Despite most of the government being occupied with the "shutdown" dilemma, the unaffected USDOL has remained busy and gifted us with two opinion letters today.
Here is a handy summary of the minimum wage increases applicable to most employers in the coming year.
The USDOL recently announced that it will continue its Payroll Audit Independent Determination (PAID) program, and wasted no time beginning its efforts to further educate employers and attorneys about the benefits of the program.
In an opinion illustrating the tangled web we weave when de-facto legislation takes place outside of Congress, the Ninth Circuit in Marsh v. J. Alexander's gave deference to the USDOL's sub-regulatory "20% Rule", restricting an FLSA tipped employee's activities, essentially on the basis that the agency's position was previously available online and that employers were therefore presumed to have notice of its potential effect.
Tip credit controversies are alive and well as employers seek clarity on the USDOL's so-called 20% Rule regarding "tipped employees" engaging in activities that do not, or at least not directly, produce tips.
After 80 years with the USDOL, the FLSA needs a shakeup. The problem is that, even as we anxiously await proposed regulations from the current agency and contemplate how things might be under a potential new one, it’s the 80-year-old law that needs change, and not just because it is outdated.
Employers should be aware of how we got to the recent FLSA amendment regarding tips, and have a solid understanding of their own tip-related practices, before trying to determine where to go from here.
USDOL's Payroll Audit Independent Determination (PAID) pilot program is meant to provide employers with the framework to proactively resolve potential FLSA claims. Nonetheless, on the whole, it seems that the benefits and risks are not particularly distinguishable from an investigation.
Whether the FLSA effectively prohibits an employer from imposing certain costs (such as for purchasing a uniform) on an employee depends on a variety of factors, including whether it is cost-prohibitive in the particular circumstances.
The public comment period for the USDOL's proposed rescission of the 2011 tip regulations has closed. Regardless of where data and "fairness" concerns might lead one, the fundamental legal issue is that the agency's authority does not extend to circumstances where an employer is not taking the tip credit.