Be Careful If You Want to Use Unpaid Interns this Summer

Summer is upon us. The time of year that many of us are pressured to take on an employee’s son, daughter, niece or nephew “just for the experience” of working in the real world. What could go wrong? The kid gets some experience and you get some free labor. A win-win, right? You might want to slow down.

Many businesses run afoul of federal law by failing to pay minimum wage and overtime pay to unpaid interns whom the law considers to actually be employees. Federal courts have historically used the “primary beneficiary test” to determine whether an unpaid Summer worker was an employee under the Fair Labor Standards Act (FLSA). Under this test, courts examine the economic realities of the worker-employer relationship to determine which party is the primary beneficiary of the relationship. If the unpaid worker is not the primary beneficiary, they should probably be classified as an employee. Continue reading “Be Careful If You Want to Use Unpaid Interns this Summer” →

The Perfect Storm: A Convergence of Unpaid Rest Breaks, the FLSA and the FMLA

As most HR professionals are aware, the Fair Labor Standards Act (FLSA) requires that non-exempt employee be paid for rest breaks of up to 20 minutes. Contrary to the common misperception that the Act requires employers to allow two paid breaks per shift, in most industries, it actually does not mandate any certain minimum or maximum number of paid breaks per shift. beverage break breakfast caffeine

Conversely, the Family and Medical Leave Act (FMLA) require employers to allow employees short breaks when certified as necessary by a health care provider. Unless the employer specifies otherwise, FMLA breaks are usually unpaid.

You see the inherent conflict set up between the FLSA (you must pay for short breaks) and the FMLA (FMLA leave is generally not compensable working time). For example, if an employer allows its employees to take three paid, fifteen minute beaks per day, can it not pay an employee for taking one, fifteen minute FMLA-qualified break per day without violating the FMLA or FLSA? Will this constitute retaliation or interference under the FMLA?

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Reminder – FLSA Salary Increase Deadline is Approaching

You may have tried to put it out of your mind, but the thing that we have been dreading is right over the horizon. No, not the Presidential election. (Does anyone else miss the days of Jimmy Carter?) I am talking about the deadline for employers to increase the minimum salary for exempt employees announced by the Department of Labor in May. December 1, 2016 is the current deadline to increase the minimum salary to $913 per week, $47,476 per year. Since the deadline falls on a Thursday, employers will probably actually implement the new salary level in late November. Continue reading “Reminder – FLSA Salary Increase Deadline is Approaching” →

The EEOC, DOL and OFCCP Announce Deadlines for Final Rules

I – The EEOC says that it will issue its final “wellness” rules by February, 2016

The Equal Employment Opportunity Commission (EEOC) indicated in its November regulatory agenda that it plans to finalize two rules governing employer wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Non-Discrimination Act (GINA) by February 2016.

As you may recall, one of these proposed rules will amend the EEOC’s ADA regulations to address the interaction between Title I of the ADA and the financial inducements that are commonly contained in wellness programs offered through employer health plans. This will have the effect of limiting how much of a financial benefit employers can offer to their employees to join such wellness programs. Continue reading “The EEOC, DOL and OFCCP Announce Deadlines for Final Rules” →

FLSA Violations Can Land You in Jail

Everyone knows that the FLSA requires that employees be paid overtime when they work over 40 hours in a work week and that the Act provides for penalties and attorney’s fees when an employer fails to do so. However, many employers are not aware that they can also do jail time for violating the FLSA. Continue reading “FLSA Violations Can Land You in Jail” →

Get Ready the Minimum Required Salary for an Exempt Employee is About to Double

On June 30, 2015 the Department of Labor issued its long-anticipated Notice of Proposed Rulemaking (NPR) updating the Fair Labor Standards Act (FLSA) regulations governing white-collar employees.

The FLSA requires that all non-exempt employees be paid time and a half their regular rate of pay for all hours worked over forty in a work week. The FLSA provides specific exemptions to this overtime requirement for executive, administrative, professional, outside sales and some computer employees. The two key components of the exemptions are that: 1. the employee must be paid on a salary basis of at least a minimum amount, and 2. the employee’s job must generally be comprised of exempt duties. Thus, we have traditionally referred to the “salary” and “duties” tests when discussing white collar exemptions. Both tests must generally be satisfied in order for an employee to be classified as exempt. Continue reading “Get Ready the Minimum Required Salary for an Exempt Employee is About to Double” →

The Department of Labor Narrows The Independent Contractor Exemption Classification

A recent DOL Interpretation will probably entitle more workers to benefits and overtime compensation as employees. David Weil, the Administrator of the Wage and Hour Division of the U.S. Department of Labor (DOL) issued an Interpretation last week regarding the proper analysis to be used in determining whether a worker is an independent contractor or an employee. See Administrator’s Interpretation 2015-1:The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors. Continue reading “The Department of Labor Narrows The Independent Contractor Exemption Classification” →

DOL Issues Rule Increasing White Collar Minimum Salary Requirement

Today, the Department of Labor issued the long-awaited proposed rules re-defining the requirements of white collar exemptions under the FLSA. The key provision of the proposed rule increases the minimum salary required in order for one to qualify as exempt from overtime payments from approximately $23,660.00 per year to approximately $50,440.00 per year. This is a dramatic increase that is assured to cause many employees to lose their status as exempt. The DOL estimates that as many as 40% of salaried employees will no longer be eligible for the exemption. Continue reading “DOL Issues Rule Increasing White Collar Minimum Salary Requirement” →

Supreme Court Clarifies Employer Obligations to Pay for Time Spent Donning and Doffing Clothes

On January 27, 2014, the United States Supreme Court unanimously affirmed a U.S. Court of Appeals decision in Sandifer v. United States Steel Corp., No. 12-417, 2014 WL 273241 (Jan. 27, 2014) holding that steelworkers’ donning and doffing of certain items of required protective gear constituted “changing clothes” within the meaning of section 203(o) of the Fair Labor Standards Act (FLSA). Since the time spent by the steelworkers donning and doffing their protective gear was specifically excluded from working time under a collective bargaining agreement, the Supreme Court held that the time was not compensable by operation of section 203(o). Continue reading “Supreme Court Clarifies Employer Obligations to Pay for Time Spent Donning and Doffing Clothes” →

Exercise Caution When Granting Year-End Bonuses

Holiday-Bonus-982x735 The Fair Labor Standards Act requires that non-exempt employees be paid at least one and half times their regular rate of pay for all hours worked in a workweek in excess of forty. Whether or not bonuses are included when making the overtime calculation can be a complicated and costly issue. Generally, bonuses are excludable from the regular rate only if the bonus fits into a specific statutory exclusion. The FLSA requires that all of the following elements be met in order for a bonus to not be included in the employee’s regular rate:

The employer must retain discretion as to whether the payment will be made;
The employer must retain discretion as to the amount of the payment;
The employer must retain discretion as to the payment of the bonus until near the end of the period which it covers; and
The bonus must not be paid pursuant to any prior contract, agreement or promise causing the employee to expect such bonus payments.

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