While recent events may have pushed issues regarding the Fair Labor Standards Act (FLSA) to the bottom of list of concerns, a recent suit filed by the U.S. Department of Labor should remind employers to not forget wage and hour issues. On March 8, 2017 the DOL filed suit in U.S. District Court for the District of Nebraska against Cilantros Mexican Bar & Grill, LLC, Managula, LLC, and Alegria LLC. The Complaint claims the Defendants failed to pay the applicable minimum wage and failed to pay overtime for work in excess of 40 hours in a workweek. The suit seeks payment of those amounts. It also requests an injunction to restrain violations of the FLSA. In an Appendix to the Complaint, 76 people are named on whose behalf relief is sought.
Not long ago employers were wrestling with a change in the regulations regarding the FLSA moving the threshold to determine which workers would be eligible for overtime pay. The regulations changed the level from $23,660 to $47,476 and allowed it to be adjusted.
The regulations were put on hold when a preliminary injunction was issued late last year. The DOL filed an appeal of that ruling. The appeal is currently pending in the 5th Circuit Court of Appeals. It is expected that the Trump administration may take a more employer friendly approach to issues, which may flow over to this appeal. Consistent with that view, the DOL has asked for a delay in the briefing in the appeal. The request has been granted and the next round of briefing is now due May 1.
On another front, on February 23rd, President Trump met with the Business Roundtable. The discussion included identification of regulations which should be changed. With regard to the DOL regulations, the group expressed particular concern over the portion of the regulation allowing the DOL to adjust the threshold level.
The following day, President Trump signed an executive order requiring each federal agency to establish a “Regulatory Reform Task Force.” The Task Forces are charged with eliminating what he considers to be unnecessary and burdensome regulations hampering the American economy. Under the order the head of each federal agency is to designate a Regulatory Reform Officer by April 25, 2017. That Officer will form a Regulatory Reform Task Force which is to evaluate existing regulations overseen by that agency to identify potential regulations to be modified or repealed. The executive order directs each Task Force to single out those regulations deemed costly and unnecessary. They are to pay particular attention to those rules that eliminate jobs, inhibit job creation, are outdated, are ineffective, impose costs that outweigh benefits or otherwise interfere with the president’s initiatives and policies. Each Task Force is to report to the agency head by May 25, 2017.
Thus, with these developments and the FLSA regulations on hold, employers may be inclined to forget issues regarding minimum wages and overtime. The FLSA requires most employees be paid at least the federal minimum wage for all hours worked and one-half the regular rate for hours worked over 40 in a workweek. A number of exemptions are provided including those in executive, administrative, professional and outside sales positions. To qualify the employees must meet tests regarding duties, be paid the minimum and be paid on a salary basis (though there are exceptions to that; for example teachers and employees practicing law or medicine do not need to meet the salary requirement). Of course, the minimum wage in Nebraska is $9.00. As the suit referenced above indicates, there is no indication DOL enforcement of the existing regulations will be effected by recent developments.