Latest from Wage & Hour Insights

In April, the Illinois Department of Labor published new regulations regarding the expense reimbursement requirements in Section 9.5 of the Illinois Wage Payment and Collection Act. The Act requires an employer to reimburse an employee for “all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed by the employer.” It defines “necessary expenditures” as “all reasonable expenditures or losses required of the employee in the discharge of employment duties that inure to the primary benefit of the employer.”

In an apparent effort to add some clarity to these
Continue Reading New Reimbursement Rules for Illinois Employers

In 2018, Congress added a provision to the Fair Labor Standards Act prohibiting employers from retaining employee tips or allowing managers or supervisors to participate in a tip pooling arrangement. Today, the U.S. Department of Labor announced a new final regulation in which the DOL asserts authority to penalize employers up to $1,100 per violation of this provision, on top of any back wages owed. Prior rules published by the Trump administration also provided for civil penalties, but only in cases of “repeated and willful” violations. The new rule allows the DOL to pursue penalties even for a first offense
Continue Reading New DOL Rule Adds Civil Penalties for Taking Employee Tips

Wage and hour law is full of traps for the unwary. Even compensation practices that are well-accepted across an entire industry can sometimes create huge headaches for employers in the face of a legal challenge. Case in point: A recent decision by the Fifth Circuit Court of Appeals in Hewitt v. Helix Energy Solutions Group, Case No. 19-20023, in is causing upheaval in the energy sector by suggesting that even highly paid supervisory employees may be entitled to overtime pay on top of their six-figure compensation because they are paid a day rate rather than a weekly salary.

The Highly
Continue Reading Even High Earning Supervisors Can Be Entitled to Overtime

Wage and hour violations in Illinois just got a lot more expensive. On Friday, July 9, 2021, Governor Pritzker signed an amendment to the Illinois Wage Payment and Collection Act that increases the penalty for underpaying wages from 2% of the amount of the underpayment per month to 5%. That may not sound like a lot, but it adds up fast.
Suppose a former employee claims that their employer failed to pay them $5,000 in vacation pay upon separation from employment. Employees have up to 10 years to file a lawsuit under the Act, so it may be several years
Continue Reading Illinois More than Doubles Penalties for Wage & Hour Violations

The Department of Labor (“DOL”) released an opinion letter addressing whether certain overtime payments based on an expected number of hours may be credited towards the amount of overtime pay owed under the Fair Labor Standards Act (“FLSA”) and whether such overtime payments are excludable from the regular rate. The answer to both questions is yes.
The inquiry came from a business that provides in-home care services on a live-in basis or for shifts of 24 hours or more. The employer pays an hourly rate plus overtime based on anticipated overtime hours. The caregivers typically work five days a week
Continue Reading Pay Me Now, or Pay Me Later? Wages Paid for Anticipated Overtime are Excludable from Employees’ Regular Rate

On September 8, 2020, the United States District Court for the Southern District of New York struck down portions of a January 2020 Final Rule issued by the Department of Labor. The Final Rule provided a new test for determining whether an entity is a joint employer with another entity under the Fair Labor Standards Act (FLSA). The Final Rule, which became effective in March of 2020, severely limited the situations in which an entity can be considered a joint employer and held liable for violations of the FLSA in a “vertical” joint employment relationship. A vertical joint employment relationship
Continue Reading DOL’s Joint Employer Test Ruled Illegal

In Field Assistance Bulletin No. 2020-4, issued June 26, 2020, the United States Department of Labor, Wage and Hour Division, recognized a number of ways an employee can establish eligibility for Family First Coronavirus Response Act (FFCRA) leave based on the closure of a summer camp or program that the employee claims would have been the place of care for the employee’s child over the summer. In addition to proof of actual enrollment or application to a camp or program, if an employee’s child attended a camp or program in the summer of 2018 or 2019 and the child
Continue Reading DOL Broadly Defines When a Summer Camp or Program is a Child’s Place of Care for FFCRA Leave

I believe most would agree, the Department of Labor’s (DOL) interpretative guidance typically provides useful insight to employers navigating often tricky wage and hour laws. This was not the case with the DOL’s decades-old guidance regarding whether an employer was a “retail or service establishment” and could claim an overtime exemption for certain employees paid on commission under Section 7(i) of the Fair Labor Standards Act (FLSA). In its interpretative guidance, the DOL created lists of industries that were either not recognized as retail establishments, or could possibly be recognized as retail establishments. In an action that should be mostly
Continue Reading DOL Withdraws Industry Lists from its Retail or Service Establishment Exemption Interpretative Rule

The U.S. Department of Labor (DOL) has issued a final rule under the Fair Labor Standards Act (FLSA) expressly authorizing employers to offer bonuses, hazard pay, and other premiums to employees whose hours, and regular rate of pay, vary from week to week.
The final rule revises 29 CFR §778.114, which is the DOL regulation that specifies how overtime is to be computed for salaried, non-exempt employees who work a fluctuating workweek. The new rule clarifies that bonuses, premium payments, commissions, and hazard pay on top of fixed salaries are compatible with the fluctuating workweek method of compensation and that
Continue Reading DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules

For regular readers of this blog, you know that my colleague, Tracey Truesdale, gave you some tips for properly paying employees in the event of a pandemic. That was on February 26, 2020. Since then, we’ve heard of employers sending entire offices of employees home to telecommute, restricting travel, and cancelling social events in reaction to the spread of COVID-19. We’ve also heard about Italy’s decision to lock down the country by closing schools and restricting all forms of travel for 16 million people, and how mortgage payments have been suspended to help employees who are faced with sudden unemployment.  
Continue Reading Walmart Takes Lead in Providing Paid Sick Leave in the Face of COVID-19 

The anticipated spread of coronavirus in the U.S. has many employers revisiting their emergency response plans. Depending on guidance from public health officials, some employees may be directed to work from home, temporarily furloughed, or work a reduced schedule. Some managers and executives may be pressed into service to perform more manual or routine tasks.
To paraphrase a favorite sign in my office, this is not the Department of Labor’s first rodeo, and there is existing guidance under the Fair Labor Standards Act’s (FLSA) implementing regulations on how employees must be compensated in these situations. Let’s look at some of
Continue Reading Coronavirus: How to properly pay employees in the event of a pandemic

U.S. DOL Issues Notice of Proposed Rulemaking
On November 5, 2019, the U.S. Department of Labor published a proposed rule that would make it easier for some employers to apply the “Fluctuating Workweek” method of calculating overtime pay for certain non-exempt employees.Background
For those not familiar with the concept, the fluctuating workweek method is one way of calculating overtime pay for non-exempt employees who are paid a fixed salary but whose hours fluctuate from week to week. The fluctuating workweek method can be extremely advantageous for employers because it allows an employer to pay a non-exempt employee a fixed salary
Continue Reading DOL Proposes Rule to Make Bonus and Incentive Pay Compatible With Fluctuating Workweek

On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. The rule increases the salary threshold for employees exempt under the executive, administrative, and professional exemptions (the “white collar exemptions”) from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). Additional changes include:

  • Increasing the total annual compensation threshold for highly compensated employees (“HCEs”) from $100,000 per year to $107,432 per year;
  • Permitting employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the increase salary threshold; and
  • Committing to updating the salary threshold more regularly.

The new
Continue Reading New Minimum Salary For Exempt Employees Takes Effect January 1, 2020

The Chicago City Council passed the new Chicago Fair Workweek Ordinance by a unanimous vote earlier today, as reported by the Chicago Sun Times.The text of the ordinance is available here:
Chicago Fair Workweek Ordinance
There have been some significant changes since the legislation was first proposed. Stay tuned for a detailed summary.
Continue Reading Chicago City Council Unanimously Approves Fair Workweek Ordinance

On June 11, 2019, Alabama Governor Kay Ivey signed a new law that prohibits wage discrimination based upon sex and protects workers who decline to share their salary history with a prospective employer. The new law takes effect August 1, 2019. Unlike laws in some other states, the Alabama law does not bar employers from asking for salary history information, but prohibits employers from refusing to interview or hire applicants who decline to provide such information.Alabama joins a growing list of jurisdictions to ban or limit the use of salary history inquiries in the hiring process, including:

  • California (statewide and in


Continue Reading Alabama Becomes Latest State To Restrict Salary History Inquiries

Among the bills awaiting signature by Illinois Governor J.B. Pritzker is an amendment to the Illinois Equal Pay Act of 2003 that would ban employers from asking job applicants for information about their wage, salary or benefits history. Governor Pritzker is expected to sign the bill, HB834. With this new law, Illinois joins at least 12 other states and multiple counties and municipalities in restricting employers’ ability to obtain or use applicants’ compensation history in the process of hiring and setting compensation.New Restrictions on Requesting and Using Salary HistoryHB834 specifically prohibits employers from screening job applicants based on their current
Continue Reading Illinois Poised to Ban Salary History Inquiries