Wage and Hour

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Effective July 1, new legislation will take effect in Virginia imposing further restrictions on the use of covenants not to compete and prohibiting their use for employees who are eligible to receive overtime pay under the Fair Labor Standards Act (FLSA), i.e., non-exempt employees.

Q: Now that 2021 is behind us, what are the new California employment law changes for 2022?

A: While employers continued to grapple with the effects of COVID-19 on their businesses, last year’s California legislative actions led to relatively fewer employment law changes than usual for the upcoming 2022 year. Below find descriptions of new employment-related changes, including new rules for severance agreements, expanded limitations on confidentiality and nondisparagement provisions in settlement agreements, extended recordkeeping requirements, changes to the California Family Rights Act, arbitration, COVID-19 compliance, wage and hour, and industry-specific developments.

Q: I heard New York is changing its rules around tip credits for some types of employees. What do I need to know?

A:  A tip credit is a concept permitted under the Fair Labor Standards Act (“FLSA”) and many state laws.  A tip credit allows employers to pay employees a cash wage of less than the minimum wage and take a tip credit up to a set amount.  For example, under the FLSA, employers can pay tipped employees a minimum cash wage of $2.13 per hour, and take a tip credit of $5.12 per hour.  If employees receive less than $5.12 an hour in tips, the employer must pay the employee the difference so that an employee always earns at least $7.25 (the minimum wage) per hour.  Regardless of whether an employer takes a tip credit, all tips are the property of the employee.  So, if an employer takes a tip credit and the employee makes more than $5.12 per hour in tips, the additional amount belongs to the tipped employee.

Q: I heard that the Pennsylvania Supreme Court recently issued a major ruling regarding overtime pay. What do I need to know?

A: On November 20, 2019, the Pennsylvania Supreme Court rejected the application of the fluctuating workweek method (“FWW Method”) of calculating overtime under the Pennsylvania Minimum Wage Act…

Q.  As a franchisor, could I potentially be held liable for the wage and hour violations committed by franchisees of my organization against their employees?

A.  On October 1, 2019, a three-judge panel of the Ninth Circuit Court of Appeals ruled that McDonald’s Corporation was not liable as a joint…

Q. A client of my company asked whether it could offer production bonuses to our employees who deliver their work product prior to the deadline. Does the FLSA require my company to account for these third-party bonuses when calculating the regular rate of pay for overtime purposes?

A.  The answer…

Q. Has the salary threshold increased for exempt status under the Fair Labor Standards Act?

A. On September 24 — more than five years after the Obama administration first proposed updating the overtime regulations of the Fair Labor Standards Act (FLSA) — the U.S. Department of Labor (DOL) released the…

Q.  What is the standard for determining whether a worker is an independent contractor for purposes of federal wage and hour laws and union organizing conduct?

A.  Recently, both the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB) issued documents supporting independent contractor status, evidencing the…

Q:  My company offers floating holidays to employees.  Can we have a “use it or lose it” policy for unused floating holidays?  Do they have to be paid out at termination?  What about personal days?

A.  Like many wage and hour questions, the treatment of floating holidays and personal days is governed by state law. As explained in more detail below, in most states, treatment of floating holidays and personal days is governed by the employer’s policy.  However, in California, treatment is governed by state law.