On September 8, 2020, the United States District Court for the Southern District of New York struck down portions of a January 2020 Final Rule issued by the Department of Labor. The Final Rule provided a new test for determining whether an entity is a joint employer with another entity under the Fair Labor Standards Act (FLSA). The Final Rule, which became effective in March of 2020, severely limited the situations in which an entity can be considered a joint employer and held liable for violations of the FLSA in a “vertical” joint employment relationship. A vertical joint employment relationship is the variety of joint employment that exists when there is some sort of intermediary, like a staffing firm, PLA, or temp agency between the employee and the employer that ultimately benefits from the employee’s work. We discussed “horizontal” joint employment in a prior post.

Several states, including Illinois, filed suit challenging the Final Rule’s legality with respect to the Final Rule’s changes to the vertical joint employment determination. Historically, courts and the DOL have made clear that control over an individual’s employment is not the dispositive factor in determining whether an entity is a joint employer with another entity. Instead, whether a joint employment relationship exists depends upon whether the employee in question is economically dependent upon the potential joint employer.


Continue Reading DOL’s Joint Employer Test Ruled Illegal

FLSA Poster imageRegular readers may have noticed that this blog took a bit of a hiatus over the summer while the authors spent some time away from work, and then working to catch up from the time away. Now that summer is winding down, the kids are heading back to school and life is starting to return

Yesterday, the United States Supreme Court issued its long-awaited decision in the Encino Motorcars, LLC v. Navarro case, that many hoped would resolve the issue as to whether Service Advisors at auto dealerships are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).  As we reported back in January 2016, the Supreme Court agreed to hear a petition filed by an auto dealership, Encino Motorcars, challenging a Ninth Circuit decision holding that Service Advisors were not exempt from overtime pay requirements.  Encino asked that the Court “restore uniformity” in legal precedent and hold that Service Advisors are exempt from the FLSA’s overtime pay requirements.  Auto dealers were hoping that the Supreme Court would bring certainty to this issue and follow prior decisions from the Fourth and Fifth Circuits holding that Service Advisors are salespeople exempt from overtime, instead of following the Ninth Circuit’s contrary decision.  Although the Supreme Court ultimately vacated the Ninth Circuit’s decision, the Court’s opinion leaves the issue open to further consideration.
Continue Reading The Supreme Court Shoots Down DOL Regulations, But Declines To Rule Whether Service Advisors are Exempt From Overtime Pay Requirements

According to a report from Bloomberg BNA, unnamed DOL staffers have stated that the salary threshold in the hotly anticipated FLSA exemption rules will be about $47,000 per year, down slightly from the $50,440 level suggested by the proposed rules published last summer. This is  not an official announcement, so while the statement may well

In a move that should surprise precisely no onecapitol-hill-building who has been paying attention to current U.S. politics, GOP lawmakers in the U.S. House and Senate introduced legislation to block the U.S. DOL’s anticipated overtime exemption rules, just two days after the DOL sent the final rule to the Office of Management and Budget. OMB review is typically the final stage before publication of a new rule.

The legislation, dubbed the “Protecting Workplace Advancement and Opportunity Act,” would:

  • Void the DOL’s new rules;
  • Allow the DOL to publish updated rules only after conducting a detailed analysis of the rules’ impact on small business, non-profit and public employers;
  • Bar the DOL from adopting rules that provide for automatic adjustments of the minimum salary level without going through a formal notice and comment rulemaking process;
  • Require any proposed changes to the “duties” tests for the overtime exemptions to be published and subject to public notice and comment.


Continue Reading DOL OT Exemption Rules DOA? Federal Wage Theft Legislation? Probably Not …