Here we go again: RIF on overtime rule sent to OMB — FEDERAL NEWS
The Labor Department announced on June 27 that it has sent a Request for Information on the controversial overtime rule to the Office of Management and Budget (OMB) for review. When published, the RFI will provide a public opportunity for comment.
The embattled final rule would have gone into effect December 1, 2016, nearly doubling the salary threshold for the executive, administrative, and professional (EAP) exemption (the so-called "white collar" exemption) at which FLSA overtime requirements would cease to apply. The rule would set the floor at $913 per week, or $47,476 annually, for full-time workers—the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the south.
Court challenge. In November 2016, in State of Nevada v. U.S. Department of Labor, a Texas federal court granted an emergency motion for a preliminary injunction in a consolidated case challenging the rule brought by 21 states (and a business coalition), ruling that "Congress intended the EAP exemption to depend on an employee’s duties rather than an employee’s salary" (see "Federal judge blocks DOL overtime rule," November 23, 2016).
The Obama-era Labor Department appealed to the Fifth Circuit and was granted its request for an expedited appeal with some modifications. But under the Trump Administration, the DOL obtained a series of extensions within which to file its reply brief. In April 2016, the department obtained an extension moving the May 1 deadline for the reply brief to June 30. In its unopposed motion requesting the extension the DOL noted that the due date was previously extended to "allow incoming leadership personnel adequate time to consider the issues." At that time, the nominee for Secretary of Labor had still not yet been confirmed, and so the government requested an additional 60-day extension.
Transparent effort to change the rule? The Economic Policy Institute responded quickly to news of the RFI, saying that the Labor Department "does not need more information about the rule." The nonpartisan think tank itself had submitted eight separate studies during the two-year rulemaking period. The public submitted hundreds of thousands of comments in support of the updated rule, EPI said, noting that corporate interests also had plenty of time to weigh in, flooding the DOL with comments and analyses during the rulemaking period—and some of their comments were incorporated into the final rule, reflected in the revised salary threshold and timing of the automatic updates.
The EPI called it "a waste of time and money" to conduct yet another review of a rule that has been thoroughly studied. "The Trump administration’s reasons for opening this RFI are clear," according to the EPI. "It is little more than a transparent attempt to weaken or even kill the updated overtime rule, and allow corporate CEOs to line their pockets at the expense of middle-class families."
Source: Written by Pamela Wolf, J.D.
Convenience store owner required to pay $48,860 for failure to pay clerk proper minimum wage and overtime — CALIFORNIA — Overtime
A Northern California convenience store owner paid a clerk $48,860 in back wages after the wage claim hearing officer ruled that the worker was not making minimum wage and was not paid overtime or double-time, according to the state Labor Commissioner’s Office.
The clerk for Mike’s Food & Liquor, located in Olivehurst, filed a wage claim on March 17, 2015. His initial claim was for $14,520 in underpaid regular wages from January 1, 2013 to October 31, 2014. The claimant filed his claim without an attorney or other advocate representing him. The Labor Commissioner’s wage claim hearing officer found that the worker was underpaid much more than he originally claimed, determining the clerk was owed $42,980, consisting of $22,162 in regular and overtime wages, $14,707 in liquidated damages, $3,586 in interest and $2,524 in waiting time penalties.
“Workers that are not paid correctly are victims of wage theft and my office can help them get back what they have earned,” said Labor Commissioner Julie A. Su. “This case shows that when workers exercise their labor rights and come forward to report wage theft, they can do so on their own without an attorney, they can receive the wages they are owed, and in some cases even more.”
The clerk worked on average 62.2 hours per week, earning an average of 20.2 overtime hours and two double-time hours for working more than eight hours on the seventh consecutive day of the workweek. Regardless of the number of hours actually worked the employer paid the clerk for 80 hours every semi-monthly pay period, which resulted in an underpayment of regular wages because most months exceed four weeks.
The Labor Commissioner’s Office entered a judgment after the employer failed to pay the award and successfully recovered $48,860, the balance of the award plus post-judgment interest.
Most workers in California, unless exempt from overtime laws, must receive overtime pay of 1.5 times the regular rate of pay for all hours worked over 8 hours in a workday or over 40 hours in a week, and double the regular rate of pay for all hours worked over 12 hours in a workday. Workers paid less than minimum wage are entitled to receive liquidated damages, which equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer fails to provide workers their final paycheck upon separation.
Source: State of California, Department of Industrial Relations, News Release No. 2017-50, June 27, 2017, http://www.dir.ca.gov/DIRNews/2017/2017-50.pdf.
Maine restores tip credit — MAINE — Wage Hour Rules
Maine Governor Paul LePage has signed a bill restoring the tip credit to the state’s minimum wage law. The law partially repeals a ballot measure passed by voters in November that increases Maine’s minimum wage rate to $12 by 2020. That ballot measure had also eliminated the tip credit, requiring employers to pay all workers the minimum wage.
Under the new law, employers will still be required to make up the difference in tipped employee pay when their tips do not bring their hourly wage up to the amount they would earn under the minimum wage. (L.D. 673, Laws 2017, approved June 26, 2017, effective January 1, 2018.)
Oregon standard minimum wage increases to $10.25 July 1 — OREGON — Wage Hour Rules
Oregon Senate Bill 1532 established a series of annual minimum wage rate increases beginning July 1, 2016 through July 1, 2022. The standard minimum wage rate will increase to $10.25 beginning on July 1, 2017.
In addition to a new standard minimum wage rate, the bill set out a separate Portland Metro rate which applies to employers located within the urban growth boundary (UGB) of the metropolitan service district. It also set out a nonurban rate which applies to employers located within the following counties: Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Harney, Wallowa, Jefferson, and Wheeler.
Standard minimum wage rate. The standard minimum wage will be $10.25 eff. 7-1-2017; $10.75 eff. 7-1-2018; $11.25 eff. 7-1-2019; $12.00 eff. 7-1-2020; $12.75 eff. 7-1-2021; $13.50 eff. 7-1-2022; and adjusted annually based on the increase, if any, to the US City average Consumer Price Index for All Urban Consumers starting July 1, 2023.
Portland Metro minimum wage rate. The Portland Metro minimum wage will be $11.25 eff. 7-1-2017; $12.00 eff. 7-1-2018; $12.50 eff. 7-1-2019; $13.25 eff. 7-1-2020; $14.00 eff. 7-1-2021; $14.75 eff. 7-1-2022; and $1.25 over the standard minimum wage starting July 1, 2023.
Nonurban County minimum wage rate. The Nonurban County minimum wage will be $10.00 eff. 7-1-2017; $10.50 eff. 7-1-2018; $11.00 eff. 7-1-2019; $11.50 eff. 7-1-2020; $12.00 eff. 7-1-2021; $12.50 eff. 7-1-2022; and $1 less than the standard minimum wage starting July 1, 2023. (S.B. 1532, Laws 2016, effective as noted above.)
Maryland minimum wage increases to $9.25 July 1 — MARYLAND — Wage Hour Rules
The minimum wage in Maryland increased to $9.25 on July 1, 2017. On May 5, 2014, Maryland Governor Martin O’Malley signed into law House Bill 295 to raise the state’s minimum wage to reach $10.10 per hour by 2018.
For employers of tipped employees who customarily and regularly receive more than $30 each month in tips, the tip credit may not exceed the applicable state minimum wage less $3.63 per hour.
Training wages and seasonal employments. Employers may pay a training wage of 85% of the minimum wage to employees who are under the age of 20 for the first six months of employment. For amusements or recreational establishments, including swimming pools, employers may pay employees a reduced wage of the greater of 85% of the state minimum wage or $7.25 per hour; This reduced wage applies only if the employer operates for no more than seven months in a calendar year or, for any six months during the preceding calendar year, has average receipts that do not exceed one-third of the average receipts for the other six months.
Exemptions. The measure also made modifications to those who are exempt under the law, removing an exemption for those who are 62 and over and employed for no more than 25 hours per week. The exemption for those employed in motion picture theaters is also removed while the exemption for drive-in theaters is retained. Also, the small business exemption for cafes, drive-ins, drugstores, restaurants, taverns and similar establishments that sell food and drink for on-site consumption will apply to businesses with an annual gross income of $400,000 or less (changed from the current $250,000 or less).
(State of Maryland, Office of the Governor, Press Release, May 5, 2014, http://www.governor.maryland.gov/blog/?p=10306; H.B. 295, L. 2014, http://mgaleg.maryland.gov/2014RS/bills/hb/hb0295E.pdf.)