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Agency Developments at the Department of Labor: The Fair Labor Standards Act

In the summer of 2019, the Department of Labor (“DOL”) made headlines when Secretary of Labor Alexander Acosta resigned. President Trump then nominated Eugene Scalia for the position, and Mr. Scalia was sworn in as Secretary of Labor on September 30. In recent months, the Senate also confirmed Cheryl Stanton as Administrator of the Wage and Hour Division.

DOL Releases Final New Overtime Rules – Effective January 1, 2020

On September 24, 2019, the Department of Labor (“DOL”) issued the final rule (the “New OT Rules”) that updates and revises the regulations which govern the exemptions from minimum wage and overtime pay requirements under the Fair Labor Standards Act (“FLSA”). Employers should carefully review the New OT Rules and the explanatory commentary. See Final Rule Announcement. The New OT Rules are set to become effective on January 1, 2020.

Considering a “Split-Day Plan” to Minimize Overtime Liability? Proceed With Caution.

A recent Minnesota Supreme Court opinion demonstrates why employers should proceed with caution if they are considering whether to implement “split-day plans” or any other complicated pay practices that are seemingly authorized by the federal wage and hour laws. See In re Minnesota Living Assistance, Inc. d/b/a Baywood Home Care, Case No. A17-1821, 2019 WL 4456081 (Minn. 2019). Specifically, the Minnesota Supreme Court concluded that the employer was liable for $1.1 million dollars in back pay and liquidated damages because it violated the Minnesota Fair Labor Standards Act (“MFLSA”) by failing to pay employees overtime following implementation of a split-day plan.

Implementing Individual Arbitration Agreements Does Not Violate NLRA, Even If Done After Collective Action is Filed

As previously discussed on Spencer Fane Human Resource Solutions, an employer can lawfully require its employees to sign individual arbitration agreements with class action waivers as a term and condition of their employment. See Employee Class Action Waivers Held Enforceable (May 22, 2018).  However, even if individual arbitration agreements with class action waivers are not, as a general rule, unlawful under the National Labor Relations Act (“NLRA”), can an employer require its employees to sign such an agreement after a collective or class action lawsuit has already been filed against it? The National Labor Relations Board (the “Board”) recently said yes in Cordúa Restaurants, Inc., Case 16-CA-160901 (August 14, 2019).

Minnesota Employers: Don’t be Caught Off Guard

All companies and organizations with Minnesota-based employees must update their employment policies and practices due to recent state law changes going into effect on July 1, 2019.  These updates are necessary due to the Minnesota Legislature’s passage of a law imposing new recordkeeping and notice requirements intended to protect all employees working in Minnesota.  These new requirements are catching many employers off guard due to the lack of publicity for the new law and the short period to achieve compliance.

SCOTUS Holds that Title VII’s Charge-Filing Procedures Are Subject to Waiver

On June 3, 2019, the Supreme Court held that filing a charge of discrimination is not a “jurisdictional” prerequisite to filing suit under Title VII of the Civil Rights Act of 1964. See Fort Bend County v. Davis, Slip Op. No. 18-525 (June 3, 2019).  Although this case deals with what sounds like an obscure legal issue, it is of great practical importance to employers. In short, it means that employers defending against claims of discrimination under Title VII must diligently assert all procedural defenses they may have as early as possible. Otherwise, a failure to assert a defense may allow the plaintiff-employee’s claim to go forward, even if the employee has not technically complied with Title VII’s mandatory charge-filing procedures.

Supreme Court Sheds Light on Class Arbitrations

The Supreme Court has further closed the window for employees to pursue class-wide claims against their employers in arbitration.  In 2010 the Supreme Court ruled a court may not compel arbitration on a class-wide basis when the arbitration agreement is “silent” on the issue.  Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010).  Nine years later, presented with an arbitration agreement that, instead of silent, was “ambiguous” regarding the availability of class arbitration, the high court has again demonstrated its preference for individual arbitration.  In Lamps Plus, Inc. v. Varela, Case No. 17-988 (slip opinion April 24, 2019), the Court held that ambiguity cannot provide the basis for finding consent to participate in class arbitration.

DOL Publishes Proposal Interpreting Joint Employer Status

On April 1, 2019, the Department of Labor (“DOL”) published its third proposal in 30 days to revise regulations interpreting the Fair Labor Standards Act (“FLSA”). The April 1 proposed rule would revise and clarify the test for when multiple employers (known as “joint employment”) can be held responsible for wages under the FLSA. The notice and full text of the rule can be found here.

DOL Publishes Proposals Interpreting “Regular Rate of Pay” in Overtime Regulations

Under the Fair Labor Standards Act (FLSA), employers must generally pay non-exempt employees overtime at a rate of one and one half times the “regular rate” of pay when they work more than forty hours in a workweek. Overtime cannot be properly calculated unless the employer knows what to include in the regular rate.  As benefits, bonuses, reimbursements and other elements of compensation have evolved, greater ambiguity has developed in determining what is included in and excluded from the regular rate.  On March 29, 2019, the Department of Labor (“DOL”) published a proposal (found here) to clarify and update several regulations that interpret the regular rate of pay requirement.

New FMLA and FLSA Opinion Letters Issued by DOL on Key Topics

On March 14, 2019, the U.S. Department of Labor/Wage and Hour Division continued its practice under the Trump Administration of issuing Opinion letters by releasing three new ones – its first Opinion letters of 2019.  One of the newly-released Opinion letters relates to the Family and Medical Leave Act (“FMLA”), and two of them involve the Fair Labor Standards Act (“FLSA”).

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