Wages

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Q.  Have there been any recent changes to the overtime pay rules that we have to be concerned about?

A.  Currently, under both federal and Pennsylvania law, to be exempt from overtime under the “white collar exemptions,” an employee must meet both the salary basis test and the duties test, meaning they must make more than a certain amount weekly and perform certain identified duties. The salary threshold has been stagnant for decades. In 2016, however, the Department of Labor (DOL) announced new regulations that would increase the salary threshold from $23,660 annually ($455 per week) to $47,476 (or $913 per week).  The regulations however, fell short of becoming law when a federal court in Texas enjoined the DOL from implementing it, only weeks before it was set to go into effect.  Today, the federal law remains in limbo, with speculation that new regulations will be issued raising the salary test to less than the previously anticipated increase, although the exact amount remains unclear.

Q.  Our company wants to establish an internship program and host student interns to work alongside our employees. Do we need to pay the interns?

A.  Possibly. Over the past few years, courts and the Department of Labor (“DOL”) have carefully examined the relationship between businesses and unpaid student interns to determine whether students working at a company are more properly classified as unpaid interns or employees protected by the Fair Labor Standards Act (“FLSA”).  Under the FLSA, if an individual is deemed a non-exempt employee, that employee must be paid at least a minimum of $7.25 per hour and one and a half times their regular rate of pay for all hours worked in excess of 40 in a workweek.  The minimum wage is higher in many states, including New York and New Jersey.

Q: Do I need to pay non-exempt employees when they go on short rest breaks of 20 minutes or less?

A: Yes.

The United States Department of Labor (“DOL”) has long taken the position that when employers offer non-exempt employees short breaks of under 20 minutes, the time spent on that break is “compensable” under the federal Fair Labor Standards Act (“FLSA”).

Q: Do I need to pay my employees if my company has closed or temporarily shut down operations due to a natural disaster or inclement weather?

A: It depends.

In the aftermath of Hurricanes Harvey and Irma, and in anticipation of the upcoming winter snow season, many employers are questioning whether they need to pay employees when their company cannot open due to a natural disaster or inclement weather.

Q.  What is the status of the EEOC’s requirement that we submit pay data with our annual EEO-1 Form?  Also, have there been any updates on the lawsuit blocking the DOL’s rule raising the salary basis for certain non-exempt employees?

A.  As we reported previously, the EEOC, as part of its effort to detect and remedy pay discrimination, amended its EEO-1 Form to require that employers with 100 or more employees submit detailed pay data on their workforce.  On August 29, 2017, the OMB sent a memorandum to the EEOC, staying implementation of this requirement.  Thus, at least for now, employers may limit the information provided on the EEO-1 Form to data on race, ethnicity and gender by occupational category (but not data on pay or hours worked).

Q.  I heard there is a new law in New York City that covers retail and fast food establishments. What do I need to know?

A.  Effective November 26, 2017, retail and fast food employers will be subject to strict new laws that govern scheduling. The law is meant to provide retail and fast food employees with more predictability around scheduling by requiring employers to provide schedules a certain amount of time in advance, and prohibiting on-call shifts, among other provisions. Retail employers are simply prohibited from violating the law, while the law provides that fast food employers are required to pay employees premiums of varying amounts for some violations.

Q.  An employee worked several hours of overtime last week. Can I offer him compensatory time off, to use in the future, rather than pay him overtime?

A.  Currently, unless you are a public-sector employer, the answer is no. Under the Fair Labor Standards Act, employees who are not exempt must be paid overtime pay (one and one-half times their regular pay rate) for all hours worked over 40 in a work week.

That may soon change, however.

Q.  I understand that the Philadelphia Wage Ordinance was supposed to go into effect soon. Do I need to take action to comply now?

A.  As we blogged previously, the new Philadelphia Ordinance would make it unlawful for employers in Philadelphia to inquire about a prospective employee’s wage history or require disclosure of wage history as a condition of employment. Employers would only be permitted to rely on such information if the prospective employee knowingly and willingly disclosed his or her wage history to the employer.