WPI Wage Watch: Minimum Wage & Overtime Updates (April Edition)

It may not have been showering minimum wage, tip, and overtime developments in April, but there was a sprinkling at the federal, state, and local levels. The U.S. Supreme Court issued a decision that will impact federal Fair Labor Standards Act (FLSA) exempt classification litigation, federal wage and hour officials have been laboring away on FLSA-related issues and programs, and state and local legislators continue to shape the labor and employment landscape across the country.

Automotive Service Advisors’ Overtime Claims Stall: The U.S. Supreme Court held that the FLSA’s automotive sales overtime exemption applied to auto dealership service advisors that consult customers concerning their servicing needs and sell servicing solutions. While the Court’s ruling applying the automotive sales exemption was significant, arguably the more noteworthy development was the Court’s rejection of the longstanding principle that exemptions are construed narrowly against an employer.1

Opt-Ins Fight for Their Right to Party (Plaintiff): In what it considered a case of first impression, the U.S. Court of Appeals for the 11th Circuit held that, even if a lawsuit is never certified as a collective action (the FLSA’s version of a class action), an opt-in plaintiff becomes a “party plaintiff” upon filing a written consent form.2 Less media attention was paid to an unpublished opinion issued the same day by a New Jersey federal district court judge who reached a similar conclusion.

Tips on Tips: The U.S. Department of Labor (DOL) issued Field Assistance Bulletin No. 2018-3, which provides guidance concerning the recent tip- and tip-pooling-related amendments to the FLSA.3 The DOL also hinted that new tip regulations would be coming soon.

Fact (Sheet) Checking DOL Opinion(s) Piece: The DOL issued opinion letters concerning the compensability of travel time and rest breaks provided as a reasonable accommodation, as well as child-support-related wage garnishments and a fact sheet concerning overtime exemptions in higher education.4

Is It Time for Employers to Get PAID? The DOL published additional information about its Payroll Audit Independent Determination (PAID) Program, which allows employers to proactively attempt to resolve FLSA violations.5

White Collar Pay Requirements: White Hot or White Noise? Ohio HB 605 aims to increase the minimum salary or fee amount exempt executive, administrative, and professional employees must be paid from the $455 per week FLSA standard to $913 per week – excluding board, lodging, and other facilities – and adjust that figure every three years. The proposed rate mirrors the rate included in the now-defunct Obama-era DOL rule. Some thought states would attempt to fill the void left after the federal rule was invalidated. Although many have tried, to date state legislators’ efforts have been unsuccessful. For example, increase provisions were amended out of California AB 1565. Although Maryland HB 974 sought to increase the amount to $900 per week, and Wisconsin AB 154 and SB 103 proposed a $970 per week standard, all three bills failed. Another unsuccessful attempt – in the opposite direction – was Maine LD 1769, which sought to decrease the number to the FLSA amount. Proposals in Arizona, Rhode Island, and Vermont remain “live,” but have barely progressed since introduction. Whether additional proposals are introduced, or existing measures advance, may depend on when the DOL releases its anticipated, updated white collar salary rule.

Loco for Local: Officials in Emeryville, California (Northern California – San Francisco Bay Area) announced that the annually adjusted minimum wage for employers with 56 or more employees will increase from $15.20 to $15.69 per hour on July 1, 2018 (the rate for employers with 55 or fewer employees was preset at $15.00 per hour).

The proposed minimum wage ordinance in Redwood City, California we discussed last month was enacted and will become operative on January 1, 2019. Space is a premium in the San Francisco Bay Area and, with this new law, employers may feel a bit cramped – the number of Bay Area minimum wage laws has increased to 18. Few municipalities in the area are not in the club, and at least one such location – Daly City – is discussing how to get its hands on one of those sweet Members Only jackets.

The Village of Western Springs, Illinois voted to opt in to the Cook County Minimum Wage Ordinance, beginning July 2018. Previously, in May 2017, the village voted to opt out of coverage under the ordinance.

The Seattle, Washington City Council voted to ban employers from paying individuals with disabilities less than the city’s minimum wage.

Lex6 Appeal:  Parties challenging the Minneapolis, Minnesota Minimum Wage Ordinance have appealed a February 2018 bench verdict in the city’s favor.

The 11th Circuit heard oral arguments concerning whether race played a part in a 2016 Alabama law that preempted local minimum wage laws, including the now-preempted Birmingham ordinance.

Agree to Not Disagree: Hawaii HB 1627 would eliminate the state labor department’s authority to issue rules allowing individuals whose earnings capacity are impaired by old age to be paid less than the minimum wage. Because members from both houses could not agree on proposed amendments, the bill has landed in a joint conference committee.

Will Your Local Broadcast Be Preempted? Wisconsin Governor Scott Walker (R) signed AB 748, which, among other things, creates another state law preempting local wage laws. Wisconsin Statutes section 104.001 already prohibits local minimum wage laws. Newly-created Wisconsin Statutes section 103.007 widens preemption to prohibit local “employee hour and overtime requirements.”

Virginia Governor Ralph Northam vetoed HB 375, which sought to prohibit local “living” wage laws for government contractors.

Recently-introduced Colorado HB 1368 would repeal the state’s preemption law and expressly grant local governments the authority to enact minimum wage laws.

Late Additions: At the end of March, at least two minimum wage bills were introduced. Delaware SB 170 would increase the state minimum wage from $8.25 to $8.75 per hour on October 1, 2018, and on October 1 for the following three years: $9.25 (2019); $9.75 (2020); and $10.25 (2021). Ohio HB 576 would, beginning January 1, 2019, increase the state minimum wage from $8.30 to $12.00 per hour, and the rate would further increase to $12.50 (2020), $13.00 (2021), $13.50 (2022), $14.00 (2023), $14.50 (2024), and reach $15.00 per hour in 2025; in subsequent years the rate would be annually adjusted (i.e., what currently occurs).

Mid-Terms Are Not Just About Congressional Power Balance: The upcoming mid-term elections may impact more than just the balance of power in Congress. The Arkansas Attorney General certified a title and name for a proposed minimum wage ballot measure for which signatures are being collected. The initiative seeks to increase the rate from $8.50 to $9.00 per hour on January 1, 2019, to $10.00 in 2020, and to $11.00 in 2021. In 2014, Arkansas voters approved a ballot measure that increased the minimum wage in 2015, 2016, and 2017. Other places where a minimum wage-related ballot measures could possibly appear include, but are not necessarily limited to, Arizona, Massachusetts, Michigan, Missouri, North Dakota, and Washington State.

Participant Ribbon: We can’t all be winners, as demonstrated by Maine LD 1757's failing to secure the necessary votes for its proposed minimum wage increases and limited subminimum wage for new employees ages 18 and 19.

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

See Footnotes

3 See David Jordan and Eli Freedberg, DOL Clarifies Amendment to the FLSA's Tip Pool Rules, Littler ASAP (Apr. 12, 2018).

4 See Tammy McCutchen and Michael Manoukian, DOL Issues Three Opinion Letters and One Fact Sheet, Littler ASAP (Arp. 13, 2018).

5 See Meredith Schramm-Strosser, Tammy McCutchen, and Lee Schreter, DOL Issues New Information on its PAID Self-Audit and Self-Reporting Program, Littler ASAP (Apr. 20, 2018).

6 Please forgive our use of Latin. We’ve been punning so hard over the last year concerning the same topics, we have, well, pun out of ways to spice up the appellate process. So, instead of recycling English-language puns we used in previous articles, we resorted to using a dead language in an attempt at humor. Latin-based jokes are a very lawyerly trait – mea culpa.

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.