Minimum Wage Linked to Poverty Line - Proposed Legislation

On Monday January 14, 2013 a bill was introduced in the United States House of Representatives and referred to the Committee on Education and the Workforce proposing a change to the minimum wage guaranteed by the Fair Labor Standards Act.

The proposed bill would peg the minimum wage to a number that is sufficient to equal 115% of the federal poverty threshold for a family of two based upon an individual working 2080 hours per year. The minimum wage would be adjusted every four years to reflect any change in the poverty threshold. Recent statistics (from 2011) show the federal poverty threshold for a family of two to be $15,504. If the bill were passed as written, using the new formula, the minimum wage would increase from $7.25/hour to $8.57/hour.

A copy of the bill can be found here: http://www.govtrack.us/congress/bills/113/hr229/text

Check back in the coming months for updates on this bill as it attempts to make its way through Congress.

The FLSA on Appeal

Rule 68 Offers of Judgment - The Supreme Court of the United States is poised to issue a decision on whether a Rule 68 Offer of Judgment moots an FLSA class in its infancy. In December, the Court heard arguments in a case involving a registered nurse meal break case. Prior to moving for conditional certification, Genesis Healthcare propounded upon the plaintiff an offer of judgment in an amount of her unpaid wages. Upon the offer not being accepted, Genesis Healthcare moved to dismiss the case. The District Court agreed and the Third Circuit reversed. You can listen to the arguments before the Supreme Court here as to whether an offer of judgment to a named plaintiffs in a collective action extinguishes the entire lawsuit.

http://www.supremecourt.gov/oral_arguments/argument_audio_detail.aspx?argument=11-1059

It should be noted that the collective action mechanism is of great importance to victims of wage theft. Allowing an employer to pick off employees who attempt to assert their rights is simply another wall put up between the victims of wage theft and their fair day’s pay.

Successor Liability – The Seventh Circuit Court of Appeals heard arguments last week on whether or not the common law doctrine of successor liability extends to claims brought under the FLSA. The Seventh Circuit, along with most other appellate courts, has applied the doctrine consistently avoid undercutting federally protected labor and employment rights when the assets of a business are sold. Under state law, normally an employer can sell their assets without any provision for liabilities – including those arising under a federal employment law – Title VII, ERISA, NLRA. However, federal courts have used a broader approach to successor liability to ensure victims of federally protected employment law are made whole in an effort to meet the Congressional intent. You can find the argument here.

www.ca7.uscourts.gov/fdocs/docs.fwx?submit=showbr&shofile=12-2440_001.mp3

Again, ensuring an employer make its employees whole through the doctrine of successor liability is a key to stopping wage theft.

Seventh Circuit Denies Summary Judgment in Wage Retaliation Case

After the Supreme Court decided that oral complaints provide protection from retaliation under the FLSA, as discussed in this earlier post, the case continues to make good law for employees. On remand, the Western District of Wisconsin granted summary judgment to the employer on the employees claim for retaliation only to be reversed later by the Seventh Circuit.

The Seventh Circuit explained that to “establish a prima facie case of retaliation under the direct method, an employee must show: (1) that he engaged in protected expression; (2) that he suffered an adverse employment action; and (3) that a causal link existed between the protected expression and the adverse action.” Circumstantial evidence can be used to establish the causal link which allows a jury to infer retaliation where: (1) there is evidence of suspicious timing, ambiguous statements or behaviors; (2) evidence that similarly situated employees were treated differently; or (3) a pretextual reason for adverse employment action.

As with many retaliation complaints, there was suspicious timing – the employee asked a supervisor if she had seen information about a class action against the employer. This statement was then relayed by email to human resources two days later and the employee was terminated. The employee also introduced evidence that another employee had been treated more favorably. Finally, there was evidence before the Court that employer had changed the initial reasoning for the termination from a violation of one policy to the violation of another policy.

Importantly, despite the employer denying doing anything wrong and presenting arguments, backed by their own evidence, to rebut the arguments made by the plaintiff, the case must go to a jury. Too often, discrimination cases are decided on summary judgment despite there being disputed facts as to what happened. At times, it seems that the summary judgment standard is not properly applied – that all facts are viewed in the light most favorable to the non-moving party, drawing all reasonable inferences in their favor, and that in doing so, summary judgment is improper when a reasonable jury could return a verdict for the non-moving party. In this case, the Seventh Circuit properly required the disputed facts be placed before a jury to decide what version of the story is true.

The Court’s opinion can be found here - http://www.ca7.uscourts.gov/tmp/OE0M17QI.pdf

Salaried Workers May Still Be Entitled to Overtime

I was talking to a friend of mine yesterday and the topic of overtime came up.  She was stunned that people who are paid a salary could and often are still entitled to overtime compensation.  As we previously wrote in this blog, an employer cannot avoid paying overtime compensation simply by paying its employees a salary rather than on an hourly basis.  See our previous post here. 

A recent case we filed against Beer Capitol Distributing is a prime example of this often misunderstood principle.   

Just because you are paid a salary, it does not follow that you should not still receive overtime compensation. 

DOL Releases FLSA Retaliation Fact Sheet

In a March 22, 2011 decision, Kasten v. Saint-Gobain Performance Plastics Corp., the Supreme Court held that the FLSA prohibits retaliation against employees for making a complaint about FLSA violations, even if the complaint is oral, as opposed to being written.  In December 2011, the Wage and Hour Division of the Department of Labor issued a Fact Sheet providing general information concerning the anti-retaliation FLSA provision.  Fact Sheet # 77A: Prohibiting Retaliation Under the Fair Labor Standards Act presents information on prohibitions, coverage, and enforcement.  Under the Coverage section, the Fact Sheet explains that the provision applies even if there “is no current employment relationship between the parties” and it also applies “to all employees of an employer even in those instances in which the employee’s work and the employer are not covered by the FLSA.”  Most importantly, the fact sheet includes the standard set forth in Kasten v. Saint-Gobain Performance Plastics Corp.: “Employees are protected regardless of whether the complaint is made orally or in writing.”  For additional information, visit: http://www.wagehour.dol.gov.

UPDATE: Proposed Changes to the Companionship and Live-In Worker Regulations

Updating our previous post regarding changes coming to the applicability of the FLSA to Companionship and Live-In Workers, the Department of Labor has published its Notice of Proposed Rulemaking.

The comment period closes February 27, 2012.

Various States Up The Minimum Wage With New Year

While the federal and Wisconsin minimum wages remain unchanged, several states have announced minimum wage rate increases effective January 1, 2012. The increases are as follows:

Arizona – Standard minimum wage increases from $7.35 to $7.65 an hour. Minimum wage for tipped employees increases from $4.35 to $4.65.

Colorado – Standard minimum wage increases from $7.36 to $7.64 an hour. Minimum wage for tipped employees increases from $4.34 to $4.62 an hour.

Florida – Standard minimum wage increases from $7.31 to $7.67 an hour. Minimum wage for tipped employees increases from $4.29 to $4.65 an hour.

Montana – Standard wage increases from $7.35 to $7.65 an hour. (Montana law does not allow employers to take a tip credit against minimum wage for tipped employees.)

Ohio – Standard minimum wage increases from $7.40 to $7.70 an hour. Minimum wage for tipped employees increases from $3.70 to $3.85 an hour.

Oregon – Standard wage increases from $8.50 to $8.80 an hour. (Oregon law does not allow employers to take a tip credit against minimum wage for tipped employees.)

Vermont – Standard minimum wage increases from $8.15 to $8.46 an hour. Minimum wage for tipped employees increases from $3.95 to $4.10 an hour.

Washington – Standard minimum wage increases from $8.67 to $9.04 an hour. (Washington law does not allow employers to take a tip credit against minimum wage for tipped employees.)

Proposed Changes to the Companionship and Live-In Worker Regulations

On December 15, 2011, President Obama and the Department of Labor issued a notice that it will soon publish a Notice of Proposed Rulemaking to the Companionship and Live-In Worker Regulations. The current regulation, created in 1974, is an exemption from minimum wage and overtime pay requirements for casual babysitters and companions for the aged and infirm. It also created an exemption only for live in domestic workers. The exemption has not been substantially changed since 1975.

Because the in-home healthcare industry has changed and grown significantly since 1975, President Obama is changing the exemption to provide extra protection for our country’s in-home healthcare workers. When the exemption was originally created, it was intended to be used for casual babysitters and neighbors performing elder sitting. Today, many in-home care workers are employed by staffing agencies and have many more responsibilities than keeping someone company. Workers employed by in-home staffing agencies were not what Congress originally intended to have exempted. President Obama now wants to provide protections under the FLSA for these professional caregivers.

On December 15, 2011, in President Obama’s Remarks on Minimum Wage and Overtime Protections for In-Home Care Workers, he stated “Today, we’re guaranteeing homecare workers minimum wage and overtime pay protection. And that’s thanks to the hard work of my Secretary of Labor, Hilda Solis. We are going to make sure that over a million men and women in one of the fastest-growing professions in the country don’t slip through the cracks. We’re going to make sure that companies who do right by their workers aren’t undercut by companies who don’t. We’re going to do what’s fair, and we’re going to do what’s right.”

The Department of Labor is not eliminating the exemption, but proposing significant changes on the limitations. The new regulations will define the tasks that may be performed by an exempt companion more clearly. The new definition of a companion’s duties is limited to fellowship and protection, with some allowance for certain personal care services, as long as the service is incidental (does not exceed 20% of the hours worked that week) and performed along with the protection and fellowship. Companionship and fellowship include activities such as playing cards, watching television, visiting with friends, taking walks, and engaging in hobbies. The incidental personal care services include activities such as dressing, grooming, toileting, driving to appointments, feeding, laundry, and bathing. Companion’s duties would no longer include general household work; as evidenced by Congress’s protections for housekeeping employees, it wants these types of employees to be protected by the FLSA.

The proposed exemption will now only apply to companions employed only by the family or the household; it will not apply to third parties such as in home staffing agencies. The proposed change will still allow the household employing the worker to claim the exemption even if it is a joint employer with an agency. However, the agency can no longer claim the exemption when it is a joint employer with the household.

The proposed exemption will make the record-keeping requirements for live-in domestic workers the same as for other employers under the FLSA.

Kohler Co. Class Update

The following are recent articles from area newspapers regarding the Kohler Co. class certification:

The Milwaukee Business Journal - Wage complaint against Kohler Co. certified as class action

The Sheboygan Press - Kohler Co. faces class action lawsuit - Administrative employees file suit about overtime

If you have any questions regarding this case or any other related matter, contact Cross Law Firm for more information.

SCOTUS to Hear Outside Sales Exemption Case

The U.S. Supreme Court (SCOTUS) recently agreed to decide whether the Fair Labor Standards Act's “outside sales exemption” applies to pharmaceutical sales representatives who do not directly sell, but rather meet with doctors to encourage them to prescribe their brand of prescription medications.

In the case of Christopher v. SmithKlineBeecham Corp. d/b/a GlaxoSmithKline, U.S., No. 11-204, cert. granted 11/28/11). The SCOTUS will review a February 2011 decision by the U.S. Court of Appeals for the Ninth Circuit, which held that the FLSA's outside sales exemption barred the claims of a proposed class of drug sales representatives for GlaxoSmithKline. (635 F.3d 383 (9th Cir. 2011)). The Ninth Circuit declined to defer to the DOL’s position that the exemption did not apply to the pharmaceutical sales representatives because their job was to promote their company's drugs, not to make final sales. The Ninth Circuit’s decision was contrary to a Second Circuit decision from July 2010 which held that the pharmaceutical sales representatives for Novartis and Schering were non-exempt under the FLSA and entitled to pursue overtime claims. (611 F.3d 141 (2d Cir. 2010)).

With its upcoming decision the SCOTUS will to resolve the circuit split on the scope of the FLSA's outside sales exemption. The SCOTUS will also likely address what deference federal courts owe to the secretary of labor's interpretations of the FLSA. We will keep you informed when the SCOTUS decision comes down.