Rhode Island Court Clarifies Sunday Premium Pay Laws, Holds Employer Liable for Back Pay and Assesses Penalty

The Rhode Island Superior Court recently issued a decision that clarifies the Sunday premium pay laws and regulations in Rhode Island. In affirming a Department of Labor and Training (DOLT) decision on appeal, a Superior Court judge declared DOLT regulations related to the vestigial Sunday work permit requirements a nullity. The judge further determined that the employer’s reliance on those regulations and associated guidance from DOLT did not provide the employer with a basis for relief from back pay and penalties assessed for failing to compensate employees in accordance with the Sunday premium pay laws.

Before 1998, Rhode Island law prohibited employers from requiring employees to work on Sundays, except for work that was of absolute necessity or that was performed pursuant to a permit issued by DOLT in cases of economic necessity. The law further provided that employees who worked on Sundays pursuant to a permit were to be paid at least one-and-one-half times their normal rate of pay. Additionally, the law afforded DOLT the authority to exempt by regulation any class of employers it determined should be exempted due to their operations or size. DOLT issued regulations relating to the old, work permit law, defining various terms and exempting various employers. As those employers were exempt from the permit requirements, they were also exempt from the requirement to pay time and a half to their employees when operating pursuant to a permit.

In 1998, the Rhode Island General Assembly substantively amended the law to eliminate the absolute necessity and DOLT permit requirements for operation on Sundays. The new statute, as then and now in effect, requires that work performed on Sundays and holidays be paid at time and a half.

In 2002 and again in 2007, DOLT re-filed its old regulations relating to the work permit law and defining “absolute necessity,” despite the significant change in the law eliminating those provisions. Nothing in the new statute, however, expressly repealed those old regulations. Effective in 2008, DOLT issued new regulations relating to exemptions for work on holidays and Sundays in conformity with the new statute. Like the new statute, however, the new regulations did not expressly repeal the old regulations.

The old regulations exempted certain public utilities (by classifying their operations as “absolutely necessary”), as well as businesses licensed or regulated by the federal government, from the Sunday work permit laws. DOLT issued letters in 2005 and 2007, both of which confirmed that public utility companies remained exempt from the Sunday premium pay requirements after the 1998 amendment, notwithstanding the fact that the amendment eliminated the “absolutely necessary” provision.

Park Row, the employer in the recent decision, owns and operates a parking garage that is open seven days per week, servicing the Providence Train Station pursuant to an agreement with Amtrak. Two garage attendants filed complaints with DOLT in 2010 because Park Row did not pay them time and a half for their hours worked on Sundays. Park Row claimed that it relied on DOLT’s longstanding practice of exempting parking garages and public utilities from the Sunday premium pay requirement, as documented in the two advisory letters from DOLT and in the old regulations. The DOLT hearing officer, however, determined that the Sunday pay requirements under the new law applied to Park Row and ruled in favor of the complainants. The case then volleyed between the Superior Court on review, DOLT on remand, and, most recently, the Superior Court on review again.

In the Superior Court’s most recent decision, Judge Carnes affirmed DOLT’s decision, including its award of back pay and imposition of a 25 percent administrative penalty. The decision establishes that the pre-1998 Sunday work permit requirements were altogether abolished by the amended law. Thus, the old regulations that were republished in 2002 and 2007 had no legal force and were absolute nullities, in spite of their continued publication by DOLT.

The court also held that DOLT was not bound by its prior letter interpretations because those interpretations were grounded on mistake and were in conflict with the applicable law. Park Row had argued that DOLT should have been equitably estopped from enforcing the Sunday premium pay requirements against it in light of DOLT’s fairly recent, contrary interpretations of the statutes in its 2005 and 2007 letters. The Superior Court, however, found that the DOLT official who wrote the advisory letters had no actual or implied authority to assert that the old regulations were still valid and to offer an interpretation of them, because the 1998 legislative amendments rendered the old regulations void, even if the amendments did not expressly void them. Thus, the DOLT official’s advice was an ultra vires act that had no legally binding effect and afforded Park Row no basis for relief on a theory of estoppel as against a government entity.

In addition, the Superior Court on review upheld the administrative penalty of 25 percent assessed by DOLT. The court found the penalty reasonably related to Park Row’s failure to abide by the Sunday premium pay laws and was not an abuse of discretion by DOLT.

Key Takeaways

All Rhode Island employers must ensure that their Sunday pay practices comply with the most recent law, effective in 1998, and the new DOLT regulations, effective in 2008, that apply to it.  The old regulations, despite continued availability and publication, are void.

Generally, Rhode Island employers must pay their employees time and a half for hours worked on Sundays. Current Rhode Island laws and regulations provide some exemptions to the Sunday premium pay requirements, including exemptions for the following: manufacturers that operate continually, seven days a week; taxi and livery companies that operate 7 days a week and 24 hours a day; qualified fueling operators, maintenance technicians, and car rental agencies at T.F. Green Airport; gas stations approximate to major interstate highways that operate 7 days a week and 24 hours a day and provide fuel sales, vehicle servicing, and a convenience store or restaurant; qualified churches or places of worship; individuals providing health care; restaurants and hotels; and exempt employees under the Fair Labor Standards Act. Employers may also petition DOLT for an exemption through a procedure set forth in the new regulations.

Violations of the Rhode Island Sunday premium pay laws, even if the result of a good-faith reliance on DOLT regulations and advisories, may subject an employer to an assessment of back pay and administrative penalties.