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Legal Update - November 2016 Newsletter

Yogi Patel - Friday, December 16, 2016

Dear valued clients and supporters: This month's newsletter will focus on significant and immediate changes to state and federal employment laws.

 

Update to Federal Law

Under the Fair Labor Standards Act (FLSA), significant changes to the Act were poised to go into effect in a matter of days (Dec 1, 2016). We covered these changes in detail in a previous article, but in short, unless an employee meets certain job performance requirements (the duties test) and earns at least $47,476.00 per year, that employee was going to be entitled to overtime pay for each week they worked in excess of 40 hours. The existing law sets that monetary threshold at $23,600 per year.

However, a federal court in Texas issued a nation-wide injunction yesterday that now temporarily prevents these changes from going into effect on December 1, 2016. Thus, for the time being, the threshold remains at $23,600. Notwithstanding this, employers are still advised to consider whether they are complying with the "duties" test under FLSA - irrespective of the uncertainty regarding the salary level. The "duties" test functionally looks at the day-to-day responsibilities given to an employee. As a general principal under FLSA, an employee who meets the salary level and the salary basis tests is exempt only if s/he also performs exempt job duties. Whether the duties of a particular job qualify as exempt depends on what they truly are - job titles or position descriptions are of limited usefulness in this determination. It is the actual job tasks that must be evaluated, along with how that particular job task "fits" into the employer's overall operations.

 

Update to State Law

As of December 31, 2016 the minimum wage in New York State is set to change. The changes vary depending on the industry, number of employees and location. For example, the minimum wage is different if you are in the fast food industry. It is different if you employee more than 11 people and different again depending on whether your business is located in NYC vs. Nassau/Suffolk County vs. Upstate NY - as in all three have different rates with different effective dates. We covered these changes in detail in a previous newsletter.

Employers should likewise be aware that the Wage Theft Prevention Act (WTPA) requires them to give employees written notification of these pay changes at least seven (7) days in advance of the effective date. Alternatively, an employer may issue a new paystub that contains the notice of wage increase. The written notice must be in English and also in the employee’s primary language if it is not English. Employers must obtain a signed and dated written acknowledgement of the pay change from the employee following the same language guidelines. Employers who violate these requirements may be subject to civil penalties of up to $50 per day, per employee.

Readers are encouraged to follow us on Twitter (@lloydpatelllp) and Facebook to receive updates on these and other issues throughout the month.

 

August 2015 Newsletter

Yogi Patel - Tuesday, August 04, 2015

Dear valued clients and supporters: This month's newsletter will focus on: (1) the EEOC’s declaration that workplace discrimination based on sexual orientation is illegal; (2) the New York State Wage Board's unanimous vote to raise the minimum wage for restaurant workers in the fast food industry to $15 an hour; and (3) the Second Circuit's decision in Glatt v. Fox Searchlight Pictures, Inc., providing valuable clarity on the question of whether interns are "employees" -- and therefore entitled to minimum wage and overtime pay under the Federal Fair Labor Standards Act and New York Labor Law.

 

Sexual Orientation and the Workplace
Title VII of the Civil Rights Act of 1964 is at the heart of Federal anti-discrimination law. It prohibits employers with at least fifteen employees from discriminating on the basis of race, color, religion, sex, or national origin. Sexual orientation discrimination is not expressly included on the list and several federal courts, both at the district court and appellate level, have previously held that the statute’s ban on sex discrimination did not encompass sexual orientation discrimination. But on July 15, 2015, the Equal Employment Opportunity Commission (EEOC) issued a ruling finding that sexual orientation discrimination is “associational discrimination on the basis of sex.” Thus, adverse actions taken by employer on account of an employees sexual orientation will now be considered illegal by the EEOC and LGBT employees will have an independent, stand-alone basis to lodge a discrimination complaint before the EEOC under Title VII. It is too early to know how courts will view this new development, and of course most employers are also governed by State and local laws that may already prohibit discrimination on the basis of sexual orientation.


Minimum Wage and Fast Food Industry Workers
The New York State Wage Board recently recommended raising the minimum wage for restaurant workers in the fast food industry to $15 an hour. In the event the Wage Order is accepted by the Commissioner in its current recommended form, the mandate would apply to all workers in fast-food restaurants that are part of chains with at least 30 outlets. More specifically, the change will apply to workers who cook, clean, serve customers, make deliveries, or perform routine maintenance work as part of their day-to-day duties. The proposed Wage Order, if implemented as is, will apply to all fast food restaurants associated with a chain of 30 or more outlets, irrespective of how many restaurants the individual employer owns. The proposal, once officially published, will then be followed by a 15-day public comment period. Comments will be accepted online and by mail. Based on those comments, the Commissioner may accept, reject or modify the Board's recommendations and file a Wage Order. The Wage Order must be filed within 45 days once the report is filed. The Order is then subject to an additional regulatory process thereafter. We will continue to monitor the situation and provide updates as the process progresses, but if you have specific questions about how this may affect you as an employee or an employer, please contact us.


Interns v. Employees
In Glatt v. Fox Searchlight Pictures, Inc., the action was brought by former production interns who worked on the Oscar-winning movie Black Swan, as well as a publicity intern at the company’s New York corporate office, all of whom were unpaid. The interns argued they should have been classified as employees and, thus, should have been compensated for their efforts. The law surrounding this issue has been unclear for several decades due to the guidance offered by the U.S. Department of Labor and conflicting interpretations by courts across the country, making it difficult for an employer to know how to comply. The Second Circuit, which covers New York, observed in Glatt that the question of an intern’s employment status is a highly individualized inquiry and not subject to a bright line rule. To assess whether interns are “trainees” under the Fair Labor Standards Act (“FLSA”) (and therefore “exempt” from overtime and minimum wage rules) or “employees" (and therefore entitled to the laws’ protections), the court adopted what it calls the “primary beneficiary” approach. Under the "primary beneficiary" test, there are at least seven independent factors that should be analyzed under the new approach to determine whether the position is truly an internship or an employment situation. Employers are advised to fully understand their obligations under Glatt prior to hiring an intern.


A more in-depth article on this issue, including the seven factors under the primary beneficiary approach will be posted here on our website shortly and readers are encouraged to follow us on Twitter (@lloydpatelllp) and Facebook to receive updates on this and other issues throughout the month.


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