making Philadelphia the first City to enact such a prohibition. 

As those in the restaurant industry know well, federal and state law allow employers to pay tipped employees less than the required minimum wage with the expectation they will receive enough tips to make up the difference. This is referred to as a "tip credit." There has long been a battle within wage and hour suits over whether and when an employee paid under the tip-credit can still be paid the below minimum wage rate while performing "side-work" or non-serving duties that do not directly result in tips from customers. In a decision issued on July 15, 2016, the Seventh Circuit helped clarify the line, finding that an employer did not violate wage laws by paying its servers under the tip credit for side work those servers performed.

The hour has arrived. Last summer, the Wage and Hour Division of the Department of Labor announced substantial revisions to federal regulations delineating who is exempt from overtime pay. After almost a year of waiting (and over 290,000 comments to the draft rule), the DOL announced this week that it will be publishing the final form of its revised overtime regulations under the Fair Labor Standards Act (FLSA). This final publication will occur on Monday, May 23, 2016, but the pre-publication version is publicly available now.

It is not uncommon for companies to contract their daily business operations to third-party companies. In Motta et al v. Global Contact Services, Inc., the court addressed whether such relationships relieve the outsourcing company of any duties to address discrimination or harassment in the workplace.

Like most employers, Hormel Foods paid its employees from the time they punched-in to the time they punched-out. Prior to punching the clock, manufacturing employees were required to dress in a clean white jumpsuit, boots, hard hat, eye protection, hearing protection, and hair net. The reverse process was repeated after the employees punched out at the end of their shift. Each employee spent almost six minutes per day off the clock "donning" [putting on] and "doffing" [taking off] required clothing and equipment.

The restaurant and gaming industry lost a battle in the Ninth Circuit over whether employers that pay their workers at least the minimum wage are subject to Department of Labor regulations restricting tip pooling arrangements.

You may recall that last December, just as Chicagoans were starting to hunker down for another cold, snowy winter, the Chicago City Council made national news by passing an ordinance that will raise the minimum wage for Chicago workers. More specifically, the ordinance will gradually raise the minimum wage for Chicago workers over the course of the next four years from the current $8.25/hour to $13/hour.

On July 3, 2015, San Francisco adds another law to its long list of city-wide labor ordinances. In addition to the City's laws on paid sick leave, minimum wage, family friendly workplace, and health care security, employers should now get acquainted with Formula Retail Labor Protections, also known as the Retail Workers Bill of Rights.

A recent opinion from the Second Circuit Court of Appeals reaffirms that the Statute of Frauds will not void an oral agreement to pay commissions if the agreement lacks a fixed duration.

California employers, take note! The laws are changing! Just this week, new laws have been enacted which affect employees and/or employers, including: