Employment Law Observer

A recently decided case by the U.S. Supreme Court shows that even highly-compensated employees can be mislabeled as overtime-exempt under the Fair Labor Standards Act (FLSA). On February 22, 2023, the Supreme Court addressed this very matter in its decision in Helix Energy Solutions Group, Inc. v. Hewitt.

By definition, the hallmark of the fluctuating workweek (FWW) is that the hours fluctuate. Now, following another opinion letter from the U.S. Department of Labor (DOL) on the topic, employers know that this does not mean fluctuating below 40 hours per week.

The United States Department of Labor (DOL) made official a new regulation increasing the minimum salary level that salaried employees must be paid to be exempt from overtime. As of January 1, 2020, if a salaried employee makes less than $684 per week—or $35,568 per year—the employee will be entitled to overtime for the hours worked beyond 40 hours in a week.

The Wage and Hour Division of the U.S. Department of Labor (DOL) has announced proposed changes to the regular rate regulations of the Fair Labor Standards Act (FLSA). According to the DOL, the proposed changes are focused on updating and clarifying the regular rate regulations, and intended to encourage employers to provide additional benefits to workers without inviting litigation.

For nearly four years, proposed Department of Labor (DOL) rule changes that would expand the number of workers eligible for overtime wages have remained in limbo. The latest twist in this long-standing saga came last week, when the DOL published a new "Notice of Proposed Rule Making" (NPRM), which sets a new salary threshold for overtime pay at $679 per week ($35,308 per year). Under these proposed rules, any salaried employee earning less than that amount, will be entitled to overtime for the hours the employee works beyond forty (40) in a week.

Earlier this month, the U.S. Department of Labor announced it will now use the primary beneficiary test” to determine whether an intern must be paid.  Its announcement comes in the wake of the 9th Circuit’s adoption of the test, joining the 2nd, 6th, and 11th Circuits.  With the announcement, the DOL also updated Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act. These moves displace a 6-part test the DOL adopted in 2010 that required all factors weigh in favor of the employer.

On October 30, 2017, the Department of Labor (DOL) indicated that it intends to appeal to the Fifth Circuit a federal district court ruling from 2016 that invalidated Obama-era overtime changes.

A federal judge from Texas struck down the Obama administration’s overtime rule, finding the salary-level test set forth by the Department of Labor did not account for an analysis of an employee’s job duties for purposes of determining whether an employee is exempt from overtime pay.  A copy of the court's opinion is available here.

A Department of Labor (DOL) 2016 Final Rule pushed federal regulations under the Fair Labor Standards Act (FLSA) that would have more than doubled the “threshold” below which nearly every salaried employee would be entitled to overtime. In November 2016, a federal district court prevented the new threshold from coming into effect, and the subsequent election of President Trump called into doubt whether revised rules would ever be implemented.

What Happened?

With the election of Donald Trump and transition to a Republican administration looming, employers are scrambling to predict what impact Trump will have on labor and employment policy and enforcement initiatives. What employers can expect in the first 12 months of a Trump Administration is unclear, but there likely will be change in the following areas:

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.

On August 21, 2015, the U.S. Court of Appeals for the District of Columbia in Home Care Association of America v. Weil reversed a lower court decision and upheld the U.S. Department of Labor's (DOL) 2013 regulatory change regarding domestic service workers who provide companionship services or live-in care. 

As e-discovery issues abound, the increased number of contract lawyers combing through massive document productions for privilege and relevance has developed into a cottage industry in the past decade. Companies helping law firms whose clients are embroiled in litigation with huge document productions has spawned new international businesses hiring American lawyers. And like any profitable business innovation, competition follows. Now law firms are bringing these document review lawyers on board and asking them to analyze myriad documents for their clients instead of farming this work to outside companies. But are these document review lawyers performing 'legal work'? The answer may depend on who you ask and why you're asking, but if you ask the Second Circuit Court of Appeals, they will tell you "no."

The Department of Labor (DOL) recently issued proposed new rules that seek to expand overtime wage coverage to more than 4.6 million workers. These proposed rules are not yet final, and the DOL seeks comments. However, now is the time to begin considering how employees are classified, and whether they may continue to be exempt from overtime wages in the future.

Greg Holaway worked as a Field Service Engineer for Stratasys, Inc. He was categorized as exempt from the provisions of the Fair Labor Standards Act (FLSA) requiring the payment of overtime. Even though his title was "Engineer," his position was closer to that of a customer service technician who installed machines and maintained previously installed machines. He was responsible for customers in various states. On February 8, 2012, Holaway sent an email to other Field Service Engineers complaining about being expected to work 45 to 60 hour weeks without overtime pay. He was terminated shortly after he sent the e-mail, ostensibly for violating the company's online protocol.

Home delivery newspaper carriers brought suit against the publisher for violations of the California Labor Code, arguing that they were not paid overtime wages, the proper minimum wage, and did not receive rest breaks, among other things. Specifically, the carriers claimed that they were improperly classified as independent contractors, though they were actually more akin to employees, and thus should have received the benefits of being an employee (such as receiving overtime wages).

Just because an employee does not report income to the IRS or used a fake Social Security card to get his job does not mean an employer can deprive the employee of overtime pay, says the 11th Circuit Court of Appeals. 

The Seventh Circuit Court of Appeals recently issued an opinion upholding a district court’s de-certification of a collective and class action under the Fair Labor Standards Act and Illinois state wage laws. While the opinion did not deal with typical Rule 23 or Section 16 issues, such as commonality or a common employer policy, it is a positive case for employers trying to get out from under lengthy, expensive class litigation.

A federal district court judge in Northern Illinois has ruled that an employee handbook, while not a “contract”, may still be an “agreement” upon which employees may rely — and sue. In this particular case, the judge denied the employer’s motion to dismiss a claim under the Illinois Wage Payment and Collection Act (IWPCA), finding that the handbook’s statements regarding compensation were an “agreement” upon which the employees’ could base their claim, despite the handbook’s numerous disclaimers stating that no legally enforceable promise was being made. The ruling, while narrowly applied in this case to support an IWPCA claim, could potentially raise major issues for Illinois employers that rely on such disclaimers to protect themselves against claims based on handbook provisions.