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.

The executive order provides that executive departments, agencies and independent establishments must ensure that all contracts and contract-like instruments include a clause that specifies the contractor or subcontractor will comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force. What that full guidance will ultimately state is unclear, although the executive order further states that the task force, “as part of its issuance,” must provide by Sept. 24, 2021, guidance, definitions and protocols.

But even when the guidance is issued, the executive order states only that it applies to “any new contract; new contract-like instrument; new solicitation for a contract … ; extension or renewal of an existing contract … ; and exercise of an option on an existing contract … .” Thus, it would appear that as rules are developed pursuant to the executive order, they likely will apply only to new contracts, the exercise of an option on a contract or modifications to existing contracts (much like certain wage and benefits requirements have been implemented in recent years). There are also a number of exceptions contained in the executive order; for example, it does not apply to “subcontracts solely for the provision of products.”

With respect to existing contracts, “agencies are strongly encouraged, to the extent permitted by law, to ensure the safety protocols required … are consistent with the requirements specified” in the executive order.

What does all this mean right now? Stay tuned. At present, it is too early to say exactly what will flow from guidance that has not been fully developed. However, all employers, especially federal contractors, will need to closely monitor what flows from the president’s announcement in the coming weeks. We will follow up on further developments.

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.

The impact of the new emergency standard on unionized employers is somewhat uncertain at this point.  Unionized employers are not obligated to bargain over compliance with legal requirements, but may be required to bargain over the effects.  In the context of the new emergency rule, for example, unionized employers may have to bargain over how unvaccinated employees will be treated if they fail to submit a negative COVID-19 test (i.e., termination, suspension, paid leave, unpaid leave, etc.) and/or how religious exemptions to a vaccination requirement will be handled.

We’ll provide additional updates as more information becomes available.

Bottom Line: OSHA’s vaccine mandate does not necessarily excuse employers from an obligation to bargain over the effects of the mandate on the bargaining unit. Accordingly, employers must carefully review and understand this new standard before unilaterally implementing a broad vaccine policy.

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.

Violations of the NY HERO Act carry stiff civil penalties of up to $10,000 for first-time violators and $20,000 for repeat violators. Additionally, the law permits employees to bring civil lawsuits when they believe employers have violated the airborne infectious disease exposure prevention plan in a manner that creates a substantial probability that death or serious physical harm to the employee could result. Employees can seek injunctive relief and are able to recover the costs and reasonable attorneys’ fees associated with asserting their rights under the NY HERO Act in court.

Please feel free to contact an attorney at BakerHostetler should you have any questions.

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.”

Continue Reading

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

Pennsylvania Employers Beware: The State’s Highest Court Expands the Bounds of Compensable Time

In a 5-2 decision, the Pennsylvania Supreme Court held that employers in the state must now pay employees for time spent on their premises when waiting for – and undergoing – required security searches.

The court explained that this period of time, even if insubstantial, is compensable because it qualifies as “hours worked” under the Pennsylvania Minimum Wage Act (PMWA):

Hours worked … includes time during which an employee is required by the employer to be on the premises of the employer ….” Continue Reading

Update on the NY HERO Act: What the NY COVID-19 Worker Protection Law Means for Employers

On May 5, 2021, Governor Cuomo signed the New York Health and Essential Rights Act (NY HERO Act) into law. As discussed in an earlier BakerHostetler post, this law mandates extensive new workplace health and safety protections in response to the COVID-19 pandemic. Pursuant to the NY HERO Act’s directives, the New York State Department of Labor (NYSDOL), in conjunction with the New York State Department of Health (NYSDOH), developed an Airborne Infectious Disease Exposure Prevention Standard, a Model Airborne Infectious Disease Exposure Prevention Plan, and various industry-specific model plans for the prevention of airborne infectious diseases.

Employers are permitted to either adopt the applicable policy template and prevention plan provided by the NYSDOL or establish an alternative plan that meets or exceeds the standard plan’s minimum requirements. Should an employer elect to create its own airborne infectious disease exposure prevention plan, it must do so with employee participation in nonunionized workplaces and in consultation with collective bargaining representatives where there is a unionized workforce. An employer’s alternative prevention plan is required to incorporate industry-specific hazards and workplace considerations. Whether utilizing a model prevention plan provided by the NYSDOL or a customized prevention plan, employers must adopt said plan within 30 days of July 6, 2021, i.e., by Aug. 5, 2021. Continue Reading