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Federal DOL Updates: Clarification on the “Joint Employer” Standard, Overtime Calculation in Multi-Week Bonus Periods, and Per-Project Pay for Exempt Salary Threshold

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The U.S. Department of Labor (DOL) published a final rule concerning the joint employer standard, as well as two Fair Labor Standards Act (FLSA) opinion letters providing guidance on specific wage and hour inquiries.  Below are key takeaways from each of these updates.

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Fifth Circuit: Clarity on Highly Compensated Employee Exception to FLSA Overtime Requirements

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August 21, 2019

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In Faludi v. U.S. Shale Solutions, the Fifth Circuit Court of Appeal confirmed that an employee’s guaranteed day rate satisfied the Fair Labor Standard Act’s (FLSA) highly compensated employee (HCE) exemption, even though the employee was only paid twice monthly.  The HCE threshold—which currently requires the employee to be paid more than $100,000 per year and at least $455 a week on a salary or fee basis—only requires that the employee “regularly receive[s]” the predetermined amount on a weekly or less frequent basis.  There is no requirement that the cash amount be calculated on weekly or less basis.

In addition, the Fifth Circuit also stated that the amount the HCE is paid is not required to bear a “reasonable relationship” to the amount actually earned. Employers should take care when setting highly compensated exempt employee pay to ensure compliance with FLSA requirements.

Action Items

  1. Have highly compensated exempt employee pay reviewed for consistency with this ruling.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

December Updates

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This Short List addresses the following topics:
  1. 2020 Minimum Wage Increases for Federal Contractors
  2. Second Circuit: Sexual Harassment vs. Sex Discrimination
  3. Third Circuit: Blue Penciling Noncompete Agreements is Okay
  4. Sixth Circuit: Statute of Limitations Cannot be Shortened for Title VII Cases
  5. Ninth Circuit: Home Care Workers’ Overtime Rule Retroactive Effective Date Applied
  6. Tenth Circuit: FLSA Applies to Workers in Cannabis Industry
  7. California: Calculating Meal and Rest Premiums Clarified
  8. California: Mandatory Service Charges May be Gratuities
  9. Bernalillo County, NM: PTO Start Date Moved Up
  10. New York: Reproductive Health Decisions Protected
  11. New York City, NY: Guidance on National Origin/Immigrant Status-based Discrimination
  12. Oregon: Don’t Retaliate – Even After Termination
  13. Columbia, SC: Criminal and Salary History Inquiries Banned
  14. San Antonio, TX: Paid Sick Leave on Hold – Again

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NLRB Changes Course on Mandatory Arbitration Agreements

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August 14, 2019

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In 2018, in Epic Systems Corp. v. Lewis, the U.S. Supreme Court stated that employers may require employees to sign arbitration agreements with class action waivers. Recently, the National Labor Relations Board (NLRB) took the Epic decision even further.

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Fifth Circuit: Day Rate Can Meet Salary Requirements Under FLSA White Collar Overtime Exemption

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August 21, 2019

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In Faludi v. U.S. Shale Solutions, L.L.C., the U.S. Court of Appeal for the 5th Circuit stated that a guaranteed day rate providing compensation over $455 can meet the Fair Labor Standard Act (FLSA) salary requirements for the white collar overtime exemption. Further, the FLSA’s reasonable relationship test does not apply to the highly compensated exemption.

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DOL Issues Final Rule on Changes to Overtime Exemptions

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January 1, 2020

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The U.S. Department of Labor (DOL) recently issued the final rule updating the salary requirements for overtime exempt classifications. For executive, administrative, professional, and computer professional exemptions, the salary threshold will increase from $455 to $684 per week (equivalent to $35,568 per year). Where state overtime exemptions are more strict, the federal rule will not impact those jurisdictions.

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Maine: Recent Employment Updates

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September 17, 2019

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Maine enacted several new laws before the close of this year’s legislative session; key provisions are summarized below.

Privacy Protections. Employers will be prohibited from requesting applicants’ Social Security numbers, unless used in the context of a pre-employment background screen or substance abuse testing.

Tip Pooling Clarified. Employers may only implement tip pooling among service employees, and provided that they do not violate the Fair Labor Standards Act (FLSA).

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September Updates

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This Short List addresses the following topics:
  1. REMINDER! EEO-1 Component 2 Reporting is Due September 30th
  2. DOL Says DOT Drivers Sleeping in Berths While Off-Duty is Unpaid Time
  3. 2nd Circuit: Collectively Bargained Arbitration is Governed by the Scope of the Agreement
  4. 9th Circuit: The Dynamex Independent Contractor Test Does Not Apply Retroactively – For Now
  5. New Noncompete Restrictions in Maine, New Hampshire, and Rhode Island
  6. Arizona: Mini-COBRA and Bona Fide Associations Updates
  7. California: Hairstyles Soon to Be Protected From Discrimination
  8. Emeryville, CA: Small Independent Restaurant Minimum Wage Hold Repealed
  9. Florida: Unemployment Compensation Protections for Domestic Violence Victims
  10. Indiana: Direct Sellers are Exempt from Minimum Wage Rules
  11. Iowa: Enacts Negligent Hiring Protections for Employers
  12. Louisiana: Electronic Notice to Employees Permitted for Group Health Insurance Plans
  13. Kansas City, MO: Enacts Salary History Inquiry Ban
  14. New Hampshire: Child Labor Hours Restricted
  15. New York: Paid Family Leave Benefit Schedule Update
  16. New York: Whistleblower’s Immigration Status is Protected
  17. Ohio: Motor Carrier Drivers Excluded from Definition of “Employee”
  18. Pittsburgh, PA: Paid Sick Leave is Revived by State Supreme Court
  19. Vermont: Expunged Records Make Criminal Convictions Vanish
  20. Virginia: Updates to Minimum Wage Exemptions and Nondisclosure Agreements
  21. West Virginia: Effect of Expunged Criminal Convictions

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DOL Issues Opinion Letters on Nondiscretionary Bonuses, Overtime Exemption Standards, and Rounding Time Under the FLSA

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July 1, 2019

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The U.S. Department of Labor (DOL) recently announced new opinion letters from the Department’s Wage and Hour Division (WHD) on calculating overtime pay for nondiscretionary bonuses and permissible rounding practices under the Fair Labor Standards Act (FLSA).  Opinion letters are responses from the WHD to submitted queries, are primarily informative in nature, and are published by the WHD to clarify or interpret existing regulations.

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