THE DOL’S “PAID” PROGRAM MAY NOT PAY OFF FOR EMPLOYERS

This review of the Department of Labor’s recently-announced Payroll Audit Independent Determination (“PAID”) program comes with side of skepticism.  With all new voluntary programs, trust but verify.

PAID was rolled out in March 2018 with much fanfare about its benefits.  PAID is a 6-month pilot program sponsored by the DOL’s Wage and Hour Division (WHD) whereby an employer can voluntarily engage in a self-audit of its payroll practices.  If that audit reveals suspected or actual violations of overtime or minimum wage provisions of federal law, the employer discloses those to the WHD.  Specifically, the employer must identify the violations, the affected employees, the timeframe, and a calculation of back wages owed to each affected employee.  The WHD then begins a process with the employer to identify and remedy violations.  The process will likely include the WHD asking for information which must then be provided. Continue reading

Sixth Circuit Deems Unlawful a Policy Requiring Employees to Repay Advanced “Draws” Upon Termination

The employer, hhgregg, Inc., has a compensation system where the sales employees (non-exempt) are paid commissions.  They are advanced a “draw” in any week in which they do not make enough sales to have the commission payments cover the minimum wage requirements.  The “draw” is then deducted from future commissions.  Upon termination, the employee – per policy – is required to immediately repay any outstanding draws.

A collective action was brought against hhgregg, and various wage and hour claims were asserted.  We are going to focus on one.

Interestingly, the employees did not focus on the policy which required them to repay any outstanding “draws” upon their termination.  In fact, the company represented it did not enforce that part of the policy.  But, the Court of Appeals found it quite interesting. Continue reading

White Collar Exemptions Continue to Be Awash with Questions

To recap, persons qualifying for what is commonly referred to as the “white collar” exemptions are exempt from the entitlement to overtime pay under the Fair Labor Standards Act (FLSA).  White collar exemptions are the executive, administrative, and professional exemptions.  With few exceptions (like teachers and attorneys) to qualify for a white collar exemption, the Department of Labor (DOL) has required, among other things, positions to be paid a minimum specified weekly salary.

In 2004, the DOL set that minimum weekly salary at $455 per week (which, if one worked 52 weeks in a year, would equal $23,660 annually).  That rate remained the same until 2016 when the Obama administration proposed to increase the rate to $913 per week (or $47,476 annualized), with an automatic accelerator built-in for successive years. The change was set to go into effect December 1, 2016.

As employers began preparing for this increase – be it reclassification of positions, increases in pay, changes in duties, or the like – lawsuits were filed contesting the proposed regulations.  On November 22, 2016, days before the regulation was to take effect, the United States District Court for the Eastern District of Texas entered an injunction, stopping the regulation from taking effect anywhere until such time as the litigation could be resolved.

Time passed.  A new administration took the helm.  The Trump administration was not as excited about the changes as the previous administration, which brings us to today.  Continue reading

Lying to the DOL is a Recipe for Disaster

By Kristen L. Brightmire

So what happened to cause Judge Dowdell to declare a jury’s verdict so unreasonable it had to be thrown out, a decision by the way which the Tenth Circuit Court of Appeals has just upheld? It’s an interesting story.

If you are from the Tulsa area, you are undoubtedly familiar with the El Tequila restaurants. In December 2010, an employee lodged a complaint with the Department of Labor’s Wage and Hour Division (DOL) which prompted an investigation into its Harvard location.  As is often the case, a time was set for the DOL investigator to report, review records, and interview certain employees.  As a result of this initial investigation, all seemed fine but for some recordkeeping violations.  The investigation was closed.

In the following months, more employees complained. The DOL opened a second investigation. This round, the DOL decided a surprise visit was warranted.  Lo and behold, the DOL discovered a different set of records revealing violations of the Fair Labor Standards Act.  Employees were not being paid minimum wage or overtime for the hours they were working.  The records the DOL had reviewed previously had been doctored.

The employee interviews were different as well. The employees not only said they worked hours for which they were not properly compensated, they told the DOL investigator they had been instructed by owner Aguirre to lie during the first investigation.

Continue reading