Fair Labor Standards Act (FSLA), FLSA Requirements, Independent Contractors, US DOL

Crisis = Opportunity with FLSA Changes

time is moneyFrom the outrage and dread being spewed on the blogos-fear, one would think that the latest moves by the U.S. Department of Labor (DOL) on overtime pay and the misclassification of independent contractors are nothing but bad news for employers.

But the Update is here to report a silver lining.

As you may have seen reported in July, President Obama announced proposed federal regulations for the Fair Labor Standards Act that would substantially revise the law on “white collar” exemptions to overtime pay, including more than doubling the minimum salary required for such exempt positions.  As a refresher, “white collar” employees who perform certain executive, professional and administrative duties can be exempt from overtime pay, if they are paid a base salary that exceeds the minimum threshold (currently $455 per week).  The proposed DOL regulations are far from final, but they give employers a great opportunity to review – and change  – any problematic treatment of employees who, arguably, should have been overtime eligible all along.

The same applies to the recent “interpretation” published by the DOL on July 15, 2015, in relation to the misclassification of employees as “independent contractors.”  According to the DOL, “most workers” now should be considered employees rather than independent contractors, and the DOL intends to “crack down” on employers that misclassify portions of their workforce as independent contractors in order to avoid overtime pay obligations, wage taxes, benefit costs and other expenses.  If a worker performs tasks that are “integral to the employer’s business,” then that worker is most likely an employee, according to the DOL.  Likewise, if the worker is “economically dependent” on the employer, then he must be an employee, the DOL contends.

Instead of merely complaining about this double-barreled DOL attack, employers should seize the opportunity to review and revise any longstanding and improper treatment of employees, thus emerging stronger than ever — before any new rules kick in.  If employers find that some employees are currently not being paid overtime – or treated as employees – but they should be, the new DOL efforts provide a good rationale for making a change now, without highlighting to employees that any pre-existing practices could support a claim for back pay.

For example, an employer that has not been paying overtime wages to “assistant managers” who might be seen by the DOL as non-exempt senior retail sales clerks, could use the proposed DOL regulations as a reason to shift the employees from salaried to hourly, with overtime.  A typical announcement in such a situation could state, “In light of newly proposed federal regulations that will change the rules with regard to ‘exempt’ salaried employees, ABC Company has reviewed and updated its pay policies.”  The employer can then bring the employees’ pay into compliance with less chance of raising a red flag — or class action lawsuits – by an employee asking, “Hey, should I have gotten overtime pay in the past?”

Likewise, employers can change independent contractors to employees – where existing law supports the reclassification – and can explain that the DOL has just come out with “new” guidance that, in the company’s view, makes it more appropriate to pay the worker as an employee going forward.

Using the DOL initiatives as the driving force behind such changes in pay is a proven strategy that can reduce the employer’s risk of wage and hour claims, and bring the workforce into greater compliance with federal law.

Action item:  The first step in this process is to conduct a “wage and hour audit,” either internally or with outside employment counsel, to determine whether the employer has any compliance vulnerabilities (most employers do), either under existing law or the proposed changes in the law.  Once that is done, the employer can then work with counsel to determine the best path forward to make any changes needed, including the important “messaging” noted above that can limit the risk of individual or class action suits.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLCFor more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Domestic Violence Unpaid Leave LAw, New Jersey Employers, SAFE Act, Uncategorized

New Jersey Extends Employee Rights Protection to Victims of Domestic Violence and Sexual Assault, Imposes New Obligations on Covered Employers

New Jersey is joining the small but growing number of states expanding workplace protections for victims of domestic violence. Beginning October 1, 2013, New Jersey employers with at least 25 employees must provide up to 20 days of unpaid leave to employees who are victims of domestic violence and sexual assault. The expanded rights provided to employees under the New Jersey Security and Financial Empowerment Act (“SAFE Act”) (law S2177) impose new and important obligations on employers. The City of Philadelphia has had a similar ordinance, known as the Domestic Violence Unpaid Leave Law, since 2009, which requires covered employers in the city to provide up to eight weeks of unpaid leave for victims of domestic violence.


Under New Jersey’s SAFE Act, employers must allow eligible employees who are victims and/or Keys for compliancewhose family members (children, parents, spouses, domestic partners or civil union partners) are victims of domestic violence or a sexually violent offense to take up to 20 days of unpaid leave in the 12-month period following an incident. Each incident of domestic violence or sexually violent offense is considered a separate offense for which an employee is entitled to unpaid leave, provided that the employee has not exhausted the allotted 20 days for the 12-month period. When an employee or an employee’s family member has been a victim of domestic violence or sexual assault, the employee may request leave for one of the following reasons:

  1. Seeking medical attention for, or recovering from, physical or psychological injuries caused by domestic or sexual violence
  2. Obtaining services from a victim services organization
  3. Obtaining psychological or other counseling
  4. Participating in safety planning, temporarily or permanently relocating, or taking other actions to increase the safety of the victim from future domestic or sexual violence or to ensure economic security
  5. Seeking legal assistance or remedies to ensure the health and safety of the victim, including preparing for, or participating in, any civil or criminal legal proceeding related to or derived from domestic or sexual violence
  6. Attending, participating in, or preparing for a criminal or civil court proceeding relating to an incident of domestic or sexual violence

Leave Timing and Notification

The SAFE Act protections apply to employees who have been employed at least 12 months and worked at least 1,000 base hours during the 12-month period immediately preceding the leave. Employees who wish to exercise their rights to leave under the SAFE Act, must provide written notice as far in advance as is reasonable under the circumstances. Employers may require the employee provide written documentation of the incident, and the SAFE Act lists specific forms of documentation that must be deemed sufficient, including, court orders, letters from prosecutors, conviction records, and medical records.

The leave may be taken intermittently in intervals of no less than a day. An eligible employee may elect, or an employer may require the employee, to use any of the accrued paid vacation leave, personal leave, or medical or sick leave of the employee during any part of the 20-day period of unpaid leave provided under the SAFE Act. In such case, any paid leave provided by the employer, and accrued leave pursuant to established policies of the employer, run concurrently with the unpaid leave provided. The employee must receive pay pursuant to the employer’s applicable paid leave policy during the period of otherwise unpaid leave. If an employee requests leave for a reason covered by both the SAFE Act and the Family Leave Act or Family and Medical Leave Act, the leave counts simultaneously against the employee’s entitlement under each respective law.

Additional Employer Obligations

To comply with the SAFE Act, employers must conspicuously display a notice of employees’ rights and obligations under the SAFE Act. A form of this notice will be published by the Department of Labor and Workforce Development. The Act also requires a covered employer to use “other appropriate means to keep its employees so informed,” but it is silent as to what other means may be used.

Until further guidance is issued, employers should consider including notifications of SAFE Act rights in employee handbooks, on Intranet sites, and in other places where the employer advises employees about their rights to leave.

Consistent with New Jersey’s other anti-discrimination and anti-retaliation laws, the SAFE Act expressly forbids employers from discriminating or retaliating against employees who exercise their rights under the SAFE Act and provides a range of available damages, which include civil penalties, lost wages, and attorneys’ fees.

This legal alert was guest-written by Adam E. Gersh. To learn more about complying with the SAFE Act or to address other labor and employment issues, please contact Michael D. Homans.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLCFor more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Family and Medical Leave Act, FMLA, I-9 Form, U.S. Department of Labor, United States Citizenship and Immigration Service

New Forms for FMLA and Immigration.

Last week was a blockbuster when it comes to new government forms and notices relating to employment.

First, the U.S. Department of Labor has issued final regulations and an updated poster for the Family and Medical Leave Act (FMLA), incorporating recent changes in the law, relating primarily to seldom-used military caregiver leave for a veteran, qualifying exigency leave for parental care and job-protected leave for airline personnel and flight crews. The poster is available here and every covered employer is now required to post the new notice, either physically or on the company intranet.

Second, the United States Citizenship and Immigration Service has issued a new I-9 form (linked here at new Two Page I-9) that all employers must use (with a 60-day grace period that started March 8, 2013).

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLCFor more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.