With Signature on Omnibus Spending Package, President Obama Funds USDOL for 2012

Posted on January 9, 2012 by Noel Tripp

On December 23rd, President Obama signed the $1 trillion omnibus spending act, which set the Labor Department budget at $14.5 billion for fiscal year 2012. This constitutes a $145.4M increase (approximately 1%) from 2011. The bill, which prevented any government shutdown from occurring, places five restrictions on U.S. Department of Labor activities during the funded period. These are:

1)      A prohibition on DOL implementation of the H-2B wage rule for temporary nonagricultural workers;

2)      A prohibition on implementation or enforcement of DOL’s proposed “coal dust” rule -- a proposed rule to lower miners' exposure to respirable coal dust in all underground and surface coal mines –until an independent assessment of DOL’s process giving rise to the rule is conducted;

3)      Continued exempt classification of service technicians at auto dealerships from overtime requirements under the FLSA pursuant to 29 U.S.C. § 213(b)(10) for DOL enforcement purposes;

4)      A freeze on the Department’s proposed development of a musculoskeletal disorders reporting requirement (aka the “ergonomics regulation”); and

5)      A prohibition on the implementation of electronic voting procedures in representation elections before the National Labor Relations Board.

This funding, and these fairly narrow concessions limiting USDOL activity, ensures the continuation of active Department enforcement heading into the election year.

 

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DOL Announces October 14 Public Meeting Regarding Proposed Child Labor Regulations

Posted on October 12, 2011 by Noel Tripp

The United States Department of Labor (USDOL) recently announced proposed amendments to the regulations governing the employment of minors in agricultural occupations. Now, the USDOL has announced a public hearing regarding the proposal. The meeting, at which “interested persons” will be given an opportunity to comment on the proposed rulemaking, will be held on October 14, 2011 from 10 a.m. to 12 noon EST in Tampa, Florida. This meeting will constitute industry employers’ best opportunity to describe the anticipated negative impact of the proposed regulations (if any) on their business.

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DOL Proposes Amendments to Child Labor Regulations

Posted on September 7, 2011 by Noel Tripp

Last week, the Department of Labor issued proposed amendments to the regulations governing the employment of minors in agricultural occupations, and solicited public commentary on the proposal ahead of a planned public hearing. These proposed amendments, which would not apply to children working on farms owned by their parents, are designed to strengthen the workplace safety requirements for minors working in agriculture, by modifying and expanding the specific occupations deemed “particularly hazardous” within agriculture, bringing those occupations in line with those applicable to to other industries. 29 CFR §§ 570.50-570.68

“These changes are comprehensive,” observes Jackson Lewis partner Craig Roberts, an expert on the DOL’s child labor regulations and enforcement practices. “Now is the time for agricultural employers to review the proposed regulations and voice any objections to them that they may have. The current regulations have been on the books unchanged for over forty years. Once final, the amended regulations will become similarly permanent and will also likely be vigorously enforced by the Department of Labor.” 

Public comments regarding the proposed regulations must be submitted to the Department by November 1, 2011. We will provide further information regarding all DOL initiatives.

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President Withdraws Nomination of Rodriguez for Wage/Hour Administrator

Posted on August 4, 2011 by Noel Tripp

In January, President Obama re-submitted his nomination of deputy assistant attorney general and chief of staff of the Justice Department's Civil Rights Division, Leon Rodriguez, to be Administrator of the DOL’s Wage and Hour Division.  On Tuesday, the White House issued a press release indicating that Mr. Rodriguez’s nomination has been withdrawn.  No reason for the withdrawal has been indicated.  As the President continues to spar with Congressional Republicans over economic issues, and in the wake of Congressional debate regarding the impact of wage-and-hour law on the economy, this withdrawal sets the stage for the President to name a new nominee for Wage and Hour Administrator.  This nomination will doubtless have important political implications, as politicians and pundits on both side of the fence will analyze the background and views of the nominee.

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USDOL Revises Tip Credit Regulations, Leaves Others Unchanged

Posted on April 14, 2011 by Noel Tripp

Following up on proposed regulations issued in 2008 for notice and comment, the U.S. Department of Labor issued final regulations last week, effective 30 days following publication in the Federal Register. These regulations address the issues below but other than in regard to use of the tip credit under Section 3(m), the changes to the text of the current regulations are minimal.

The final rule, consistent with the original proposed rulemaking, states that there is no maximum contribution percentage to valid mandatory tip pools, thus permitting employers to require tipped employees to pool their tips with other service personnel, without a hard cap restriction on the amount pooled.  The DOL previously has taken the position that a "customary and reasonable" maximum contribution meant 15 percent of an employee's tips. However, the rule also states that mandating an employee share his or her tips with a lawful tip pool is the only permissible use to which an employer can put an employee’s tips. This regulatory position contradicts the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc., 596 F.3d 577 (9th Cir. 2010). In Woody Woo, the Ninth Circuit ruled that an employee has no property right in his or her tips under the FLSA, unless the employer takes a tip credit pursuant to Section 3(m). The new rules also require advance notice of the employer’s use of the tip credit and how the employer calculates it.

In addition to these changes, the enacted regulations eliminated the “20 percent rule” applicable to employees engaged in fire protection activities. As the regulation creating such a rule – permitting fire protection employees to spend up to 20% of their time on non-exempt non-fire protection work – 29 C.F.R. § 553.212, had been superseded by an amended to Section 3 of the FLSA to define the term “employee in fire protection activities,” the DOL eliminated the rule as applied to such employees, consistent with case law interpreting the regulation in light of the new amendment. 

Disappointingly, the DOL declined to adopt regulations clarifying the rules relating to the fluctuating workweek method of overtime compensation and the payment of compensatory time off to public sector employee under Section 7(o) of the Act.

It is vital to note that the DOL’s preamble raises significant questions regarding the application of the fluctuating workweek method of overtime in certain situations. Employers who utilize this payment method should discuss these issues with counsel. 

Otherwise, the changes effected by the new rules are unlikely to be substantial. The hospitality industry should continue to monitor its tip practices closely under federal and state law.

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USDOL Issues Second Pro-Employee "Administrator's Interpretation"

Posted on June 17, 2010 by Noel Tripp

As discussed previously, the USDOL Wage and Hour Division has ceased issuing Opinion Letters in response to specific requests for guidance from the public, but rather has decided to issue more general “Administrator’s Interpretations” of its own volition on topics of the DOL’s choosing. As with the first such Interpretation, which set forth the Division’s current view that loan officers generally cannot qualify for the administrative exemption, the Division’s second Interpretation, issued on June 16, also evinces a pro-employee position and contravenes Opinion Letters issued by the Division during the Bush administration. 

Specifically, Deputy Administrator Nancy J. Leppink’s “Interpretation” significantly modifies the Division’s application of § 3(o) of the FLSA, 29 U.S.C. § 203(o), which provides that time spent “changing clothes or washing at the beginning or end of each workday” can be non-compensable pursuant to “the express terms” of a collective bargaining agreement, or “by custom or practice” thereunder. This is a vital provision for unionized employers, as pursuant to case law time spent donning and doffing protective equipment is generally compensable unless addressed by the CBA or “custom or practice”. The DOL’s revised position is that: (1) time spent donning and doffing “protective clothing” (e.g., helmets, smocks, plastic aprons, arm guards, gloves, knife holders, etc.) is a compensable activity not subject to § 3(o); and (2) changing into “ordinary clothes” (i.e. a uniform) can commence the compensable workday even if the changing time itself is not compensable.   This second conclusion has potentially expansive implications.

As to the first issue, the Interpretation specifically rejects Opinion Letters issued by the DOL in 2002 and 2007 stating that the term “clothes” typically includes such protective equipment, and thus time spent in donning and doffing them can be non-compensable. Deputy Administrator Leppink found that excluding such “protective equipment” from the definition of “clothes” is consistent with Congress’ intent to narrowly circumscribe the 3(o) exclusion. However, in reaching this conclusion, the DOL assumes that § 3(o) is an exemption to an FLSA requirement, and thus is to be construed narrowly, despite the fact that many courts (including multiple Circuit Courts) have ruled that § 3(o) is not an “exemption” but instead a definition of “hours worked”, to be construed broadly. Ms. Leppink relied on DOL Opinion Letters issued in 1997, 1998 and early 2001 stating that “protective equipment” was not clothes for purposes of 3(o). (All three of these opinion letters were issued by the Clinton administration.)   Deputy Administrator Leppink acknowledged that recent Circuit Court decisions were consistent with the 2002 and 2007 Opinion Letters and contrary to the DOL’s new position. The Interpretation attempts to distinguish those appellate court decisions, but the new position of DOL cannot be reconciled with them. 

In a second and potentially much more controversial opinion, Ms. Leppink stated that even if “changing clothes” is excluded from “hours worked” under § 3(o) and is non-compensable, it nevertheless can be a principal activity that may starts the continuous compensable workday if it is otherwise a “principal activity.” The FLSA provides that employees are entitled to compensation for all hours worked from the beginning of the first “principal activity,” until the end of the last “principal activity,” including any task which is “integral and indispensible” to those principal activities. The 2007 Opinion Letter and numerous court decisions which held that where § 3(o) excludes from “hours worked” the time cannot start the compensable work day. Ms. Leppink rejected that position and referred to the conclusions in the 2007 Opinion Letter as “conclusory.”   An argument can be made that such an interpretation renders § 3(o) meaningless and is directly contrary to the legislative history of the statute. The DOL’s new position as set forth in the Interpretation, is that any time spent following clothes changing, including time spent walking or commuting to an employee’s actual work station, is now compensable regardless of whether the employer is unionized or § 3(o) is applicable, unless the employer can demonstrate such changing time is not integral and indispensable.    

All employers should carefully review their practices regarding whether any mandatory attire worn by employees constitutes a “uniform”, and whether changing time and/or time immediately following changing time is compensable in light of this Interpretation due to the expansive nature of its language. Unionized employers who have negotiated time donning and doffing protective clothing as non-compensable must carefully consider whether to continue such a practice.   An influx of FLSA claims, especially against unionized employers who have availed themselves of § 3(o), is likely and it will be up to the courts to decide whether to adopt the DOL’s modified positions.
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Federal Court Finds Pre-Shift Time De Minimis And Non-Compensable

Posted on June 11, 2010 by Noel Tripp

The Second Circuit recently affirmed a district court’s decision dismissing security guards’ claims for minimal amounts of allegedly uncompensated work time. In doing so, the Court reiteratedthe general principle applied by federal courts that “"[w]hen the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. . . . It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved." Albrecht v. Wackenhut Corp., 2010 U.S. App. LEXIS 10973 at * 3 (2d Cir. N.Y. May 28, 2010) quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692 (1946).

In Albrecht, the security guards alleged that time spent obtaining and returning their firearms and radios pre and post-shift constituted a “principal activity” under the FLSA, and thus was compensable. The court held that the Plaintiffs failed to controvert evidence in the record that such “arming up” and “arming down” involved only 30-90 seconds, and thus was de minimis. Id. at * 5. 

The Court acknowledged Plaintiffs’ argument that a requirement that non-exempt employees be present and available “15 minutes before the start of a scheduled shift” could give rise to a viable claim under the FLSA, but held that this claim was not properly alleged in the original complaint, which was limited to the time related to arming up and down. Id. at * 5-6.

Despite this favorable result, employers should be conservative in deeming mandatory time spent on premises to be non-compensable as a preliminary and/or de minimis activity.  In fact, the USDOL generally does not recognize the de minimus defense.

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