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DOL Publishes Informal Guidance on the Families First Coronavirus Response Act

On March 24, 2020, the Department of Labor (“DOL”) released an initial set of Questions and Answers (“Q&A”) regarding the Families First Coronavirus Response Act (“FFCRA”).  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave and emergency family and medical leave (“FMLA”) benefits to employees in connection with COVID-19.

The Q&A is the latest in a series of publications from the DOL and the Internal Revenue Service to shed light on the FFCRA.  Below are some highlights from this guidance for employers to consider as they prepare to comply with the FFCRA:

  • Effective Date: The FFCRA will become effective on April 1, 2020 and will expire on December 31, 2020.
  • Retroactivity: Benefits under the FFCRA are not retroactive.  Any leave provided to employees prior to April 1, 2020 will not count toward the employer’s leave obligations under the FFCRA, and cannot form the basis for payroll tax credits.
  • Employee Threshold Requirements Generally:
    • The 500-employee threshold is calculated based on the number of US employees an employer has as of the date the employee’s leave is requested.
    • The following types of employees should be included in an employer’s calculation: full-time employees, part-time employees, employees on leave, temporary employees who are jointly employed, and day laborers supplied by a temporary agency.
    • Independent contractors (as defined under the Fair Labor Standards Act [“FLSA”]) are

Families First Coronavirus Response Act: Paid Sick Leave Provisions (Part 1 of 2)

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “FFCRA or Act”).  The FFCRA provides for two types of leave for employees:  Paid Sick Leave (up to 80 hours) and Emergency Family and Medical Leave (up to 12 weeks with a combination of paid and unpaid leave).  This post is part 1 of 2 summarizing the requirements of the FFCRA and focuses on Paid Sick Leave. 

  • Effective Dates: The Act will become effective no later than April 2, 2020 and expire on December 31, 2020.
  • Department of Labor (“DOL”) Obligations: Must issue a “Model Notice” for employers to post within 7 days of enactment and guidance within 15 days of enactment.
  • Covered Employer – Anyone engaged in commerce with fewer than 500 employees,[1] as defined under the Fair Labor Standards Act (“FLSA”).
    • EXCEPTION – The DOL may issue guidance excluding employers with fewer than 50 employees from the paid leave requirements of the Act if the paid sick leave would “jeopardize the viability of the business as a going concern.”
  • Eligible Employees – All employees (as defined under the FLSA), regardless of length of employment, and regardless of whether full-time or part-time.
    • EXCEPTION: If an employee is a healthcare provider or an emergency responder, the employer may choose not to provide paid sick leave to those employees.  (The DOL may issue guidance on this point.)
  • Affirmative Requirements for Employers under the Act:

U.S. Department of Labor Proposes Changes to Minimum Salary for Overtime Exemptions

On March 7, 2019, the United States Department of Labor issued a notice of proposed rulemaking that would change the minimum salary levels necessary for an employee to be properly classified as exempt from the overtime compensation requirements of the Fair Labor Standards Act.  Under the proposed rule, the minimum salary for most exemptions would rise from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized).  The minimum annual compensation for the “highly compensated employee” exemption would rise from $100,000 to $147,414.

For employees in the executive, administrative and professional exemptions, the proposed rule would permit nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary.  In addition, provided that the employee has received at least ninety percent (90%) of the required minimum compensation in each payroll week for 52 weeks, the employer would be permitted to make a single “catch-up” payment within one pay period after the end of the 52-week period, in order to bring the employee’s compensation to the required level.

For “highly compensated employees,” the proposed rule would require that ten percent (10%) of the minimum annual compensation be paid in the form of a weekly salary, but the remainder could be paid in the form of nondiscretionary bonuses and incentive payments.  In addition, the rule would also permit a “catch-up” payment as described above.

The proposed rule would formally rescind the Obama-era rule proposed in 2016, which was blocked by permanent injunction before it

Supreme Court Rejects “Narrow” Reading of Overtime Exemption and Concludes that Auto Dealership Service Advisors are Exempt From Overtime

On its second trip to the U.S. Supreme Court, a six-year-long dispute between five auto dealership employees and their employer came to an end when the Supreme Court found that the employees were properly classified as exempt employees under the Fair Labor Standards Act (“FLSA”).  In the case, plaintiffs Hector Navarro and four other employees worked as service advisors—employees who meet and greet customers bringing their cars to dealerships for service or maintenance and suggest and sell such services to customers.

The service advisors in this case filed suit in 2012, claiming back pay under the FLSA for hours worked in excess of 40 in a week on the basis that they were misclassified as exempt.  Specifically, the employees argued that they neither sold nor repaired vehicles and, therefore, were improperly denied overtime in violation of the FLSA.  The employees also alleged violation of California state wage and hour laws.   However, in 2013, the district court agreed with the dealership’s argument that an exemption applied, dismissing the FLSA claims and declining to exercise jurisdiction over the California state law claims.

The Ninth Circuit reversed the District Court relying on regulations issued by the Department of Labor (“DOL”) in 2011.  In 2016, the Supreme Court reversed the Ninth Circuit because it had deferred to the DOL’s rule that service advisors were not overtime exempt, which the Court concluded was procedurally defective.  On remand, in 2017, the Ninth Circuit again found in favor of the service advisors.

On April 2, 2018, the

Mandatory Paid Sick Leave for Arizona Employees: How Proposition 206 Impacts Your Business

After surviving a legal challenge rejected by the Arizona Supreme Court, Arizona’s $10 minimum wage enacted under Proposition 206 is already in effect, and the sick leave portion of the law takes effect in July. For many companies, this will require new paid time off and sick leave policies, or at least revisions to their existing policies.

With enactment of Proposition 206, Arizona joins other states with sick leave laws, including Illinois, California, Oregon, Washington, Massachusetts, Vermont, and Washington, D.C. As previously reported by the Bryan Cave Retail Law blog, the Illinois law took effect in January 2017.

The Arizona law generally applies to all Arizona employees; it makes no distinction between salaried, hourly, full-time, part-time, temporary or seasonal employees. All employees must accrue one hour of paid sick time for every 30 hours worked.

Paid sick leave can be used for medical care of a mental or physical illness, injury or health condition of the employee or their children, spouse or registered domestic partner, parents, grandparents, grandchildren, siblings, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship. Paid sick leave cannot be used, however, to bond with a new child or for grief and recovery following a family member’s death.

Employers cannot ask the reason for taking paid sick leave unless three consecutive days off are requested, in which case they can request documentation that the leave was requested for permitted reasons.

Bryan Cave attorneys

House Passes Bill to Reduce Overtime

May 25, 2017

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On May 3, 2017, the House of Representatives passed H.R. 1180, Working Families Flexibility Act, a law that would amend the Fair Labor Standards Act, to allow employers to give workers paid time off or comp time instead of time-and-a-half overtime pay.  Under the Act, comp time could only be provided in lieu of overtime if it is part of a collective bargaining agreement that was negotiated with the labor organization.  For non-union employees, the employee must have knowingly and voluntarily agreed to the comp time.  There are other conditions such as the employee working a minimum 1,000 hours in a 12-month period before he or she can agree to comp time, as well as limitations, including a maximum accrual of 160 hours of comp time and a mandatory payout of compensation for any unused and accrued comp time by the end of calendar year.  See H.R. 1180 at www.congress.gov/bill/115th-congress/house-bill/1180/text.

Republicans will need eight Democratic votes in support of the Working Families Flexibility Act to avoid filibuster in the Senate.

We will be tracking the Working Families Flexibility Act.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers assess their wage and hour obligations. If you or your organization would like more information on the proposed Working Families Flexibility Act or any other employment issue, please contact an attorney in the Labor and Employment practice group.

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