Seyfarth Synopsis: With DOL’s overtime exemption rule currently under White House review, we could see its publication sooner rather than later.

We previously reported on the Biden Administration’s April 2024 target date to publish the DOL Wage and Hour Division’s (“WHD”) final rule on increasing the minimum salary level for white-collar exemptions, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.” An April release now appears distinctly within the realm of possibility since DOL sent the rule to OMB for Office of Information and Regulatory Affairs (“OIRA”) review late last week. 

OIRA, nestled within the broader OMB structure, reviews rules before agencies finalize them for publication in the Federal Register. But OIRA review is fickle, and recent examples demonstrate no clear timeline for approval. While the review of WHD’s independent contractor rule, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,” took from September 2023 until early January 2024, DOL’s Davis-Bacon revision, “Updating the Davis-Bacon and Related Acts Regulations,” sat with OIRA from December 2022 into August 2023.

Whenever OIRA concludes its review, DOL will then move to publish the final overtime rule in the Federal Register. The final rule will go into effect sometime after publication, likely within 60 or perhaps 90 days. Of course, the rule will almost assuredly face legal challenge, which could delay or derail its implementation. 

As the FLSA landscape continues to evolve, Seyfarth’s national Wage and Hour Litigation practice group is pleased to share our observations and analysis of the 2023 FLSA litigation trends as well as our forward-looking predictions for 2024.

Wage and hour litigation and enforcement actions continued as a hot-button concern in 2023, as plaintiffs’ lawyers advanced novel and creative claims and Supreme Court and appellate-level battles took place over long-accepted standards—for exempt status, collective action certification, and the arbitrability of certain wage and hour cases. And pay laws remained in flux, as local, state, and federal legislatures and agencies quarreled over everything from minimum wages, to questions of who is an employee and who not, and—further—to rules around the disclosure and frequency of employee pay. Remarkably, against this backdrop, the number of cases filed nationally under the FLSA reduced marginally compared to 2022, falling to its lowest since the peak in 2015. For 2024, we predict that the mix of wage and hour litigation and enforcement actions will remain varied. With ongoing government rulemaking on various regulations, and especially given that 2024 is an election year, when candidates on both sides will use wages as a lightning rod, we also speculate that we will see another increase to the number of suits filed nationally.

Access the flipbook here: 

2023 FLSA Litigation Metrics & Trends (seyfarth.com)

We hope our analysis is of assistance to you and/or your colleagues. Should you have any questions or comments, please reach out to your Seyfarth attorney.

Brett Bartlett and Noah Finkel, are co-chairs of Seyfarth’s Wage & Hour Litigation Practice Group.

Date and Time

Wednesday, March 6, 2024
3:00 p.m. to 3:45 p.m. Eastern
2:00 p.m. to 2:45 p.m. Central
1:00 p.m. to 1:45 p.m. Mountain
12:00 p.m. to 12:45 p.m. Pacific

Register Here


About the Program

Much has happened in the 10 years since our national Wage and Hour Litigation Practice Group wrote ALM’s authoritative Wage & Hour Collective and Class Litigation treatise. We are excited to continue our informative webinar series to discuss—in bite-sized increments—the past decade’s most important changes to the federal and state employee pay litigation landscape.

The standards for determining independent contractor classification and joint employer status are in a constant state of flux, both at the federal and state levels. With the proliferation of “gig” work and staffing arrangements, businesses are faced with heightened uncertainty as to what, if any, actions they can take without creating liability under federal and state wage laws. And the Department of Labor’s inconsistent efforts at rulemaking on these topics have only further increased that uncertainty. 

Join our panel as they explore the rules governing worker classifications under the FLSA and state laws, and also highlight the related question of a business’s potential liability for wage-hour law violations as a joint employer.

Our Wage & Hour Collective and Class Litigation treatise, published by ALM Law Journal Press, is widely recognized as an authoritative resource on the subject and is commonly used by lawyers, judges, and academicians in researching the many complex and evolving procedural and substantive defense issues that may ultimately determine case outcomes. 

Get your copy here.

Speakers

Andrew M. McKinley, Partner, Seyfarth Shaw LLP
Pamela L. Vartabedian, Partner, Seyfarth Shaw LLP
Eric M. Lloyd, Partner, Seyfarth Shaw LLP
Kelly J. Koelker, Senior Counsel, Seyfarth Shaw LLP


If you were unable to attend our previous sessions, you can find recordings and materials available at the links below.

Time Well Spent: 10 Years of Wage & Hour Wisdom and What’s on the Way

Time Well Spent Session 2: Shifting Standards of Conditional Certification

Time Well Spent: Session 3: Certification and Decertification

Time Well Spent Session 4: Arbitration of Wage-Hour Claims

Time Well Spent Session 5: Exemptions and Responses

By: A. Scott Hecker and Ariel Fenster

Seyfarth Synopsis: Child labor laws remain fertile ground for government enforcement as evaluate key issues for 2024. Late last year, the Wage Hour Division released guidance for new processes to assess greater penalties against companies who violated child labor laws. Companies should take note of the increased financial risks and overall teamwork between the government agencies to crack down on child labor violations.

On November 28, 2023, the Department of Labor’s Wage and Hour Division (WHD) issued a Field Assistance Bulletin (“FAB”) explaining changes to its process to assess Civil Money Penalties (CMPs) for child labor law violations.  The WHD’s focus on child labor law comes as no surprise, as in early 2023, the Department of Labor (DOL) announced its strategic initiative  with the Department of Health and Human Services (“HHS”) to crack down on child labor law violations, citing an 88% increase in the number of children employed in violation of the law over the last five years.  Employers with minor employees now face greater economic liability when WHD concludes they have committed child labor law violations. 

Most commonly, WHD uncovers alleged violations and assesses attendant penalties through investigations, which may be initiated based on employee complaints or under WHD initiatives targeting particular business sectors.  Given the priority DOL places on child labor law violations, investigations increased in both retail and the fast food industry last year – a trend that will most likely continue, at least through 2024.  One of the first questions every investigator must ask is whether the company employs minors.  If the company does employ minors, the investigator will assess compliance with federal and state child labor laws.

Prior to the CMP FAB, WHD assessed penalties on a per child basis – meaning that once a violation for a particular minor was found, the DOL stopped “counting” how many violations occurred and simply issued a flat fee penalty for that child.  WHD totaled the number of minors, and the amount could be increased or decreased based on a factors including company size and/or repeat violations.

Now, the DOL will issue penalties per violation, instead of per minor.  Imagine three violations were found for one employed minor.  Pre-November 2023, one penalty would be assessed.  But the new FAB allows WHD to issue an employer three violations.  Consequently, penalty assessments will increase drastically when there are multiple minors.

DOL explained additional premiums it will assess based on willfulness and type of injury.  The chart indicates the total penalty can go up (or down) based on a variety of factors:

  1. Repeated Violations;
  2. Willfulness/ Knowledge;
  3. Number of Minors Employed;
  4. Age of Minors;
  5. Type of Hazardous Work;
  6. Resultant Injuries;
  7. Duration/ Months of Illegal Employment; and
  8. Total Hours Worked.

After assessing the above factors, the DOL will look at a company’s earnings to further adjust the total penalty.  Often, companies and their attorneys are in the dark as to the exact penalty structure for violations, so the transparency DOL provides in its FAB is unique, and although we are seeing concrete percentages, there may also be subjective factors that come into play – making it important to seek legal counsel when facing a child labor investigation.

We’ve previously opined about penalties assessed on “hot goods,” i.e., materials manufactured in factories with oppressive child labor that then enter the stream of commerce.  Note, hot goods exposure extends beyond the producer of the goods, with the manufacturer or dealer also subject to enforcement activity from WHD.  With its new FAB, DOL expands and increases penalties associated with nonserious injuries, and starting November 28, 2023, increased penalties when violations are found.

Recent WHD enforcement has led to penalties in the millions of dollars, along with further economic impacts resulting from halting the flow of hot goods into commerce.  Recently, through a consent judgment, the DOL secured a multimillion dollar penalty against a meat packing company for overtime and child labor law violations.  DOL determined that minors were working illegal overtime hours and hazardously involved in meat carving.  DOL halted the flow of subject “hot goods” into commerce – illustrating potential financial impacts for child labor violations beyond the possibility of significant monetary penalties.

Beyond DOL’s interagency initiative with HHS, employers should expect continued collaboration between DOL’s sister enforcement agencies, WHD and the Occupational Safety and Health Administration.  While WHD is charged with the enforcement of child labor laws, OSHA’s safety and health regulations apply to basically all employers.  So, where OSHA finds minors working, it can refer any perceived child labor issues to WHD; similarly, if WHD identifies broader workplace safety and health issues during child labor investigations, companies can expect the Division will let its OSHA colleagues know.  We recently saw an example of interagency collaboration involved in the death of a minor in a sawmill accident.  Both agencies investigated, based on the employer’s failure to provide adequate training to adults and minors, and between the two investigations, the company received over a million dollars in fines and penalties.  Similarly, OSHA recently issued violations and penalties following the death of teenage worker in a poultry plant, and WHD has an open investigation at the facility.

Given the collaborative climate among agencies, employers can expect increases in both child labor law enforcement and penalty exposure through – at least – the balance of the year.  Discussing compliance with competent counsel can help businesses protect their workers and head off potential issues before they arise.

For more from Seyfarth on child labor issues, listen to relevant Firm podcasts here and here.  Please connect with your favorite Seyfarth attorney on the above, or any other legal concerns you may have.

By: Phillip J. Ebsworth, Andrew Paley, and Michael Afar

Seyfarth Synopsis: The California Supreme Court addressed the split in appellate authority and held that trial courts do not have the inherent authority to strike a PAGA claim on manageability grounds.

In Estrada, the trial court had dismissed the plaintiff’s PAGA claim following a bench trial, on the grounds that the claim was “unmanageable.” The Supreme Court, agreeing with the Court of Appeal, held that a trial court cannot strike a PAGA claim solely on manageability grounds. In reaching its conclusion, the Supreme Court affirmed that PAGA claims should be manageable and a trial court can, and should, use the full tool box of case management procedures at its disposal to ensure that a PAGA claim is “effectively tried.” However, outright dismissal of the PAGA claim due to unmanageability alone is not a tool that the trial court has at its disposal.

The Supreme Court explicitly left open the question as to whether PAGA claims can be stricken to preserve an employer’s due process rights and noted that an employer-defendant has a due process right to present affirmative defenses and must be permitted to “introduce its own evidence, both to challenge the plaintiffs’ showing and to reduce overall damages” and if plaintiffs seek to use a statistical model to prove their claims, defendants “must be given a chance to impeach that model or otherwise show that its liability is reduced.”

For a more in-depth review of the Supreme Court’s decision and what it means for employers, you can find Seyfarth’s analysis here.

By: Clara L. Rademacher and Ryan McCoy

Seyfarth Synopsis: On December 26, 2023, the Federal Motor Carrier Safety Administration (“FMCSA”) announced they would be accepting comments from the public in response to multiple petitions requesting waivers from the agency’s determinations preempting California and Washington’s meal and rest break rules. This includes the opportunity to respond to the California Attorney General’s recent petition submitted on behalf of California’s drivers.

Many Entities And Organizations Submitted Petitions For Waivers

As previously written, the FMCSA announced in August 2023 that it would start accepting petitions for waivers from its own preemption determinations. Although the FMCSA in 2018 had determined that federal regulations preempted California law, the agency’s announcement signaled a shift in the agency’s view of the preemption determination over more employee-friendly state rules, or at least a shift in the politics surrounding the issue after the exit of the prior administration. Nonetheless, the notice still left unclear important issues including the scope of the waivers the FMCSA may consider granting and whether the FMCSA is considering a wholesale elimination of its prior determinations in California.

The International Brotherhood of Teamsters, the Truck Safety Coalition Citizens for Reliable and Safe Highways and Parents Against Tired Truckers, William B. Trescott, and the State of California all submitted petitions requesting that the FMCSA waive its determination preempting California’s MRB rules for drivers of commercial motor vehicles subject to FMCSA’s hours of service (HOS) rules. The California Attorney General’s broad petition submitted in November 2023 was discussed here.

In response, the FMCSA recently announced on December 26, 2023 that it will accept comments on any issues raised in the submitted petitions for waiver or before February 26, 2024.

The FMCSA requests that comments address the following issues in response to the arguments advanced by the waiver petitions:

  1. Whether and to what extent enforcement of a state’s meal and rest break laws with respect to intrastate commercial motor vehicle drivers has impacted the health and safety of drivers.
  2. Whether enforcement of state meal and rest breaks as applied to interstate commercial motor vehicle drivers will exacerbate the existing truck parking shortages and result in more trucks parking on the side of the road and whether any such effect will burden interstate commerce or create additional dangers to drivers and the public; and
  3. Whether enforcement of a state’s meal and rest break laws as applied to interstate commercial motor vehicle drivers will dissuade carriers from operating in that state; and
  4. Whether enforcement of a state’s meal and rest break laws as applied to interstate property carrying or passenger carrying CMV drivers will weaken or otherwise impact the resiliency of the national supply chain.

Employers Should Remain Beware Of Looming Changes

As discussed previously, the issue of whether drivers are subject to state meal and rest break rules will remain in flux as a result of legal and political considerations. Employers should continue to keep their eye on these developments, including any action by the FMCSA on the petitions that were filed in response to the FMCSA’s unexpected invitation. This new public comment period also provides employers with an opportunity to provide their own valuable, unique insight into the issues raised by the waiver petitions that were submitted, which the FMCSA may use when determining whether to grant any of the waiver petitions that were submitted.

By: Phillip J. Ebsworth and Michael Afar

Seyfarth Synopsis: The first reported PAGA case of 2024 serves as a reminder of the importance of precise language for an enforceable PAGA waiver and the risks of including a “poison pill” provision in a class/representative/PAGA action waiver in arbitration agreements.

In DeMarinis, the First District affirmed the trial court’s denial of the employer’s motion to compel arbitration finding that the agreement contained a wholesale PAGA waiver in violation of Iskanian and a “poison pill” provision. As representative PAGA claims cannot be compelled to arbitration under Iskanian and Viking River, the Court concluded that the “poison pill” language prevented a grant of the employer’s motion. In fact, the Court noted that in the absence of the poison pill provision, the employer could have compelled the plaintiff’s individual Labor Code claims and individual PAGA claims to arbitration, and compelled waiver of the class claims. Instead, the employer is facing class and representative PAGA claims in state court.

The First District has provided employers another reminder to review their arbitration agreements. With the ever-evolving landscape of PAGA case law, time and attention should be given to the language of arbitration agreements and class and representative action waivers. In 2024, employers should resolve to schedule a new year’s check up of their arbitration agreement.

Seyfarth Synopsis:  Today the U.S. Department of Labor issued its final rule, attempting to define employee versus independent contractor status under the Fair Labor Standards Act (FLSA) (the “Final Rule”).  The Final Rule jettisons an earlier attempt under the prior Administration to modernize and simplify how to determine who is an employee and who is a contractor by focusing on two core factors. The Final Rule instead purports to return to an ambiguous totality-of-the-circumstances approach, while also placing a thumb on the scale in favor of more workers being deemed employees under the FLSA.

Background

The FLSA defines “employee” in an unhelpful, circular fashion. Section 3(e) of the FLSA defines the term “employee” as “any individual employed by an employer.” Section 3(d), in turn, defines “employer” to “include[e] any person acting directly or indirectly in the interest of an employer in relation to an employee.” 

In the absence of a concrete statutory definition of “employee,” and to distinguish between employees (who are covered by the FLSA) from independent contractors (who are not), court decisions predominately coalesce around some form of an “economic realities test,” in which courts balance several factors to determine if a worker is so dependent on the business to which they render services that they must be deemed an employee.  But application of the economic realities test has led to divergent outcomes based on similar facts. As summarized by Judge Easterbrook of the Court of Appeals for the Seventh Circuit, the economic realities test “is unsatisfactory both because it offers little guidance for future cases and because any balancing test begs questions about which aspects of ‘economic reality’ matter and why.”  Sec’y of Labor v. Lauritzen, 835 F.2d 1529, 1539 (7th Cir. 1988) (Easterbrook, J. concurring). 

In January 2021, the DOL issued an interpretation delineating how to define an employee versus a contractor under the FLSA (the “2021 Rule”).  In doing so, the DOL proposed to simplify the multi-factor test by setting forth two core factors to consider: (1) the nature and degree of the worker’s control of the work, and (2) the worker’s opportunity to earn a profit or loss. The proposal further provided that, if both factors point toward the same classification—whether employee or contractor—then the worker is likely to be classified as such. If, however, those factors point in opposite directions, then three other factors should be considered: (1) the amount of skill required for the work; (2) the degree of permanence of the working relationship between the individual and the company, and (3) whether the work is part of an integrated unit of production. The 2021 Rule was a welcome development for the business community.

Following the change in administration, however, the DOL delayed the effective date of that rule and then (unsuccessfully) attempted to withdraw it in May 2021. 

The DOL’s New Interpretation

As we discussed here, on October 11, 2022, the DOL issued a notice of proposed rulemaking (“NPRM”) proposing to rescind the 2021 Rule and replace it with a multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor under the FLSA. And as we discussed herehere, and here, the NPRM proposed an analysis which skewed the inquiry in favor of employee status. The Final Rule largely adopts the NPRM, with a few exceptions, as noted below.

(1)        Totality-of-the-circumstances test. As with the NPRM, the Final Rule adopts a totality-of-circumstances test, eschewing the more targeted and focused inquiry under the 2021 Rule. Under this analysis, “no one factor or subset of factors is necessarily dispositive, and the weight to give each factor may depend on the facts and circumstances of the particular relationship.”  Absent from the Final Rule is any indication on how courts should weigh each factor, depending the particular facts and circumstances, or even the facts within each factor. Indeed, the DOL expressly declined to create an analytical framework that would provide businesses and workers “a scorecard or a checklist.” The Final Rule also appears to permit consideration of multiple facts across different factors, but provides no guidance on how that should occur, so that those individual facts will not be afforded outsized weight in the final analysis.

(2)        The worker’s opportunity for profit or loss depending on managerial skill. “This factor considers whether the worker has opportunities for profit or loss based on managerial (including initiative or business acumen or judgment) that affect the worker’s economic success or failure in performing the work.” The Final Rule helpfully clarifies that it is a worker’s “opportunities” for profit and loss, instead of whether the worker actually takes advantage of that opportunity, that is the touchstone under this prong. Under the NPRM, a worker’s unilateral choice to forego an entrepreneurial activity would have made employee status more likely. Under the Final Rule, however, it is the fact that the worker has the choice at all—and thus the ability to exercise his business judgment—that is indicative of independent contractor status. The Final Rule also added the language “including initiative or business acumen or judgment,” which was absent from the NPRM. This is a welcome addition because the NPRM focused merely on “managerial skill,” which narrowed the types of evidence indicative of independent contractor status.

(3)        Investments made by the worker and the employer. The Final Rule adopts the NPRM’s formulation that an investment borne by the worker must be capital or entrepreneurial in nature to indicate independent contractor status, and that investments should be assessed separately from the opportunities-for-profit-or-loss factor (unlike in the 2021 Rule). The Final Rule also adopts the NPRM’s approach that a worker’s investment “should be considered on a relative basis with the potential employer’s investments in its overall business.” However, the Final Rule clarifies that the comparison should be primarily qualitative, rather than quantitative—i.e., on whether the worker is making similar types of investments, not on the amount or size of the investments (which will almost always be greater for the alleged employer). Further, although the NPRM originally suggested that any cost borne by a worker to perform a job could not be evidence of capital or entrepreneurial investment, the Final Rule acknowledges that investments in tools and equipment may occur for many reasons beyond performance of a particular job, including the performance of more types of work, the reduction of costs, or the extension of market reach, and thus could be evidence of independent contractor status in certain circumstances.

(4)        Degree of permanence of the work relationship. The Final Rule states that the permanency factor “weighs in favor of the worker being an employee when the work relationship is indefinite in duration, continuous, or exclusive of work for other employers.” The NPRM originally provided that, where a lack of permanence is due to “operational characteristics that are unique or intrinsic to particular businesses or industries and the workers they employ,” that lack of permanence would not necessarily be evidence of independent contractor status. The Final Rule was adjusted to acknowledge that if the lack of permanence was both related to operational characteristics and the worker’s exercise of independent business initiative, it may be evidence of independent contractor status. The Final Rule, however, provides no clear guidance as to what qualifies as the worker exercising his business initiative in this context. The Department’s commentary also newly recognizes that the permanence factor cannot be reduced to mere considerations of length, and instead, can only be fully analyzed against the backdrop of a full understanding of the relationship between the worker and business (such as intermittent freelancing).

(5)        Nature and degree of the business’s control over the worker. The Final Rule largely adopts the NPRM with respect to the control factor. Facts relevant to control would include whether the employer sets the worker’s schedule, supervises the performance of the work, sets the price or rate for service, or explicitly limits the worker’s ability to work for others. One important change from the NPRM is that the Final Rule clarifies that “actions taken by the potential employer for the sole purpose of complying with a specific, applicable Federal, State, Trial, or local law or regulation are not indicative of control.”  In contrast, “actions taken by the potential employer that go beyond compliance . . . and instead serve the potential employer’s own compliance methods, safety, quality control, or contractual or customer service standards may be indicative of control.”  The DOL seems to be saying that strict compliance with health and safety standards imposed by law are not indicative of employee status, but if an employer goes beyond those standards (e.g., creates a safer work environment than strictly required) this “may” be indicative of employee status. This creates a potentially harmful disincentive: businesses that go beyond minimum safety standards risk having their independent contractors deemed employees. Equally problematic, the Rule provides no clarification of the meaning behind its “sole purpose” language. For example, a business may believe that imposition of a legally required standard has secondary value (indeed, most laws exist for some beneficial purpose beyond the mere fact of compliance). But it is unclear under the Final Rule’s articulation whether such a secondary consideration, even if it would have had no impact on the business’s act of complying with the law, could impact the analysis of this factor.

Separately, the NPRM originally provided that any means of technological “supervision” would be relevant evidence of control. The Final Rule, however, acknowledges that is not always the case, and provides that technological supervision is only evidence of control if used to “supervise the performance of the work.” That is, under the Final Rule, merely collecting data generated from the actions of a worker (e.g., that an item was delivered) is not necessarily evidence of control. However, if that data is paired with additional supervisory action, such as directing or correcting the worker’s conduct, it may be evidence of employer-like control under the Final Rule.

(6)        Extent to which the work performed is an integral part of the employer’s business. The DOL’s framing of this factor may be particularly problematic. The Final Rule states that “this factor does not depend on whether any individual worker in particular is an integral part of the business, but rather whether the function they perform is an integral part” and that when the work a worker performs is “critical, necessary, or central to the employer’s principal business,” then this factor weighs in favor of employer status. It begs the question of how to determine an employer’s “principal business” or what is “critical, necessary, or central to it,” though the DOL’s commentary to its proposal provides possible guidance. The Final Rule fails to offer any convincing explanation for its departure from the “integrated unit of production” standard used in the 2021 Rule and first articulated by the Supreme Court in Rutherford Food Corp. v. McComb, 331 U.S. 772 (1947), which largely rests on the DOL’s belief that using Rutherford’s actual language would be “overly rigid.”

(7)        Whether the worker uses specialized skills in performing the work. Under the Final Rule, like under the NPRM, if a worker “uses specialized skills and . . . those skills contribute to business-like initiative,” then the worker is more likely a contractor. In its commentary, however, the DOL proposes to define those skills narrowly. The DOL commentary also proposes that, even when a worker possesses specialized skills, that fact is irrelevant unless the work requires those skills.

Under the proposed rule, no one factor would be dispositive or entitled to predetermined weight. While on the one hand this may seem to lead to greater flexibility, it blurs lines, leads to inconsistent results, and provides businesses and workers little of the clarity that rulemaking on worker status was supposed to provide.

What’s Next and What Will It Mean

With the Department of Labor’s retreat from the 2021 Rule only a short time after it went into effect, businesses and workers alike are faced with yet another potential analytical test against which they must measure their work relationships. Although the Final Rule attempts to tilt the scale towards employee status in the average case, substantial questions remain about the ultimate impact of the Final Rule, including whether it will be afforded any deference from courts, whether it will survive an inevitable legal challenge, and whether (like the 2021 Rule) it will be in jeopardy in any administration change. In the meantime, businesses should review their independent contractor relationships in light of the Final Rule.

By A. Scott Hecker

Seyfarth Synopsis: On December 6, 2023, the Biden Administration announced the release of its Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions. The U.S. Department of Labor’s Wage and Hour Division continues to pursue – with frequent delays – a number of significant rulemakings, including the Division’s proposed increase to the minimum salary level for white-collar exemptions.

While U.S. DOL Wage and Hour Division rulemakings have progressed since the Spring 2023 Regulatory Agenda, many big-ticket items remain in process with uncertain timelines. 

For example, the (extended) comment period on the Department’s rule, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,” closed approximately one year ago on December 13, 2022.  But the regulated community has yet to learn how the Department will address insights expressed in more than 55,000 comments to the proposed rule.  The current Regulatory Agenda lists November 2023 as the anticipated date for a final independent contractor rule.  Discerning readers may note November 2023 is now part of history.  In fact, the Biden Administration issued its current Regulatory Agenda in December, which comes after November, so one may wonder why DOL memorialized its latest failure to meet an estimated rulemaking deadline, rather than providing a revised estimate.

The Regulatory Agenda lists April 2024 as the estimated date for release of the final rule on the increase to the minimum salary level for white-collar exemptions.  DOL finally published its Notice of Proposed Rulemaking, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” on September 8, 2023.  Seyfarth submitted one of the 33,000+ comments received in response to this NPRM, and we see the April 2024 estimate to issue a final rule as . . . ambitious.  As you likely know, the rule seeks to increase the overtime threshold from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year).  A footnote explains the threshold could increase, since the final rule will incorporate new wage data.  Hurdles the EAP rulemaking may face as it moves toward final form include Congressional Review Act issues, the November 2024 presidential election, and almost-certain litigation challenging the final rule’s validity.  For more details on the overtime exemption rule’s substance – and the Firm’s comment – please check out our relevant blog posts here and here.

One impactful rule WHD was able to carry across the finish line recently, “Updating the Davis-Bacon and Related Acts Regulations,” purports to clarify and modernize the DBA’s implementing regulations.  The rule went into effect on October 23, 2023, and we blogged about some of the key changes government contractors must address in response.  The updated regulations will also impact some employers that do not hold government contracts if they choose to comply with the Act’s prevailing wage and apprenticeship requirements to claim enhanced tax credits under the Inflation Reduction Act.  See here and here for thoughts on the IRA and its expected effects.

Employers should anticipate the Division will leverage all of its – limited – resources to achieve the Biden Administration’s wage-hour goals before the end of this presidential term.  It takes time to comply with new regulations, so it is prudent for businesses to consider steps they can take now to ensure compliance in the event pending rules become final and binding.

Please connect with the author or your favorite Seyfarth attorney with any questions about wage-hour issues or other compliance concerns.

Date and Time

Thursday, December 5, 2023
3:00 p.m. to 3:45 p.m. Eastern
2:00 p.m. to 2:45 p.m. Central
1:00 p.m. to 1:45 p.m. Mountain
12:00 p.m. to 12:45 p.m. Pacific

Register Here


About the Program

A lot has happened in the 10 years since our national Wage and Hour Litigation Practice Group wrote ALM’s authoritative Wage & Hour Collective and Class Litigation treatise.  We are excited to launch our informative webinar series to discuss—in bite-sized increments—the past decade’s most important changes to the state and federal employee pay litigation landscape.

During this series, the treatise’s authors, along with those who have contributed to the publication and key practice group members, will cover topics ranging from lawsuit fundamentals to arbitration to settlement strategies. 

Few topics have seen more change in the ten years since the treatise’s release than the law surrounding arbitration of wage-hour claims – both federally and in California. Our panel will discuss current law regarding class and collective action waivers in arbitration agreements, mass arbitration management, and best practices for drafting and implementing mandatory arbitration programs. 

Our Wage & Hour Collective and Class Litigation treatise, published by ALM Law Journal Press, is widely recognized as an authoritative resource on the subject and is commonly used by lawyers, judges, and academicians in researching the many complex and evolving procedural and substantive defense issues that may ultimately determine case outcomes. 

Get your copy here.

Speakers

Patrick J. Bannon, Partner, Seyfarth Shaw LLP
Daniel C. Whang, Partner, Seyfarth Shaw LLP
Kelly J. Koelker, Senior Counsel, Seyfarth Shaw LLP
Michael E. Steinberg, Associate, Seyfarth Shaw LLP

Register Here


If you were unable to attend our previous sessions, you can find recordings and materials available at the links below.

Time Well Spent: 10 Years of Wage & Hour Wisdom and What’s on the Way

Time Well Spent Session 2: Shifting Standards of Conditional Certification

Time Well Spent: Session 3: Certification and Decertification