On April 1, 2019, the Department of Labor proposed a new regulation, and it wasn’t an April Fool’s joke. The new regulation would seek to update the Department’s sixty year old test for determining joint employer relationships under the Fair Labor Standards Act. It is worth noting that this is different from the long running dispute over the joint employer test decided by the National Labor Relations Board as a part of its 2013 Browning-Ferris decision. This new rule would apply to allegations that employers had failed to pay their workers legally obligated wages under the Fair Labor Standards Act. Joint employers would be jointly and severely liable for any ordered back pay.
The Fair Labor Standards Act sets national standards for wage and hour issues related to employees. The law empowers the Department of Labor to set eligibility standards for overtime pay as well as a series of exemptions for it. Employees who qualify for overtime under the law receive time-and-a-half pay for hours worked more than forty hours a week. Time-and-a-half pay is a 50% increase to the employee’s “regular rate of pay.”
Labor issues have been causing headaches in the trucking industry for a long time. The industry seems perpetually short of qualified drivers. Ensuring drivers stay compliant with applicable rules on driving times and record-keeping presents a different set of challenges. On top of that, some companies have caused problems by violating labor laws, refusing to pay labor judgments, and thus undercutting their competition.
The laws and regulations that cover employee pay change with some regularity and can be quite complex. Regulations about overtime and the minimum wage laws have seen a lot of publicity recently, especially as it relates to attempts to raise the minimum wage. One area that does not see a lot of mention in the press are the rules that apply specifically to tipped employees.
Wage and Hour litigation continues to increase across most types of businesses in the United States. The number of cases filed in the US reached an all-time high in 2015. Unsurprisingly, industries with large number of service jobs caused the majority of cases and losses: hotels, restaurants, leisure companies, as well as department stores and supermarkets. The nature of these suits can vary but often involve multiple claims - misclassification of employees, failure to pay or calculate overtime properly, breaking rules on rest periods and meal periods, as well as a host of violations relating to the paying of tipped employees.
A United States District Court Judge in Texas issued a nationwide temporary injunction against the Department of Labor’s new rule implementing a higher minimum salary for overtime exempt employees in November, 2016. The rule had garnered a lot of criticism from businesses worried over the financial costs of either paying workers a higher salary or paying them overtime. Forecasts had put the number of employees affected by the new rule at over four million people.
Last August, the National Labor Relations Board released a major decision in a case in involving the waste management company Browning Ferris Industries, more commonly known as BFI. The case sent shockwaves through the business company as it opened the door for a massive increase in potential liability for companies that use contracted labor.
Now, almost a year later, the impact of the Browning Ferris case continues to work its way through various agencies, a process somewhat complicated by the fractured nature of the United States’ regulation of labor standards.