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Ninth Circuit States Employers Must Include Cash-in-Lieu of Benefits Payments in Overtime Calculation

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All Employers with Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington Employees

EFFECTIVE

June 2, 2016

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Offering a flexible benefits plan is an oft-cited tool for organizations to improve employee satisfaction, recruitment, and retention.  However, employers should be very careful when designing benefits plans that permit cash-in-lieu of payments, as the City of San Gabriel discovered in a recent case.

Sixth Circuit Sets Standard for Employer Constructive Knowledge of Overtime Hours Worked

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All Employers with Kentucky, Michigan, Ohio and Tennessee Employees

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May 19, 2016

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The Sixth Circuit recently stated in Craig v. Bridges Bros. Trucking LLC. that an employer has constructive knowledge of an employee working overtime if it would have discovered the overtime by “exercising reasonable diligence.”  The plaintiff, Donna Craig, was a bookkeeper for Bridges who processed payroll, including her own compensation.  Craig frequently worked over 40 hour weeks and recorded her hours worked in time sheets, including overtime.  However, Bridges only paid Craig overtime once.  Craig alleged that Bridges told her she was not eligible for overtime.  On the other hand, Bridges argued that Craig should have known she was eligible for overtime, and that the company was unaware that Craig worked overtime.

Fifth Circuit Affirms Employers Cannot Withhold Optional Expenses from Credit Card Tips

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All Employers with Louisiana, Mississippi, and Texas Employees

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June 14, 2016

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Generally in the Fifth Circuit, employers can pay employees, who earn tips, less than the minimum wage as long as the employee receives enough in tips to make up the difference.  If not, the employer must make up the difference to ensure the minimum wage is met.  Though the rule seems simple, the complexity of tip credits—including situations such as when tips are shared—can get employers in trouble.  The Fifth Circuit recently highlighted another danger zone, stating that employers cannot hold back portions of credit card tips to pay for optional expenses.

Oregon’s New Requirements for Pay Stubs, Time Records and Wage Notices

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All Employers with Oregon Employees

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January 1, 2017

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Oregon passed a bill designed to increase employer transparency in wages and payroll records.  Effective January 1, 2017, SB 1857 provides new regulations for: (1) the type of information employers must include on itemized wage statements; (2) when employees can view their payroll records; and (3) prevailing wage rates paid to employees working on public works projects.  The new regulation also provides the Oregon Bureau of Labor and Industries (“BOLI”) with increased enforcement funding derived from the Wage Security Fund to investigate and enforce wage claims.

July Updates

Workplace Posting Deadlines for July 1, 2016

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Varies; See Below

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July 1, 2016

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A number of minimum wage and/or specific paid sick leave ordinances go into effect in July, just one week away. Employers should check the table below for some imminent deadlines for workplace postings.

Ninth Circuit States Federal Rounding Regulation Does Not Require Employees to Gain or Break Even

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All Alaska, Arizona, California, Hawaii, Idaho,
Montana, Nevada, Oregon, and Washington Employers

EFFECTIVE

May 2, 2016

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The Ninth Circuit Court of Appeals stated in Corbin v. Time Warner Entertainment Advance/Newhouse Partnership (“TWEAN”) that the federal rounding regulation for timekeeping, versus actual time worked, does not require employees to gain or break even over each pay period.  Rather, the regulation is intended to calculate wages such that they average out over the long term.  In Corbin, an employee argued that he had wrongfully been deducted minutes of compensable time as a result of the rounding system.

New Federal Overtime Rules Mean Changes to Classification of Exempt Workers in All States

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All Employers

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December 1, 2016

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The U.S. Department of Labor (“DOL”) recently released the long-awaited Final Rule (“Rule”) changing overtime exemption requirements under the Fair Labor Standards Act (“FLSA”) affecting all states.  Employers need to review employee classifications for possible changes in preparation of the December 1, 2016 deadline.

U.S. Department of Labor Sweeps West Coast Fast Food Businesses for Pay Compliance

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All West Coast Employers Owning a Fast Food Franchise

EFFECTIVE

Immediately

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Investigators from the U.S. Department of Labor (DOL)’s Wage and Hour Division are sweeping fast food establishments on the west coast to ensure that proper minimum wage and overtime regulations are being observed. This investigation continues to focus on establishments located in California, Oregon and Washington.

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California Enacts an Increase in Piece-Rate Worker Compensation, with Retroactive Repercussions for Resolving Back Wage Claims Without Litigation

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All California Employers who Employ Piece-Rate Employees

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January 1, 2016

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On October 10, 2015, Gov. Brown signed AB 1513 into law, adding Section 226.2 to the California Labor Code.  This legislation is a response to prior court rulings related to required compensation for mandated breaks and other nonproductive time. Specifically, the bill sets forth minimum compensation requirements for rest and recovery periods and other nonproductive time for piece-rate workers, in addition to and separate from their established piece rates.  Each type of compensation must also be documented on an employee’s paystub.  Additionally, employers who have not been paying piece-workers for this additional time have the opportunity to resolve back claims without litigation.  This statute will become effective on January 1, 2016, but will have retroactive repercussions for wages earned as of July 1, 2012.

This information applies to all companies who employ piece-rate workers in California.  Examples of employees who are compensated as piece-rate workers include, but are not limited to, those who may do installation work, closing financial transactions when paid a flat rate, agricultural work, manufacturing work, logistics work when a piece rate applies to drivers’ deliveries, etc.

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