WPI Wage Watch: Minimum Wage & Overtime Developments (August Edition)

Although the U.S. Department of Labor may steal the show in terms of August developments involving the minimum wage, tips, and overtime, states are by no means singing backup. State labor departments on opposite sides of the country are moving forward with white collar regulations, a ballot measure was certified in the South, and in the Midwest a 2019 minimum wage rate was announced and two measures may go to voters in November. And don’t forget local ordinances, which will make a special guest appearance to close out the show.

Wearing White (Collar) After Labor Day: On August 27, the U.S. Department of Labor announced that throughout September 2018 it will hold public listening sessions to gather input concerning the “white collar exemptions” for executive, administrative, professional, and outside sales employees. Employers have been anxious to see how the current administration will approach the issue, given a federal district court judge in Texas nullified the salary-level changes adopted during the Obama administration.

Changes to the exemptions are potentially afoot not only at the federal level. In August, the Washington State Department of Labor & Industries solicited input on its “draft rule concepts,” which “comprise a menu of policy options for consideration prior to drafting EAP [Executive, Administrative, Professional] rule updates” that “include suggestions from stakeholder comments, language to align with similar federal rules, and other possible updates for consideration.” Comments are due by the close of business on Wednesday, September 5. Also, as we noted last month, Pennsylvania’s Department of Labor and Industry extended the deadline to August 22, 2018 to submit comments on proposed changes to its white collar exemption rules.

A Penny for Your Thoughts, Labor Department: On August 28, the DOL announced that it released four FLSA-related opinion letters in which it opined that: 1) a company selling a technology platform to other businesses can be considered a “retail or service establishment” for purposes of the Fair Labor Standards Act’s (FLSA) 7(i) overtime exemption for employees paid wholly or partly on a commission basis; 2) time an employee spends voluntarily participating in wellness activities, biometric screenings, and benefits fairs, regardless of whether done on-site or during regular working hours, is not considered “hours worked” because an employee – not an employer – benefits from the activity and such time is considered “off duty”; 3) Employees of food service operations that are functionally integrated with theater operations are exempt from overtime; and 4) member examination graders for private nonprofits who annually travel domestically or from abroad for a one- to two-week period to grade a global credentialing examination may be classified as volunteers instead of short-term employees.1

Land of 10,000 Rates Announces 2019 Numbers: The Minnesota Department of Labor and Industry announced its annual adjustment to the state minimum wage. Effective January 1, 2019, the minimum wage for large employers will increase from $9.65 to $9.86 per hour. A separate increase, from to $7.87 to $8.04 per hour, will apply under the following circumstances: 1) for employees of small employers with annual gross revenues less than $500,000; 2) for employees of hotels, motels, lodging establishments and resorts who are working on summer work, travel Exchange Visitor (J) non-immigrant visas; 3) as a training wage for employees younger than 20 years of age for the first 90 consecutive days of employment; and 4) as a youth wage for employees younger than 18 years of age.

Minimum Wage in a Box (Ballot, That is): As we inch closer to the mid-term elections in November, more minimum wage increase measures have qualified for the ballot or may be put to voters.

The Arkansas Secretary of State certified that sufficient signatures were collected to advance a proposal, so voters will decide whether to increase the $8.50 per hour state minimum wage to $9.25 (2019), $10.00 (2020), and $11.00 (2021).

A group opposing a Michigan initiative has appealed to the state supreme court after an appellate court ruled in favor of placing before voters a proposal to increase the $9.25 per hour state minimum wage to $10.00 (2019), $10.65 (2020), $11.35 (2021), and $12.00 (2022), with annual adjustments occurring in 2023 and subsequent years. The measure would also gradually phase out the tip credit, with the minimum cash wage tipped employees must directly receive from employers based on a percentage of the applicable minimum wage: 48% (2019); 60% (2020); 70% (2021); 80% (2023); 90% (2023); and 100% (2024).

In Missouri, the Secretary of State certified a proposal to increase the $7.85 per hour state minimum wage to $8.60 (2019), $9.45 (2020), $10.30 (2021), $11.15 (2022), and $12.00 (2023),

with annual adjustments – increases or decreases – occurring in 2024 and subsequent years.

Berkeley, CA Employers Prepare for October 1 Minimum Wage Increase: On October 1, 2018, the minimum wage in Berkeley, CA will increase from $13.75 to $15.00 per hour. A separate rate applicable only to Youth Works and job-training participants will increase from $12.00 to $13.25 per hour.

Miami Beach Minimum Wage Ordinance Appeal Reaches State Supreme Court: On August 29, the Florida Supreme Court agreed to review a state trial court judge’s decision, which was affirmed on appeal, that held the City of Miami Beach, Florida did not have the authority to enact its minimum wage ordinance, which would have instituted a citywide minimum wage on January 1, 2018.

We will continue to monitor and report on minimum wage and overtime developments as they occur.

See Footnotes

1 For more information about the opinion letters, see Estee Bartell and Tammy McCutchen, DOL Issues Six New Opinion Letters and Establishes a New Office of Compliance Initiatives, Littler ASAP (Aug. 28, 2018).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.