Bass, Berry & Sims attorney Tim Garrett provided insight for an article outlining the emergency motion filed by 21 states to bar the Fair Labor Standards Act (FLSA) overtime rule, set to take effect December 1, 2016. The new rule will more than double the salary level for those employees classified as exempt from overtime pay from the current level of $23,660 to the new level of $47,476, or $913 per week. In the motion filed this week, the 21 states are challenging the FLSA’s new salary-level test. In the article, Tim states “I do not anticipate that the motion to delay the new salary level will be successful, other than perhaps in a manner specific to the state-plaintiffs.”
Bass, Berry & Sims attorney Tim Garrett discussed the potential delay in implementation of the new overtime rules for an article in Nation’s Restaurant News. A bill that could delay the implementation of the overtime rules by six months cleared the House on September 28, 2016, but the bill faces a potential veto by the President if it progresses pass the Senate. Tim notes that the real battle for the legislation will be whether it can garner the two-thirds vote needed to override the potential veto. “‘I would be surprised,’ Tim said. ‘This is a difficult political point to make it appear as though a senator or congressman is against an increase in pay for the middle class.'”
Bass, Berry & Sims attorney Tim Garrett provided insight on the Department of Labor’s (DOL) overtime pay policy, slated to take effect on December 1, 2016 (for additional background on the DOL policy, read the firm’s blog post, “DOL Announces New Salary Level in Overtime Regulations“). As Tim points out for the article, “‘I’m not saying overtime pay shouldn’t be increased, but this should be done in more responsible manner… The regulations currently don’t recognize some unintended consequences.'” According to Tim, these consequences may include the following:
On July 14, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued a revised version of its proposal to expand pay data collection from federal contractors and other employers with more than 100 workers. The revised proposal pushes back the date of the first required employer report to allow for the use of W-2 wage and salary reports.
The EEOC initially published its proposed rule in late January. The proposed rule expands the information certain employers must report to the federal government on an EEO-1 report. The EEOC’s proposal would add data on pay ranges and hours worked to the information currently collected.
The EEOC considered and adopted specific suggestions made by commenters during the initial 60-day comment period that ended earlier this year. For example, the EEOC moved the due date for the EEO-1 survey from September 30, 2017 to March 31, 2018, to simplify employer reporting by allowing employers to use existing W-2 pay reports, which are calculated based on a calendar year. In addition, the EEOC agreed to give employers the choice of reporting either a 40-hour week for full-time exempt and 20-hour week for part-time exempt workers, or in the alternative, providing an annual report for such employees. This change is in response to employer concerns for the non-standard weekly hours for this category of workers. The updated rule comes with a fresh, 30-day comment period that runs until August 15, 2016.
The U.S. Department of Labor (DOL) has announced a new “salary level” to the so-called white collar overtime exemptions under the Fair Labor Standards Act. In short, the new rules take effect December 1, 2016, and will more than double the salary level for those employees classified as exempt from overtime pay from the current level of $23,660 to the new level of $47,476, or $913 per week. The highly compensated executive salary level has been raised to $134,000. The new rule is expected to impact millions of employees and is expected to be especially hard on small businesses, nonprofits, many retailers, and employers in some regions of the country.
The DOL also announced that the salary level will be adjusted automatically every three years, based on the 40th percentile of the weekly earnings of full-time salaried workers in the lowest-wage Census region. Historically, the DOL has taken the position that future adjustments in salary level required new rule-making.
In an article published on May 18, 2016 by Law360, Bass, Berry & Sims attorney Tim Garrett provided insight on the Department of Labor’s (DOL) final rule raising the minimum salary level for those employees qualifying for overtime pay. As Tim states for the article:
An Indiana Federal Court Judge recently ruled that NCAA student-athletes are not employees and thus do not have a claim for minimum wage payments. In Anderson et al. v. NCAA et al., three former track athletes claimed that, as student-athletes, they really should be treated as student interns and that under the Department of Labor guidance issued in 2010, the athletes were more akin to employees, entitled to minimum wage pay.
District Judge William T. Lawrence disagreed and dismissed the wage lawsuit against several defendants, including the NCAA and the University of Pennsylvania. The Judge determined that the athletes’ attempt to use the guidance for interns was not instructive for, and should not be followed in the case of, student-athletes. The Judge also noted that universities having thousands of student-athletes who are unpaid is not a secret but yet the Department of Labor has not issued guidance directly addressing them or claiming that the minimum wage laws apply to student-athletes.
Counsel for the student-athletes vowed to appeal the ruling.
In a February 4, 2016, decision, United States ex rel. Wall v. Circle C. Construction, LLC, the Sixth Circuit summarily rejected the government’s assertion that the measure of damages in a False Claims Act (FCA) suit involving a violation of prevailing wage rate requirements was the total amount paid for the work. The Sixth Circuit’s rejection of the “total contract value” theory of damages in the prevailing wage rate context is a welcome development for FCA defendants who are faced with increasingly creative damages theories asserted by the government and the relator’s bar.
Circle C’s Army Contract
For a case that involved a relatively minor non-compliance with the prevailing wage rate requirements applicable to federal construction contracts, the Circle C. Construction case has a long history. Circle C entered into a contract to construct warehouses at the U.S. Army base at Fort Campbell, located in Kentucky and Tennessee. Pursuant to the Davis-Bacon Act, Circle C was required to pay electrical workers at least $19.19 per hour, plus a fringe benefit rate of $3.94 per hour. Circle C was also required to submit certified payroll for itself and its subcontractors.
Home healthcare agencies and other third party employers of home care workers recently lost a key fight to prevent the Department of Labor (“DOL”) from eliminating Fair Labor Standards Act (“FLSA”) exemptions for employees who provide companionship services and live-in care within a home. On August 21, the District of Columbia Court of Appeals reversed a district court decision invalidating the regulations, meaning that employers in at least 27 states (where state law has not afforded the home care workers with minimum wage or overtime protections) should now modify their pay practices to conform with the new regulations. Continue Reading New Ruling Impacts Home Care Worker Exemptions Under the FLSA
Yesterday, I presented an hour-long webinar discussing how to prepare for and navigate the “Fair Pay and Safe Workplaces” proposed rule and accompanying guidance.
On May 28, 2015, the Obama Administration published the much anticipated proposed DOL guidance and accompanying Federal Acquisition Regulation (FAR) proposed rule implementing EO 13673, Fair Pay and Safe Workplaces (July 31, 2014). In the webinar we highlighted key elements of both publications and their impact on government contractors, including:
- The new “labor law violation” disclosure requirements and resulting contracting officer responsibility determinations
- Unique role of “Labor Compliance Advisors”
- Paycheck transparency and independent contractor notice requirements
- Limitation on companywide arbitration plans
Feel free to listen to the webinar below or download the slides.