In Razak v. Uber Technologies, Inc., a Pennsylvania federal judge ruled last week that drivers for UberBLACK, the company’s higher-end limousine service, are properly classified as independent contractors. In granting Uber’s motion for summary judgment, this court was the first federal court to determine whether drivers for UberBLACK are employees or independent contractors under the Fair Labor Standards Act (“FLSA”) and similar Pennsylvania state laws.
On March 6, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) announced a new pilot program through which employers may settle potential overtime and minimum wage claims under the FLSA by paying back pay owed to the affected employee(s), but without paying civil penalties or liquidated damages. The Payroll Audit Independent Determination (PAID) program will be available for six months, after which the Department will evaluate the viability of the program. This program is purely voluntary, both for employers, in that they would need to self-disclose the violation(s) to the WHD, and employees, who may choose to accept the back pay being offered by the employer as full settlement of the potential claim, or decline the offer and file suit, thus preserving the right to recover liquidated damages if successful. If the employee chooses to accept the back pay, and thus settle the potential claim by signing a release of that claim, the WHD will only approve a release if it is tailored to the identified violations and the time period covered by the back wages payment. Employers are not eligible for the program if they are already under investigation by the WHD, involved in litigation or arbitration regarding the particular claim, or the employee has already communicated an interest in litigating or settling the issue. Claims that could be resolved through this program include misclassification of employees as exempt from overtime or failure to pay for “off the clock” work.
Earlier this year, the United States Department of Labor (“DOL”) reinstated seventeen George W. Bush Era opinion letters which were issued in January 2009, but later withdrawn by the Obama Administration. Opinion letters are official guidance from the DOL’s Wage and Hour Division that provide employers with detailed responses to fact-specific questions pertaining to the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Davis-Bacon Act (DBA).
In 2010, the DOL stopped issuing opinion letters and instead began issuing “administrative interpretations,” which offered a more general interpretation of the law rather than a response to specific questions posed by employers or employees.
The United States District Court for the District of Minnesota has dramatically cut an attorney-fee request in a wage-and-hour collective action against Chipotle Mexican Grill Inc. from $3.2 million to $600,000, finding the original amount “excessive” in light of the relatively small $62,000 recovery and straightforward nature of the case. Harris et al. v. Chipotle Mexican Grill Inc., No. 13-CV-1719 (SRN/SER), 2018 WL 617972 (D. Minn. Jan. 29, 2018).
The 81 percent fee reduction marks the end of an almost five-year saga, which began in 2013 as a nationwide putative collective action by employees Marcus Harris and Julius Caldwell. Through the action, Harris and other named plaintiffs, who were employed as hourly workers at Chipotle’s Crystal, Minnesota, restaurant sought unpaid straight time and overtime wages based on allegations that Chipotle forced its non-exempt employees to perform off-the-clock work, pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, and the Minnesota Fair Labor Standards Act, Minn. Stat. §§ 177.21-177.35.
On September 15, 2017, the U.S. Department of Labor (“DOL”) announced the 2018 minimum wage rate for covered federal contractors and subcontractors, as required by Executive Order 13658.
Beginning January 1, 2018, the minimum wage for covered contractors will increase from $10.20 per hour to $10.35 per hour. The minimum cash wage for tipped employees performing work on or in connection with a covered federal contract will also increase from $6.80 per hour to $7.25 per hour, effective January 1, 2018. If the worker’s tips combined with the required cash wage of at least $7.25 per hour do not equal the minimum rate, then the contractor must increase the cash wage paid to a tipped employee to bring him or her up to $10.35 per hour.
On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced that the U.S. Department of Labor (DOL) is withdrawing two major pieces of informal guidance issued during the Obama administration, pertaining to joint employment and independent contractors under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq.
The two Administrator Interpretations Letters were issued by the former head of the DOL’s Wage and Hour Division, David Weil. The first guidance letter, Administrator’s Interpretation No. 2015-1, took an aggressive position regarding misclassification of employees as independent contractors. It stressed that the “economic realities” of worker-employer relationships were paramount—i.e., whether, as a matter of economic reality, a worker was dependent on the putative employer—and suggested that most workers should be classified as employees. Although it relied on case law, the Administrator Letter provided additional refinements and, significantly, de-emphasized consideration of “control”—a major element under most common law tests.