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

This week, Rep. Linda Sanchez (D-CA) introduced legislation that would extend the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most home care workers, improve federal and state data collection and oversight with respect to the direct care workforce, and create a grant program to help states recruit and train direct care workers. Specifically, the Direct Care Workforce Empowerment Act (H.R. 5902) would limit the “companionship services” FLSA exemption to those who work 20 or fewer hours per week. To learn more about the bill, please continue reading at Littler's D.C. Employment Law Update blog.

Photo credit: AlexRaths

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Following a Connecticut district court’s denial of summary judgment to the employer in Ruggeri v. Boehringer Ingelheim Pharmaceuticals, Inc., a collective action brought by pharmaceutical sales representatives who claimed the were improperly classified as exempt employees, the pharmaceutical company has been hit with another putative collective action by sales representatives seeking overtime wages. But in this new case, Lopez-Lima v. Boehringer Ingelheim Pharmaceuticals, filed on July 21, 2010 in the federal District Court for the Southern District of Florida, plaintiffs allege that Boehringer hired them as “non-exempt commission-paid pharmaceuticals sales representative[s].” To learn more about the case, please continue reading at Littler's Healthcare Employment Counsel blog.

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The Department of Labor’s Wage and Hour Division (WHD) has released a fact sheet to help employers comply with the lactation break time obligations established by the new health care law. The Patient Protection and Affordable Care Act (“Affordable Care Act”) amends section 7 of the Fair Labor Standards Act (FLSA) to require employers to provide rest breaks and suitable space for employees who are nursing mothers to express breast milk for up to one year after the child’s birth. To learn more about the fact sheet, please continue reading at Littler's Washington D.C. Employment Law Update blog.

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The Federal Motor Carrier Safety Administration (“FMSCA”) recently announced its intent to grant a limited, two-year exemption from federal hours of service rules for certain drivers engaged in the transportation of ammonia. The FMSCA, a division of the U.S. Department of Transportation, is currently seeking public comments regarding this proposal.

The FMSCA administers the regulations governing the maximum driving and on-duty time for drivers utilized by motor carriers. On March 22, 2010, FMSCA announced a 90-day waiver of these regulations for drivers involved in the transportation of certain ammonia products.

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Legislation introduced in both the House and Senate would impose new record-keeping requirements on employers that hire independent contractors, and impose stricter penalties for misclassification. Introduced by Rep. Lynn Woolsey (D-CA) and Sen. Sherrod Brown (D-OH), the Employee Misclassification Prevention Act (H.R. 5107, S. 3254) would amend the Fair Labor Standards Act (FLSA) to require employers to keep records on and notify workers of their employment or independent contractor classification and their right to challenge that classification. For more information on the legislation and its implications for employers, continue reading at Littler's D.C. Employment Law Update blog.

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While the most recent change to the Fair Labor Standards Act (FLSA) and the attention it may receive might seem small in comparison to Health Care Reform, the FLSA Amendment is significant. The Amendment, which now provides break time to nursing mothers, imposes a new requirement under the FLSA. For further analysis on the Amendment and its implications for employers, continue reading at Littler's D.C. Employment Law Update blog.

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To commemorate Equal Pay Day, Sen. Tom Harkin (D-Iowa) and Rep. Eleanor Holmes Norton (D-DC) reintroduced the Fair Pay Act (S. 904, H.R. 2151).  Continue reading on Littler's Washington DC Employment Law Update blog.

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President Obama has chosen Lorelei Boylan as his nominee for Administrator of the Department of Labor’s Wage and Hour Division.  Continue reading on Littler's Washington DC Employment Law Update blog.

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This final segment of our three part series on the Multi State District Office (MODO) focuses on creating informal agreements with your MODO with regards to voluntary compliance.

Of course, most District Offices, in addition to MODO responsibilities, must also conduct and manage its own investigation case load, and tend to have more work than resources. So, if a company has not had multiple investigations, a large investigation covering multiple facilities or a history of non-compliance, the employer will have little (or no) contact with its MODO.

However, MODOs are also tasked with encouraging employers to create voluntary compliance programs and to work with cooperatively with employers who choose to create such programs. Thus, MODOs will welcome an employer interested in developing a cooperative program to maintain compliance.

There are no written or formal agreements between MODOs and employers – and, in most cases, we would not recommend entering a formal agreement. However, it is very beneficial for companies to create informal arrangements with their MODOs. The arrangement usually begins with a meet and greet between the District Director of the MODO and senior company executives (such as the General Counsel and/or Vice President of Human Resources). During this meeting the employer demonstrates their commitment to compliance and designates a contact person who will deal directly with the DOL. In return, the company should ask the MODO to notify the contact person whenever a complaint is filed against the company.

Both the DOL and employers benefit from this relationship. First, the employer’s contact person is able to develop a relationship with the MODO. If a complaint is filed, there is less tension on both sides and the matter is usually resolved quickly and efficiently. Rather than an investigator asking a manager for payroll records, the MODO will call the contact person and obtain the records and set up interviews if necessary. This process helps the employer avoid unreasonable investigators, and if a bad investigator is assigned to investigate the company, the employer can seek relief from the MODO. The process is less disruptive and easier on both parities. Another advantage of working with a MODO is the ability to obtain their assistance when conducting self audits or correcting payroll errors. Finally, the DOL usually will not assess civil money penalties or interest to employers who develop positive working relationships with them.

With increased wage and hour enforcement on the horizon, it is more important then ever to develop a good working relationship with your company’s MODO. Creating a partnership with your MODO now is perhaps the best preventative measure you can take to avoid contentious and unpleasant investigations in the future.

This blog entry was authored by Salvador Simao.

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This second part of our three part series on the Main Office District Office (MODO) focuses on the specific procedures that apply to multi-state enterprises.  A previously reported in Part I:  Who's Your MODO, Littler's Salvador Simao, a former trial attorney with the Department of Labor (DOL), discusses ways in which multi-state employers can effectively partner with the DOL.

Although not generally known by employers, the Wage and Hour Division has procedures to coordinate enforcement efforts for multi-state employers. These procedures are outlined within Chapter 61 of the Wage Hour Field Operations Handbook (FOH), which is not released to the public. The purpose of these procedures is two fold: First, to ensure consistent results when investigating similar issues in different facilities in different geographic locations. Second, to enable the Wage and Hour Division to uncover national, systematic violations.

In general, these procedures assigns each multi-state employer to the District Office (DO) with geographic jurisdiction over the employer’s company headquarters (or Main Office – MO). Thus, the acronym for the multi-state employer process is the MODO process – the Main Office District Office. The goal of the MODO process is to obtain maximum compliance while using DOL resources as efficiently as possible.

Of course, investigators have primary responsibility for conducting a wage-hour investigation in a single facility. Under the MODO process, however, an investigator can recommend that the investigation be expanded to cover additional facilities or even all the facilities of the employer if s/he uncovers a violation that appears to be caused by a company-wide policy or process. The decision to expand the investigation beyond one facility or one state is made by the MODO, who will consider the employer’s overall enforcement history in making that decision.

It is also the MODO’s responsibility to independently monitor the multi-state employers headquartered within its jurisdiction. The MODO will look for similar violations occurring at an employer’s facilities in different states to determine whether a national investigation is warranted. The MODO will create a strategy to ensure the employer comes into and remains in compliance with wage-hour laws. To this end, the MODO will receive reports at the conclusion of every investigation involving the multi-state employers headquartered within its jurisdiction.
These responsibilities of the MODO are generally accomplished using the Wage and Hour Division’s enforcement database, called WHISARD, which contains information regarding every investigation conducted by the Division.

The final segment of our three part series on the Multi State District Office (MODO) will focus on creating informal agreements with your MODO with regards to voluntary compliance.

This blog entry was authored by Salvador Simao.

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In this three-part series, Littler shareholder Salvador Simao, a former trial attorney with the Department of Labor (DOL), discusses ways in which multi-state employers can effectively partner with the DOL. The first part examines the organization of the DOL Wage & Hour Division, and enforcement efforts under new Secretary of Labor Hilda Solis.

In her first public appearance after Senate confirmation, Secretary of Labor Hilda Solis declared to the AFL-CIO Executive Council, “There is a new sheriff in town.” Armed with reports from the Congressional General Accounting Office (GAO) criticizing enforcement efforts by the Wage and Hour Division, Secretary Solis is well positioned to begin changing the culture at DOL.
Already, the Wage and Hour Division is hiring 100 new investigators. Congress gave DOL funding for the new investigators in the stimulus package. Under the Bush administration, although collecting more back wages than the Clinton administration, the number of wage-hour investigators declined from 950 to 750. In short, we can expect to see increased wage-hour enforcement in the near future.

What can employers do to minimize or avoid aggressive enforcement? One way is to seek a cooperative relationship with your company’s Wage and Hour Division MODO. What is a MODO? Read on – we explain it all below.

Organization of the Wage and Hour Division
The DOL’s Wage and Hour Division enforces the Fair Labor Standards Act, Family Medical Leave Act, the Employee Polygraph Protection Act, the Consumer Credit Protection Act, and prevailing wage laws. Generally, the Wage and Hour Division will conduct an investigation of a company if it receives an employee complaint or as part of a targeted initiative (e.g., a survey of child labor compliance in quick service restaurants). At times, follow-up investigations will be done to ensure continued compliance with the laws.

Investigations are performed out of about 50 district offices. Each district office has a District Director (DD), one or two Assistant District Directors (ADD) and, of course, investigators. Some districts are so large that they have satellite offices. For example, in North Carolina the district office is Raleigh, but there is also a “field office” in Charlotte. Field Offices are normally run by an ADD who reports to the DD in the district office.

District Directors report into a regional office, which in turn reports into the national office. The Wage and Hour Division has five regional offices: the Northeast Region in Philadelphia, the Southeast Region in Atlanta, the Southwest Region in Dallas, the Midwest Region in Chicago and the West Region in San Francisco. Each regional office is run by a Regional Administrator and a Deputy Regional Administrator. Employers rarely deal with the regional and national offices, as most investigations are resolved at the district office level.

As is true in any organization, individual investigators have different styles and approaches when it comes to conducting audits. However, there are ways to reduce anxiety and ensure consistency in various audits if your company has locations in multiple states. In the second part of this series, we explain the role of the Main Office District Office (MODO) and the specific procedures that apply to multi-state enterprises.

This blog entry was autored by Salvador Simao.

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On Tuesday, February 10, 2009, Rep. Cathy McMorris Rodgers (R-WA) reintroduced the Family-Friendly Workplace Act (H.R. 933), a bill that would amend the Fair Labor Standards Act (FLSA) to permit private-sector employees to chose compensatory leave in lieu of cash wages for overtime hours worked. This “comp time” option has long been available to public sector employees, and has proven to be very popular. Continue reading on Littler's Washington DC Employment Law Update blog.

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The Eleventh Circuit Court of Appeals rules that the “outside sales” exemption to the FLSA overtime requirements was properly applied to an executive for a title insurance company whose primary duty was conducting “promotional work” with the company’s clients, even though the employee did not finalize sales herself. According to the court, the executive, who was credited with sales through commission-based compensation, was conducting “sales in some sense.”

For more information about this development, see Littler's ASAP "Eleventh Circuit Holds Title Insurance Executive Who Conducts 'Promotional Work' Exempt Under the FLSA 'Outside Sales' Exemption" by Angelo Spinola and Matthew Laflin.

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President Obama has signed his first piece of legislation, the Lilly Ledbetter Fair Pay Restoration Act, into law. The Act is likely to result in an increase in the number of discrimination claims against employers, as it effectively eliminates the statute of limitations in wage discrimination cases and significantly expands the class of protected employees, and thus, potential litigants. For a more in-depth analysis, see Littler's ASAP: Paycheck Rule Revived for Pay Discrimination Claims with Signing of the Lilly Ledbetter Fair Pay Act.

This blog update was authored by Andrea Hallier.
 

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In an opinion letter dated December 19, 2008 (FLSA2008-18), the DOL found that itamae-sushi chefs and teppanyaki chefs were tipped employees under the FLSA, eligible to participate in employer-mandated tip pools.

Section 3(t) of the FLSA defines tipped employees as “any employee engaged in an occupation in which he/she customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t). Section 3(m) allows tip-pooling among employees who customarily and regularly receives tips. 29 U.S.C. § 203(m); see also 29 C.F.R. § 531.54.

Itamae-sushi chefs and teppanyaki chefs have direct contact with customers, at the bar counter area (itamae-sushi chefs) and at customer tables (teppanyaki chefs). In support of its opinion, the DOL cited its “longstanding position that counter persons who serve customers may participate in tip pools. Citing FLSA Field Operations Handbook § 30d04(a); Wage and Hour Opinion Letter 1/25/83 (waiter chef who brings food order from kitchen to table and cooks it on hibachi grill in front of customers may share in tip pooling).
 

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In a decision that could lead to significant litigation cost savings for employers, the United States Court of Appeals for the Tenth Circuit recently endorsed the so-called “fluctuating workweek” method of calculating back pay awards for misclassified, salaried employees in lawsuits arising under the Fair Labor Standards Act (FLSA).

The FLSA provides that non-exempt employees are generally entitled to overtime pay at a rate of one and one-half times their regular rate of pay for all time worked in excess of 40 hours per week. 29 U.S.C. § 207(a)(1). When a non-exempt employee is paid a fixed salary and there is a “clear mutual understanding” that the salary is compensation for all hours worked each workweek (whether many or few), then: (a) the regular rate of the employee may be determined each workweek by dividing the salary by the number of hours worked in that week; and (b) payment for overtime hours at one-half that rate will satisfy the overtime pay requirement (because such hours have already been compensated at “straight time” via the salary itself). 29 C.F.R. § 778.114.

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