For months, employers have been preparing for the U.S. Department of Labor’s (DOL) new Fair Labor Standards Act “white-collar” overtime exemption regulations, which were to take effect on December 1, 2016. Now, in a surprising decision issued on November 22, 2016, a Texas federal court issued a nationwide preliminary injunction blocking the regulations. The Court’s decision means that employers no longer have to comply with the new regulations by December 1.
What happens next remains to be seen — The injunction, which has not yet been appealed by the DOL, creates uncertainty as to the future of the regulations, particularly in light of the new incoming presidential administration. Should the DOL choose not to appeal the decision, or should the injunction be held up on appeal, the injunction could forecast the demise of the regulations.
What does this mean for employers? The answer depends on how far down the path employers have gone to comply with the proposed December 1 changes. To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes. And, depending on the final outcome of this legal battle, it is possible employers may never need to implement them.
Employers who have already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016, are placed in a difficult situation with managing employee expectations and the changed legal landscape. Whether employers can or should reverse salary increases they have already implemented should be discussed carefully with your legal counsel.
For any questions on the status of the enjoined FLSA regulations or for legal guidance as to how to communicate with employees that those announced changes will not go into effect on December 1, 2016, please contact Amanda Lavis at ALavis@Rhoads-Sinon.com
In light of recent changes by the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor (DOL), employers should conduct a compliance check to ensure they are abiding by federal law posting requirements.
On June 2, the EEOC announced that it is more than doubling the fines for employers that violate notice posting provisions of Title VII and other statutes from $210 to $525 per violation. The EEOC said it was adjusting the penalty for inflation, in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. Employers covered by Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act or the Genetic Information Nondiscrimination Act must post notices describing the key provisions of these acts in “prominent and accessible” spots in the workplace, according to the EEOC. The requirement applies to private employers, state and local governments, and educational institutions employing 15 or more individuals, as well as to federal contractors and subcontractors. The “EEO is the Law” poster, prepared by the EEOC, summarizes these laws and is available for free here in English, Arabic, Chinese and Spanish
In May, the DOL issued a new user-friendly Family and Medical Leave Act (FMLA) poster. Employers who are covered by the FMLA are required to display a DOL-prepared poster advising employees and applicants of the major provisions of the Act. Employers are still permitted to display the prior version of the poster (dated February 2013) or may elect to use the new poster (dated April 2016). A copy of the new poster is available for free from the DOL here.
You may recall previous blog posts surrounding lawsuits over some unpaid interns in film. (Don’t worry, this isn’t the kind of sequel where you need to have seen the previous installments). Essentially, a group of interns who worked on the Fox Searchlight Pictures’ “Black Swan” sued Fox Searchlight on the grounds that they should have been paid at least minimum wage under the Fair Labor Standards Act. Back in 2013, the plaintiff’s won. The crux of the suit provided that if employers maintain an unpaid internship program, those interns must be provided training as if in an “educational environment” and, perhaps more importantly, the intern must provide no material benefit to the employer. In other words, in order to remain unpaid, the intern cannot practically function as an assistant to company employees by getting coffee, making copies, and running errands. In our sequel, we reported that in 2015, the United States Court of Appeals for the Second Circuit vacated the “Black Swan” decision, holding that the lower court erred in focusing too much on the above criteria in determining whether an internship can be unpaid and that the current criteria is adopted from old legal precedent and “too rigid.” In our most recent installment, we introduce some new characters. Aulistar Mark worked at Gawker, a New York City based online media company and blog network (famous for blogs such as Lifehacker, Deadspin, and Jezebel), for three months in 2010. Hudson also worked at Gawker, back in 2008. Mark and Hudson, along with two other plaintiffs who have since dropped out of the suit, sued Gawker and its founder Nick Denton in June 2013. According to the complaint, their work included researching and writing stories, which was “central to Gawker’s business model as an Internet publisher.” Plaintiffs, like the Black Swan interns, argued that they should have been paid at least minimum wage under the FLSA. Recently, a New York federal judge Alison J. Nathan ruled in favor of Gawker. First, Hudson’s (and other similar plaintiffs who sought class-action certification) claims were dismissed as time-barred. More importantly, however, Mark’s claims were dismissed. “Mark’s time with [Gawker blog] Kotaku was a bona fide internship in which Mark traded his labor for significant vocational and educational benefits, and these benefits outweighed those received by defendants in the form of Mark’s work and the ability to evaluate him for future employment,” Judge Nathan wrote. Essentially, Mark benefitted from the program at least as much as Gawker. Moreover, Judge Nathan determined that while Mark did similar work done by paid employees, he failed to provide any evidence Gawker used the interns to displace paid employees or that it would’ve hired more paid employees had there been no interns. Further, Mark received credits associated with his work at Gawker. Ultimately, Marks had obtained sufficient benefits to be properly classified as an “intern,” not an “employee,” and was therefore not owed FLSA-based compensation. So what does this mean for employers? Although this case is one small step in the right direction, we nevertheless suggest you tread lightly when it comes to unpaid interns. Particularly if they are not receiving college credit. If you choose to retain unpaid interns, make sure that the interns glean some benefit from the program, and that that benefit is at least as much as yours from their work. That means acting more like an employee, and less like a coffee-courier.
On May 20, 2014, U.S. District Judge John E. Jones III struck down both Pennsylvania’s ban on marriage for same-sex couples, and its prohibition against recognition of same-sex marriages legally entered into in other jurisdictions, on the grounds that such laws violate both the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the United States Constitution. The ruling in Whitewood v. Wolf now permits same-sex couples to marry in Pennsylvania, and recognizes the marriages of already married same-sex couples. Governor Tom Corbett has stated he will not appeal the decision.
With the decision in Whitewood, Pennsylvania now joins eighteen other states and the District of Columbia in allowing same-sex marriage. The Whitewood decision will have a significant impact in employers on a variety of matters, including leave under the Family Medical Leave Act and benefits.
Employers should review their employee benefit plans and handbooks to ensure compliance with the Whitewood decision. If you need assistance in reviewing your plans, handbooks, or policies, or have questions regarding the Whitewood decision, please contact Amanda Lavis.