Employers beware. A recent case serves as a reminder as we wind down the calendar year that employers should closely review their policies and procedures applying to employees paid on a 100% commission or draw basis. In Stein v. HHGreg Stores, the United States Appeals Court for the Sixth Circuit ruled that, while a retail employer’s draw on future commissions to meet minimum wage requirements was lawful, the company policy requiring repayment for outstanding draws after an employee had been terminated was not.
While we were in the midst of office holiday parties and end of the year celebrations, the Fourth Circuit Court of Appeals came down with two precedential decisions for employers to ponder in the New Year. In Williams v. Genex Services, LLC, the Court analyzed the FLSA’s learned professional exemption, while in Calderon v. GEICO General Insurance Co., the Court analyzed the FLSA’s administrative function exemption.
The Eleventh Circuit recently joined the Second Circuit in adopting the employer-friendly “primary beneficiary” test to determine whether unpaid interns are properly classified as employees under the FLSA. The Second Circuit’s June decision in Glatt v. Fox Searchlight Pictures, Inc. struck the first blow in this area, and the Eleventh Circuit’s recent decision in Schumann v. Collier Anesthesia, P.A. provides employers with additional momentum in deterring future unpaid intern lawsuits.
Allen Smith at SHRM Online continues his coverage of the DOL’s proposed overtime rules in this latest article, “Overtime Proposed Rule Will Result in ‘Hard Choices’ for Some Employers,” which looks at the difficult choices employers are facing in deciding how best to cope with the expected new rules.
The article does an excellent job of addressing how the new rules will impact employers differently, but that each employer should be taking steps now to assess the rules’ impact and plan accordingly. As I state in the article: “The proposed rule affects different employers in different ways,” and its effect “will depend on factors such as the strategic goals of the organization, its business model, the type of industry and regions in which they operate, the overall competitive landscape, the organization’s culture, and so on. After running that analysis, each employer will decide how, if at all, they will change their pay practices to satisfy the dictates of the new rule.”
For example, employers with workforces that almost never work overtime will not be impacted significantly or even minimally by any required reclassification. Other employers, such as employers in the retail or hospitality industries, will feel the rule’s impact more acutely since they currently employ many exempt workers who fall below the contemplated salary threshold. They will have to determine which pay practice changes (e.g. increase salary, reduce hours, additional staffing, etc.) align best with their strategic goals and account for these other factors and proceed from there.
One of the most disconcerting things about the DOL’s proposed rule release was that it failed to provide any real clarity on its stance regarding the job duties test. Rather than set forth concrete proposed changes for comment, the DOL asked a series of questions on whether it should in fact modify the job duties test, and if so, how. The DOL took this approach even though it just finished an extensive “listening tour” with relevant stakeholders asking these very same questions. And as I said to Allen Smith of SHRM Online, who quoted me in an article entitled “DOL Questions About Duties Tests Should Concern Employers,” while the DOL provided us with the opportunity to “respond” to these questions over the next couple of months, it can thereafter decide to put any changes to the job duties test into the final rule without allowing us to formally comment on them. In other words, the DOL appears to be short-circuiting the notice and comment period requirement. Perhaps the DOL will not change the job duties test after all, or at least not yet, but I certainly came away with an uneasy feeling after finishing my reading of the proposed rule. Stay tuned…
The Department of Labor has released its long-awaited notice of proposed rulemaking updating the Fair Labor Standards Act’s white collar overtime exemptions. The DOL released the proposed rule on Tuesday morning and will invite interested parties to submit written comments over the next two months. The revisions would more than double the minimum salary threshold for the law’s white collar exemptions, which the White House expects would immediately entitle approximately five million additional workers to overtime pay, and they also provide for future automatic increases. We take a look at the proposal and its potential implications below.
So it’s going to snow a lot today and tomorrow. A lot. A potential blizzard. Some say this could be one of the biggest snowstorms ever to hit the East Coast. More than a foot of snow is expected in Manhattan, up to two feet out on Long Island, and maybe more than two feet in and around Boston. This means closed schools, downed power lines, impassable streets, and even travel bans, which also means that employers will have to decide whether to close their doors early this evening and whether to open up their doors tomorrow (and/or Wednesday). As we’ve written about before, in making those decisions, employers must account for their obligations to comply with federal, state, and local wage and hour laws.
Written by Michael Arnold
Last month Condé Nast decided to end its storied internship program. The termination came on the heels of a multi-million dollar lawsuit filed by two former interns alleging that Condé Nast failed to pay them at least the minimum wage and overtime. That lawsuit, along with similar lawsuits against others in the publishing and entertainment industries, appeared to open a floodgate of intern class action litigation across New York City (and elsewhere). The fear for many students (HS, undergrad and graduate alike) craving a coveted spot in some of the nation’s top companies or merely just trying to get their foot in the door in this troubled economy was that other employers would follow Condé Nast’s lead and end their programs. But a recent Intern Survey conducted by the Society for Human Resource Management shows that these fears are mostly unfounded.
Written by Jillian Collins
While the Boston Red Sox celebrate their first World Series clinched at Fenway Park in 95 years, two teams that missed the playoffs are making headlines for their pay off the field. The U.S. Department of Labor’s crackdown on classification of unpaid interns has spread to Major League Baseball, with the DOL launching an investigation this month into the San Francisco Giants and the Miami Marlins. Continue Reading Crying Foul: DOL Investigates Two Major League Baseball Team’s Pay Practices