Tuesday, May 26, 2020

The DOL "Unshackles" Employers in Retail and Services Industries

Authors: Laura Reathaford

On May 18, 2020, the United States Department of Labor (DOL) implemented a final rule arguably giving employers more flexibility in the retail and service industries to exempt certain employees from overtime pay requirements. 

Generally, the Fair Labor Standards Act (FLSA) requires that employers pay employees at an overtime rate for time worked in excess of 40 hours in a workweek, unless the employees are exempt under Sections 7 or 13 of the statute. One of these exemptions applies to employees who work for a “retail or service” establishment if: (i) the employee’s regular rate of pay averages more than one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked; and (ii) more than half the employee’s total earnings in a representative period comes from commissions.

The federal FLSA regulations explain that an employer is a “retail or service establishment” if it typically has a “retail concept.” The regulations have also included a list of industries that were viewed as “lacking” a “retail concept” (such as accounting firms, construction contractors, and real estate companies) and a list of industries that “may be recognized” as having a “retail concept” (such as auto repair shops, department stores and restaurants).  The regulations have not included an explanation of why certain industries were included on each of these lists.


On March 18, 2020, the DOL withdrew these two lists in an effort to allow any employer to argue for the retail and service exemption by applying the same test to everyone – irrespective of whether their industry was listed as potentially exempt. The DOL noted that some courts have questioned the merit of the lists and that the new rule will allow more businesses to “assert that they have a retail concept,” as long as they meet the existing definition of “retail” and certain other criteria. The DOL further stated, that “Insofar as these establishments were deterred from availing themselves of the exemption and its flexibilities, they may now do so if they qualify—including by having more flexibility to work with workers on commission-based pay arrangements.”


 “This final rule unshackles job creators in the retail space who had previously been categorically excluded from the exemption without notice and comment,” said Wage and Hour Division Administrator Cheryl Stanton. “Permitting all retail employers to potentially qualify for this exemption can increase flexibility for businesses and workers. Eliminating confusion empowers job creators to grow their businesses, comply with the law and provide even more good jobs for American workers.”

Employers who may have been deterred from seeking the FLSA retail and service overtime exemption should consider seeking the advice of counsel to determine whether their employees may meet the test of the exemption in light of this new rule. Employers should also consider whether any state or local wage and hour laws also implicate overtime pay obligations even if overtime pay is not required by the FLSA. 

Wednesday, May 20, 2020

Employee Well-being While Working Remotely

Authors: Jehan Kamil Moore with assistance from Vanessa Vaughn West 

"The Modern Workplace" has taken on a new meaning during this time when many employees are working from home, social distancing, and, often, balancing increased responsibilities for homeschooling, childcare and caring for older relatives. My modern workplace often includes Zoom meetings while my daughter watches cartoons or plays in the same room. Telephone calls are sometimes interrupted by a request for a snack. I have a friend who starts her workday after her children go to bed and goes to sleep herself around 3:00 a.m., just to get a few hours of sleep before her kids are up again at 6:00 a.m. People like to use the term "new normal," but there is nothing normal about what we are experiencing. Work and home have combined to create what some have described as a never-ending Saturday, Groundhog's Day or the Flat Spot. Working from home can be great. Working from home during a global pandemic is not great. Accordingly, employers should be mindful of employee well-being during this abnormal time. Here are some things to consider:

Monday, May 11, 2020

A Small Break for Employers—EEO-1 Data Collection Suspended to 2021

Author: Caitlin Miles Gehlan

The Equal Employment Opportunity Commission (the “EEOC”) announced yesterday that, due to the COVID-19 Pandemic, it would suspend the anticipated opening of its 2019 EEO-1 Component 1 data collection and the 2020 EEO-3 and EEO-5 data collections. The EEOC’s EEO-1 Component 1 data collection process requires an employer to report the number of employees working for a covered business and sort those employees by job category, race, ethnicity, and gender. In turn, the EEOC’s EEO-3 data collection process requires race, ethnicity, and gender reporting by local unions and the EEO-5 data collection process requires race, ethnicity, and gender reporting by public elementary and secondary school districts.

Tuesday, April 21, 2020

COVID-19, Employee Protected Concerted Activity, and Labor Unions

Authors: Neil Goldsmith & Jack Rowe

The COVID-19 pandemic has drastically changed the landscape for all employers. Most have had to lay off or furlough a significant number of employees and institute other cost-cutting measures, such as salary decreases, discontinuation of 401(k) matching programs, and hours reductions. For those still operating, they face the challenge of keeping their employees safe while still meeting their customers’ demands, priorities that are not always aligned. 

In this environment, labor unions have been fighting to insert themselves into these critical management decisions in the name of protecting their members. Additionally, in non-unionized environments, employers need to be aware of employees’ rights to engage in “protected concerted activity” under Section 7 of the National Labor Relations Act (“NLRA”). All employees, whether part of a union or not, have rights to engage in “protected, concerted activity” under the NLRA. This includes banding together with other employees to complain about wages, hours, and working conditions. 

Friday, April 17, 2020

Responding to Employee Reluctance, Refusal or Inability to Remain or Return to Work During the Pandemic

Author: Mark Mathison

Employers have been facing an incredible range of complex and varied issues during the COVID-19 pandemic. Not least among these have been how best to respond lawfully to workers for whom work is available but who are reluctant to work, refuse to be in the workplace, or who may be unavailable because they are sick or have been exposed to the virus. Now, as the nation begins to contemplate a reopening process that will significantly increase the number of open workplaces, these questions will arise with increasing frequency. Making sound decisions about how to respond to employees with concerns about being at work will depend on thoughtful integration of an unusually wide variety of considerations, both legal and practical.  

Thursday, April 9, 2020

Continuing COVID-19 Related Employment Developments: Modifications to Workers Compensation Coverage and Unemployment Benefits

Author: Dean LeDoux

In the continued wake of the COVID-19 pandemic, numerous states have recently taken steps, through either new legislation or executive orders issued by governors, to expand both workers compensation and unemployment benefits in circumstances tied to COVID-19. We highlight Minnesota developments as examples.

Workers Compensation Benefits for Essential Workers:  

Newly enacted legislation in Minnesota creates a presumption of workers’ compensation coverage for various categories of workers who contract COVID-19. Categories of covered workers include first responders, health care workers, and childcare workers. Frequently Asked Questions on the new law can be found here. Other states, such as Missouri, have taken similar steps, regarding at least first responders. 

Workers compensation laws, including Minnesota’s statute, typically require an employee seeking coverage for an occupational disease to show a direct causal connection between the disease or illness and the workplace. Under the new Minnesota law, the employer now has the burden to show that the employment was not a direct cause of the illness (a heightened proof standard). 

Tuesday, March 31, 2020

Keeping You Up to Date on COVID-19 Employment Issues: Links to Our Alerts

Author: Dorrie Larison

We know that we are all feeling a bit overwhelmed by the fast-pace of information being circulated about employment related COVID-19 issues and laws. In an effort to help you organize and retain COVID-19 information in a concise way, you will find links below to each of the Employment Alerts, Blog Posts, and Webinars by Lathrop GPM on COVID-19 employment issues. We will continue to keep you up to date with Alerts and blog posts as the various federal and state agencies issues new laws, regulations, and answers to the questions posed by employers. Please check here on the Modern Workplace for updates or go to the Lathrop GPM website to find all of the COVID-19 Alerts by our various practice groups.
Employment Alerts from Lathrop GPM
The Modern Workplace Blog Posts