US Dept of Labor Files Appeal to Vacate Overtime Injunctive Relief…AND Requests Expedited Review of Appeal

Law Law

The Department of Labor filed a motion for an expedited briefing of its appeal of a federal judge’s decision to put the brakes on the very flawed overtime Final Rule.  Employers should be very cautious at this point before making any “major” changes such as “reclassifying” otherwise qualified salaried exempt employees…to hourly non-exempt status.  We have seen a multitude of “knee-jerk” reactions to this ill-thought out Final Rule whereby many of our clients have, in fact, reclassified otherwise qualified salaried exempt employees to hourly non-exempt status thus stripping them of any prestige or sense of professional accomplishment and, additionally, penalizing them monetarily for no good business reason other than what’s been mandated in this new Overtime Final Rule.  And, to add insult to injury…those same employees, typically,  will not have an opportunity to work much overtime, if any, under the new law because many employers have further reduced their work hours so they will rarely have an opportunity to work over 40 hours in any given workweek.

The appeal to stay the injunction was brought Dec. 1 by Labor Secretary Thomas Perez, Wage and Hour Administrator David Weil, Assistant Administrator Mary Zeigler and the DOL following the November 22 injunctive relief against the new overtime Final Rule by federal district judge in Texas.  The appellate process can be time-consuming.   The notice of appeal triggers the District Court for the Eastern District of Texas to send a record of the case to the Fifth Circuit Court of Appeals in New Orleans, which could take a couple of weeks. Then there is the timeline for filing briefs, which is at least 30 days.   Without an expedited hearing, the briefs wouldn’t be filed before Inauguration Day on Jan. 20.

Few Employer Objections to Raising Salary Level

A recent survey of our clients indicated that there were few objections  to raising the minimum salary level from its present $23,660 per annum to, ultimately, the $47,476 per annum. However, those same employers also stressed that the increase should be mandated “overnight” on employers.    Emperical evidence of other wage or salary increases by the feds and/or states over the years has always seen a “graduated” increase over several years..until it reaches the statutory required level.  These  “graduated” incremental increases were easier to absorb for employers than what US DOL and President Obama are requiring with this new Final Overtime Rule.

 If the upcoming change of administration is the only reason presented (President-elect Trump has indicated he does not support the entire Final Rule), the judges may not be inclined to speed up the review process.  Again, we advise our client employers to be somewhat cautious about making unnecessary job reclassifications especially if the salaried exempt employees are clearly a bonafide salaried exempt employee at this point in time…even if they’re earning less than the $47,476 per annum minimum criteria  which the new Overtime Final Rule would mandate.  We believe, based on our professional experience with US DOL/WHD, that we will see an increase in the salary level minimum but would be “phased in” over time…rather than implemented “overnight” as this Final Rule attempts to do.

Motion to Stay?

Now employers must anxiously await what the 5th Circuit decides to do.  But I’m inclined, based on my investigative experience with US DOL Wage and Hour Division, to believe that there will ultimately be a salary increase to the current salary level ($23,660 per annum)..but that the increase will be implemented gradually, over several years, just as states’ minimum wage increases have been implemented.

And, bear in mind, that US DOL solicitors are being prodded by Secretary Perez and President Obama (before he leaves office) to “create havoc” by filing a request with the courts to  suspend the injunction during the appeals process.  If that happened, we’d be back to square one and the rule would apply—perhaps only for a limited period of time.

Difficult Legal Road Ahead for DOL

Although DOL has appealed the preliminary injunction, the overtime rule still faces an uphill battle.  A final court decision could take some time and the new administration arriving on Jan. 20 is unlikely to defend the rule in court.  Further, many legal experts we have consulted with feel that this case focuses more on the new Overtime Final Rule violating the federal Administrative Procedures Act more than any other legal argument presented so far.  Either way, an appeals court can take months to rule on a lower court’s decision.   It’s going to be interesting to see how this all plays out…during 2017.  But, again, employers should be very cautious about making any “knee jerk” reactions to this Overtime Final Rule…until the courts have ruled.

And, lastly, the Department of Labor under President-elect Donald Trump may order the withdrawal of DOL’s appeal of a preliminary injunction blocking the federal overtime rule if there hasn’t been a decision on the appeal by Inauguration Day.

Twenty-one States File Legal Challenge to Obama’s New Final Overtime Rule…Finally

I’ve been telling everyone for the past several months that, so far, there hasn’t been any legal challenges to the US Dept of Labor’s new “Final Rule” on overtime which is slated to go into effect at midnight on December 1, 2016.  However, that’s not the case now.

The overtime rules implemented by the Obama administration are scheduled to take effect Dec. 1. The regulation, which was finalized in May, makes anyone earning up to $47,476 a year, or roughly $913 a week, eligible for overtime pay — a dramatic increase over the $23,660 cutoff now.  But the lawsuit argues the rule is unconstitutional because it dictates wages that states must pay employees for government functions, according to the Review-Journal.

It also argues the change would upset the state budgeting process by requiring states to pay overtime to more employees.

“Longstanding federal law requires an overtime exemption for ‘bona fide executive, administrative or professional’ employees,” Nevada Attorney General Adam Laxalt (R) said in statement to the Review-Journal. He went on to say that the federal government “is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount.”

The Department of Labor says the rule will extend overtime to more than 4 million workers in its first year.

“This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work,” the agency said, according to the Review-Journal.

Other states that joined in the suit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.

On the surface of it, the new Final Rule would, in fact, have more employees eligible for overtime compensation.  But what I’ve found over the last several months…dealing directly with clients, law firms, accountancy firms and employers, is that there seems to be a large “negative” effect in the form of “reduced work hours”; reclassification of “salaried exempt”  employees to “non-exempt hourly” regardless of whether or not they were actually and correctly filling the work role of a bonafide “salaried exempt” worker.  And, the most dramatic effect so far has been to simply terminate personnel because employers believe they will not be able to afford paying their lowest “salaried exempt” employee $47,476.00 per year.

Many of us in labor law enforcement, have been perplexed over why US Dept of Labor’s Wage and Hour Division never ever considered “phasing in” this new Final Rule.  Whenever there has been a substantial increase in the minimum wage on a state by state basis, states will typically “phase in” annual increase “incrementally” until the final minimum wage is reached.  So, why US Dept of Labor and Obama administration chose not to do that in this case…is perplexing.

Also see:  http://wsau.com/news/articles/2016/sep/20/states-file-legal-challenge-to-obama-administration-overtime-pay-rule

Michigan Youth Employment – Child Labor Requirements

Youth Employment Standards Act 90 of 1978 defines a minor who is less than 18 years of age, including but not limited to employees, volunteers, independent contractors and performing artists.

Student Worker

Minors under 18 years of age must obtain a work permit or a written agreement or contract entered into between the employer and the governing school district, public school academy, or nonpublic before starting work. Work permits can be obtained from the issuing school officer (the chief administrator of a school district, intermediate school district, etc.) the minor attends or the school district where the minor will be employed. If the minor changes jobs, a new work permit is required for the new employer. A work permit may be revoked for poor academic performance. A work permit is required even if the minor is home/cyber/virtual/online schooled, does not attend school, or out-of-state resident.

Work permits are no longer available for bulk purchase from Michigan Center for Career & Technical Education; work permits are available for printing or download below.  Note: CA-6 work permits must be printed, front and back, on pink paper and CA-7 work permits must be printed, front and back, on yellow paper to be valid.

Youth Employment Forms Packet
Youth Employment Standards Rules
Standards for Issuance of Work Permits
Standards for Issuance of Work Permits Checklist
Legislative link to the Youth Employment Standards Act 90
CA-6 Work Permit (must be printed pink and front to back)
CA-7 Work Permit (must be printed yellow and front to back)

WHO NEEDS A WORK PERMIT (INCLUDING SUMMER)
Minors under the age of 18 cannot be employed or permitted to work, with or without pay, volunteer or independent contractor until the person, company, business, firm or corporation proposing to employ the minor obtains and keeps on file at minor’s place of employment a current and valid age and color appropriate work permit, which has been issued by an issuing officer of the school district, intermediate school district, public school academy or nonpublic school prior to starting work.
Compulsory School Attendance “…The law in Michigan governing co,pulsory attendance requires a parent, legal guardian, or other person having control or charge of a child…who was age eleven before that date and entered grade 6 in 2009 or later shall attend school from age six to eighteen…”

Whether minor is:

  • homeschool
  • cyber school
  • virtual school
  • online school,
  • obtaining G.E.D.
  • out-of-state resident
  • not attending school

Minors under the age of 18 are required to have a work permit prior to starting work.

If a minor comes from another state to work in Michigan, the minor should bring an official birth certificate and an unofficial transcript from the previous school attended which includes the school’s complete name, address, city, state, zip code, county and telephone number.

HOW TO OBTAIN WORK PERMIT

The minor first must go in person to a school district, intermediate school district, public school academy or nonpublic school official designated as an issuing officer and provide one of the following acceptable forms of evidence of age:

Minors seeking employment who are homeschooled shall be issued a work permit by the issuing officer of the school district, intermediate school district, public school academy, or nonpublic school in which the minor’s residence or prospective employer is located.  The minor must present a signed, written statement from the parent or guardian, as the instructor of record, indicating how many hours per week the student is being homeschooled.  The issuing officer will review the parent/guardian statement and issue the work permit with those hours reflected.  The issuing officer will attach the parent/guardian statement to the work permit and keep a copy of the statement with their copy of the work permit filed at the school.

  • A certified copy of birth record or other proof of age showing the place and date of birth
  • A certified copy of valid operator’s license issued by this state showing date of birth
  • The school record or the school census record
  • The sworn statement of minor’s parent/guardian and statement from physician

The minor and parent/guardian must complete Section I of the work permit in its entirety (all areas must be completed).

The minor then takes the work permit to the employer, after completing Section I, and the employer must complete Section II of the work permit, in its entirety (all areas must be completed including listing all work the minor will be performing, equipment and/or tools minor will use, starting and ending hours to be worked, number of days per week to be worked and number of hours per days to be worked, etc).

The minor must take the work permit, after the employer has completed Section II, in person to a school district, intermediate school district, public school academy or nonpublic school official designated issuing officer for review and to complete section III.

The issuing officer must copy the work permit and place the work permit in the minor’s permanent school file and return the original work permit to the minor.

The minor must give the original work permit (after the designated official issuing officer has reviewed and approved by signing and dating) to the person, company, business, firm or corporation prior to start of work which is kept on file at the minor’s place of employment.

HOW TO OBTAIN AN APPLICATION FOR PERFORMING ARTS AUTHORIZATION

An “Approved” Application for Performing Arts Authorization form is needed from this department for all minors between the ages of 15 days old to 17 years prior to any performance (modeling, live stage, dancing, singing, filming, taping, etc.).  The company, the payroll company that is paying the minors and the extras, and the production company must submit a current and valid workers’ compensation insurance certificate along with the Application for Performing Arts Authorization form for each minor at least 10 days prior to start date and time of rehearsal and performance to this office for processing.

The “Approved” Application for Performing Arts Authorization form is needed for each minor, written parent/guardian permission statement, and the “Posting Requirements” must kept on-site at minor’s place of employment/performance.  All records required by the Act 90 of 1978 must be maintained and made available for inspection by an authorized representative of the Department and the employment must be in compliance with all provisions of the Act.

Application for Performing Arts Authorization Form (2 pages)

Michigan Penal Code (Excerpt) Act 328 of 1931

When both federal and state laws apply the more stringent standard must be observed

Migraine Headaches – The bane of FMLA world for Employers

Of all the various “serious health conditions” which are FMLA-qualifying events, the “migraine headache” has employers twisting and turning…trying to figure out how to deal with the ever-increasing numbers of employees allegedly suffering from chronic migraines. Now, before anyone accuses me of being “heartless” or “unsympathetic” (other than a plaintiff’s attorney) to the plight of those truly suffering from this chronic condition, let’s review some facts.  Under current FMLA law, Sections 825.112 spells out exactly what qualifies for FMLA leave, either a solid block of leave or intermittent leave.  FMLA Section 825.113 further defines exactly what constitutes a “serious health condition.”  And, folks, chronic migraine headaches are included and recognized as a “serious health condition” which incapacitizes an individual under FMLA.

And, here’s where it gets even more frustrating for employers.  In accordance with FMLA Section 825.115(f), “Absences attributable to incapacity under FMLA…qualify for FMLA leave even though the employee or covered family member does not receive treatment from a health care provider during the absence, and even if the absence does not last more than 3 consecutive, full calendar days…”  So, how do you spell “migraine”:  FMLA.  And, in fact, we’ve come to the point under FMLA where migraine headaches are practically synonymous with FMLA leave.

How to Control FMLA Employee Abuse – Migraines or Otherwise

Here are a few tips for employers or HR functions to use to control FMLA abuse:

(1)  Insure that employees complete an Initial FMLA Certification. If the employer requests medical certification, the employee must provide a complete and sufficient certification at his/her expense, generally within 15 calendar days after the employer’s request.

(2)  Don’t accept incomplete or insufficient certifications.  A certification is considered “incomplete” if one or more of the applicable entries on the form have not been completed.  A certification is considered “insufficient” if the information provided is vague, unclear, or nonresponsive.  In writing, inform the employee what’s deficient, and require that it fixed within a reasonable period of time.

(3)  Get a second opinion.  An employer who has reason to doubt the validiity of a medical certification has the right, and may require the employee to obtain a second medical opinion (cannot use company medical personnel nor anyone affiliated with employer) at the employer’s expense.

(4)  Recertify.  In general, the employer may request the employee to provide a recertification no more often than every 30 days and only in connection with an absence by the employee.  However, one exception to the rule is when the employer receives information that causes it to doubt the employee’s stated reason for the absence or the continuing validity of the existing medical certification.  Then, the employer can request recertification sooner.

Also, remember that an employee who needs FMLA leave time does NOT need to use any sort of magic language or formally request FMLA leave.  The employee doesn’t even need to say “FMLA”.  If the employee s provides enough information, either verbally or in writing, about his/her serious health condition to inform you that said employee may need FMLA leave, ALWAYS treat that request the same as you would for someone who specifically requests FMLA leave.

Or, if you welcome lawsuits or legal action, then ignore the above “advice.”

Home Care Employees Now Covered Under FLSA

Homecare Royalty Free Stock PhotoU.S. Court of Appeals Unanimously Upheld DOL Rule, Opinion Effective as of Oct. 13, 2015

The Department of Labor issued the Home Care Final Rule to extend minimum wage and overtime protections to almost 2 million home care workers. The rule was challenged in federal court, but on August 21, 2015, a federal Court of Appeals issued a unanimous opinion affirming the validity of the Final Rule. This opinion upholding the Home Care Final Rule became effective on October 13, 2015, when the Court of Appeals issued its mandate. We continue to provide employers technical assistance for coming into compliance with the Rule. As with all of our enforcement actions, employers and workers can expect that we will strategically use our enforcement resources, including complaint-based and agency-initiated investigations, to achieve compliance with these new important protections.

Please see below for more details about the litigation and the Department’s non-enforcement policies.
U.S. Court of Appeals Unanimously Upheld DOL Rule, Opinion Effective as of Oct. 13, 2015

The Department of Labor issued the Home Care Final Rule to extend minimum wage and overtime protections to almost 2 million home care workers. We believe the Rule is the right policy—both for those employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce allowing them to remain in their homes and communities. The Home Care Final Rule, issued on October 1, 2013, had an effective date of January 1, 2015.

The Department has led an unprecedented implementation program to help employers of home care workers prepare for FLSA compliance, including offering an extensive and individualized technical assistance program, providing a 15-month period before the effective date, and adopting a time-limited non-enforcement policy.

In June 2014, associations of home care companies filed a lawsuit in federal court challenging the Final Rule. In December 2014 and January 2015, U.S. District Court Judge Richard Leon issued opinions and orders vacating the Final Rule’s revised third party regulation and revised definition of companionship services, respectively.

The Department of Labor filed an appeal of the district court’s orders to the U.S. Court of Appeals for the District of Columbia Circuit. The case is Home Care Association of America v. Weil, No. 15-5018 (D.C. Cir.).On August 21, 2015, the Court of Appeals issued a unanimous opinion affirming the validity of the Final Rule and reversing the district court’s orders.

Because of the district court orders, the Department could not begin enforcement of the Final Rule on January 1, 2015, and because the Court of Appeals opinion did not take effect immediately, it could not begin enforcement on August 21, 2015, either. The home care associations asked the Court of Appeals and the Chief Justice of the U.S. Supreme Court to delay the date the Court of Appeals opinion would become effective, but both requests were denied. The Court of Appeals opinion reversing the district court’s orders became effective on October 13, 2015, when the Court of Appeals issued its mandate. The Department did not begin enforcement of the Final Rule until 30 days after that date, which means November 12, 2015. From November 12 through December 31, 2015, the Department was in the second phase of the time-limited non-enforcement policy it announced in October 2014, during which it exercised prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which States and other entities had made good faith efforts to bring their home care programs into compliance with the FLSA since the promulgation of the Final Rule.

As of January 1, 2016, we continue to provide employers technical assistance for coming into compliance with the Rule. As with all of our enforcement actions, employers and workers can expect that we willstrategically use our enforcement resources, including complaint-based and agency-initiated investigations, to achieve compliance with these new important protections.

August 21, 2015 U.S. Court of Appeals Decision (PDF)