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Massachusetts: Commission-Only Workers Get Overtime

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May 8, 2019

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In Sullivan v. Sleepy’s LLC, the Massachusetts Supreme Judicial Court recently stated that retail salespeople who are paid entirely in commissions or draws are entitled to separate and additional overtime or Sunday pay. There, employees who worked more than 40 hours in a week and on at least one Sunday, did not receive any additional compensation beyond their daily draw and commissions. Even though the compensation received always equaled or exceed the minimum wage and overtime and Sunday pay rates, the court stated that this was insufficient. Overtime and Sunday pay laws, as well as Department of Labor Standards’ (DLS) opinion letters, supported its interpretation.

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March Updates

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This Short List addresses the following topics:
  1. U.S. Supreme Court Reversed Ninth Circuit Equal Pay Ruling Based on Judge’s Death
  2. Fifth Circuit: Restated Its Position that Title VII Does Not Protect Sexual Orientation
  3. California: Guidance on New Agricultural Overtime Pay Requirements
  4. Alameda, CA: City Minimum Wage Increases to $13.50 in July, Regardless of Employer Size
  5. Florida: Miami Beach Minimum Wage Struck Down
  6. Illinois: $9.25 Minimum Wage by January 2020, With New Possible Penalties
  7. Minneapolis, MN: Minimum Wage Increase Approved
  8. New Jersey: $10 Minimum Wage in July 2019, $15 by 2024
  9. Westchester County, New York: Bans the Box
  10. Portland, Oregon: Prohibits Discrimination Against Atheists and Agnostics
  11. West Virginia: Federal Law Enforcement Pension Freed From State Taxes

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California: Employers Face New Hurdles with Independent Contractor Classifications

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April 30, 2018

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In Dynamex Operations West, Inc. v. Superior Court (Lee), the California Supreme Court created a new test for determining whether a worker is an employee or independent contractor for purposes of wage and hour claims, making it one of the strictest standards in the country. A class action was filed against a delivery service employer who converted its employee drivers to independent contractors in 2004 for economic reasons. The class alleged, in part, that they were misclassified and Dynamex failed to pay overtime, provide itemized wage statements, and reimburse business expenses.

California: State Supreme Court Sets Formula to Calculate Overtime on Flat, Non-Production Bonuses

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March 5, 2018

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In Alvarado v. Dart Container Corp., the California Supreme Court stated that when calculating the per-hour value of a flat, non-production bonus for purposes of overtime, the total compensation must be divided by the number of non-overtime hours the employee actually worked during the pay period.

Connecticut: Overtime for a Fluctuating Work Week Schedule is Calculated Based on State Law

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August 17, 2017

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In Williams v. General Nutrition Centers, Inc., the Connecticut Supreme Court recently stated that employers must calculate overtime for a fluctuating work week (“FWW”) schedule based on state, rather than federal, overtime rules.

There, GNC followed federal rules and divided the employees’ weekly pay by the actual number of hours the employees worked in that week to determine the employees’ regular rate of pay. However, the court stated that Connecticut requires employers to divide weekly pay by the number of hours the employees usually work each week, rather than actual hours.  In following the federal model, the GNC employees would always work over 40 actual hours per week when overtime is involved.  Thus, the number of actual hours would be greater than the usual hours worked, and the resulting calculation for the regular rate of pay would always be lower than if the usual hours were used to calculate rates.

Connecticut employers with FWW schedules should review overtime calculation methods to ensure compliance with the recent ruling.

Action Items

  1. Read the text of Connecticut Supreme Court’s opinion here.
  2. Review overtime calculations for compliance with state overtime rules.
  3. 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.

© 2017 ManagEase, Incorporated.

Oregon: Changes to Manufacturing Overtime Rules (Again)

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August 8, 2017

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Early this year, the Oregon Bureau of Labor and Industries (“BOLI”) published a new interpretation of how employers must calculate overtime hours for employees in a mill, factory, or manufacturing establishment.  This interpretation was swiftly overturned by a county court.  Now, Governor Kate Brown has signed H.B. 3458 into law, which codifies the applicable method to calculate overtime for these employees.

Ninth Circuit: Wage Rates Used for Overtime Hours Cannot Be Lower Than Those Used for Non-Overtime Hours

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March 21, 2017

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In Brunozzi v. Cable Communications, Inc., the Ninth Circuit stated that wage rates cannot be decreased in weeks when overtime is worked, as compared to weeks when no overtime is worked. There, two cable technicians were paid a piece rate per cable system installed, plus a contractually-based production bonus each pay period as part of their regular wages.  When the employer calculated overtime, it reduced the production bonus by the amount of overtime paid for piece rate work, which meant that employees received lower wage rates than when they did not work overtime.

Eleventh Circuit: Commissions Paid Only Apply to the Workweek in Which They Are Earned When Calculating Overtime Exemption Status

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April 13, 2017

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In Frexia v. Prestige Cruise Services, LLC, an employee alleged that his employer violated the FLSA because the employee’s compensation—a weekly fixed salary plus sales-based commission—fell below the overtime exemption threshold for certain weeks. The Eleventh Circuit’s review of the case confirmed that pay for work performed each workweek must be counted for that workweek, rather than counted across a span of several weeks, in order to meet the overtime exemption threshold.

Oregon: Manufacturer Employers Must Count Both Daily and Weekly Overtime

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in the Manufacturing Industry

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January 2017

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Between December 2016 and January 2017, the Oregon Bureau of Labor and Industries (“BOLI”) changed its interpretation of overtime hours for employees in a mill, factory, or manufacturing establishment.  A “manufacturing establishment” is “any place where machinery is used for ‘manufacturing purposes’” under specified circumstances.

Judge Blocks White Collar Overtime Exemption Rule from Taking Effect Nationwide

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November 22, 2016

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Since the U.S. Department of Labor issued the finalized White Collar Overtime Exemption Rule (the “Rule”) in May this year, employers across the country have been preparing to comply with the Rule’s requirement for white collar employees to earn $47,476 annually in order to maintain exemption status rather than being paid overtime.  In an eleventh hour ruling, just days before its effective date of December 1st, a Texas federal judge ordered a preliminary injunction on the Rule, preventing the Rule from going into effect nationally on its slated December 1st start date.  The Rule was expected to result in millions of workers either (a) being re-classified as non-exempt, and therefore entitled to wage and hour protections, including overtime pay; or (b) receiving dramatic salary increases to keep workers classified as exempt.