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”).
On March 7, 2019, the Department of Labor (“DOL”) published a long-awaited proposal for revising the regulations relating to the white-collar exemptions from overtime and minimum wage under the Fair Labor Standards Act (“FLSA”). In the Notice of Proposed Rulemaking (“NPRM”), DOL has proposed increasing the threshold salary amount for certain white-collar exemptions from its current $455 per week (or $23,660 per year) to $679 per week, or ($35,308 per year). In 2015, DOL had proposed increasing this threshold to over $47,000 per year ($913 per week). As we reported here, that proposal was blocked by a federal court in Texas in late 2016.
On February 25, 2019, the United States Supreme Court vacated a decision previously decided by the full Ninth Circuit because it was filed after Judge Stephen Reinhardt, who authored the opinion, died. In the case, Rizo v. Yovino, the Ninth Circuit held that employers could not rely upon an employee’s prior salary as a “factor other than sex” in defending against a claim under the Equal Pay Act. We discussed the Ninth Circuit’s decision here. Notably, the Ninth Circuit was the only federal circuit court to decide that employers could never rely upon salary history as a factor other than sex. All eleven judges (including Judge Reinhart) in the Ninth Circuit had agreed that prior law should be overturned, and that the employer’s utilization of salary history alone to set salaries was impermissible.
In New Prime, Inc. v. Oliveira, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) does not apply to contracts with independent contractors in the transportation industry. This decision is very important for transportation companies because, to the extent a contract with any transportation worker contains a mandatory arbitration provision, the arbitration provision is not covered by, and is no longer enforceable under, the FAA.
As of January 1, 2019, the minimum wage increased in over 20 states. Employers with workers in Arizona, Colorado, and Florida should note the following rates that are effective January 1:
Arizona – $11.00
Colorado – $11.10
Florida – $8.46
On November 6, 2018, Missouri voters overwhelmingly voted in favor of amending the Missouri Minimum Wage Law (“MMWL”) to increase the state-wide minimum wage. Therefore, effective January 1, 2019, the Missouri minimum wage rate will increase to $8.60 per hour and will keep increasing each successive year until 2023 when the increases will stop at the target minimum wage rate of $12.00 per hour. Employers must begin the process of budgeting for and implementing these changes ahead of the effective date of the first increase. Employers should also be aware of the non-wage-rate related changes that the law implements. However, the wage increases do not apply to “public employers.”
On November 6, 2018, Missouri’s voters approved a medical marijuana ballot initiative, Amendment 2, while rejecting two competing medical marijuana initiatives on the ballot. This constitutional amendment empowers doctors to authorize patients to buy medical marijuana for the treatment of a variety of conditions. It likewise provides that dispensaries may sell marijuana for medicinal purposes. Amendment 2 does not cover recreational use of marijuana, which is currently allowed in nine states. Missouri is the 31st state to legalize medical marijuana. While Amendment 2 authorizes use of marijuana for medicinal purposes, this is not a “free pass” for employees. Amendment 2 does not allow employees to use marijuana while working, on the employer’s premises, or to work while impaired by marijuana use that occurred prior to the employee’s work shift. With that said, the passage of Amendment 2 will likely create multiple issues of varying complexity for Missouri’s employers for years to come, including:
On November 6, 2018, the United States Supreme Court unanimously held (8-0) that the Age Discrimination in Employment Act (“ADEA”) extends to all small state and local government employers, not only public entities with twenty or more employees.
Beginning October 16, 2018, employers with high injury and illness rates can expect more frequent OSHA inspections in connection with the resurrection of the agency’s Site-Specific Targeting (SST) Program. OSHA will use the SST Program to prioritize employer facilities and establishments for health and safety inspections in the coming year.
The Tenth Circuit Court of Appeals recently provided an important reminder to employers about the pitfalls that can occur when attempting to determine whether workers are employees or independent contractors. The court held that individual workers who personally perform janitorial cleaning services could be found to be employees under the Fair Labor Standards Act (“FLSA”), even if those workers have formed corporate entities and entered into franchise agreements with a franchisor See Acosta v. Jani-King of Okla., Inc., Case No. 17-6179, 2018 WL 4762748 (10th Cir. Oct. 3, 2018). The holding in Jani-King emphasizes the principle that forms and labels are not the deciding factor in determining whether a worker is considered an “employee” for FLSA purposes. Under current law, administrative agencies and/or the courts will make a determination as to “employee” status under the FLSA by examining the totality of the circumstances in light of the factors stated in the “economic realities test.”