My colleagues Michael S. Kun and Jeffrey H. Ruzal at Epstein Becker Green has a Wage and Hour Defense blog post that will be of interest to all retailers: “Proposed DOL Rule To Make More White Collar Employees Eligible For Overtime Pay.”Clock

Following is an excerpt:

More than a year after its efforts were first announced, the U.S. Department of Labor (“DOL”) has finally announced its proposed new rule pertaining to overtime. And that rule, if implemented, will result in a great many “white collar” employees previously treated as exempt becoming eligible for overtime pay for work performed beyond 40 hours in a workweek – or receiving salary increases in order that their exempt status will continue.

Read the full original post here.

As we reported, last November, voters in Massachusetts approved a law granting Massachusetts employees the right to sick leave, starting on July 1, 2015.  The law provides paid sick leave for employers with 11 or more employees and unpaid sick leave for employees with 10 or fewer employees. While the law set forth the basics, many of the details, which have differentiated the various sick leave laws across the country, were not previously specified (e.g., minimum increments of use, frontloading, documentation).  The Massachusetts Attorney General’s Office (“AGO”) has set forth proposed regulations to guide employers in implementing the upcoming sick leave law.

Some of the proposed regulations include:

  • To determine an employer’s size, the number of employees at all locations will be counted, not just those employees in Massachusetts. For example, if a company has 25 employees in New York and three employees in Massachusetts, the employer will be required to provide paid sick leave to the Massachusetts employees because the employer has 11 or more employees in total.
  • Employees may use sick leave in hourly increments. However, if the employer has to hire a replacement, and does so, the employer may charge the employee for the entire missed shift.
  • If an employer decides to pay employees for their accrued, unused sick leave at the end of the calendar year, the employer need only frontload 16 hours in the following calendar year (as opposed to all 40 hours the employee will receive that year).[1]
  • An employer may choose to frontload 40 hours of sick leave per year rather than tracking accrual rates throughout the year.
  • An employer may not request documentation about an employee’s need for leave until the employee has taken 24 consecutive hours of sick leave.
    • At that point, an employee may provide documentation in the form of a doctor’s note or a written statement evidencing the need to use sick leave.[2]
    • If leave is related to domestic violence, an employee may provide alternative documentation.
    • The employee may submit any of the above documentation in any form customarily used to communicate, including via text message, e-mail, or fax.
  • Employers must provide written notice to employees at the beginning of employment as to what constitutes a “calendar year” for accrual and use purposes.
  • Employers must post the notice of the Earned Sick Time Law in the workplace and provide a copy to all employees.

The AGO will be holding six public hearings throughout the state, including one in Boston on May 18, 2015, to entertain comments to the proposed regulations. The deadline for written comments, which may be submitted by mail or electronically, is June 10.  If you would like assistance in preparing any comments, please contact us. We will provide an update upon adoption of the regulations (whether in this form, or revised after the comment period).

[1] This is more employer-friendly than the New York City Earned Sick Time Act, which requires that 40 hours be frontloaded if an employer pays out sick leave at the end of the calendar year.

[2] The AGO will create a model form for this use, but such form has not been posted yet.

One day before the U.S. Department of Labor’s Family & Medical Leave Act (“FMLA”) same-sex spouse final rule took effect on March 27, 2015, the U.S. District Court for the Northern District of Texas ordered a preliminary injunction in Texas v. U.S., staying the application of the Final Rule for the states of Texas, Arkansas, Louisiana, and Nebraska.  This ruling directly impacts employers within the retail industry who are located or have employees living in these four states.


In United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) as unconstitutional, finding that Congress did not have the authority to limit a state’s definition of “marriage” to “only a legal union between one man and one woman as husband and wife.”  Significantly, the Windsor decision left intact Section 2 of DOMA (the “Full Faith and Credit Statute”), which provides that no state is required to recognize same-sex marriages from other states.  Further to the President’s directive to implement the Windsor decision in all relevant federal statutes, in June 2014, the DOL proposed rulemaking to update the regulatory definition of spouse under the FMLA. The Final Rule is the result of that endeavor.

As we previously reported, the Final Rule adopts the “place of celebration” rule, thus amending prior regulations which followed the “place of residence” rule to define “spouse.”  For purposes of the FMLA, the place of residence rule determines spousal status under the laws where the couple resides, notwithstanding a valid out-of-state marriage license.   The place of celebration rule, on the other hand, determines spousal status by the jurisdiction in which the couple was married, thus expanding the availability of FMLA leave to more employees seeking leave to care for a same-sex spouse.

The Court’s Decision

Plaintiff States Texas, Arkansas, Louisiana, and Nebraska sued, arguing the DOL exceeded its authority by promulgating a Final Rule that requires them to violate Section 2 of the DOMA and their respective state laws prohibiting the recognition of same-sex marriages from other jurisdictions.  The Texas court ordered the extraordinary remedy of a preliminary injunction to stay the Final Rule pending a full determination of the issue on the merits.

The court first found that the Plaintiff States are likely to succeed on at least one of their claims, which assert that the Final Rule improperly conflicts with (1) the FMLA, which defines “spouse” as “a husband or wife, as the case may be” and which the court found was meant “to give marriage its traditional, complementarian meaning”; (2) the Full Faith and Credit Statute; and/or (3) state laws regarding marriage, which may be preempted by the Final Rule only if Congress intended to preempt the states’ definitions of marriage.

The court then held that the Final Rule would cause Plaintiff States to suffer irreparable harm because, for example, the Final Rule requires Texas agencies to recognize out-of-state same-sex marriages as valid in violation of the Texas Family Code.

Lastly, although finding the threatened injury to both parties to be serious, the court decided that the public interest weighs in favor of a preliminary injunction against the DOL.  The court found in favor of upholding “the stability and consistency of the law” so as to permit a detailed and in-depth examination of the merits.  Additionally, the court pointed out that the injunction does not prohibit employers from granting leave to those who request leave to care for a loved one, but reasoned that a preliminary injunction is required to prevent the DOL “from mandating enforcement of its Final Rule against the states” and to protect the states’ laws from federal encroachment.

What This Means for Employers

Although the stay of the Final Rule is pending a full determination of the issue on the merits, the U.S. Supreme Court’s decision in Obergefell v. Hodges likely will expedite and shape the outcome of the Texas court’s final ruling.  In Obergefell, the Supreme Court will address whether a state is constitutionally compelled under the Fourteenth Amendment to recognize as valid a same-sex marriage lawfully licensed in another jurisdiction and to license same-sex marriages.  Oral arguments in Obergefell are scheduled for Tuesday, April 28, 2015, and a final ruling is expected in late June of this year.

Before the U.S. Supreme Court decides Obergefell, however, employers in Texas, Arkansas, Louisiana and Nebraska are advised to develop a compliant strategy for implementing the FMLA—a task that may be easier said than done.  Complicating the matter is a subsequent DOL filing in Texas v. U.S. where the DOL contends that the court’s order was not intended to preclude enforcement of the Final Rule against persons other than the named Plaintiff States, and thus applies only to the state governments of the states of Texas, Arkansas, Louisiana, and Nebraska.

While covered employers are free to provide an employee with non-FMLA unpaid or paid job-protected leave to care for their same-sex partner (or for other reasons), such leave will not exhaust the employee’s FMLA leave entitlement and the employee will remain entitled to FMLA leave for covered reasons.  We recommend that covered employers that are not located and do not have employees living in one of the Plaintiff States amend their FMLA-related documents and otherwise implement policies to comport with the Final Rule, as detailed in EBG’s Act Now Advisory, DOL Extends FMLA Leave to More Same-Sex Couples.  Covered employers who are located or have employees living in one of the Plaintiff States, however, should confer with legal counsel to evaluate the impact of Texas v. U.S. and react accordingly, which may depend on the geographical scope of operations.

Our colleagues Adam Abrahms, Steven Swirsky, and Martin Stanberry at Epstein Becker Green have a Management Memo blog post that will be of interest to many of our readers: “NLRB Issues 13 Complaints Alleging McDonald’s and Franchisees Are Joint-Employers.”

Following is an excerpt:

While the General Counsel’s actions are alarming, particularly for businesses that rely upon a franchise model, the issuance of these complaints comes as little surprise because, as we reported in July of this year, the General Counsel had previously announced the decision to take this action and pursue claims of joint-employer liability. What is somewhat surprising about the announcement is its timing because the Board has not yet issued its decision in Browning-Ferris, 32-RC-109684, where the Board invited interested parties to opine in amici briefs on the benefits and drawbacks of the current standard relied upon by the Board to determine if two employers are a joint-employer and to propose a new standard and factors the Board should consider in such cases. Similar to its recent repudiation of Register Guard, the Board may use Browning-Ferris to moot the thirty years of joint-employer case law that followed TLI, Inc. 271 NLRB 798 (1984).

On the Wage & Hour Defense Blog, coauthor Steven Swirsky comments:

The National Labor Relations Board continues to focus on the changes in the nature of the employer-employee relationship, and the question of what entity or entities are responsible to a company’s employees for compliance with the range of federal, state, and local employment laws, including wage payment and overtime laws.

The Board’s General Counsel has now taken another big step in his effort to broaden the definition of “employer,” issuing a series of 13 complaints alleging that McDonald’s shares responsibility for franchisees’ employees. At the same time, the Board is poised to answer the question of whether the long standing test that the NLRB has relied on for more than 30 years to determine joint employer status should be replaced with a broader definition, and if so what it should be.

Read the full original post here.

Regarding the Supreme Court’s Integrity Staffing Solutions v. Busk opinion, issued today, our colleague Michael Kun at Epstein Becker Green has posted “Supreme Court Holds That Time Spent in Security Screening Is Not Compensable Time” on one of our sister blogs, Wage & Hour Defense.

Following is an excerpt:

In order to prevent employee theft, some employers require their employees to undergo security screenings before leaving the employers’ facilities. That is particularly so with employers involved in manufacturing and retail sales, who must be concerned with valuable merchandise being removed in bags, purses or jacket pockets.

Often in the context of high-stakes class actions and collective actions, parties have litigated whether time spent undergoing a security screening must be compensated under the Fair Labor Standards Act (“FLSA”). On December 9, 2014, a unanimous United States Supreme Court answered that questionno.

The Court’s decision in Integrity Staffing Solutions v. Busk may have a far-reaching practical and legal impact. Not only may it make more employers comfortable conducting security screenings of their employees, but it may bring an end to most class actions and collective actions filed against employers seeking compensation for employees’ time spent in such screenings.

By Nancy L. Gunzenhauser

Election Day 2014 proved to be a big win for employees who earn minimum wage.  Several states and cites approved measures to increase the minimum wage.  The city of Oakland, CA established its first ever minimum wage at $12.25/hour, which will go into effect on March 2, 2015.  Over the past few years, many states and cities have passed legislation that will increase minimum wage based on inflation rates, as tied to the Consumer Price Index.  While some states have not yet announced the new minimum wage, they may still see increases in the new year (e.g. Colorado).  Below is a chart with the minimum wage increases that are currently set to begin in 2015.

We may also soon see an increase in Illinois.  The state ballot had a nonbinding referendum question asking voters whether the minimum wage should be raised from $8.25/hour to $10/hour January 1, 2015.  Voters overwhelmingly voted “yes.”  Increase to the minimum wage, however, will require legislative approval.

Make sure to check back in a few weeks, and we’ll announce if any new minimum wage increases are set to hit your state or city.

*The minimum wage in Seattle will depend on the number of employees in the company and whether the company provides health benefits to its employees.


While by most accounts the current term of the Supreme Court is generally uninteresting, lacking anything that the popular media deem to be a blockbuster (the media’s choice being same-sex marriage or Affordable Care Act cases), the docket is heavily weighted towards labor and employment cases and a few that potentially affect retail employers in particular. They are as follows.

The Court already has heard argument in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, which concerns whether the Portal-to-Portal Act, which amends the Fair Labor Standards Act, requires employers to pay warehouse employees for the time they spend, which in this case runs up to 25 minutes, going through post-shift anti-theft screening. Integrity is a contractor to, and the 9th Circuit had ruled in against it, holding that the activity was part of the shift and not non-compensable postliminary activity. Interestingly, DOL is on the side of the employer, fearing a flood of FLSA cases generated from any activity in which employees are on the employers’ premises.  This case will affect many of our clients and should be monitored carefully.

On December 3rd, the Court will hear argument in Young v. United Parcel Service, Inc., No. 12-1226, which poses whether the Pregnancy Discrimination Act requires an employer to accommodate a pregnant woman with work restrictions related to pregnancy in the same manner as it accommodates a non-pregnant employee with the same restrictions, but not related to pregnancy. The 4th Circuit had ruled in favor of the company, which offered a “light duty program” held to be pregnancy blind to persons who have a disability cognizable under the ADA, who are injured on the job or are temporarily ineligible for DOT certification. Ms. Young objects to being considered in the same category as workers who are injured off the job. This case, too, will create a precedent of interest to at least some of our clients. Of  note, this week United Parcel Service sent a memo to employees announcing a change in policy for pregnant workers advising that starting January 1, the company will offer temporary light duty positions not just to workers injured on the job, which is current policy, but to pregnant workers who need it as well. In its brief UPS states “While UPS’s denial of [Young’s] accommodation request was lawful at the time it was made (and thus cannot give rise to a claim for damages), pregnant UPS employees will prospectively be eligible for light-duty assignments.”  The change in policy, UPS states, is the result of new pregnancy accommodation guidelines issued by the Equal Employment Opportunity Commission, and a growing number of states passing laws mandating reasonable accommodation of pregnant workers.

On October 2nd, the Supreme Court granted cert. in a Title VII religious accommodation case, EEOC v. Abercrombie & Fitch Stores, Inc., No. 14-86. The case concerns whether an employer is entitled to specific notice, in this case  of a religious practice – the wearing of a head scarf —  from a prospective employee before having the obligation to accommodate her.  In this case, the employer did not hire a Muslim applicant. The Tenth Circuit ruled that the employer was entitled to rely upon its “look” policy and would not presume religious bias where the employee did not raise the underlying issue. Retail clients and others will be affected by the outcome.

More will follow as developments warrant.

Wage & Hour Guide App for Employersby Michael Kun

We’re very pleased to announce that a brand-new version of our free, first-of-its-kind app, the Wage & Hour Guide for Employers, is now available for Apple, Android, and BlackBerry devices. The new app takes advantage of a software-as-a-service programming platform developed by Panvista Mobile.

Our newest version of the app is not only available to users of a variety of devices, but it offers simpler, faster, and more useful ways for employers to locate wage and hour information at the touch of a fingertip.  As new issues are constantly emerging in this area, we’re pleased to provide updated information and critical tools to help employers address wage and hour laws and regulations, such as recent minimum wage increases.

Key features of the updated app include:

  • The Android version is now available for the first time on the Google Play store – also it is also available for BlackBerry devices
  • Updated iPhone and iPad versions are now available on the App Store
  • New summaries of wage and hour laws and regulations are included, including recent minimum wage increases in California, Connecticut, Georgia, Illinois, Maryland, Massachusetts, New Jersey, New York, Texas, Virginia, and the District of Columbia
  • Direct feeds of EBG’s Wage & Hour Defense Blog
  • Easy sharing of content via email and social media
  • Access to EBG’s @ebglaw Twitter feed
  • Rich media library of publications from EBG’s Wage and Hour practice
  • Expanded directory of EBG’s Wage and Hour attorneys

Existing iOS users should visit the App Store to download the new iPhone and iPad versions; the previous edition of the app is retired.

California has created additional protections for unpaid interns and created additional requirements for sexual harassment prevention training.  In addition, California has mandated a new requirement for most employers to provide their employees with paid sick leave.  This new sick-leave requirement will go into effect next summer on July 1, 2015. For a more detailed description of these changes, click here to review the Act Now Advisory written by our colleagues Jennifer L. Nutter and Marisa Ratinoff.


On Epstein Becker Green’s Management Memo blog, I review New Jersey U.S. District Court’s ruling in Naik v. 7-Eleven that four franchise owner-operators may pursue overtime and minimum wage claims against franchisor 7-Eleven under both the federal Fair Labor Standards Act (“FLSA”) and the New Jersey Wage and Hour Law (“NJWHL”).

Following is an excerpt from the blog post:

On July 29, 2014 the NLRB’s General Counsel announced a decision to treat McDonald’s, USA, LLC as a joint employer, along with its franchisees, of workers  43 McDonald’s franchised restaurants with regard to unfair labor practices charges filed by unions on behalf of the  workers and authorized charges against of both the franchisees and McDonalds. (See our July 30 blog post  and Aug. 14 blog post)

To access the full blog post, please click here.