Wyatt Employment Law Report


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DC Circuit Reinstates DOL Rule Applying FLSA’s Minimum Wage and Overtime Provisions to Home Care Workers

By Michelle D. Wyrick

Companionship services, L&EOn August 21, 2015, in Home Care Association of America v. Weil, the United States Court of Appeals for the District of Columbia Circuit cleared the way for the implementation of regulations extending the Fair Labor Standards Act’s (“FLSA’s”) minimum wage and overtime provisions to many home care workers. The court rejected a challenge to the United States Department of Labor’s (“DOL’s”) authority to change its interpretation of the scope of the FLSA provisions exempting from minimum wage and overtime guarantees domestic-service workers who provide either companionship services or live-in care for the elderly, ill, or disabled. The court’s ruling directly affects home care workers who are employed by third-party providers, like home health care agencies.

For four decades, the DOL interpreted the FLSA’s exemptions for companionship services and live-in workers to apply to employees of third-party providers. The old regulations specifically stated that domestic workers, who were employed “by an employer other than the family or household using their services,” were not included in the FLSA’s protections. Thus, traditionally, those workers have not been eligible for Continue reading


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NLRB Rules That Filing a Class or Collective Action Is Protected, Concerted Activity

By Michelle D. Wyrick

Last week, the National Labor Relations Board (“NLRB”) decided in 200 East 81st Restaurant Corp. d/b/a Beyoglu that “the filing of an employment-related class or collective action by an individual employee is an attempt to initiate, to induce, or to prepare for group action and is therefore conduct protected by Section 7” of the National Labor Relations Act (“NLRA”). The employee in the case, a waiter, testified that he mentioned filing a lawsuit against his employer to one co-worker, who declined to participate in the proposed lawsuit. When the waiter filed the lawsuit, he did not obtain prior authorization from any other employee. On the day the complaint was served on the employer, the employer removed the waiter’s name from the work schedule and asked him if he expected to work while he was filing a lawsuit. The waiter left the workplace and was never told he could return to work. The Administrative Law Judge found that the employer terminated the waiter’s employment in retaliation for filing the lawsuit, on behalf of himself and other similarly situated employees, alleging violations of the Fair Labor Standards Act (“FLSA”).

The dissent disagreed with the majority’s conclusion that an employee’s filing of a class or collective action automatically equates to protected, concerted activity. The dissent noted that not every non-NLRA class or collective claim “triggers an automatic overlay of NLRA rights and restrictions.” In the dissent’s view, the simple act of filing a class or collective action “does not instantly convert the Continue reading


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DOL Issues Guidance on FLSA’s “Suffer or Permit” Standard for Independent Contractors

By Courtney Ross Samford

Yesterday, the DOL released new guidance on the FLSA’s “suffer or permit” standard that governs the distinction between employees and independent contractors. According to the DOL, the goal of the guidance is to reduce the increasing number of employees who are misclassified as independent contractors.

The FLSA defines “employee” as “any individual employed by an employer.” 29 U.S.C. 203(e)(1). The term “[e]mploy includes to suffer or permit to work.” 29 U.S.C. 203(g). The phrase “suffer or permit” is determined by the economic realities test, which includes the following factors: (1) the extent to which the work performed is an integral part of the employer’s business; (2) the worker’s opportunity for profit or loss depending on his or her managerial skill; (3) the extent of the relative investments of the employer and the worker; (4) whether the work performed requires special skills and initiative; (5) the permanency of the relationship; and (6) the degree of control exercised or retained by the employer. The guidance goes on to discuss each factor in greater detail. Significantly, the DOL opined in the guidance that “applying the economic realities test in view of the expansive definition of ‘employ’ under the [FLSA], most workers are employees under the FLSA.” (Emphasis added).

In light of the DOL’s emphasis on misclassified workers, all employers should carefully evaluate each independent contractor to ensure that he or she is properly classified pursuant to the economic realities test. The full guidance is located here.


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Proposed Revisions Pertaining to Federal Overtime Regulations

By Chelsea K. Painter

On Tuesday, June 30, 2015, in an attempt to “modernize and streamline” the regulations on exemptions from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime pay requirements, the U.S. Department of Labor issued a Notice of Proposed Rulemaking (“NPRM)” dollar billwhich focuses primarily on increasing federal overtime pay regulatory coverage to nearly 5 million people by raising the minimum salary threshold required to qualify for the FLSA’s “white collar” exemption. Specifically, the Department proposes to:

  1. Set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($970 a week; or $50,440 a year) in 2016;
  2. Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  3. Establish a mechanism for automatically updating the salary and compensation levels going forward so as to ensure a useful and effective test for exemption.

 

The Department’s regulations have generally required each of the following three tests to be met for the white collar exemptions to apply: 1) the employee must be paid a predetermined, fixed salary that is not subject to Continue reading


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United States Supreme Court to Revisit Class Action Issues

By Michelle D. Wyrick

Last week, the United States Supreme Court agreed to review Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, which gives the Court an opportunity to consider class certification questions about how damages may be proven in a class action and whether a class can include members who were not injured.

Tyson Foods is a donning and doffing case in which the lower court certified collective and class actions under the Fair Labor Standards Act and state law. The plaintiffs, who were hourly production workers at an Iowa processing facility, alleged that Tyson Foods did not adequately compensate them for time spent donning and doffing protective equipment and walking to and from their work stations. Although Tyson Foods did not record the time actually spent by each employee on these tasks, it added several minutes per shift to each employee’s paycheck to compensate them.

At trial, to prove damages, the workers relied on individual time sheets and compared them to a time study of a sample of employees who were observed donning, doffing, and walking. The jury returned a verdict for Continue reading


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Kentucky Court of Appeals Rules That Kentucky Wage and Hour Statute Does Not Permit Class Actions

By Michelle D. Wyrick

In an important ruling for employers, on February 27, 2015, the Kentucky Court of Appeals ruled that KRS 337.385 does not permit individuals to pursue claims for unpaid wages and overtime in Kentucky as class actions. See McCann v. The Sullivan University System, Inc., No. 2014-CA-000392-ME. The Court relied on the language in KRS 337.385(2) stating that actions for unpaid wages and overtime may only be maintained by one or more employees “for and in behalf of himself, herself, or themselves.” The Court concluded that this language does not permit plaintiffs to pursue claims for unpaid wages and overtime compensation in a representative capacity.

The Court contrasted the language in KRS 337.385 and the Fair Labor Standards Act, which expressly permits plaintiffs to Continue reading


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Court Invalidates Rule Extending the FLSA’s Minimum Wage and Overtime Requirements to Home Health Care Workers Employed by Third Parties

By Brittany L. Hampton

The U.S. District Court for the District of Columbia struck down the U.S. Department of Labor’s regulations concerning the companionship services exemption to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). See Home Care Association of America v. Weil, No. 14-cv-967 (D.D.C. 2014). Under the FLSA, providers of home care services employed by a third party are deemed to fall within the FLSA’s domestic employee and/or companionship services exemptions. Companionship services, L&EHowever, the Department of Labor’s Wage and Hour Division issued a Final Rule with an effective date of January 1, 2015 (but not to be enforced until July 1, 2015) effectively eliminating this exemption by revising the definition of “companionship services” and subjecting third-party providers to minimum wage and overtime requirements imposed by the FLSA.

The National Association for Home Care & Hospice, Home Care Association of America, and the International Franchise Association brought an action challenging the Final Rule under the Administrative Procedure Act arguing that the rule was arbitrary and capricious, and inconsistent with Congress’ intent. Specifically, the plaintiffs claimed the rule would “have a destabilizing impact on Continue reading