The Department of Labor’s Latest Final Rule Publication Regulates Managers Who Receive Tips and Delineates Willful Violations of the FLSA

“Drip, drip, drip” is the best description of the Biden administration’s staggered attack on the 2020 Tip Final Rule through delays, withdrawals, amendments and notice of proposed rulemaking (NPRM). The latest action by the Department of Labor (DOL) came last week, when the Wage and Hour Division published its final rule addressing managers who receive tips and penalties for violations of the Fair Labor Standards Act (FLSA) (September Tip Final Rule). These regulatory amendments will be effective Nov. 23, 2021.

Managers Who Receive Tips

As expected, the September Tip Final Rule tracks the 2018 Consolidated Appropriations Act (CCA) by prohibiting managers, supervisors and employers from keeping employees’ tips, and it defines managers and supervisors in line with the executive exemption from overtime. See 29 C.F.R. § 531.52(b)(2); see also 29 C.F.R. §§ 541.100(a)(2)-(4) and 541.101 (delineating the executive exemption). Also as expected, the September Tip Final Rule allows mandatory tip pools to include employees who do not customarily and regularly receive tips if the employer pays all employees in the pool the full minimum wage and does not take a tip credit. See 29 C.F.R. § 531.54(c)(3) and (d).

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12 Quick Takeaways from the Safer Federal Workforce Task Force’s Vaccine Mandate for Federal Contractors

On Friday, Sept. 24, 2021, the Safer Federal Workforce Task Force published its new guidance pursuant to the president’s recent executive order directing that all federal contractors’ employees be vaccinated. The detailed 14-page guidance has a number of important clarifications of who must be vaccinated, by when and what other steps a federal contractor must take.

Here are 12 high-level takeaways.

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Sharply Divided En Banc 5th Circuit Opines on Salary Basis Requirement for Day Rate Employees Under the FLSA

In a 12-6 split decision, the en banc 5th Circuit Thursday evening released its ruling in Hewitt v. Helix Energy Solutions Group, Inc., Case No. 19-20023, addressing the issue of when an employee paid a daily rate can qualify for the “salary basis” requirement for certain exemptions from overtime pay under the Fair Labor Standards Act (FLSA). The majority of the 5th Circuit held that, despite earning over $200,000 a year and indisputably performing job duties that qualified for exempt status, the plaintiff was not exempt from overtime pay because he was paid a day rate that did not comport with the “salary basis” requirement.

The FLSA exempts certain “executive,” “administrative” and “professional” employees from overtime pay. The Department of Labor (DOL) regulations interpreting these exemptions require that, in order to qualify, employees must (1) perform certain job duties and (2) be paid at least $684 per week on a “salary basis.” The DOL regulations also exempt certain “highly compensated” employees (HCEs) who (1) receive $107,432 in total annual compensation, which must include at least $684 per week paid on a salary basis, and (2) customarily and regularly perform at least one exempt executive, administrative or professional job duty. Continue Reading

The President’s Vaccine Executive Order – A Prelude of Things to Come for Federal Contractors?

With much fanfare, on Sept. 9, 2021, President Joe Biden announced, among other wide-ranging proposed requirements for employers generally, a COVID-19 vaccine mandate for federal employees and certain government contractors. The president stated that he signed an “executive order that will require federal contractors to” have their employees vaccinated. (“Remarks by President Biden on Fighting the COVID-19 Pandemic,” Sept. 9, 2021.)

Although this recent announcement regarding government contractors and related announcements from the president have generated substantial headlines, their collective effect is by no means immediate, despite the executive order pertaining to contractors stating that it will take effect “immediately.” (“Executive Order on Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors,” Sept. 9, 2021.) Rather, a closer read of the executive order reveals that it may take some time to take full effect, assuming it remains unchallenged, although it can be assumed that the administration will do everything it can to rapidly deliver on the president’s remarks.

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BREAKING: OSHA’s Vaccine Mandate and Unionized Employer Bargaining Obligations

President Biden has just announced that he is tasking OSHA with implementing a new emergency rule mandating that employers with at least 100 employees either require their workforce to be vaccinated or require unvaccinated employees to produce a negative COVID-19 test every week.  Details are still very scant, but it does not appear that the rule will require employers to actually administer the tests.  Instead, the onus will be on unvaccinated employees to get tested and submit the results.

Because the rule will be adopted as an emergency temporary standard, the adoption process will be expedited and will not involve a period for public comment.  Nonetheless, given that OSHA’s emergency COVID-19 rule for healthcare workers required six months to develop, it’s possible that the new emergency rule may not take effect until toward the end of this year.

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COVID-19 Designated as a Highly Contagious Communicable Disease Under NY HERO Act

As we previously discussed in May and July, the New York Health and Essential Rights Act (NY HERO Act), signed into law by then-Gov. Andrew Cuomo, required employers to take numerous health and safety measures in response to the COVID-19 pandemic.

On Sept. 6, 2021, Gov. Kathy Hochul announced that the commissioner of the New York State Department of Health (NYSDOH Commissioner), under the NY HERO Act, designated COVID-19 as a highly contagious communicable disease that presents a serious risk of harm to the public health. Therefore, companies must now implement their airborne infectious disease exposure prevention plans. The NYSDOH Commissioner’s designation will remain in effect until Sept. 30, 2021, at which time he will review the level of transmission of COVID-19 in New York State and determine whether to continue the designation.

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Caution Signs Ahead: New NLRB General Counsel Memo Offers a Surprising (and Alarming) Road Map of Plans and Priorities

New National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo appears ready and willing to help deliver on President Joe Biden’s promise to be “the most pro-union president [we’ve] ever seen.”

Abruzzo issued a recent memorandum listing various types of cases on which the NLRB’s regional directors will be required to seek guidance during her term so that she can execute a “centralized” strategy in changing the labor law landscape. According to the memorandum, such centralized consideration is necessary in light of the “wide array of doctrinal shifts” that the board has undertaken in the past several years. In other words, the new general counsel is looking for immediate opportunities to overturn Trump-era NLRB precedent and steer the law in a decidedly pro-labor direction. Continue Reading

A Brave, New World? Recent NLRB Rulings Concerning Mail Ballot Elections May Be The Beginning Of A New Era In Board Elections

Since the onset of the COVID-19 pandemic in March 2020, unions and employers alike have had to adjust to a “new normal” of mail ballot NLRB elections. Under normal circumstances, the NLRB’s preferred and standard method for conducting elections is in person, usually at the employer’s facility and – depending on the size of the voting pool – at various times throughout the workday. But in the context of the pandemic, a majority of NLRB elections have instead been conducted by mail ballot. As the Delta variant has pushed infection rates back to alarming levels in many states across the U.S., mail ballot elections may continue to be the rule rather than the exception, at least in some hard-hit areas.

With mail ballot elections, however, come many unique questions and concerns about maintaining the integrity of the voting process and effectively preventing the coercion and manipulation of employees. Two recent NLRB cases are particularly illustrative in this regard.

In Professional Transportation, Inc., 370 NLRB No. 132 (2021), the NLRB established a bright-line rule concerning voting solicitation in the mail ballot context. Moving forward, employers and unions will be deemed to have committed objectionable conduct in an NLRB mail ballot election by offering to collect employee mail-in ballots for mailing or by otherwise offering to assist in mail ballot submission. The NLRB held that such solicitation casts doubt on the integrity of the election process and the secrecy of employee ballots. Moreover, in the NLRB’s view, solicitation of mail ballots also suggests that the party engaging in such conduct is officially involved in the election process, which the Board has held is “incompatible with [its] responsibility for assuring properly conducted elections.” The Board therefore concluded that solicitation of mail ballots may be grounds for overturning election results if the solicitation affects enough votes to determine the outcome. Notably, Chairman McFerran observed in a footnote to the opinion that “it is time for the Board to reevaluate its historic preference for manual elections and to consider expanding and normalizing other ways to conduct elections on a permanent basis, including mail, telephone, and electronic voting.”

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Welcome to Turkmenistan: Joint Employment Rules Rescinded, Leaving Massive Crater in FLSA Regulations

No visit to Turkmenistan would be complete without a visit to the Darvaza Crater, more commonly known as the Door to Hell. This massive crater formed decades ago after a Soviet drilling rig collapsed. Roughly 40 years ago, the Soviets lit the crater on fire to burn off the methane. But Turkmenistan has some of the largest gas reserves in the world, which meant you couldn’t just make the gas go away.

The fire still burns today, and the massive, fiery hole is an impressive sight.

A massive hole can also describe what the Department of Labor’s Wage and Hour Division (WHD) just created. Continue Reading

New NYC Law Requires Two-Step Background Checks and Expands List of Pre-Adverse Action Factors

The New York City Fair Chance Act (FCA) amendments expand protections for individuals with a criminal record and impose new obligations on employers that conduct background checks. The changes take effect July 29, 2021.

The amendments require most background checks to be conducted in two steps,[1] provide “complete protection” for non-convictions and add specific FCA factors that must be evaluated for pending criminal charges. Continue Reading