Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

The U.S. Supreme Court has agreed to resolve in Christopher v. SmithKline Beecham Corp. (11-204) whether the Fair Labor Standards Act’s (FLSA) outside sales exemption applies to pharmaceutical sales representatives (PSRs). The Court also will consider whether deference is owed to the Secretary of Labor's own interpretation of the FLSA exemption and related regulations. At stake is not only how an estimated 90,000 PSRs are to be paid under the FLSA, but also the deference to be paid to amicus briefs filed by the Department of Labor (DOL).

The FLSA’s outside sales exemption relieves from the Act’s overtime requirements “any employee employed . . . in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary).” Specifically, the regulations explain that an employee who works as an outside salesman is one:

(1) Whose primary duty is: (i) making sales within the meaning of section 3(k) of the Act; or (ii) obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and (2) Who is primarily and regularly engaged away from the employer's place or places of business in performing such primary duty.

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We are pleased to announce a new addition to Littler's blogroll:

Employee Benefits Counsel

Brought to you by Littler's Employee Benefits, ERISA and Benefit Plan Litigation, and Executive Compensation practice groups, this blog covers:

• Legislative and regulatory developments in the employee benefits arena, including the topics of health care reform; plan design and administration; employee benefits litigation; and
• Executive compensation, providing insight and analysis on legal developments that warrant discussion.

During this time of significant governmental change and shifts in the strategy and style of benefits litigation, Littler's depth of experience in employee benefits, litigation, and executive compensation matters gives our attorneys a distinctly broad perspective with which to provide insight and useful analysis of the latest developments. To subscribe to receive email alerts of new blog posts, please enter your email address in the Subscribe box on the right side of the Employee Benefits Counsel blog homepage.

Photo credit: IdeaBug Media

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As previously discussed, in recent amendments to its overtime regulations, New Jersey had inadvertently eliminated the exemption for sales employees paid on commission, which closely tracked an exemption in Section 7(i) of the Fair Labor Standards Act (sometimes known as the "inside sales" exemption).

After Littler assisted in drawing attention to this issue, the New Jersey Department of Labor and Workforce Development published on November 21, 2011, a proposed amendment to its regulations designed to restore the exemption. A public hearing on the proposed amendment is scheduled for Tuesday, December 13, 2011, and written comments are due by January 20, 2012. Final regulations, then, could issue as early as February.

To learn more about the proposed amendment and its implications for employers, please continue reading Littler's ASAP, New Jersey Issues Proposed Regulations to Restore Its Exemption for Commissioned Sales Employees, by Tammy McCutchen.

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A federal district court in California recently issued a decision in Dilts v. Penske Logistics, LLC, holding that motor carriers that transport property are not subject to California’s meal and rest break laws because such laws are preempted by the Federal Aviation Administration Authorization Act. To learn more about the decision and its implications for employers, please continue reading Littler's ASAP, Federal District Court Holds Motor Carriers Are Not Subject to California's Meal and Rest Break Laws, by Michael Gregg.

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By Michael Kessel

In 2009, New Jersey passed a law requiring the Department of Labor and Workforce Development (“DLWD”) to issue regulations providing that any employer who is required to maintain and report records regarding wages, benefits, and taxes pursuant to state law “shall conspicuously post notification” of the obligation to maintain and report those records.

The DLWD has now issued those new regulations and a sample notification that complies with the law.

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UPDATE: In an unusual move, the California Supreme Court accepted a post-argument brief concerning the “rolling 5” issue – whether meal periods must be provided for every 5 consecutive hours of work, e.g., in an 8-hour shift, if an employee takes a meal period after 3 hours, then works a further 5 hours after the meal period, must a second meal period be provided. Also, the brief addresses whether the court’s decision will apply prospectively or retroactively. If applied retroactively, the statute of limitations for meal period violations is 3 years, but challenges could also be filed under California’s unfair competition law, which has a 4-year statute of limitations.

By Alison Hightower

The long awaited oral argument in the seminal meal and rest break decision involving Brinker Restaurant finally occurred today. Before a packed courtroom, lawyers for a hopeful class of waiters and waitresses and the representatives of California employers battled it out before the seven justices of the California Supreme Court.

At issue are critical issues of interpretation that plague California businesses daily, and have sparked literally thousands of lawsuits, most brought as class actions seeking to recover the one hour “premium pay” owed for every missed meal or rest period.

• What does it mean to “provide” an uninterrupted 30 minute off-duty meal period—is it sufficient to make that meal period “available” to the employees and allow the employee to decide whether to take that time off, or must the employer “ensure” that the employee in fact did no work for 30 minutes?
• When must that meal period be taken to be legally compliant—could Brinker require employees to take that meal period within the first two hours of their shifts so they would be available to service customers during busy periods?
• “Must a meal period be provided every five hours? If an employee takes an early meal period after the second hour, would the employee be entitled to two meal periods in one eight-hour shift?”
• Must a rest period be offered within the first four hours of a shift, or could Brinker delay the rest period until after 4 hours had been worked?
• Must that rest period be offered before the meal period is made available?

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• Brinker Restaurant Corp. v. Superior Court">Share Link

Under the California Labor Code, certain computer software employees, as well as licensed physicians and surgeons, are exempt from state overtime requirements if they receive a minimum hourly, monthly or yearly rate. The rate is determined annually based upon changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers. Because the Index experienced a 2.5% increase over the past year, the California Division of Labor Standards Enforcement (DLSE) adjusted the rates these individuals must be paid to be considered overtime-exempt.

Computer Software Employee

Effective January 1, 2012, DLSE announced a 95-cent increase in the hourly rate for computer professionals, from $37.94 to $38.89 per hour. The monthly rate increases $164.69, from $6,587.50 to $6,752.19 per month. Finally, the annual salary increases $1,976.25, from $79,050 to $81,026.25 per year.

Licensed Physicians or Surgeons

Effective January 1, 2012, DLSE announced a $1.73 increase in the hourly rate for licensed physicians and surgeons, from $69.13 to $70.86 per hour.

Photo credits: arakonyunus and Inkastudio

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The Vermont Department of Labor has announced the state’s 2012 minimum wage rates. Effective January 1, 2012, an employee must be paid at least $8.46 per hour, a 31-cent increase from 2011. Additionally, tipped employees must be paid at least $4.10 per hour, a 15-cent increase from 2011. The maximum tip credit an employer may take increases 16 cents per hour to $4.36 per hour. For a list of 2012 minimum wage rates in other states, please see our previous post.

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Although the 2012 federal minimum wage will remain unchanged at $7.25 per hour, six states have announced that their minimum wage will increase on January 1, 2012. Additionally, one state has proposed an increase, and another will announce its 2012 minimum wage either this month or in December. One state, however, announced that its minimum wage will not change in 2012.

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