The most comprehensive resource available for payroll professionals. This service provides payroll news, white papers, custom research answers, webinars on the hottest payroll topics, survey and research reports, in addition to access to Bloomberg BNA’s Payroll Library™.
The Supreme Court released decisions during its 2015-2016 term that affect employers' compliance with federal wage and hour laws.
During the term that ended June 28, the major subjects relevant to payroll were compensability of time for changing clothes at work and exemptions from overtime requirements.
The high court, through declining to consider an appeal, also affirmed the validity of the Labor Department's 2013 final rule that extended federal minimum wage and overtime protections to certain home-care workers. Here are the decisions:
Representative data. Wage and hour class actions sometimes may be established based on the compensation experiences of a sample of the employees, without including specific payment data for each employee, the Supreme Court said in a decision regarding compensability of time for changing clothes ( Tyson Foods Inc. v. Bouaphakeo , 2016 BL 87179, U.S., No. 14-1146, 3/22/16 ).
Before the court's decision in this case, it had been unclear if a representative sample could be used to certify a class action, David C. Frederick, the lawyer who represented the employees in this case, told Bloomberg BNA. The court's decision made it easier for employees to unite in seeking back pay from employers.
A representative sample of employees may be used in class certifications to determine the average amount of time that all class members spent changing into and out of special gear, as long as each employee in the class could rely on the data for that sample group if they individually were to sue the employer, the court said.
“In this case each employee worked at the same facility, did similar work, and was paid under the same policy,” the court said. “Under these circumstances the experiences of a subset of employees can be probative as to the experiences of all of them.”
Rule applicability. The Labor Department's 2011 rule that caused certain service advisers at car dealerships to be nonexempt from Fair Labor Standards Act overtime provisions was not properly established, so a lower federal appeals court that relied on the rule when deciding that the employees were nonexempt needed to again review whether back pay was owed to the advisers, the Supreme Court said ( Encino Motorcars LLC v. Navarro, 2016 BL 196078, U.S., No. 15-415, 6/20/16 ).
An amendment to the FLSA enacted in 1966 exempted “any salesman, parts man, or mechanic primarily engaged in selling or servicing automobiles” at certain dealerships from the overtime requirements of the FLSA. The Labor Department in 1987 adopted a rule clarifying that service advisers at such dealerships were exempt from the overtime requirements of the FLSA under the 1966 amendment, which was codified as Section 213(b)(10)(A) of the U.S. labor code.
The Labor Department in 2011 adopted a final rule ( RIN 1215-AB13, 1235-AA00) that overrode its 1987 rule and established the department's position that service advisers were nonexempt. The Supreme Court said the 2011 rule could not bind judges to accept its terms because the rule was “procedurally defective,” as agencies are required to “give adequate reasons” for changing rules but the “2011 regulation was issued without the reasoned explanation that was required,” the court said.
When an agency fails “to provide even a minimal level of analysis” regarding a rule that revises a previous rule, “its action is arbitrary and capricious and so cannot carry the force of law,” the court said.
Home-care workers. A federal appeals court decision that the Labor Department had authority to issue its 2013 home-care worker final rule ( RIN 1235-AA05) was maintained by the Supreme Court when it declined June 27 to review a home care industry group's appeal of the case ( Home Care Ass'n of Am. v. Weil, U.S., No. 15-683, cert. denied 6/27/16 ).
In general, at least four Supreme Court justices must agree to review an appeal for the high court to conduct the review and issue a decision. The department started to enforce the rule Nov. 12, 2015.
An amendment to the FLSA enacted in 1974 exempted from the act's minimum wage and overtime requirements domestic service employees who either provide companionship services to certain individuals who require assistance in caring for themselves or live in the household where they provide services. These exemptions are collectively known as the companionship-services and live-in exemptions.
The Labor Department implemented regulations in 1975 regarding the 1974 amendment, but the 2013 final rule adjusted the definition of companionship services by limiting, to a greater degree than in the 1975 regulations, the types of jobs that would be considered to involve companionship services and therefore be exempt from FLSA minimum wage and overtime requirements.
Also under the 2013 rule, third-party agencies that employ domestic service employees cannot use the companionship-services and live-in exemptions to prevent them from being covered by the FLSA's minimum wage and overtime protections.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)