Following two years of anticipation, after a similar but more aggressive rule was proposed by President Obama’s administration and then squashed by federal courts in Texas, the Department of Labor (DOL) has issued the long-awaited Notice of Proposed Rulemaking that, if enacted, would expand access to overtime pay for certain employees under the Fair Labor Standards Act (FLSA). DOL estimates that this change could expand overtime eligibility for over one million American workers, about 3.7 million fewer than would have been impacted under the Obama proposal. The proposed rule is available here.
Continue Reading DOL Publishes Proposal to Expand Overtime Protections
SCOTUS Upholds Employee Class Action Waivers in Epic Systems
The Supreme Court put to rest years of uncertainty regarding the enforceability of class action waivers for employees when it decided Epic Systems Corp. v. Lewis, 582 U.S. ___ (2018) on May 21. In a 5-4 decision, the majority held that employers do not violate the National Labor Relations Act (NLRA) or the Federal Arbitration Act (FAA) by requiring employees to sign arbitration agreements that waive their rights to bring class action suits. While the Supreme Court’s decision focused on class action waivers in the context of arbitration agreements, its holding could be extrapolated to uphold employee class action waivers included in any agreement between an employer and employee.
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No Tax Deductions for Sexual Harassment Settlements with Non-Disclosure Agreements
Part of Our Series on the Tax Cuts and Jobs Act of 2017
The Tax Cuts & Jobs Act of 2017 adds a new provision to the Code, section 162(q), that eliminates deductions for settlement payments related to sexual harassment or sexual abuse “if such settlement or payment is subject to a nondisclosure requirement.”
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DOL Issues Guidance on Its Broad View of Joint Employment
On January 20, the Department of Labor’s Wage and Hour Division (WHD) issued new guidance on joint employment under the Fair Labor Standards Act (FLSA). The guidance marks the third time in recent years that WHD has stressed the broad definition of “employment” under the FLSA, following June 2014 guidance on joint employment in the home health care industry and July 2015 guidance on misclassification of employees as independent contractors. WHD’s consistent focus reiterates that the agency believes that many workers are classified incorrectly and will focus its enforcement activity on these areas.
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DOL Proposes to Expand Overtime Protection
The Department of Labor has proposed a rule (available here) that would significantly increase the minimum salary threshold required to qualify for the FLSA’s so-called “white collar” exemptions for executive, administrative, and professional employees. The finalized rule is expected to take effect in 2016.
The current salary threshold, set in 2004, is $455 per
Update on Final Rule for the Family Medical Leave Act
On March 26, 2015—just one day before the Final Rule for the Family Medical Leave Act (“FMLA”) was to take effect—a federal court in Texas blocked the Final Rule’s application to the states of Texas, Arkansas, Louisiana, and Nebraska, pending a full determination of the issue on the merits in Texas v. United States.
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Supreme Court Makes New Rule in Analyzing Pregnancy Discrimination Act
The Supreme Court held on March 25, 2015 in Young v. UPS that a plaintiff alleging pregnancy discrimination based upon the denial of an accommodation may proceed under the familiar McDonnell Douglas framework generally applied to Title VII discrimination claims. The Court’s decision, which resulted in a remand to the Fourth Circuit, surprised many observers in rejecting the arguments set forth by both parties in the case and instead setting forth a new rule for applying the Pregnancy Discrimination Act (“PDA”).
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FMLA Protections for Same-Sex Spouses
Under a Final Rule recently adopted by the Department of Labor (“DOL”), legally married same-sex couples will be included in the definition of “spouse” under the Family and Medical Leave Act (“FMLA”) and will be eligible to use FMLA leave to care for their spouse or family member, regardless of whether their marriage would be recognized in the state where they live. The Rule is effective March 27, 2015, although at least one state Attorney General has filed an action seeking to enjoin implementation of the Rule.
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Individual Arbitration Agreements Held to Preclude Class Actions under FLSA
In two closely watched cases, the Second Circuit has ruled that the Fair Labor Standards Act (“FLSA”) does not preclude the waiver of class action claims (known technically as “collective actions” under the FLSA). In decisions issued on August 9th and 12th, the Second Circuit reversed lower court rulings that had refused to enforce individual arbitration agreements signed by the plaintiffs. Instead, the appeals court sent the cases back to the district courts with instructions to compel the plaintiffs to honor their agreements with their employers and to submit their FLSA overtime disputes to separate, individual arbitration proceedings.
Following the Supreme Court’s recent decision in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), the Second Circuit in Sutherland v. Ernst & Young, case no. 12-cv-304, rejected the plaintiff’s arguments that the FLSA contained a “contrary congressional command” barring waivers of class arbitration, and, further, that the plaintiff could not “effectively vindicate” her rights in an individual arbitration, inasmuch as such a proceeding would be “prohibitively expensive.” In Raniere et al. v. Citigroup Inc. et al., case no. 11-cv-5213, the Second Circuit issued the same decision on the same basis.
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DOL Moves Forward with Disability Hiring Rules for Government Contractors
On July 31st, the Office of Federal Contract Compliance Programs (“OFCCP”) of the Department of Labor submitted to the Office of Management and Budget (“OMB”) a final rule revising federal regulations regarding affirmative action for individuals with disabilities by covered federal contractors and subcontractors. If adopted, the regulations would mark the first time the federal