Video from Wage and Hour Presentation (FLSA Overtime Regulations)

On August 1, 2024, Jens Thorsen and Valhalla Business Advisors invited me to speak about recent developments in wage and hour law. It was a solid mix of fundamentals, and the new FLSA overtime regulations (with some Pennsylvania Minimum Wage Act thrown in for good measure). You can view the recording of Emerging HR Updates Seminar Overtime Rules '24. 

New Whitepaper: New Pennsylvania Wage and Hour Regulations

Apologies for the brief blogging hiatus - I plan to ramp back up for the Fall. For now, please check out this new whitepaper: New Pennsylvania Wage and Hour Regulations. The new regs primarily address tipped employees and the calculation of the regular rate (for calculating overtime) for nonexempt salaried employees. 

Wait, where'd it go? DOL pulls down Fact Sheet

My last post was based on the new DOL Wage and Hour Fact Sheet # 84 (DOL: Pay employees for job-mandated COVID vaccines, tests, screening during normal work hours). Welp, DOL unpublished the fact sheet - it's gone (here's the full numeric list, with no #84 as of the date of this post). 

I have not seen any formal explanation. As I noted in my post, the fact sheet was intertwined with the OSHA vax-or-test ETS, and relied on the same justification for tying the vaccine to the workplace (which, notably lost at the Supreme Court). Presumably, DOL is going back to the drawing board after the Supreme Court stayed the OSHA mandate. 

DOL: Pay employees for job-mandated COVID vaccines, tests, screening during normal work hours

[Update 1/21/2022 2:05 pm: Where did it go? Looks like DOL pulled the Fact Sheet described in this post from its website (although, it still appears in the Department's Index of fact sheets)]. 

Welp, I'm sure this was supposed to coincide with the now-seemingly-dead OSHA vaccine mandate. That said, it it applies to employer mandates more broadly. I'm talking, of course, about U.S. Department of Labor Wage and Hour Division Fact Sheet #84: Compensability of Time Spent Undergoing COVID-19 Health Screenings, Testing, and Vaccinations Under the Fair Labor Standards Act (FLSA) (just rolls right off the tongue, doesn't it?). 

The bottom line:

[I]f an employer requires an employee to obtain a COVID-19 vaccine dose, undergo a COVID-19 test, or engage in a COVID-19 related health screening or temperature check during the employee’s normal working hours, the time that the employee spends engaged in the activity is compensable. Employees must be paid for such time during normal working hours, regardless of where the activity occurs.

Sounds simple enough, but what about mandatory activities that occur outside of normal working hours?

DOL appears to take the general position that employer-mandated COVID-19-related activities are still compensable when done outside of working hours. But, there's a carveout in a vax-or-test scenario for employees who "voluntarily" choose not to get vaccinated and get tested instead - they do not get paid for their time spent testing. Employees with a disability or religious exemption to the vaccine mandate are not voluntarily foregoing the vaccine, so they would get paid for testing.

I should also note that the DOL's position on this seems based on an argument that is very similar to OSHA's (losing) argument at the Supreme Court. Specifically, the DOL fact sheet reads:

As reflected in the OSHA Vaccination and Testing ETS, the Federal Government has determined that vaccination is the most effective and efficient control available to protect employees from becoming seriously ill and dying due to occupational exposures to COVID-19. Employers must pay employees who report to a workplace where other individuals are present and who do not work exclusively outdoors for time spent going to, waiting for, and obtaining a mandatory COVID-19 vaccine dose because it is necessary that employees be able to perform their jobs safely and effectively during the pandemic.

In the context of the OSHA ETS, the Supreme Court specifically rejected this argument that vaccines are workplace employment safety regulations. So, it is not clear if DOL would fair any better - perhaps they would because in this context it would be an employer-issued requirement.

Third Circuit defines "personal staff exception" to FLSA

Post 2 (of 2) on Clews v. Cnty. of Schuykill. Last time, I explained that the County had not waived its affirmative defense that the employees claiming unpaid overtime fell under the "personal staff exception" to the Fair Labor Standards Act (FLSA). This time, let's look at who that exception actually covers. 

The FLSA generally covers "employees," but excludes people who work for a state, political subdivision, or intergovernmental agency; are not covered by the applicable civil service law; and fall within one of several categories listed in the FLSA. That list includes those "selected by the holder of [a public elective office] to be a member of his personal staff.” 29 U.S.C. § 203(e)(2)(C)(ii)(II). Yeah, have I ever mentioned that there are a lot of exceptions to the FLSA and they can be complicated? Anyway, we call this one the "personal staff exception."

The Third Circuit first noted that many courts have looked favorably on Teneyuca v. Bexar Cnty., a Fifth Circuit decision identifying 6 factors:

(1) whether the elected official has plenary powers of appointment and removal, 

(2) whether the person in the position at issue is personally accountable to only that elected official, 

(3) whether the person in the position at issue represents the elected official in the eyes of the public, 

Not official use.

(4) whether the elected official exercises a considerable amount of control over the position, 

(5) the level of the position within the organization’s chain of command, and 

(6) the actual intimacy of the working relationship between the elected official and the person filling the position.

That said, the list was not exhaustive, and even courts that adopted it sometimes added their own factors. The Third Circuit didn't exactly reject the Teneyuca factors, but did note concern raised in other contexts that "[t]oo often the factors in a checklist . . . result[] in rote following of a form containing factors where courts tally up and spit out a score without an eye on the principles."

Thus, the Court endeavored to distill the factors into two overarching themes.

[F]or an employee to be a member of an elected official’s personal staff,  

1) the official must work closely with the employee in a sensitive position of trust and confidence, and  

2) the official exercises personal control over the employee’s hiring, promotion, work conditions, discipline, and termination.

Of course, with the usual caveats and wiggle room.... both themes should (not must) be satisfied, "no single factor is dispositive," the themes "often overlap," and "[c]ontext matters." The Court noted that the Teneyuca factors may still be used but only to the extent they are relevant to the two th
emes. 

Third Circuit on waiver of affirmative defenses in wage and hour claims

In Clews v. Cnty. of Schuykill, three former deputy coroners filed claims under the Fair Labor Standards Act (FLSA), seeking overtime pay and alleging retaliation (firing) for complaining about not getting overtime pay. The employer argued that the employees were not covered by the FLSA because they fell under the "personal staff exception," which excludes people who work as personal staff for elected officials.*

The County, however, did not plead this affirmative defense in its answer to the complaint. Generally, a party must plead affirmative defenses as part of their answer. See, Fed. R. Civ. P. 8.1(c). That said, the Court noted past precedent holding that affirmative defenses may be raised at any time "so long as the plaintiff suffers no prejudice." Sharp v. Johnson, 669 F.3d 144, 158 (3d Cir. 2012).

Not official use.

Here, the plaintiffs "did not explain what could have been developed in discovery with more explicit notice of the exception." Furthermore, they did not request to reopen discovery even after the County  had specifically briefed the issue. The County also consistently asserted that the employees were exempt from the FLSA (while not specifically identifying the personal staff exception in the answer). Finally, the County also questioned each of the plaintiffs about their job responsibilities. 

The Court ultimately held that the county did not waive the personal staff exception affirmative defense by failing to plead it in the answer to the complaint because the plaintiffs could not show any prejudice. 

Lessons for both sides here:

• Defendants should raise affirmative defenses as early as possible to avoid waiver.
• Plaintiffs should request to reopen discovery if a new affirmative defense pops up after discovery. If it's granted, then they can explore the affirmative defense. If it's denied, they have a stronger argument that they incurred prejudice as a result of the defendant raising it late in the game. 

* The Third Circuit also analyzed the scope of the personal staff exception - perhaps an issue for a future blog post. 

DOL Wage and Hour Opinion Letter on Travel Time for Telworkers

The federal government agencies have been unveiling guidance and regs faster than I can even blog about them. I'll try to hit some of the highlights in the next week or so though. Of course, all of this comes with the giant caveat that we have a new administration coming in, and it will likely hold different views on at least some of these issues. 

On the last day of 2020, DOL Wage and Hour issued opinion letter FLSA2020-19. As you probably already know, commute time is generally not compensable. The opinion letter addresses what, frankly, I'd call some no-brainers. If an employee is teleworking and has to drive an hour to a parent-teacher conference and then comes into the office - compensable? Of course not! Why would an employer be responsible for paying its employees to drive to their kid's school?

Employers, however, should be aware of the "worksite-to-worksite" doctrine: 

Travel time must be counted as hours worked when it is part of an employee's principal activity, such as travel from worksite to worksite during the work day.

But, if the employee is not required to travel from home to office (let alone to a parent-teacher conference) as part of their job, then the time is probably not compensable. 

Employers should also note the "continuous workday" doctrine:

[T]he period between an employee's first and last principal activities will "in general" be compensable.

But, again, if an employee is not required to travel between home and office for work, then the employee is effectively relieved from duty during that travel time. From the opinion letter:

When an employee arranges for her workday to be divided into a block worked at home and a block worked at the office, separated by a block reserved for the employee to use for her own purposes, the reserved time is not compensable, even if the employee uses some of that time to travel between the home and office.

The letter does not specifically address a situation where the employee uses all of that time to commute. I do not believe the result would be different though. If an employee arranges to spend some time at home and then some time in the office, that time will likely not be compensable. 

What would make the result different? If the employee were required to do some work from home immediately before or after being required to come into the workplace. In that situation, the employer is effectively controlling the entire bloc of the employee's time for the employer's benefit - probably compensable. 

Four new DOL Wage and Hour opinion letters!

 DOL has been super busy the past few months! On Monday, it released four new opinion letters:

1. "An employee's work hours do not have to fluctuate above and below 40 per workweek for an employer to be able to use the fluctuating workweek method of calculating overtime pay." For my Pennsylvania readers, don't forget about this SCOPA decision. 

2. DOL packed several exemption issues into this opinion letter on a corporate-management trainer who works part-time. Some takeaways: a. Paying a day rate does not satisfy the salary basis test (because it varies, is not calculated on a weekly basis, and is not known until after the work is completed); b. employees may maintain their exempt status even if they receive an hourly wage rate for hours on top of the required minimum salary; c. employees must meet the minimum salary threshold for the white collar exemptions (and the minimum annual salary threshold for the highly compensated employee exemption), and this amount may not be prorated for part-time employees.

Not official use.

3. Another opinion letter "[a]ddresses an employer’s compliance with FLSA’s minimum wage requirements when reimbursing delivery drivers for business-related expenses incurred while using their personal vehicles during the course of employment."

4. Finally, an oddly specific letter concluding that truck drivers who provide waste removal service for oilfield operators may qualify for the "retail or service exemption" if the services are "not different from the services furnished to the general public and that its services are recognized as retail within the waste-removal industry."

New DOL guidance on compensation for teleworking employees

DOL published a new Field Assistance Bulletin: Employers’ obligation to exercise reasonable diligence in tracking teleworking employees’ hours of work. Generally, employers must pay nonexempt employees for time worked, "if the employer knows or has reason to believe that work is being performed." 

Employers must, as a result, pay for all work they know about, even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work.

Allen v. City of Chicago, 865 F.3d 936, 938 (7th Cir. 2017). Obviously, this presents some challenges for employers of remote employees. Specifically, how do they know what work is being done when the employees are teleworking from home?

Not official use.

Employers must "exercise reasonable diligence to acquire knowledge regarding employees’ unscheduled hours of work." That's great, but what does it mean? Well, one way for an employer to show reasonable diligence is by "establishing a reasonable process for an employee to report uncompensated work time." Allen at 938. 

What if an employee doesn't report the time, but the employer could discover that the work has been completed? Per the new bulletin (relying a lot on Allen):

[I]f an employee fails to report unscheduled hours worked through such a procedure, the employer is generally not required to investigate further to uncover unreported hours . . .  Though an employer may have access to non-payroll records of employees’ activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours, reasonable diligence generally does not require the employer to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported.

The bulletin also cites case law, noting that employers need not sort through phone records, supervisors' knowledge, computer aided dispatch ("CAD") records, etc. 

Bottom line: Employers can avoid a lot of potential wage and hour headaches (and, by "headaches," I mean DOL investigations and lawsuits) by simply establishing an easy way for employees to report their time. Some employers utilize automated tools - not a problem per se, but employees must have some way to report additional time worked if it happens.
 

Looks like the Pennsylvania overtime rule is back

Straight from the Department of Nothing Can Ever Be Simple - looks like the Pennsylvania overtime regs are back in business. To refresh your memory (or in the event that you haven't been following this debacle):

• The United States Department of Labor issued a new overtime rule, raising the minimum salary threshold for the white collar exemptions to $684/week; 

• Meanwhile Pennsylvania decided it was going to pass its own rule that would raise that minimum threshold to $780/week in 2021, and $875/week in 2022; 

• But then, it looked like there was a compromise that would raise the minimum wage in PA but keep the overtime threshold at the federal level of $684/week. 

The Governor warned that if the compromise legislation didn't move forward in January, then the new overtime regulation was comin'. The compromise legislation didn't move forward, so guess what? The Independent Regulatory Review Commission approved the new reg on January 31, 2020. 

It's not quite a done deal yet - but it's heading in that direction. We may see some judicial or legislative roadblocks before this is all said and done. 

HT: Eric Meyer - Oh, it’s back on in Pennsylvania as new salary-level test hikes are approved.

SCOPA: Fluctuating Work Week method of overtime pay does not comply with PA Minimum Wage Act

How do simple concepts get so complicated? Both the federal Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA) require employers to pay non-exempt employees time-and-a-half for hours over 40 worked in a workweek. So, if an employee makes $10/hour and works 50 hours, they get $550: $400 ($10 * 40 hours) + $150 ($15 * 10 hours). Easy, right?

But, wait! What about non-exempt employees who earn a salary? First, you need to calculate their regular rate, by taking their weekly salary and dividing it by the number of hours worked. For salaried employees, the regular rate will therefore vary depending on how many hours they worked that week. Now, the big question - how much do they get for overtime?

Under the FLSA, it is very clear that the employee's salary covers the base amount of regular pay for all hours worked. The employer must only pay the employer the extra 50% of the regular rate for hours over 40. There's a regula29 CFR § 778.114:
tion directly on point,

If during the course of 4 weeks this employee works 40, 37.5, 50, and 48 hours, the regular hourly rate of pay in each of these weeks is $15.00, $16.00, $12.00, and $12.50, respectively. Since the employee has already received straight-time compensation on a salary basis for all hours worked, only additional half-time pay is due. For the first week the employee is entitled to be paid $600; for the second week $600.00; for the third week $660 ($600 plus 10 hours at $6.00 or 40 hours at $12.00 plus 10 hours at $18.00); for the fourth week $650 ($600 plus 8 hours at $6.25, or 40 hours at $12.50 plus 8 hours at $18.75).

In other words, the employer must pay the regular salary and then add the regular rate, times a multiplier of 0.5, times the number of hours over 40 worked in the workweek. We call this the "Fluctuating Work Week (FWW)" method. 

Unfortunately, Pennsylvania has no such regulation addressing the FWW. In Chevalier v. General Nutrition Centers, Inc., the Pennsylvania Supreme Court held that the FWW method does not comply with the PMWA. Instead, employers must use a multiplier of 1.5. 

Pennsylvania compromise minimum wage and overtime legislation pending

The past couple of months have been very hectic on the wage and hour front in Pennsylvania:

• First, the U.S. Department of Labor issued a final rule, raising the minimum salary threshold for the white collar exemptions to $684/week ($35,568 annually) starting on January 1, 2020.

• Then, the Pennsylvania Department of Labor and Industry announced that it was moving forward with its own rule -  it would phase in an even higher minimum salary threshold for the exemptions to $780/week ($40,560 annually) in 2021 and $875/week ($45,500 annually) in 2022. 

• Now, the Pennsylvania Senate has passed a compromise bill that would raise the minimum wage to $9.50 per hour with the understanding that Gov. Wolf will withdraw the proposed Pennsylvania increase to the minimum salary threshold. Gov. Wolf has given the House until the end of the month to pass this new legislation (although the vote on the proposed overtime rule is not scheduled until the end of January). 

I will continue to monitor this issue. 

New DOL overtime regulations: Non-discretionary bonuses and commissions

One area of the new U.S. DOL overtime regulations that has not received a lot of attention is the new rule regarding non-discretionary bonuses and commission payments. Like the proposed Obama-era rule, the new rule likewise allows employers to cover up to 10% of the minimum salary threshold for exempt employees.

The new threshold is $684/week. Employers may pay as little as 90% of that ($615.50), so long as they cover the difference with non-discretionary bonuses or commissions. What happens if the employee does not earn enough to make up the 10%?

Not official use.

The final rule permits employers to meet the salary level requirement by making a catch-up payment within one pay period of the end of the 52-week period. In plain terms, each pay period an employer must pay the [exempt] employee on a salary basis at least 90 percent of the standard salary level and, if at the end of the 52-week period the sum of the salary paid plus the nondiscretionary bonuses and incentive payments (including commissions) paid does not equal the standard salary level for the 52-week period, the employer has one pay period to make up for the shortfall (up to 10 percent of the required salary level). Any such catch-up payment will count only toward the previous 52-week period's salary amount and not toward the salary amount in the 52-week period in which it was paid.

This is different from the Obama-era rule, which required employers to catch up or pay the bonuses at least quarterly.

"Pennsylvania Moving Forward with New Overtime Rules"

The new federal overtime regulations draw a lot of attention and media coverage. In Pennsylvania, however, they may be irrelevant in about a year. The PA Department of Labor and Industry (DLI) announced that it is moving forward with its own new overtime rules.

DLI submitted the final rule, which must be approved by the Independent Regulatory Review Commission before it takes effect. Like the federal rule, it raises the minimum salary level for the white collar exemptions (executive, administrative, and learned professional). The PA rule will set an even higher threshold starting in the second year:

This increase will be phased in over three steps: $684 per week, $35,568 annually (per federal rule), on January 1, 2020; $780 per week, $40,560 annually in 2021; and $875 per week, $45,500 annually in 2022.

Astute readers will notice that the PA cutoff in 2022 is slightly lower than the one initially proposed. Presumably, there will be some litigation around both the fed and PA rules - so stay tuned.

New whitepaper: New Department of Labor overtime regulations are here, meanwhile Pennsylvania’s proposed regulations loom

Straight from the department of shameless self-promotion, my new whitepaper: New Department of Labor overtime regulations are here, meanwhile Pennsylvania’s proposed regulations loom. Enjoy!

It's official - New DOL overtime rule is here!

The U.S. Department of Labor Wage & Hour Division published the final rule for the new overtime regulations today. Some links:

Not official use.

• DOL update page (with additional links and information);
• Final Rule; and
• Fact Sheet.

Some highlights:

• raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker); 

• raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year; and

• allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices.

Effective date: January 1, 2020. 

Third Circuit on third-party bonuses and the "regular rate" under the FLSA

The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees 1.5 times their "regular rate" of pay for overtime (hours over 40 worked in a work week). Sometimes, that's an easy calculation. If the employee makes $10/hr then (s)he gets $15/hr for overtime. The "regular rate," however, includes "all remuneration for employment paid to, or on behalf of, the employee" (with some exemptions).

In Sec. U.S. DOL v. Bristol Excavating, Inc., the Third Circuit issued a precedential opinion analyzing when bonuses from a third party count toward the "regular rate" for calculating overtime. Basically, Bristol contracted with a company called Talisman to provide services at drilling sites. Talisman paid Bristol employees who worked at the Talisman drilling sites bonuses for safety, efficiency, and completion of work. Because nothing is ever easy, the holding was:

Not official use.

[I]ncentive bonuses provided by third parties may or may not be remuneration for employment, depending on the understanding of the employer and employee.

Classic "it depends" response. So, what does it depend on?

The Court tells us that "a third-party payment qualifies as remuneration for employment only when the employer and employee have effectively agreed it will." This agreement may be an express contract, but it may also be an implicit agreement. The Court pointed to some signs of such an agreement:

• The course of dealing - the employee "regularly and actually received" the bonus;
• The employer "regularly and predictably relies on a bonus to induce certain behavior;"
• Direct involvement of the employer in initiating the bonus or setting its terms;
• Unannounced or discretionary third party bonuses generally do not count.

The employer simply allowing its employees to participate in a third party bonus program does not establish an implicit agreement. 

The Court summarized its holding as:

To sum up, in order for a course of dealing to result in an implied agreement to treat third-party incentive bonuses as remuneration for employment, a fact finder should consider whether the specific requirements for receiving the payment are known by the employees in advance of their performing the relevant work; whether the payment itself is for a reasonably specific amount; and whether the employer’s facilitation of the payment is significantly more than serving as a pass through vehicle. If the answer to all of those questions is yes, there should then be a holistic assessment of the level of the employer’s involvement in the third-party bonus program, to determine if it can fairly be said that the employer and employees have adopted the third-party incentive bonuses as part of their employment agreement. There may be other relevant considerations that arise from case to case, but an employer’s role in initiating, designing, and managing the incentive bonus program will likely be of high importance.

DOL WHD takes new position on compensable time for truck drivers in sleeper berth

The U.S. Department of Labor (DOL) Wage and Hour Division (WHD) issued a new opinion letter on an old issue - FLSA2019-10 (Compensability of time spent in a truck’s sleeper berth while otherwise relieved from duty).

In short, if a truck driver is relieved of duty and permitted to sleep (or do whatever (s)he wants) in an adequate truck sleeper berth, then that time is not compensable. That means employers do not need to compensate the employee for that time, or factor it in when calculating overtime.

Not official use.

The situation presented in the opinion letter was:

[A] workweek wherein a particular driver spent 55.84 hours driving, inspecting, cleaning, fueling, and completing paperwork, and 49.96 hours in the sleeper berth, during which time he was permitted to sleep, did not perform any work, and was not on call to perform work.

How many compensable hours? If you answered 55.84, give yourself a prize! This assumes that the truck driver is really off-duty.

By contrast, if the employee remains on-duty (ex. on call (often interrupted), studying job-related materials, or doing paperwork) then that is compensable time. Also, the law draws a distinction between “waiting to engage” and “engaged to wait.” The classic example of the latter is a driver who is required to wait at a job site for goods to be loaded into the truck. That driver is not just waiting to start work, he is on-duty waiting for the truck to be loaded.

This new opinion letter should benefit most employers, as the prior guidance (which was replaced by this new letter) only allowed employers to exclude 8 hours of sleep time as non-compensable for any trip longer than 24 hours (and no hours for trips under 24 hours).

Another new DOL rule - this time, on the "regular rate"

Not official use.

Under the Fair Labor Standards Act (FLSA), an employer must generally pay a non-exempt employee an overtime premium for hours over 40 worked in a workweek. Overtime pay is equal to 1.5x (or 150% of) the employee's "regular rate."

This calculation can be easy - an employee who makes $8/hour gets $12/hour for overtime. Sometimes it's hard though. Employees receive all kinds of perks and payments and it can be difficult to calculate them into the regular rate (or know if you even need to).

Yesterday, the U.S. Department of Labor announced a new proposed rule to update regular rate calculations. DOL pointed to some highlights:

[E]mployers may exclude the following from an employee's regular rate of pay:

• the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services; 

• payments for unused paid leave, including paid sick leave; 

• reimbursed expenses, even if not incurred "solely" for the employer's benefit; 

• reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements; 

• discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary; 

• benefit plans, including accident, unemployment, and legal services; and 

• tuition programs, such as reimbursement programs or repayment of educational debt. 

The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, "call back" pay, and others.

The DOL is trying to incentivize employers to provide these "perks" without fear that they will have to include them in overtime calculations. Unfortunately, employers may still face this concern because many state laws also require an overtime premium; and, whether these perks are excluded from that calculation will depend on the state law.

DOL: Complying with state wage and hour exemptions is not enough

Last week, the U.S. Department of Labor issued an opinion letter (FLSA2019-1). The employer is located in  New York, which has a state law exemption from overtime pay requirements for "residential janitors." The federal Fair Labor Standards Act does not include an exemption for residential janitors. Does the employer have to pay the residential janitors overtime?

Simply put, where state and federal wage and hour laws are different, the employer must generally comply with both of them, and "meet the standard of whichever law gives the employee the greatest protection."

Not official use.

The FLSA allows employees to collect liquidated damages, but if the employer acted in "good faith" then a court may deny liquidated damages. DOL "does not believe that relying on a state law exemption from state law minimum wage and overtime requirements is a good faith defense to noncompliance with the FLSA, but a court retains discretion to make that determination on a case-by-case basis."

The letter notes that the statute of limitations for FLSA claims is extended from 2 years to 3 years for a "willful violation." The letter, however, does not expressly address whether reliance on a state law exemption is sufficient to limit recovery to two years - this is likely a fact-based inquiry dependent on whether the employer "knew that its conduct was prohibited" or "showed reckless disregard for the requirements."

Bottom line: employers (and their attorneys) must be familiar with, and comply with, federal, state, and local wage and hour laws.