Authored by Alex Passantino

‘Twas the week before Christmas, 2-0-1-5
When the poetry elves on the blog came alive.
Crafting their rhymes with a purpose so clear:
Presenting the wage-hour gems of the year.

In January, for new regs in this year our breath bated.
Then for six painful months, we speculated and waited.
And just as we geared up to celebrate Independence,
Out came a proposal that will create more defendants.

With a salary level that for 10 years has been flat,
They looked at New York’s and said “higher than that.”
More than double the old; and then they got clever …
The proposed sal’ry level will increase for forever.

Anticipated changes to duties caused quite a fuss
When DOL said “If you’ve got some ideas, just tell us.”
Of the Department’s proposal, employers were understandably wary,
So we wrote down some ideas on how to make it less scary.

Nearly 300 thousand comments they have to review,
It will be late into next year before they are through.

Next up on the list of your wage-hour joy,
Are the efforts to change what it means to employ:
ContractorsJoint employment. Fissured industry.
Interns. The “third way” and gig economy.

Economic realityRight to control.
They’re integral to your business? Now you’re in a deep hole.
So many angles, it can drive you berserk.
As agencies and courts figure out what is “work.”

And if divergent decisions bring you a sense of elation,
Then please focus attention on class certification.
Approvals, denials, and some decerts, too.
No matter the side, there’s a case for you.

But as summer approached, there arose quite a stir,
A case that’d explain what the class cert rules were.
A Supreme explanation, o my-o, o me-o
We’d learn about class via Bouaphakeo.

They’ve argued, but there’s no decision, not yet,
And a limited ruling on records might be all that we get.
But the cases keep coming. Their numbers broke the charts.
Whether giant class actions or cases broken in parts.

And the response to those filings? The employers’ retort?
A wide range of ways to get them out of court.

Some cases get mooted. Some cases do not.
At Genesis’s open question, SCOTUS might take a shot.
Does an offer of judgment that’s not been accepted
Mean the plaintiff cannot proceed with his class as expected?

Increasingly used as a litigation life saver
Arbitration agreements with a class action waiver;
And when asked if state laws could class waivers prevent, yo,
The Supremes laid the smack-down to dear Sacramento.

With all of these options, it comes as a surprise then,
That one resolution keeps on getting the Heisman.
For reasons that many cannot understand,
To settle wage claims courts think they must hold your hand.

That’s our year in review, we whipped you right through it.
Next year? The new regs and a mad dash to review it.
But before 2015 joins the past’s ranks,
You keep on reading our blog, and for that we give thanks!

THANKS TO ALL OF OUR READERS. BEST WISHES FOR A HAPPY, HEALTHY, AND PROSPEROUS NEW YEAR!

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Seyfarth attorney C.J. Eaton published an article in the Winter (2012) edition of the Northeast Human Resources Association’s (“NEHRA“) Insights magazine.  The article “The A to Z of the Massachusetts Wage Payment Law” aims to assist employers in answering some of the difficult questions employers struggle with concerning the Massachusetts Wage Payment Law.

Authored by Laura Reasons

In an important victory for the City of Albuquerque, the Tenth Circuit in Chavez v. City of Albuquerque issued an opinion upholding a decision of the District of New Mexico.

The Tenth Circuit held:  (1) the City’s dual calculation method does not violate the Fair Labor Standards Act (“FLSA”); (2) sale back proceeds for sick leave are includable in the regular rate calculation while those for vacation days are not; (3) paid time off, paid under the CBA but not required under the FLSA, is not hours worked for purposes of calculating the regular rate under the FLSA; (4) the proper divisor for calculating the regular rate is the number of hours actually worked, not 40; and (5) the City’s use of a one-half multiplier is also proper.

Plaintiffs filed suit on behalf of themselves and all similarly situated employees, arguing that the City’s method of calculating the regular rate violates the FLSA because it fails to include certain add-ons and bonuses.  They argued further that the City improperly calculates overtime by dividing by the total number of hours worked in the regular workweek, rather than by 40; and by using a one-half multiplier rather than a one-and-one half multiplier.

Plaintiffs also argued that the City’s “dual calculation method” is improper.  The City calculates the amount of overtime due to an employee under the FLSA, then makes a separate and distinct calculation under applicable CBAs.  It compares the two amounts and pays employees whichever is greater, ensuring employees are always paid at least as much as they are entitled to under the FLSA, if not more.  Plaintiffs argued that the City should, instead, somehow combine requirements of the CBAs with requirements of the FLSA.

The District Court ruled for the City on all claims, except the claim that the City improperly fails to include the proceeds of vacation and sick leave buy back in the regular rate calculation.  The City and Plaintiffs appealed.

Until this decision, only two other Courts of Appeal had ruled on the issue of the inclusion of sick leave sale back proceeds in the regular rate calculation.  This issue arises when an employee does not use all of his or her vacation or sick days and, as provided for in the CBAs, sells the vacation or sick days back to the City.  Previously, the Eighth Circuit in Acton v. City of Columbia held that sick leave buy back must be included in the regular rate calculation; while the Sixth Circuit in Featsent v. City of Youngstown ruled the opposite way. 

Following a Department of Labor (“DOL”), Wage & Hour Division Opinion Letter, the Tenth Circuit split the baby, so to speak, ruling that sick leave sale back proceeds must be included in the regular rate calculation, while those for vacation days need not be.  This case creates important precedent in a not often litigated area.