Wyatt Employment Law Report

Revised Department of Labor Joint Employer Standard

By Mitzi Wyrick

On January 12, 2020, the United States Department of Labor (“DOL”) updated its standard for determining who is a joint employer under the Fair Labor Standards Act (“FLSA”) for the first time in 60 years.  Under the FLSA, an employee may be employed by more than one employer, which puts each employer at risk for unpaid wages and overtime.

The new joint employer standard specifies that when an employee performs work for the employer that simultaneously benefits another company, that company will be considered a joint employer if they are acting directly or indirectly in the interest of the employer in relation to the employee.  The DOL adopted a balancing test to determine which employers are considered joint employers under the FLSA.  The factors to be considered include whether a company:

(1) hires and fires employees;

(2) supervises and controls employees’ work schedules or conditions of employment to a substantial degree;

(3) determines employees’ rate and method of payment; and

(4) maintains employment records.

Merely reserving the right to control the employee’s working conditions does not establish that a company is a joint employer.  Instead, to be considered a joint employer, the company would actually have to exercise control over another company’s employees.

The revised joint employment standard clarifies that an employee’s economic dependence on a business does not determine whether that business is a joint employer under the FLSA. In addition, the rule identifies certain factors that do not determine whether a business is a joint employer. These factors include having a franchisor/franchisee business model; providing a sample employee handbook; permitting a company to operate a facility on another company’s grounds; participating with another employer in an apprenticeship program; offering or participating in an association health or retirement plan with other companies; or requiring a business partner to comply with legal obligations, such as minimum wages, workplace safety, or anti-harassment.

The DOL has included several examples of what does and does not constitute joint employment status in the revised regulation.  They can be found here:   https://www.federalregister.gov/documents/2020/01/16/2019-28343/joint-employer-status-under-the-fair-labor-standards-act  In addition, the DOL has published a fact sheet about the revised standard:  https://www.dol.gov/agencies/whd/flsa/2020-joint-employment/fact-sheet as well as a list of frequently asked questions:  https://www.dol.gov/agencies/whd/flsa/2020-joint-employment/faq

It is important to remember that the revised rule only address joint employment only under the FLSA and does not apply to any other statute or agency.  The revised joint employer rule becomes effective on March 16, 2020.  Before then, employers should review their relationships with contractors, staffing agencies, and affiliated corporations to minimize their risk for being found to be a joint employer under the FLSA.

DOL Releases Final Rule Updating the Regular Rate and Basic Rate Requirements Effective January 15, 2020

By Sharon Gold

Last month, the Department of Labor (“DOL”) published a Final Rule that revised certain regulations concerning the Fair Labor Standards Act (“FLSA”) regular rate requirements.  The Final Rule is effective January 15, 2020.

Under the FLSA, non-exempt employees must be paid one and a half times their regular rate for overtime.  Which bonuses and perks to include in the regular rate has been confusing to employers for decades.  Despite the changing workforce of modern benefits and perks of employment, the regulations concerning which perks to include in the regular rate has not been revised in more than fifty years. Continue reading

NLRB Reaffirms Decertification Petition Timeline

By Marianna Michael

The National Labor Relations Board (“NLRB” or “Board”) recently reaffirmed that a voluntary extension of the certification year will not bar decertification elections. The certification year is the one year period following a union’s certification after winning an election. During the certification year, the Board does not conduct an election in an effort to allow the union and the employer ample opportunity to negotiate a collective bargaining agreement. However, unions and employers may negotiate a voluntary extension of the certification year. Pursuant to the Board’s holdings, the Board may conduct a vote during the voluntary extension after they receive a decertification petition and confirm that the remaining requirements are met. A decertification petition is submitted by employees who no longer want the union to act as their exclusive representative. The decertification process is used to determine whether a union continues to enjoy majority status among employees. Continue reading

High Deductible Health Plan – Helpful Guidance from the IRS

By Sherry Porter

Many employers sponsor high deductible health plans (HDHP) coupled with a health savings account (HSA) to provide group health insurance for their eligible employees.  In order to utilize an HSA, the individual must have coverage under a HDHP and have no disqualifying health coverage.  One issue that has arisen relates to the requirement that the HDHP generally cannot provide for any medical expense (except for preventive care) until the participant satisfies the minimum deductible for that year.  If the HDHP provided health care benefits for anything except preventive care prior to the individual meeting the deductible, then the individual is disqualified from having an HSA. This has created some interesting issues for participants with existing illnesses or chronic conditions.  The IRS has recently provided guidance that most employers (and participants) will find helpful. Continue reading

ICE On-Site Inspections: A New Concern for STEM OPT Employers

By Roger Morris

All STEM OPT employers need to be aware of reports that Immigration and Customs Enforcement (“ICE”) has begun random on-site inspections of STEM OPT employers. It is becoming increasingly important for any business that employs STEM OPT students to plan and train staff for the day ICE comes knocking at your door.

“STEM OPT” is a reference to foreign graduates of U.S. universities who earned degrees in Science, Technology, Engineering, or Math (“STEM”), who have been approved by the U.S. Citizenship and Immigration Services to receive post-graduation Optional Practical Training (“OPT”). Continue reading

New DHS “Public Charge” Rule Set to Take Effect This Month

By Glen Krebs.  Roger Morris, who recently passed the Kentucky Bar Exam, contributed to this article.

Last month, the Department of Homeland Security (“DHS”) published a final rule set to go into effect October 15, 2019 governing the Immigration and Nationality Act’s provisions on public charge grounds of inadmissibility. The final rule redefines “public charge” and is vastly more restrictive than current policy. Many expect the rule change to result in significantly higher denial rates of adjustment of status applications.

“Public charge” has been a part of American immigration law for over a century. When an individual is seeking to adjust his or her status to that of a lawful permanent resident or seeking admission to the United States, the United States Customs and Immigration Services (“USCIS”) conducts an evaluation based on the likelihood of the individual becoming a “public charge.” Continue reading

DOL Releases Final Rule Raising Salary Minimum to $35,568, Effective January 1, 2020

By Sharon Gold

On September 27, 2019, the Department of Labor (“DOL”) published the much anticipated Final Rule that significantly raises the minimum salary for exempt workers from $23,660 to $35,568.  It is estimated that more than one million workers will either become eligible for overtime pay or have their salaries raised to meet the minimum.  The Final Rule is available here.

Continue reading