Wage and Hour

AB 5 and AB 71: CA Legislature Dukes It Out Over Dynamex and Borello

The battle between Dynamex and Borello continues. Two competing bills – Assembly Bill 5 (“AB 5”) and Assembly Bill 71 (“AB 71”) – each seek to codify the respective worker classification tests. On May 29, 2019, the California State Assembly overwhelmingly passed AB 5, a bill seeking to codify Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which adopted the three-factor “ABC” test to determine a worker’s classification for wage order claims. Now the bill is headed to the state Senate. Meanwhile, AB 71, a bill seeking to codify S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, has thus far not enjoyed the same success. READ MORE

European Court of Justice: Employers Obligated to Systematically Record Working Time

According to a recent decisions of the European Court of Justice (ECJ) (May 14, 2019 – C‑55/18), the Member States of the EU must oblige employers to systematically record the working time of their employees. Only in this way can it be ensured and enforced that the working time rules are observed and that the intended health protection of the employees is guaranteed. READ MORE

Ninth Circuit “Cleans House” in Vazquez v. Jan-Pro Decision by Holding ABC Test Applies Retroactively and Opining on Its Effect on Franchisors

On May 2, 2019, the Ninth Circuit in Vazquez v. Jan-Pro Franchising Int’l, Inc. held that the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court applied retroactively. Dynamex adopted the “ABC” test for independent contractor classification for claims arising under California’s Wage Orders. For those claims, an employer must show that all three prongs of the ABC test are met to justify independent contractor status. For information on Dynamex’s adoption of the ABC test, read our prior coverage here. READ MORE

District Court Orders Employers to Submit Component 2 Data by September 30, 2019

The EEOC has been ordered to collect employers’ EEO-1 Component 2 pay data by September 30, 2019.  The D.C. District Court issued the order after finding back in March 2019 that Office of Management and Budget (OMB’s) decision to stay the collection of Component 2 pay data lacked the reasoned explanation required by the Administrative Procedure Act.  See our prior blog posts here, here, and here about National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458 (TSC) (D.D.C.).  Since then the court has been critical of the EEOC’s compliance with its order, and held a status conference and a hearing in March and April. READ MORE

Tip-ping the Scales: New Challenge to the DOL’s Revised Tip Credit Rule

As was reported late last year, the Department of Labor (“DOL”) in 2018 published an Opinion Letter (FLSA2018-27), effectively rescinding the agency’s 80/20 tip credit rule. In general, the tip credit rule permits employers in tip-producing industries, such as the restaurant industry, to compensate employees at a minimum rate of $2.13 per hour, and to take a credit against the tips an employee receives. An employer is additionally responsible for the remainder of an employee’s wages, if any, between what the employee earned in wages and tips combined, and the federal minimum wage. READ MORE

EEOC’s Revised Pay Data Collection Rule is Back in Force

Uncertainty continues for the EEOC’s attempt to expand the collection of employers’ pay data. Last Monday, the D.C. District Court in National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458 (TSC) (D.D.C. Mar. 4, 2019), reinstated the EEOC’s revised EEO-1 form that increases employers’ obligation to collect and submit pay data. READ MORE

Money for Nothing? On-Call Checks For Free: California Court Says Employers Must Pay Employees For Certain On-Call Scheduling Requirements, Even If Employees Are Not Called Into Work

A California Court of Appeal recently issued an order in Ward v. Tilly’s, Inc. finding that certain on-call scheduling practices trigger “reporting time pay” requirements even when the employee does not actually come into the work site. READ MORE

2019 Federal Wage and Hour Updates: The DOL Tackles Potential OT Violations and Ministerial Exceptions Under the FLSA

On December 21, 2018, the Department of Labor issued two opinion letters regarding the Fair Labor Standards Act (“FLSA”). The first opinion letter explains that an employer failed to comply with the FLSA’s overtime requirements when it designated a standard regular rate of pay for overtime purposes and the actual regular rate of pay exceeded that amount. The second opinion letter found that certain members of a religious organization were not employees under the FLSA, but, even if considered employees, qualified for the ministerial exception. This blog post explores both letters. READ MORE

What We May See from the California Supreme Court in 2019

2018 saw some major developments in employment law, particularly in California. The California Supreme Court embraced the ABC test for independent contractors in Dynamex, and rejected the de minimis doctrine for Labor Code claims in Troester. While 2019 has already brought legislative changes through the #metoo laws effective January 1, attention should also be on cases before the California Supreme Court. These cases may present new challenges for all employers, but particularly for media companies and employers doing business across state lines. The Court’s decisions in these cases have the potential to increase employers’ exposure to liability. We highlight some such cases here. READ MORE

Making a List and Checking It Twice – Key Employment Considerations For The New Year

You may be asking yourself: How is it already almost 2019?! With the New Year fast approaching, for those employment law enthusiasts out there, here are some legal issues that you want to keep in mind as you look back on 2018 and forward to 2019:

1. Compensation

Year-End Bonuses: Employers distributing holiday bonuses, holiday gift cards, year-end merit bonuses, and other types of compensation to nonexempt employees should consider whether the compensation must be included in a nonexempt employee’s “regular rate” of pay when calculating overtime. The Code of Federal Regulations carves out some specific types of pay that need not be included in an employee’s regular rate of pay. For example, Section 778.211 excludes purely discretionary bonuses and section 778.212 excludes gifts for Christmas and other special occasions.  So, an employer giving employees gift cards for the holidays or other special occasions is not required to incorporate the value of those gift cards into an employee’s regular rate of pay as long as the amounts “are not measured by or dependent on hours worked, production, or efficiency.” See 29 C.F.R. § 778.212(a); 29 U.S.C.A. § 207.

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