Fair Labor Standards Act

When:  Thursday, September 14, 2017    8:00 a.m. – 4:30 p.m.

Where:  New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce.  Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier

View the full briefing agenda and workshop descriptions here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions.  Seating is limited.

Our colleague Michael S. Kun, national Chairperson of the Wage and Hour practice group at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the financial services industry: “Stop! Texas Federal Court Enjoins New FLSA Overtime Rules.”

Following is an excerpt:

The injunction could leave employers in a state of limbo for weeks, months and perhaps longer as injunctions often do not resolve cases and, instead, lead to lengthy appeals. Here, though, the injunction could spell the quick death to the new rules should the Department choose not to appeal the decision in light of the impending Donald Trump presidency. We will continue to monitor this matter as it develops.

To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes. And, depending on the final resolution of this issue, it is possible they may never need to implement them.

The last-minute injunction puts some employers in a difficult position, though — those that already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016. …

Read the full post here.

Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the financial services industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”

Following is an excerpt:

As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new overtime exemption rule that would have more than doubled the current salary threshold for the executive, administrative, and professional exemptions and was scheduled to take effect on December 1, 2016. To the extent employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will, at the very least, appear to allow many employers to postpone those changes—but likely not in the case of employees who work in New York State.

On October 19, 2016, the New York State Department of Labor (“NYSDOL”) announced proposed amendments to the state’s minimum wage orders (“Proposed Amendments”) to increase the salary basis threshold for executive and administrative employees under the state’s wage and hour laws (New York does not impose a minimum salary threshold for exempt “professional” employees).  The current salary threshold for the administrative and executive exemptions under New York law is $675 per week ($35,100 annually) throughout the state.  The NYSDOL has proposed the following increases to New York’s salary threshold for the executive and administrative exemptions …

Read the full post here.

Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the financial services industry: “NLRB Argues ‘Misclassification’ as an Independent Contractor Is Unfair Labor Practice.”

Following is an excerpt:

In a further incursion into the area of the gig and new age economy, the Regional Director for the National Labor Relations Board’s Los Angeles office has issued an unfair labor practice complaint alleging that it is a violation of the National Labor Relations Act (the “Act”) for an employer to misclassify an employee as an independent contractor. …

The issuance of the complaint in this case comes less than a month after the Board’s General Counsel issued General Counsel Memorandum 16-01, Mandatory Submissions to Advice, identifying the types of cases that reflected “matters that involve General Counsel initiatives and/or priority areas of the law and labor policy.”  Among the top priorities are “Cases involving the employment status of workers in the on-demand economy,” and “Cases involving the question of whether the misclassification of employees as independent contractors,” which as reflected in the IBT complaint the General Counsel contends violates Section 8(a)(1) of the Act.

Read the full post here.

The DOL has been steadfast in expanding worker coverage under the Fair Labor Standards Act (“FLSA”), and the financial services industry, like most, will be affected. The DOL’s initiative began on July 6, 2015, when it published a Notice of Proposed Rulemaking (“NPR”) that is expected to extend overtime protection to almost five million white-collar workers who are currently not entitled to overtime pay because they are classified as exempt. The NPR, which is expected to be finalized in July 2016, will likely more than double the salary threshold to qualify for FLSA exemption under the executive, administrative, or professional exemption, increasing it to $970 per week, or $50,440 per year. In addition, the highly compensated employee exemption, which, if satisfied, lightens the duties requirements of the executive, administrative, or professional exemptions, is expected to increase from $100,000 to $122,148. Once in place, these salary threshold requirements are expected to increase annually to adjust for inflation, which has not previously been the case.

Less than two weeks later, on July 15, 2015, the DOL issued Administrator’s Interpretation No. 2015-1 on independent contractor misclassification, promoting the now famous “tagline” that most workers are employees—and not independent contractors—who are, therefore, covered by the FLSA. To support its position, the DOL redefined its long-standing “economic realities” test, which courts rely upon when determining whether there exists an employer-employee relationship. The traditional economic realities test includes the following non-dispositive criteria: (i) the degree of control exercised by the business over the worker; (ii) the worker’s opportunity for profit or loss; (iii) the degree of skill and independent initiative required to perform the work; (iv) the permanence or duration of the working relationship; (v) the extent to which the work is an integral part of the business; and (vi) the worker’s investment in his or her own business. In this Administrator’s Interpretation, however, the DOL significantly revised this objective test by radically redefining the factors to promote “employee” status.

Not resting on its already significant initiative, on January 20, 2016, the DOL issued Administrator’s Interpretation No. 2016-1 (“new Interpretation”) concerning joint-employment liability. The new Interpretation provides that businesses that utilize employees of third-party employers may be considered joint employers of those workers and therefore covered by the FLSA. Also, the new Interpretation states that joint employment often involves a “larger and more established” employer “with a greater ability to implement policy or systemic changes to ensure compliance.” The DOL explains that investigators may hold the larger company responsible for “financial recovery” and “future compliance.” The larger companies are undoubtedly more important to the DOL as they are the deep-pocket joint employer that can be held responsible for the entire amount of back wages owed.

The new Interpretation explains that there are two types of joint employment on which the DOL will focus: horizontal and vertical relationships. Horizontal joint employment exists when an employee has employment relationships with two or more related or commonly owned businesses. In assessing horizontal joint employment, the DOL focuses on the relationship between the businesses, not the workers. The DOL explains that a horizontal joint-employment relationship may exist in situations when: (i) employers share an employee’s services, (ii) one employer acts in the interest of the other employer in relation to the employee, or (iii) one employer controls the other employer and therefore shares control of the other employer.

Vertical joint employment exists when a worker provides services to one company while being formally employed by a third party, such as a labor supplier. To determine whether joint employment exists, the DOL analyzes whether an employee of one business, the labor supplier, is economically dependent on another business that utilizes the labor supplier’s employee.

In light of the DOL’s ongoing initiative to increase coverage under the FLSA, businesses should carefully consider their relationships with independent contractors and their labor supply workforce. Businesses should closely monitor their relationships with independent contractors and be disciplined in limiting their engagement with contractors to discrete projects of a finite duration. In addition, businesses should avoid using contractors as headcount replacement. Doing so places firms at risk for claims by individuals that they were misclassified and entitled to pay and benefits.

With respect to using a labor supplier’s employees, businesses should effectively “partner” with the labor supplier. As part of any services agreement, labor suppliers should explicitly represent that they are treating their workers as employees, and not as independent contractors. Businesses should also have the right to review the labor supplier’s employment records for the workers it supplies to confirm FLSA compliance. In addition, financial services firms may want to pay careful attention to the contracts between them and the labor suppliers, confirming that such contracts contain: (i) appropriate forum and choice of law provisions, (ii) representations regarding wage and hour and other legal practices, and (iii) an explicit indemnification by the labor supplier for any liability arising from a joint-employment relationship.

A version of this article originally appeared in the Take 5 newsletter “Five Employment Law Compliance Topics of Interest to Financial Services Industry Employers.”

Employment Law This Week – Epstein Becker Green’s new video program – features an interview with attorney John Fullerton, a founding contributor to this blog.

Mr. Fullerton discusses the lack of clarity on what constitutes a whistleblower. Marketing firm Neo@Ogilvy has decided not to appeal to the U.S. Supreme Court in a case that would have tested the definition of a whistleblower under the Dodd-Frank Act. At issue is whether an employee can be eligible for anti-retaliation protection under the Dodd-Frank Act even if he or she does not provide information of corporate wrongdoing directly to the SEC. The U.S. Court of Appeals for the Fifth Circuit says “no,” but the Second Circuit disagrees.

Click below to view the episode and also see our earlier post “2nd Circuit Expands Dodd-Frank Anti-Retaliation Protection to Cover Internal Whistleblowing.”

My colleagues Michael S. Kun and Jeffrey H. Ruzal at Epstein Becker Green wrote a Wage and Hour Defense blog post that will be of interest to all financial services employers: “Proposed DOL Rule To Make More White Collar Employees Eligible For Overtime Pay.”Clock

Following is an excerpt:

More than a year after its efforts were first announced, the U.S. Department of Labor (“DOL”) has finally announced its proposed new rule pertaining to overtime. And that rule, if implemented, will result in a great many “white collar” employees previously treated as exempt becoming eligible for overtime pay for work performed beyond 40 hours in a workweek – or receiving salary increases in order that their exempt status will continue.

Read the full original post here.

By Allen B. Roberts, Douglas Weiner

While most attention in the legislative and political process leading to enactment of the Patient Protection and Affordable Care Act (“PPACA”) focused on the significant impact on the delivery of health care, employers need to be aware, also, of amendments to the Fair Labor Standards Act (“FLSA”). The FLSA amendments impose certain employer responsibilities in providing health care benefits, confer whistleblower protections and authorize the U.S. Department of Labor (“DOL”) to undertake increased enforcement related to health care.

While other features of the FLSA amendments are addressed in our client alert, “Health Care Reform Legislation Amends the Fair Labor Standards Act to Give the U.S. Department of Labor Increased Enforcement Authority over Health Care,” here is a summary of whistleblower protections:

Continue Reading New Healthcare Legislation Brings FLSA Whistleblower Protections