Pennsylvania Governor Repeals New Overtime Rules as Part of Budget Deal

On June 30, 2021, Pennsylvania Governor Tom Wolf signed an approximately $40 billion state budget package. In exchange for increased funding for public schools in the state budget, Governor Wolf agreed to repeal Pennsylvania’s new overtime regulations, which were set to increase the minimum salary that employers must pay to certain salaried employees to classify them as exempt from overtime requirements under the Pennsylvania Minimum Wage Act of 1968.

DOL Proposes New Rule to Establish Minimum Wage Standards for Federal Contractors

On July 22, 2021, the U.S. Department of Labor (DOL) published a notice of proposed rulemaking to outline the standards and procedures that it will use to administer President Joe Biden’s Executive Order 14026, which he signed on April 27, 2021. Executive Order 14026 proposed an increase to the minimum wage for workers performing work on federal contracts to $15 per hour beginning January 30, 2022. The proposed rule applies only to federal contractors. It builds upon Executive Order 13658 signed by then-president Barack Obama that established a minimum wage of $10.10 for federal contractors with annual increases for inflation. The current rate is $10.95 per hour; the minimum wage for tipped federal contract workers is $7.65 per hour. Below is a brief summary of the scope of the DOL’s proposed rule and changes, if finalized.

Colorado Moves the Goalposts Again on White-Collar Exemptions

In November 2020, the Colorado Department of Labor and Employment (CDLE) adopted Colorado Overtime and Minimum Pay Standards Order (COMPS) #37, which went into effect on January 1, 2021. COMPS #37, like its predecessor orders, outlined the requirements for employees to qualify for exemption from Colorado’s overtime and minimum wage requirements. Among other things, COMPS #37 clarified a point that employers had long struggled with: Colorado’s requirement that an employee “directly serve[]” an “executive” to qualify for the administrative exemption.

Burned-Out Workers and Time-Off—Do Employment Laws Allow Flexibility?

As the United States gradually emerges from the pandemic, employers (and especially those in the tech sector whose workforces can easily work remotely) are looking for ways to help frazzled and burned-out employees. In addition, many employees are seeking opportunities to preserve the flexibility they gained during pandemic remote-work arrangements. Time off, company holidays, and workday flexibility are among the top remedies for these concerns. But outmoded state and federal labor laws may impede a new era of worker freedom.

California Supreme Court’s Decision on Premium Payments for Meal, Rest, and Recovery Break Violations

On July 15, 2021, the California Supreme Court issued a decision that will increase dramatically California employers’ potential liability for missed meal, rest, and recovery breaks. In Ferra v. Loews Hollywood Hotel, LLC, the court unanimously held that employers must pay premium payments to employees for missed meal, rest, and recovery breaks at the employee’s “regular rate of pay” instead of their base hourly rate, as many employers were doing.

Ontario Court Finds Non-Ontario Payrolls Count Toward Severance Threshold

In its recent ruling in Hawkes v Max Aicher (North America) Limited, 2021 ONSC 4290, the Ontario Divisional Court ruled on an application for judicial review that the entire payroll of an employer that terminates the employment of an Ontario-based employee should be used to determine whether the employer’s payroll is at least $2.5 million per year, and therefore whether severance pay may apply. This decision reversed a ruling from the Ontario Labour Relations Board (OLRB) that was based on previous case law finding that only an employer’s Ontario payroll was considered for the severance pay threshold.

First Circuit Upholds Federal Preemption of Massachusetts Wage Act Claims

On June 10, 2021, the First Circuit Court of Appeals upheld the dismissal of a plaintiff’s lawsuit alleging, among other things, failure to pay wages under the Massachusetts Wage Act. In Rose v. RTN Federal Credit Union, the First Circuit held that the Labor Management Relations Act (LMRA) preempted the plaintiff’s wage claims because she was a member of a union and because her employer, RTN Federal Credit Union, had an existing collective bargaining agreement (CBA) with the union that governed her wages and overtime pay.

Colorado Supreme Court Holds ‘Use-It-Or-Lose-It’ Vacation Policies Are Void in Nieto v. Clark’s Market

On June 14, 2021, the Colorado Supreme Court provided an answer to the long-standing question of whether “use-it-or-lose-it” vacation policies are permissible under the Colorado Wage Claim Act (CWCA). In the case of Nieto v. Clark’s Market, No. 19SC553, the Colorado Supreme Court held that an employer may not require an employee to forfeit vacation pay upon the termination of the employment relationship, and any agreement purporting to do so is void.

Wisconsin Supreme Court Limits Tort Claims Related to Conduct Following Worker’s Compensation Injury

On May 20, 2021, the Wisconsin Supreme Court limited the tort claims an employee may bring based on alleged conduct that occurred between injuries covered under the state’s workers’ compensation law. The opinion in Graef v. Continental Indemnity Company may support employer arguments to limit employment-related litigation claims brought by employees because worker’s compensation provides an exclusive remedy to employees injured in the course of employment.

Virginia Overtime Wage Act: How Employers Can Prepare for the July 1 Effective Date

The Virginia Overtime Wage Act (VOWA), Va. Code § 40.1-29.2, becomes effective July 1, 2021, and will significantly alter employers’ wage and hour obligations in Virginia. At first glance, the VOWA appears to track federal law under the Fair Labor Standards Act (FLSA). Upon closer examination, however, this new law contains important nuances that deviate from the FLSA, such as a new method for calculating the regular rate of pay, an extended statute of limitations, automatic liquidated damages, possible treble damages, and the effective elimination of popular pay schemes.

100 Days of the Biden Administration, Part I: Key Labor and Employment Policy Developments

April 30, 2021, marked President Joe Biden’s 100th day in office, and his administration has wasted little time advancing its policy priorities. At this moment, the administration is focusing most of its attention on repealing much of the policy accomplishments of the previous administration but can be expected to advance its own proposals in short time. Additionally, Democrats in the U.S. House of Representatives are looking for ways around the U.S. Senate’s legislative filibuster in order to advance their ambitious legislative agenda. Below is a very brief outline of the major labor and employment legislative actions of President Biden’s first 100 days.

Wisconsin Legislature Expressly Authorizes Electronic Tip Declarations

Like the federal Fair Labor Standards Act, Wisconsin law allows hospitality employers to pay certain tipped employees less than the minimum wage with the understanding that the tips they receive will cover the difference. More specifically, Wisconsin law allows employers to claim a tip credit of up to $4.92 per hour for employees who “customarily and regularly receive tips.” Among other things, Wisconsin law requires employers to have a “signed tip declaration” in order to claim the credit.

DOL’s New Outreach Initiative and Guidance on Application of the FLSA to Pandemic Scenarios, Including the Compensability of COVID-19 Screening Activities

On April 26, 2021, the U.S. Department of Labor (DOL) posted an update on its blog regarding its new Essential Workers, Essential Protections initiative, which is designed to “ensure that workers know about the wage and hour laws that protect them – and how to contact [the DOL] to get help if they need it.”

Multistate Compliance for Employers With Out-of-State Remote Employees

The COVID-19 pandemic has shifted a number of previously in-person positions to remote work and telecommuting. In the meantime, many employees have moved out of state from their usual office locations for personal or financial reasons. As a result, many employers are left wondering what their legal obligations are for remote employees working out of state. The biggest concerns are local employment laws, workers’ compensation insurance, and unemployment insurance obligations. Employers may also be subject to out-of-state payroll tax obligations.

Costa Mesa, California, Enacts Premium Pay Ordinance for Retail Grocery and Pharmacy Workers

On March 16, 2021, the City Council of Costa Mesa, California, passed an urgency ordinance establishing premium pay for retail grocery and pharmacy workers during the COVID-19 pandemic. Costa Mesa is a large city in Orange County located southeast of Los Angeles. The ordinance requires that large retail establishments that sell groceries or prescription and nonprescription drugs in Costa Mesa provide their workers with premium pay of $4.00 for each hour worked. The ordinance took effect immediately and will expire 120 days from its effective date.

California Legislature Sends New COVID-19 Supplemental Paid Sick Leave Bill to Governor for Signature

Within days, California employers may have to provide employees with even more COVID-19–related paid leave. On March 18, 2021, the California Legislature passed Senate Bill 95, which creates new Labor Code Section 248.2 and Labor Code Section 248.3. These new Labor Code sections provide covered employees and in-home supportive service providers with up to 80 new hours of COVID-19 supplemental paid sick leave. As explained below, the bill is far more expansive than the California COVID-19 supplemental paid sick leave statute that expired on December 31, 2020. The new legislation covers more employers and requires paid sick leave for many more reasons.   If Governor Newsom signs SB 95, the law will take effect 10 days later and expire on September 30, 2021, unless extended.

Incomplete Payroll Records Lead to Employer FLSA Liability, Fifth Circuit Rules

Employers recognize that the Fair Labor Standards Act (FLSA) requires that they pay nonexempt employees overtime wages for all hours worked in excess of 40 hours in a workweek. Additionally, the FLSA imposes recordkeeping requirements on employers regarding the hours worked by their nonexempt employees. A recent Fifth Circuit Court of Appeals decision, U.S. Department of Labor v. Five Star Automatic Fire Protection, LLC, illustrates the danger to employers when they fail to keep complete timekeeping records of their nonexempt employees’ work.

American Rescue Plan Act Signed: Details on the Latest COVID-19 Relief Package

On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021—a $1.9 trillion economic relief package. While the legislation marks the first major legislative victory for President Biden and the administration, it is the sixth federal legislative relief package aimed at addressing the COVID-19 pandemic and its economic fallout. The legislation continues some programs established in these previous efforts, but it also adds some important components. Set forth below are some of the major provisions of the American Rescue Plan Act.

Long Beach ‘Hero Pay’ Ordinance Survives Preliminary Injunction

On February 25, 2021, the U.S. District Court for the Central District of California denied a motion for preliminary injunction brought by the California Grocers Association (CGA) against the City of Long Beach. In California Grocers Association v. City of Long Beach, CGA asked the court to stop the city from enforcing its Premium Pay for Grocery Workers Ordinance, one of the many “hero pay” or “hazard pay” ordinances enacted by California localities in the past several weeks.

California Supreme Court Issues Significant Meal Period Decision

Taking a meal break in California is no simple affair.  Culminating seven years of litigation involving one California employer, on February 25, 2021, the Supreme Court of California issued its unanimous opinion in Donohue v. AMN Services, LLC, resolving two questions regarding California meal periods. The court’s opinion also raised, but did not resolve, questions regarding meal period compliance that will likely challenge employers and litigants for years.