In its semi-annual regulatory agenda, the U.S. Department of Labor indicated that the Fair Labor Standards Act (FLSA) proposed regulations concerning exemption from overtime and minimum wage requirements and determining independent contractor status won’t be released until August. Bipartisan legislation has been introduced in the House of Representatives to protect older job applicants from discrimination. The Labor Department announced that a jury awarded the largest back wage verdict against an employer for failure to pay employees for time spent putting on and removing protective equipment and showering to avoid possible lead exposure and other hazards. The National Labor Relations Board issued a decision modifying the independent contractor standard under the National Labor Relations Act.
Labor Department Regulatory Update – As part of its semi-annual regulatory agenda, the U.S. Department of Labor announced that a proposed rule concerning the exemption from the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA) for executive, administrative, and professional employees will not be released until August 2023. This marks another delay in the issuance of the proposed rule, which was initially expected in October 2022 and then pushed back until May 2023. The salary basis threshold that must be met to qualify for the exemption is currently $35,568/year.
Additionally, the Labor Department indicated that the proposed rule on independent contractors that it issued on October 13, 2022, would be finalized in August 2023. A final independent contractor rule was published by the previous administration on January 7, 2021. When the current administration assumed office, it first delayed and then withdrew the rule in May 2021. In March 2022, a U.S. District Court for the Eastern District of Texas, in the case of Coalition for Workforce Innovation, et al. v. Marty Walsh, Secretary of Labor et al. reinstated the January 7th, 2021, rule, which the judge concluded became effective on March 8, 2021. The Department of Labor has appealed the District Court’s decision to the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit has granted two stays of the litigation each for 180 days pending the issuance and release of a new rule. The second stay was due to end on June 12, 2023, and the Fifth Circuit granted a third stay, this one for 120 days as requested by the Labor Department. In the order granting the stay, the Fifth Circuit noted that the Labor Department had received approximately 54,000 comments on the proposed rule it issued on October 13, 2022. This stay will allow the Labor Department to complete the rulemaking process.
Bipartisan ADEA Legislation Introduced – The Protecting Older Job Applicants Act (H.R. 3491) has been introduced by bipartisan members of the House Committee on Education and the Workforce. The sponsors of the legislation are Representatives Salazar (R-FL), Scott (D-VA), Obernolte (R-CA), and Costa (D-CA). The bill is designed to protect older job applicants from employment discrimination. The bill would amend the Age Discrimination in Employment Act of 1967 (ADEA) to make it unlawful for employers to “limit, segregate, or classify” employees or applicants for employment that would deprive them of employment opportunities or “otherwise adversely affect [their] status as an employee or applicant for employment because of such individual’s age.”
The bill, which has been referred to the Committee on Education and the Workforce also would give the Equal Employment Opportunity Commission (EEOC) one year to conduct a study to determine the number of claims pending or filed with the EEOC alleging age discrimination by job applicants. The study would include recommendations of best practices designed to prevent and address age discrimination in the hiring process.
DOL Wins Record Back Wage Verdict – The U.S. Department of Labor announced that a jury awarded back wages exceeding $22 million to more than 7,500 employees of East Penn Manufacturing Company, which manufactures batteries. This is the largest verdict under the Fair Labor Standards Act (FLSA) that has been obtained by the Labor Department which intends to ask for an equal amount be awarded in liquidated damages. The Labor Department alleged that the employer paid workers only for their eight hour scheduled shift and failed to pay them for the time they spent putting on and removing protective equipment and to shower to avoid possible lead exposure and other hazards. Solicitor of Labor Seema Nanda stated, “Decades of settled law states that employers must pay employees for all hours worked, and this includes the time employees spend changing into and out of uniforms and showering where such activities, as here, were necessary and indispensable to their work.”
NLRB Modifies Independent Contractor Status Under the NLRA – The National Labor Relations Board (NLRB) issued a decision in The Atlanta Opera, Inc., that modified the standard for determining independent contractor status under the National Labor Relations Act (NLRA). According to the NLRB, in this case it found that “the makeup artists, wig artists, and hairstylists who work at the Atlanta Opera – had filed an election petition with the Board seeking union representation – are not independent contractors, excluded from the Act, but rather are covered employees.”
The Board overturned a 2019 decision in SuperShuttle in which it was held that “entrepreneurial opportunity for gain or loss should be the animating principle of the independent contractor test.” The Board believed that entrepreneurial opportunity for gain or loss should be one factor along with others in determining whether services are provided as part of an independent business. The NLRB reinstated the previous test it adopted in FedEx II that was based on common law agency theory contained in Section 220 of the Restatement of Agency addressing the relationship between masters and servants. Highlights of the ten factors enumerated include: the extent of control the employers exercises over the work, whether the individual is engaged in a distinct occupation or business and the skill required, whether the employer or the individual supplies the tools and the workplace, length of time for which the person is employed, method of payment whether by time or job, whether the work is part of the regular business of the employer, and whether the parties believe they are creating a master-servant relationship. In this case, the Board concluded that the evidence pointed towards employee status.