The U.S. Court of Appeals for the Third Circuit, in Higgins v. Bayada Home Health Care Inc., held that it is not a violation of the Fair Labor Standards Act (FLSA) for an employer to deduct time from an exempt employee’s paid time off (PTO) bank for failing to meet a productivity target. The employer in the case had developed a point-based system to ensure that employees met certain “productivity minimums,” with various tasks being assigned a certain number of “productivity points.” When employees consistently exceeded their productivity minimums, they received additional compensation. When employees failed to meet their weekly productivity minimums, however, their available PTO was deducted. The employer did not deduct from an employee’s salary once PTO had been exhausted.

Continue Reading Third Circuit Rules Paid Time Off Is Not Part of an Exempt Employee’s Salary

The U.S. Court of Appeals for the Sixth Circuit recently held in Clark v. A & L Homecare and Training Center, that plaintiffs must show a “strong likelihood” that other employees are “similarly situated” to the plaintiffs for a court to certify a Fair Labor Standards Act (FLSA) collective action and facilitate notice of the action. The “strong likelihood” standard has the potential to make it more difficult for plaintiffs to facilitate notice of their FLSA collective actions to other potential collective members.

Continue Reading The Sixth Circuit Sets a New Standard for Notification of FLSA Collective Actions

The first phase of the District of Columbia Tip Credit Elimination Act of 2021 became effective May 1, 2023.

The Tip Credit Elimination Act, which was passed by voters in the District of Columbia in November 2022 as Initiative 82, will phase out Washington, D.C.’s tip credit for employers with employees who receive tips by 2027. To achieve this, the act provides that the minimum cash wage for tipped employees will gradually increase as the maximum tip credit available to employers decreases.

Continue Reading District of Columbia Tip Credit Elimination Act Increases Cash Wage for Tipped Employees

On May 3, 2023, New York Governor Kathy Hochul signed into law the FY2024 New York State Budget Agreement (the Budget), which includes legislation increasing the state’s minimum wage rate over the next three years.

Continue Reading New York State’s Minimum Wage To Increase Effective January 1, 2024

In Mathews v. USA Today Sports Media Group, LLC et al., plaintiff Elizabeth Mathews (Mathews) brought a collective action under the FLSA alleging that she was an employee rather than an independent contractor to the defendant. Mathews moved for conditional certification pursuant to the widely followed two-step conditional FLSA certification process adopted in Lusardi v. Xerox Corp, 118 F.R.D. 351 (D.N.J. 1987). Under this approach, an initial collective certification determination is made using a lenient standard—that proposed members of a collective are similar enough to receive notice of the lawsuit so the proposed collective member may decide whether to affirmatively join the lawsuit. In the second step, which occurs after collective certification discovery has been completed, the district court makes a second decision when the employer moves for “decertification” of the collective, using a stricter standard, to determine whether the named plaintiffs and opt-in members are “similarly situated.”

Continue Reading Eastern District of Virginia Follows the Fifth Circuit’s One-Step Certification Approach for Collective Actions Under the Fair Labor Standards Act (FLSA)

As California Governor Gavin Newsom’s administration seeks to finalize the 2023-24 Governor’s Budget, the California Joint Legislative Audit Committee has moved to audit the persistent backlog of wage theft cases at the Division of Labor Standards Enforcement. The audit is set to begin September 1, 2023, absent developments demonstrating to the committee an investigation is no longer necessary. A further description can be found here.

San Mateo County (the County) enacted a new minimum wage ordinance that took effect April 1, 2023. The County’s minimum wage is an hourly rate of $16.50. Beginning January 1, 2024, and each January thereafter there will be increases in the rate.

The new ordinance applies to the unincorporated areas of the County, but not the city of San Mateo or other cities within the County that have their own minimum wage ordinances.

Continue Reading New Minimum Wage Ordinance in San Mateo County, California

Recently, a California court of appeal held that employees can pursue Private Attorneys General Act (PAGA) claims for violations of California’s Healthy Workplaces, Healthy Families Act of 2014 (HWHF) (Labor Code § 245 et seq.) The HWHF generally requires employers provide eligible employees at least three paid sick days per year. Enforcement of this requirement is the responsibility of the labor commissioner and attorney general, and employers who do not comply may be subject to compensatory and liquid damages. They also may incur civil penalties under section 248.5. Section 248.5(e), which states “any person or entity enforcing this article on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive, or restitutionary relief . . . .” (emphasis added). The interpretation of the italicized language became the core of the dispute in this recent case.

Continue Reading California Court of Appeal Opens New Pathway for Private Attorneys General Act Claims

In O’Reilly v. Daugherty Systems, the U.S. Court of Appeals for the Eighth Circuit[1] ruled that, for purposes of the Equal Pay Act (EPA) claim, greater experience can serve as a legitimate reason for a pay differential on March 29, 2023. Affirming the district court’s grant of summary judgment for the defendant, the Eighth Circuit held that differences in skillset and experience between a plaintiff and a single comparator can establish that a pay disparity between them was based on a factor other than sex, an affirmative defense to an EPA claim. The recent decision adds one more notch in the developing question of what constitutes a legitimate reason for pay differences under the EPA.

Continue Reading Eighth Circuit Pushes Back Against Using More Experienced Comparators in EPA Claims