U.S. DOL Issues Six New Opinion Letters

The U.S. Department of Labor (DOL) has been busy. It recently issued six new opinion letters on various compliance issues. As described below, four of the letters involve the federal Fair Labor Standards Act (FLSA) and two of the letters involve the federal Family and Medical Leave Act (FMLA). While DOL opinion letters are issued in response to a particular employer’s submission of a question to the DOL, employers that rely on a DOL opinion letter in setting their practices have a legal “safe harbor” defense if faced with, as applicable, a FLSA or FMLA legal challenge. That being said, courts are not required to follow DOL guidance, and employers should be sure to be mindful of potential state or local law variances.

FLSA Opinion Letters

• FLSA Opinion Letter 2018-20 addresses whether time spent by a nonexempt employee voluntarily engaging in employer-sponsored wellness activities, biometric screenings, and benefit fairs constitutes compensable time under the FLSA. The short answer is that, if handled properly, an employer can set such time up to be nonworking time that is unpaid. To do so, the employer must ensure that: (i) employee participation is voluntary; (ii) the employee does not perform job-related activities while participating; and (iii) the wellness and benefits activities primarily benefit the employee. Activities that are aimed at educating an employee to make informed decisions about their personal wellness, benefits, or finance choices are likely to be viewed as primarily benefiting the employee.

Student Loan Debt Preventing Your Employees from Saving for Retirement? There May Be a Solution

Recent college graduates (and some not-so-recent ones as well) are often saddled with student debt to the point that they do not feel like they can afford more than debt service, rent, and living expenses. Certainly, they don’t always feel they can afford 401(k) plan contributions. That means that, in many cases, the recent grads are leaving an important piece of compensation on the table—if you don’t contribute to the 401(k) plan, you also miss out on the employer match.

And yet, 401(k) and matching contributions are particularly valuable when one is new in their career. The younger you are when you start contributing, the more time you have to accumulate earnings on those early contributions. Starting early is a key factor in building up a nest egg big enough to support you in retirement.

Members of Congress Introduce Paid Leave and Flexible Work Bills

Several Members of Congress have introduced competing bills related to paid leave and flexible work schedules. The proposals have sparked debate at the federal level about whether and how to require paid family leave, paid sick time, and flexible scheduling.

The Economic Security for New Parents Act

The Economic Security for New Parents Act would give workers at least two months off at about two-thirds of their regular salary in order to care for newborn or newly adopted children. The workers would fund the bill themselves by deferring Social Security benefits for several months. Sen. Marco Rubio, R-Fla., introduced the bill earlier this month.

The Workflex in the 21st Century Act

The Workflex in the 21st Century Act would allow businesses to bypass certain local employee benefits laws if they provide flexible work arrangement plans that include a combination of paid leave and flexible work options. The plan must provide employees with a minimum amount of paid leave per year of between 12 to 20 days, depending on the size of the employer and the tenure of the employee. It also must provide at least one of the following flexible work options: a biweekly work program; a compressed work schedule; a telework program; a job sharing program; flexible schedule; or predictable scheduling. Rep. Mimi Walters, R-Calif., introduced the bill last fall.

Avoiding Restrictive Covenant Problems – Simple Steps That Can Save You Heartache and Expense

In the past week, I have been involved in two situations in which an employer received a “cease and desist” letter from a potential competitor. The employers had hired employees away from the potential competitors and were then notified by the potential competitors that the employees were subject to various restrictive covenant obligations. The potential competitors’ letters made various demands regarding the restrictive covenants and restrictions to be placed on the employees’ activities.

As many of you know, restrictive covenants prevent employees from engaging in various types of actions both before and after they leave employment. Restrictive covenants include such things as:

• Non-competition restrictions which prevent an employee from working for a competitor;
• Non-solicitation of employee restrictions;
• Non-solicitation of customer restrictions;
• Confidentiality protections;
• Trade-secret protections; and
• Assignments of inventions.

Pay Equity: A Growing Priority in the #MeToo Era

In the #MeToo Era, employers who are focused on proactive sexual harassment prevention and response measures should also be mindful of other aspects of gender equity, such as pay equity. The Wall Street Journal recently reported that the U.S. Equal Employment Opportunity Commission (EEOC) is investigating Uber for potential gender discrimination in hiring and in its pay practices. The investigation is in line with the EEOC’s 2017-2021 Strategic Enforcement Plan, which included a focus on equal pay protections as a strategic priority.

Uber is just one of a number of companies facing public scrutiny over their pay practices. For example, Netflix was the subject of reports earlier this year that it had paid its female lead less for her Queen Elizabeth role in The Crown than her male co-star. Netflix subsequently announced that, going forward, “no one gets paid more than the Queen.” 

Former Partner Loses Millions by Violating Non-Compete

Non-competition and non-solicitation agreements can be useful tools for companies trying to protect their key client relationships and confidential information. Enforcing these agreements, however, can sometimes be difficult, given the law’s general disfavor of them. A recent Minnesota Court of Appeals case illustrates how a thoughtfully drafted non-compete can protect a company in the event that a former key employee begins competing with his former company.

Sick and Safe Time Leave Reaches Northern Minnesota

The City of Duluth, Minnesota recently became the third major Minnesota city to enact a local law providing eligible employees with paid leave for sick or safe time absences. On May 29, 2018, the Duluth City Council adopted Ordinance No. 10571 (the Ordinance), which establishes minimum standards for earned sick and safe time leave. The Ordinance is set to take effect on January 1, 2020. 

Covered Employers and Employees

The Ordinance is written to apply to employers with five or more employees nationwide—regardless of where those employees are located. Employee eligibility, however, is written to tie to how much time an employee spends working in Duluth. Employees are to be eligible for paid sick or safe leave under the Ordinance if they: (1) work in Duluth more than 50% of their working time in a 12‑month period; or (2) are “based in” Duluth, spend a “substantial part” of their time working in Duluth, and do not spend more than 50% of their work time in a 12‑month period outside of Duluth.