Last week, President Obama announced changes to the overtime pay laws by expanding its protection to almost 5 million workers. Currently, under the Fair Labor Standards Act, workers who earn more than $455 per week, that is, $23,660 per year, cannot make a claim for overtime pay if they work in excess of 40 hours per week. However, President Obama’s proposed rule will raise the threshold from $455 per week to $970 per week ($50,440 per year) as early as next year. Meaning, after the law goes into effect, workers who make as much as $970 per week can claim overtime wages, even if they are classified as a manager or professional. The salary threshold has not been changed since the 1970s.
Category: Uncategorized
NJ GAS STATION ATTENDANTS AWARDED $5.5 MILLION IN BACK WAGES
The U.S. Labor Department reported that over 1,100 gas station attendants in New Jersey have received $5.5 million in back wages and damages over the past five years as a result of the Labor Department’s “multiyear enforcement initiative.” The Labor Department found that attendants employed by various gas stations including Shell, Exxon, BP have been denied basic minimum wage and overtime pay, in violation of the Federal Labor Standards Act. Due to its enforcement efforts, the Labor Department also reported that the industry was positively impacted in that some gas station hired more employees to avoid overtime violations, began to track hours worked, and contacted the Labor Department for help in providing training to managers on wage and hour laws.
The Fair Labor Standards Act requires non-exempt employees to be paid at the least the federal minimum wage of $7.25 per hour and over time pay of one and one-half times their regular rate of pay for hours worked in excess of 40 hours per week. The law also requires employers to maintain accurate time-keeping records and prohibits retaliation against employees who exercise their rights under the law. Most states also have wage and hour laws.
INQUIRIES ABOUT CRIMINAL CONVICTIONS BARRED FROM NYC JOB APPLICATIONS
The “Fair Chance Act,” a bill providing protection to prospective employees with criminal histories during the interview process, was recently passed by a 45-5 vote by the New York City Council. Under the bill, private employers are barred from asking about arrest and conviction records, but only until a conditional job offer is made. Similarly, the bill also states that background inquiries must be deferred until after a job offer is made. After an employer learns of an applicant’s criminal history and decides to rescind a job offer, the employer is required to state in writing why they are withdrawing the offer, and the applicant has three days to respond. If the employer still decides not to hire the applicant after an objection is made, the applicant can file a lawsuit in court or file a complaint with the city Commission on Human Rights.
There are, however, exemptions in which an employer may lawfully consider an applicant’s criminal history when hiring certain individuals, such as, bank tellers, safety officers, home health care aides and those who work with children.
NEW YORK NAIL SALONS MUST POST BILL OF RIGHTS
In an effort to eliminate the exploitation of nail salon workers, New York Governor Andrew Cuomo issued a workers’ bill of rights that must be posted in plain view at every nail salon. The posters are printed in 10 languages and state the minimum wage and overtime requirements for both tipped and non-tipped workers. In addition to including a list of safety gear that salon owners must provide to workers, the poster also states what employers are not permitted to do, i.e., steal tips, deny meal breaks, require workers to pay for job training, etc.
The poster can be found here.
U.S. SUPREME COURT RULES AGAINST ABERCROMBIE & FITCH IN RELIGIOUS DISCRIMINATION CASE
We reported last year that the U.S. Supreme Court was set to hear an appeal in a religious discrimination case commenced by Samantha Elauf, a Muslim woman, in 2008. Elauf alleged that she was denied a salesperson position at an Abercrombie & Fitch children’s store in Oklahoma because she wore a headscarf during her interview, which ran afoul of Abercrombie’s “Look Policy.”
Earlier this week, the U.S. Supreme Court in an 8-1 decision ruled that Abercrombie might have discriminated against Elauf on the basis of religion under Title VII of the Civil Rights Act. The Court was asked to determine if Elauf was required to ask for a religious accommodation for her head covering in order to sue Abercrombie. Although Elauf wore the headscarf to her interview, she did not explicitly ask for a religious accommodation to continue wearing it. The Court ruled that Abercrombie’s knowledge of Elauf’s need for a religious accommodation was not relevant; rather, only if the headscarf was a “motivating factor” in the Company’s decision not to hire her was important. Justice Scalia explained, “Motive and knowledge are separate concepts…An employer who acts with the motive of avoiding accommodation may violate [the law] even if he has no more than an unsubstantiated suspicion that accommodation would be needed.” As such, the Court reversed the lower court’s ruling in favor of Abercrombie and sent the case back to the lower court for further review.
In a statement issued by Abercrombie, the Company said that it has replaced the “Look Policy” with a new dress code that allows associates to be “more individualistic” and changed its hiring practices to not consider attractiveness.
THIRD CIRCUIT REVIVES SLEEPY’S DRIVERS SUIT
As we previously reported, the delivery drivers of Sleepy’s LLC commenced a class action lawsuit alleging that the Company misclassified them as independent contractors, thereby denying them certain employee protections and benefits.
The lower court ruled that the drivers were independent contractors based on a test called the “economic realities test.” The drivers appealed to the Third Circuit, which in turn, requested certification from the New Jersey Supreme Court on the independent contractor issue. The NJ Supreme Court held that the “ABC Test,” rather than the “economic realities test,” should be used in deciding whether the drivers are employees or independent contractors. As such, the Third Circuit ruled earlier this month that based on the NJ Supreme Court ruling, summary judgment in favor of Sleepy’s could not stand. In its decision, the Court stated that it would vacate the grant of summary judgment in favor of Sleepy’s and remand the case back to the district court for it to apply the appropriate test in determining whether the drivers are employees or independent contractors.
This firm will continue to monitor the developments in this case.
GOVERNOR CUOMO ANNOUNCES STATEWIDE EMERGENCY MEASURES TO PROTECT NAIL SALON WORKERS
Earlier this week, New York Governor Andrew M. Cuomo announced that a multiagency task force will conduct investigations of nail salons and institute new rules that salons must comply with to protect manicurists from potentially dangerous chemicals found in nail products. He also stated that, “New York State has a long history of confronting wage theft and unfair labor practices head on…and with the formation of this new Enforcement Task Force, we are aggressively following in that tradition.” Governor Cuomo vowed that nail salons that did not comply with orders to pay workers back wages, or are unlicensed, would be shut down.
Governor Cuomo’s initiative follows a two-part investigation by Maslin Nir regarding the mistreatment of nail salon workers in New York. Her report was published in the New York Times last week and has commanded attention. The comprehensive report was a result of 13 months of researching and reporting and shed light on the unfair labor practices and mistreatment of various nail salon workers. The report exposed the stories of several immigrant nail salon workers who stated that their employers required them to pay $100 to $200 as a “training fee” just to begin working at the salon, and were not paid any wages for months, that is, until their bosses deemed them fit to earn wages. In one instance, when one worker finally was paid, she stated she was paid $30 per day. Although more experienced workers are sometimes paid more, i.e., $40-$80 per day, it still is below minimum wage due to their long working hours. Workers’ tips have also been docked by owners due to minor errors, and overtime pay is basically unheard of in this industry even though workers routinely work up to 12 hour days. Unfortunately, these stories documented in Maslin’s report are commonplace to many workers in this industry.
Maslin further reported that many of these workers endure humiliation and physical abuse by owners and are constantly video-recorded as they work. The report stated that many nail salon workers are Asian and Hispanic with limited English-speaking capabilities and are in this country illegally and are reluctant to report violations or complain because they are just happy to have a job.
The full New York Times report can be found here.
NJ COURT REJECTS CHALLENGE TO TRENTON SICK LEAVE LAW
In November, Trenton passed an ordinance that entitles certain employees to paid sick leave. Business groups, including The New Jersey Business and Industry Association, State Chamber of Commerce, New Jersey Food Council and others, filed a lawsuit in an attempt to void the law. Christopher Gibson, the lawyer for the business groups, argued that paid sick leave should be uniform throughout the state rather than legislated locally by individual municipalities. He further argued that the law was “vague, ambiguous and contrary to New Jersey law.” After hearing three hours of argument, Mercer County Superior Court Judge Mary C. Jacobsen rejected these arguments and ruled that the ordinance is reasonably related to promoting the health of Trenton’s citizens and the people who work there.
To date, nine municipalities have passed similar paid sick leave laws, including, Jersey City, Newark and Montclair.
NYC BANS THE USE OF CREDIT CHECKS FOR SOME JOB SEEKERS
Last week, the New York City Council passed legislation that bans most NYC employers from checking a prospective employee’s credit history during the hiring process. The bill, sponsored by councilman Bill Lander, passed by a vote of 47-3 and serves as a victory for labor and consumer activists who have long been arguing that credit history is a poor predictor of job performance. Lander stated, “Credit checks for employment unfairly lock New Yorkers out of jobs…Millions of Americans who have bad credit, would also be great employees. What they need to repair their credit is a job, and to make it harder for them to get a job is the definition of unfair.”
The legislation, however, does not bar the usage of credit checks for jobs involving “public trust,” which include police officers, some high-level city workers and positions that involve cyber security or fiduciary duties.
SEC ANNOUNCES FIRST ENFORCEMENT ACTION AGAINST COMPANY IN WHISTLEBLOWER PROTECTION CASE
Whistleblowers are given protection under Section 240.21F-17 of the Dodd-Frank Act. The rule states, in part, “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violations, including enforcing, or threatening to enforce, a confidentiality agreement…with respect to such communications.” This rule was promulgated to prevent companies from stifling whistleblowers.
Although the Securities and Exchange Commission has been signaling its intention to crack down on violators of the rule, it did so for the first time earlier this month. The SEC imposed a $130,000 penalty to Houston-based global technology and engineering firm, KBR, Inc., for using improperly restrictive language in its confidentiality agreements.
Specifically, KBR was found to have violated the rule by requiring witnesses to sign confidentiality agreements with language that threatened to discipline or fire them for speaking to outside parties without prior approval from its legal department during a securities fraud investigation. The SEC did not find any instances in which KBR specifically prevented employees from communicating with the SEC; however, it found that the language contained in the confidentiality agreements had a potential chilling effect on whistleblowing. KBR has since amended the language in its confidentiality agreement.
This case serves as a reminder to employers to avoid including language that an employee may interpret as impeding his or her right to talk to the SEC or another government entity in agreements including confidentiality agreements, employment agreements and separation agreements as well as employment manuals.