FLSA

FLSA lawsuits on the rise

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arrow-riseStatistics released earlier this month by the Administrative Office of the U.S. Courts show an 8.8% increase in the number of Fair Labor Standards Act (“FLSA”) cases in the year ending in September 2014 as compared to the prior year.

This dramatic increase is the result of a variety of factors. First, the law itself has many ambiguities in its terms and definitions. Although the Department of Labor has attempted to reduce ambiguity in its guidance and regulations, many terms and issues are still unresolved and leave open the potential for legal claims. Also, the law is old. Applying a law passed in 1938 to the modern workplace, with drastic advances in technology, can be very difficult and often times leads to confusion. Finally, both employees and the attorneys to whom they may go to challenge a termination are becoming more savvy regarding wage and hour issues. As a result, we are seeing many cases where a terminated employee who comes into an attorney’s office looking to sue for “wrongful termination” walks out with a wage and hour claim – potentially even a class claim.

Employers should continue to review wage and hour practices to make sure that employees are properly classified as exempt or non-exempt and are being paid in accordance with local requirements. In addition, employers with specific concerns about class or collective actions should consider an arbitration program, which would require all claims to be dealt with in arbitration on an individual – not class or collective – basis.

Supreme Court Rules Amazon’s Workers Don’t Have to be Paid for Security Checks

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iStock_000006056297SmallYesterday, the Supreme Court ruled 9-0 (in a rare, labor and employment law unanimous decision) that workers supplied by a staffing agency for positions in Amazon’s warehouses do not have to be paid for time spent in security screening lines, reversing a federal appeals court ruling that found workers should be paid because the screenings were a necessary part of their jobs and benefited their employer. The Supreme Court disagreed. “The security screenings at issue are noncompensable postliminary activities,” the Justices wrote. “The workers were employed not to undergo security screenings, but to retrieve products from warehouse shelves and package them for shipment.”

The case is Integrity Staffing Solutions, Inc v. Jesse Busk and Laurie Castro, U.S. Supreme Court, No. 13-433.

Federal Contractor Alerts

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United States FlagLGBT Discrimination

White House officials announced this week that President Obama intends to sign an executive order banning federal contractors from discriminating against employees based on sexual orientation or gender identity.

Many states and local governments already have laws, applicable to all employers, banning this type of discrimination. Last year, the Senate passed the Employment Non-Discrimination Act that would have prohibited this type of discrimination against all workers in the United States, but the bill stalled in the House.

Obama’s executive order would protect up to sixteen million employees working for employers with federal contracts. In the meantime, federal contractor employers may wish to consider reviewing their non-discrimination and non-retaliation policies to ensure that sexual orientation and gender identity are explicitly covered.

$10.10 Minimum Wage for Employees of Federal Contractors

Seeking to fulfill President Obama’s executive order (issued in February), the Labor Department proposed a rule this week to raise the minimum wage for employees of federal contractors to $10.10 an hour.

The wage increase would benefit about 200,000 workers, an estimate that was not available when the executive order was announced. If enacted, the rate would apply to contracts issued on or after Jan. 1, 2015. The DOL is expected to issue the final rule on October 1, 2014.

A Big (Bad?) Week for Employers Under the FLSA

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overtimeIt was a big week for the Fair Labor Standards Act.

On March 7th, the Supreme Court let stand a decision that the owner, president and CEO of a supermarket chain in New York is personally liable for his company’s failure to make required payments on a FLSA settlement agreement.  The owner argued that to be held personally liable he had to be responsible for the violations (rather than just have general control over corporate operations). However, the Supreme Court refused to hear his arguments against the court of appeals’ decision, which can be interpreted broadly to suggest that an individual may be held personally liable for FLSA violations by virtue of general control of over corporate affairs.

On March 10th, the Supreme Court declined to review an appeals court decision finding that undocumented workers can sue — and recover wages owed — under the FLSA.

Then, on March 13th, President Obama directed the Secretary of Labor to update the FLSA’s overtime exemptions to provide more employees with overtime pay.  Some have speculated that the change will be to significantly raise the minimum weekly salary for an employee to be considered exempt under most exemptions (currently $455/week), but changes could also include rewrites of the job duties tests for the frequently used “white collar exemptions” or other limitations on current exemptions.  It remains to be seen what changes will be proposed by the administration and whether they can be implemented before the end of the President’s term.  We will keep you posted as we learn more.