Wyatt Employment Law Report


Kentucky Supreme Court Unanimously Upholds Executive COVID Response Orders

Written by: Marianna Michael

On November 12, 2020, the Supreme Court of Kentucky, overruling a lower court, unanimously upheld Governor Andy Beshear’s authority to issue executive orders in an emergency. Attorney General Daniel Cameron had joined three Northern Kentucky business owners in contesting executive orders issued by Governor Beshear in response to the COVID-19 pandemic. The plaintiffs argued that the restrictions exceeded Governor Beshear’s constitutional powers.

The court limited its opinion to the issues before it, making note of certain hot button issues it was not addressing. In regard to masks, the court only ruled on whether the penalty provisions in the emergency regulation are enforceable. The court also did not address restraints on religious activities, since those issues were not before the court and the issue had previously been litigated in federal court. The court also did not address restraints on elective medical procedures.

Governor Beshear’s actions were challenged in relation to KRS Chapter 13A and provisions of the Constitution of Kentucky. The court ruled that Governor Beshear properly declared a state of emergency pursuant to KRS 39A.100, which authorizes the governor to declare a state of emergency in the event of the occurrence of any of the situations or events contemplated under KRS 39A.010. The plaintiffs argued that KRS Chapter 13A limits the governor’s powers under KRS Chapter 39. The court ruled that nothing in the text of KRS 39A requires consideration of Chapter 13A or promulgation of regulations. Simply put, “the Governor can choose to act solely through executive orders.” Further, the court found that Governor Beshear’s executive orders do not violate Sections 1 or 2 of the Kentucky Constitution because they are not arbitrary. Finally, the court ruled that the Boone Circuit Court’s ruling, which granted injunctive relief prohibiting enforcement of Governor Beshear’s orders or regulations, was improper because the plaintiffs were unable to prove that they suffered irreparable injury. The court held that, “[e]ven if some Plaintiffs arguably have established irreparable harm to their businesses, that alone is insufficient to justify an injunction precluding enforcement of emergency orders and regulations directed to the protection of the health and safety of all Kentuckians.”

The Supreme Court of Kentucky’s full opinion can be found here.


DOL Issues Proposed Rule Clarifying Distinction Between Employees and Independent Contractors Under the FLSA

Written by:  Sean Williamson

On September 22, 2020, the Department of Labor (“DOL”) issued a proposed rule that attempts to clarify the distinction between employees covered by the Fair Labor Standards Act (“FLSA”) and independent contractors.  The FLSA requires covered employers to pay nonexempt employees at least the federal minimum wage for every hour worked and overtime pay for every hour worked over forty (40) in a work week, and it also mandates that employers keep certain records regarding their employees.  A worker who performs services for an individual or entity as an independent contractor, however, does not fall within the FLSA’s requirements applicable to employees.

The FLSA does not define “independent contractor,” but the DOL and the courts have long interpreted the distinction between an employee and independent contractor to require evaluation of the worker’s economic dependence on the putative employer.  The ultimate inquiry is whether—as a matter of economic reality—the worker is dependent on a particular individual, business, or organization for work (and thus is an employee) or is in business for himself or herself (and thus is an independent contractor).  While this “economic reality” test has existed for some time, the DOL’s proposed rule emphasizes that the underpinnings and application of the test have lacked focus, creating uncertainty in the regulated community.

The DOL’s proposed rule attempts a “clear articulation” of the test by sharpening the inquiry into five distinct factors.  Two “core” factors—(1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss—would be afforded greater weight than any others in the analysis of economic dependence or lack thereof.  The three remaining, but less probative, factors to be considered under the proposed rule are (3) the amount of skill required for the work, (4) the degree of permanence of the working relationship, and (5) whether the work is part of an integrated unit of production.  If the first and second “core” factors both weigh in favor of finding either an employee or independent contractor relationship, the analysis is likely complete and will not be affected by the remaining three subsidiary factors, which serve as tie-breakers.

 This dual factor analysis, with tie-breaking factors, substantially departs from the multi-factor, “totality of the circumstances” tests applied in various federal courts.  It also shifts the focus of the analysis away from the potential employer’s control over the worker, instead focusing on the worker’s control over his or her work, such as decisions of when to work and for how long.  The DOL’s proposed rule would provide businesses with much needed clarity in classifying their workers, and a more favorable standard for those businesses wishing to treat workers as independent contractors.

Businesses, however, should be cautious in relying on the DOL’s proposal should it ultimately be adopted as a final rule.  The country is in the midst of a hotly contested election cycle.  There is no guarantee that a new presidential administration or Congress would not eliminate the regulation.  Even if the proposed rule survives the pitfalls of electoral politics, it will very likely be challenged in the courts which might decide that the DOL’s interpretation of the FLSA is not entitled to judicial deference.  Finally, the DOL’s proposed rule does nothing to obviate the obligations of businesses to comply with more restrictive state laws.


Payments and Perks: the DOL Announces a Proposal to Clarify What Qualifies as Overtime

By Marianna Michael

On Thursday, March 28, 2019, the U.S. Department of Labor (“DOL”) announced proposed changes to the overtime provisions of section 7(e) of the Fair Labor Standards Act.  In its current form, the statute generally requires employers to pay overtime if workers work more than 40 hours a week.  One exemption to the overtime rule includes the salary basis exemption, where employees generally must be paid at least $455 per week on a salary basis, unless they are outside sales employees, teachers and employees practicing law or medicine.

accounting-blur-budget-128867Overtime pay is equal to one and one half times the regular rate of pay.  In designating what is included under the regular rate of pay, the current provision makes a distinction between payments and perks.  With the proposed provision, the DOL seeks to clarify what qualifies as either a payment or perk in an attempt to discourage employers from offering incentives that are excluded from the calculation of overtime pay.

The proposed changes confirm that the following types of employer-provided benefits may be excluded from the regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes and employee discounts on retail goods and services;
  • payments for unused paid leave, including paid sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • discretionary bonuses;
  • benefit plans, including accident, unemployment and legal services; and
  • tuition programs, such as reimbursement programs or repayment of educational debt.

This proposal is published for public comments and will remain open until May 28, 2019.  Comments may be submitted to the Notice of Proposed Rulemaking at www.regulations.gov. More information is available here.


Comment Period Open for DOL’s Proposed Salary Increase

By Sharon Gold

The Office of the Federal Register officially published the Notice of Proposed Rulemaking (“NPRM”) raising the salary minimum for exempt workers that we discussed last week.  The NPRM proposes to raise the minimum salary for exempt workers to $35,308 per year ($679 per week), from the current minimum of $23,660 per year ($455 per week).  The NPRM also raises the highly compensated minimum to $147,414 per year, up from the current minimum of $100,000.  Once a proposed rule is officially published, the 60 day comment period is open.  Employers have until May 21, 2019 to comment.  The link to comment is available here.

If the Rule is finalized, it is estimated that 1.1 million workers will have their salaries raised to the minimum or will be eligible for overtime.


DOL Releases Much Awaited Proposed Rule Raising Salary Minimum to $35,308 – Employers Have 60 Days to Comment

By Sharon Gold

On Thursday, March 7, 2019, the Department of Labor (“DOL”) released the much anticipated Notice of Proposed Rulemaking (“NPRM”) that significantly raises the minimum salary for exempt workers from $23,660 to $35,308.  It is estimated that if this rule is finalized, more than a million workers will either become eligible for overtime pay or have their salaries raised to meet the minimum.

Employers will recall that in late 2016, a mere few days before the salary minimum was supposed to be raised to $47,476, a federal judge in Texas blocked the rule.  Since that time, the DOL issued a Request for Information about the salary rule in 2017.  More than 200,000 employers and individuals commented.  In addition, the DOL had six in-person listening sessions in connection with the Request for Information.  The DOL indicated Continue reading


H-2B Random Selection Process to Begin July 2019

By Glen Krebs

The Department of Labor’s (“DOL”) Office of Foreign Labor Certification (“OFLC”) has announced a plan to change the way it handles the ETA-9142B form which begins the H-2B application process.  Beginning July 3, 2019, all H-2B applications submitted to the National Processing Center (“NPC”) in the first three days of the filing period will be collected.  The filing period begins 90 days before the date of need, so for a date of need beginning October 1, 2019, the filing period begins on July 3, 2019.  On the fourth day of the filing period (July 6), the OFLC will conduct a random selection process on all applications collected by the NPC in the first three days.  Applications covering the first 33,000 H-2B workers will be assigned to Group A.  The Group A applications will then be assigned to NPC analysts in the order of the random selection.   If there are applications for more than 33,000 workers, the remaining applications will be assigned to Group B, Group C, etc. after the random selection process is complete.  Each subsequent group will cover 20,000 H-2B workers.  If there are not 33,000 H-2B worker applications in the first three days, after the random selection process is complete, processing will continue in the normal fashion based on when the application is received by the NPC.

Employers will receive either a Notice of Deficiency or a Notice of Acceptance just as in prior years.  It is in the employers’ best interest to be prepared to conduct their recruitment and submit their reports quickly.  That will allow them to receive Temporary Labor Certification and submit the I-129 to the United States Immigration and Customs Service (“USCIS”) before the 33,000 visas allotted in each six-month period are issued to other employers.

For questions or help with H-2B Non-Agricultural Worker visas, please contact Glen Krebs (859)288-7409.


Changes to OSHA Electronic Submission Requirement Take Effect February 25

By Julie Laemmle Watts

ballpen-contemporary-desk-955390.jpgThe Occupational Safety and Health Administration (“OSHA”) published a final rule on January 25, 2019, which goes into effect February 25, 2019.  The final rule better protects worker privacy by eliminating the electronic submission requirement of certain forms.  Specifically, employers with 250 or more employees will no longer have to electronically submit information from Form 300 (Log of Work-Related Injuries and Illnesses) and Form 301 (Injury and Illness Incident Report).  However, employers with 250 or more employees, as well as employers in certain designated industries with 20 or more employees but fewer than 250 employees, will still be required to electronically submit  information from Form 300A (Summary of Work-Related Injuries and Illnesses) on an annual basis.  The final rule also requires covered employers to submit Employer Identification Numbers (“EIN”) when electronically filing injury and illness data, which OSHA hopes will reduce duplicative employer reporting.  Notably, employers do not have to submit EINs until 2020.

The final rule does not change the fact that all covered employers must still maintain OSHA Forms 300 and 301 onsite for OSHA inspections and enforcement of actions.

Important dates:

Final rule goes into effect February 25, 2019

Submission of Form 300A data for 2018 is due by March 2, 2019

Submission of EIN is due by March 2, 2020 (to coincide with employers’ submission of 2019 300A data)

Please notify us if you would like to discuss the above with a member of the labor and employment team at Wyatt, Tarrant & Combs, LLP.