Wage and Hour

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The beginning of a new year, or new fiscal year, can often bring changes to a company’s workforce. Many businesses will perform or complete performance reviews and implement compensation changes based on the prior year. The new year can also be a time when employees make moves of their own – new year, new job.

All of this activity can create some thorny questions about a company’s obligations to a departing employee. Let’s say an employee receives a glowing performance review that merits a bonus and a raise for the following year. They are paid the bonus on February 15th and given the raise with an effective date retroactive to January 1st. In the following March, the employee submits notice of their resignation, announcing that their family has decided to move, and they have accepted a new job out of state. Their last day will be April 30th. Can the employer claw back the bonus that was just paid? What about the salary increase?

The gig economy has had a substantial impact on employment nationwide, and Minnesota is no different. Minneapolis in particular has been a hotbed for disputes between rideshare companies and local lawmakers trying to increase pay for their drivers. National rideshare companies recently threatened to pull out of Minneapolis entirely after the city council mandated pay increases that the companies said went further than necessary to meet the city’s minimum wage standards. Implementation of the new ordinance, and the threatened exodus by rideshare employers, have been delayed while the state legislature works on passing new regulations for the industry that would apply across Minnesota.

Under the Fair Labor Standards Act (FLSA), employers must provide overtime pay to employees at one and one-half times an employee’s regular pay rate for every hour the employee works beyond 40 hours in a workweek, unless the employee falls within a specified exemption. Under current U.S. Department of Labor (DOL) regulations, exempt employees include executive, administrative, professional, and computer employees who perform certain duties, and earn at least $684 per week ($35,568 annually). Highly compensated employees who perform office or nonmanual work and are paid a total annual compensation of $107,432 are also exempt.

As of September 13th, the Department of Labor’s Wage and Hour Division (DOL-WHD) is partnering with the Equal Employment Opportunity Commission (EEOC) to focus on “enhanced law enforcement” through information sharing, joint investigations, training, and outreach.

The Memorandum of Understanding (MOU) is considered voluntary and is not legally binding, but may…

The Paid Leave for All Workers Act, expected to be signed soon by Illinois Governor J.B. Pritzker, would require nearly all covered Illinois employers to provide employees paid leave to be used for any purpose. Illinois would be just the third state to mandate paid leave – only Maine and Nevada have similar laws.

Once signed, the Act would take effect on Jan. 1, 2024, and provide nearly all Illinois workers with a minimum of 40 hours of paid leave, or a pro rata number of hours, during a designated twelve-month period.

On January 26, 2023, the Michigan Court of Appeals reversed the lower court decision that would have gone into effect on February 19, 2023. That decision, among other items, would have increased Michigan’s hourly minimum wage to $13.03 and would have greatly expanded the state’s paid sick leave requirements. The Court of Appeals decision means that employers do not have to make changes to their paid sick leave policies that were drafted in compliance with the Michigan Paid Sick Leave Act that went into effect in 2019. Further, businesses no longer have to scramble to adjust minimum wage rates for both tipped and non-tipped workers as required under the lower court decision. Michigan’s hourly minimum wage will remain at $10.10. The tipped minimum wage remains at $3.84 an hour. 

The Colorado Division of Labor and Employment (CDLE) had a busy last few weeks of December in 2022, revising a number of its Interpretive Notice and Formal Opinions (INFOs). On December 23, 2022, CDLE issued a revised INFO #16 regarding Deductions From, and Credits Towards, Employee Pay.

The Colorado Wage Act (C.R.S. § 8-4-105(1)(e))…

Key Points

  • On October 13, 2022 the Department of Labor (DOL) published a notice of proposed rulemaking advising that it intends to alter the test used to distinguish “independent contractors” from employees under the Fair Labor Standards Act (FLSA).
  • The proposed rule will rescind the 2021 Independent Contractor Rule and replace it with a multifactor, totality-of-the-circumstances test that will likely cause an increase in the number of workers classified as employees.

On July 19, 2022, in the decision, Mothering Justice et al., v. Dana Nessel et al. (Nessel), the Michigan Court of Claims (Court)  held that in 2018 the Michigan Legislature unconstitutionally amended two voter-initiatives, the Earned Sick Time Act, PA 338, and the Improved Workforce Opportunity Wage Act (IWOWA), PA 337, by amending the proposals in the same legislative session that the Legislature enacted the two initiatives. The Legislature’s tactic of adopting and amending the voter initiatives subverted the constitutional protections against “legislative interference with the People’s constitutional right of initiative.” The Court’s holding nullified the amendments to the initiatives, 2018 Public Act (PA) 368 (IWOWA) and 2018 PA 369 (renamed as the Paid Medical Leave Act), and reinstated the original, more expansive terms of PA 338 and PA 337.

U.S. Supreme Court, in Viking River Cruises, Inc. v. Moriana

In a landmark 8-1 ruling, the U.S. Supreme Court, in Viking River Cruises, Inc. v. Moriana (No. 20-1573, June 15, 2022), provided California employers with much needed relief from the onslaught of wage-hour claims brought under the California Labor Code Private Attorneys General Act of 2004, Cal. Labor Code sections 2698 et seq. (the “PAGA”).  The Court emphasized the preemptive effect of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”), finding that the FAA preempts a rule of California law that invalidates arbitration agreements containing waivers of the right to assert representative PAGA claims.  The Court overruled the California Supreme Court’s rule to the contrary in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 380 (2014).  The immediate impact of Viking River is to authorize motions by California employers utilizing mandatory arbitration agreements with class action waivers to dismiss PAGA claims brought in court or, alternatively, to compel arbitration of them.