Tag: Fair Labor Standards Act

Florida’s Minimum Wage is Increasing in 2021

Setnor Byer Insurance & Risk

On January 1, 2021, Florida’s minimum wage will increase nine cents to $8.65 per hour. The minimum wage for tipped employees, which must be paid in addition to tips, is also increasing nine cents to $5.63 per hour. Florida’s minimum wage is adjusted annually for inflation. It has gone up $2.50 since 2005. Download Florida’s 2021 Minimum Wage Poster.

Florida’s Minimum Wage Act applies to those employees entitled to receive the federal minimum wage under the Fair Labor Standards Act. Employers must pay no less than the federal minimum wage or their state’s minimum wage, whichever is higher. Florida’s minimum wage in 2021 will remain higher than the current federal minimum hourly wage of $7.25.

Florida employers must make employees aware of their rights by prominently displaying a minimum wage poster in a conspicuous and accessible place wherever minimum wage employees are employed. Employees can sue for violations of Florida’s Minimum Wage Act, but they must first provide their employers written notice of their intent to sue, which must:

Employers then have 15 calendar days to pay all unpaid wages or resolve the claim to the employee’s satisfaction. Otherwise, the employee may file a lawsuit. The Florida Attorney General can also bring a civil action against employers. Each willful violation can result in a $1,000 fine.

To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims. Contact us to learn more about protecting your business with Employment Practices Liability Insurance.

FLSA Update: New White-Collar Exemption Rules Permit “Catch-Up” Payment to Satisfy Minimum Salary Requirement

The Fair Labor Standards Act’s new white-collar exemption regulations did more than increase the minimum salary requirement for exempt executive, administrative and professional employees from $455 to $684 per week. They also let employers use nondiscretionary bonuses, incentives and commissions to satisfy up to 10 percent of the minimum salary requirement.

In other words, if an exempt employee’s annual salary, including nondiscretionary bonuses, incentives and commissions, is less than $35,568 at the end of the year, employers may make one final payment of up to $3,556.80 to satisfy the minimum salary requirement for that employee. These “catch-up” payments are subject to the following rules.

  • Employers may only use nondiscretionary bonuses, incentives and commissions that are paid annually or more frequently.
  • Employers may utilize any 52-week period as the year (calendar year, fiscal year, hire-date anniversary, etc.).
  • If an employer does not identify a specific 52-week period in advance, the calendar year will apply.
  • The “catch-up” payment must be made no later than the next pay period after the end of the year.
  • If the “catch-up” payment is made after the end of the 52-week period, it may count only toward the prior year’s salary amount and not toward the salary amount in the year it was paid.

According to the Department of Labor, this change was made in recognition of evolving compensation practices in a growing number of workplaces. “Catch-up” payments are not required, but many employers are expected to take advantage of the new rule. The new white-collar exemption regulations are effective January 1, 2020, so employers don’t have much time to evaluate their current payroll practices and take corrective actions if necessary.

Regulatory changes often create uncertainty, so employers should carry Employment Practices Liability Insurance that includes limited wage & hour coverage. Please contact us if you would like to learn more about employment practices liability insurance.

Did You Know…Florida’s Minimum Wage is Going Up in 2019?

Florida’s minimum wage applies to those employees entitled to receive the federal minimum wage under the Fair Labor Standards Act. It is adjusted annually for inflation. According to the Florida Supreme Court, only upward adjustments are permitted.

Employers are required to pay the federal or their state’s minimum hourly wage, whichever is higher. Since Florida’s 2019 minimum hourly wage will be higher than the federal minimum hourly wage of $7.25, Florida employees entitled to minimum wage cannot be paid less than $8.46 per hour.

Florida employers must prominently display a minimum wage poster in a conspicuous and accessible place wherever minimum wage employees are employed. This poster must notify employees of the minimum wage and of their rights and protections under Florida’s Minimum Wage Act.

Employees can sue employers for minimum wage violations, but they must first provide written notice of their intent to sue, which must:

  • identify the minimum hourly wage to which the employee claims entitlement;
  • provide the actual or estimated work dates and hours for which payment is sought; and
  • state the total amount of alleged unpaid wages.

Upon receiving such notice, an employer has 15 calendar days to pay the total amount of unpaid wages or resolve the claim to the employee’s satisfaction. Otherwise, the employee will be allowed to file a lawsuit for unpaid minimum wages. The Florida Attorney General can also bring a civil action against employers. Each willful violation can result in a $1,000 fine.

To protect against employment practices liability claims, employers should implement a training program and explore their options for insuring against wage and hour claims.

Please contact us for more information about protecting your business from employment-related liabilities.

Fair Labor Standards Act: Wage & Hour Law Update

What is the most recent development involving Fair Labor Standards Act? Here’s a hint. It’s not the highly-publicized rise and fall of those new white-collar overtime exemption regulations. In fact, quite a bit has happened since the Department of Labor officially abandoned its fight for new white-collar regulations in late 2017.

Opinion Letters

In June 2017, the DOL announced that it would reinstate the issuance of written opinion letters to help employers and employees better understand the FLSA. These letters provide the Wage and Hour Division’s official opinion of how the FLSA applies in the specific circumstances described by the person requesting the opinion.

On January 5, 2018, the DOL made good on its promise when it re-issued seventeen FLSA-specific opinion letters, the first in nearly a decade. These letters were originally prepared in 2009 by the departing Bush administration and quickly withdrawn under the new Obama administration. Then, on April 12th, the DOL issued two new FLSA-specific opinion letters.

This new round of opinion letters covers various topics, including:

  • Compensability of frequent rest breaks required by a serious health condition;
  • Compensability of travel time;
  • Calculation of salary deductions;
  • Salary deductions for full-day absences based on hours missed; and
  • Year-end non-discretionary bonuses.

Opinion letters are significant because they can provide an affirmative defense for actions that may otherwise be unlawful under the FLSA. An employer may avoid liability for actions:

  • Taken in good faith; and
  • In conformity with and in reliance on any written regulation, order, ruling, approval or interpretation of the DOL’s Wage and Hour Division.

Tipped Employees

In December 2017, the DOL proposed new tip regulations. Under the FLSA, employers can credit tips toward their minimum wage obligation. This “tip credit” is equal to the difference between the cash wages it pays the employee (which must be at least $2.13 per hour) and the $7.25 per hour Federal minimum wage.

Under current regulations, employees must be allowed to keep all of their tips, except for tips distributed through a tip pool. However, the tip pool must be limited to employees who customarily and regularly receive tips, like servers, bartenders and bussers. This restriction applies regardless of whether an employer claims a tip credit.

The proposed regulations remove this restriction for employers that do not take a FLSA tip credit and pay a direct cash wage of at least the full Federal minimum wage. The proposed regulations do not change the rules for employers that do claim a tip credit.

Under the proposed regulations, employers who do not take a tip credit would be allowed to share tips with back-of-house workers and other employees who do not customarily and regularly receive tips. According to the DOL, this lets employers reduce wage disparities among employees who all contribute to a customer’s experience, and also incentivizes all employees to improve customers’ experience.

The period for public comment on the proposed regulations ended February 5, 2018, so we can only wait to see what the DOL does next.

The rapidly changing FLSA can put employers at serious risk. Adjusting to change takes time, but violations can happen in the blink of an eye. Employers should consider Employment Practices Liability Insurance to protect against various employment-related claims, including limited coverage for wage and hour claims.

Please contact us if you would like to learn more about protecting your business with employment practices liability insurance.

To receive regular updates about developments which may affect your business, subscribe to Setnor Byer Insurance & Risk’s weekly risk management news brief.

Federal Judge Blocks New White-Collar Overtime Regulations

A federal judge in Texas has blocked the Fair Labor Standards Act’s new white-collar overtime exemption regulations. Ten days before their effective date, District Court Judge Amos Mazzant issued a nationwide preliminary injunction that temporarily prohibits the Department of Labor from implementing and enforcing the new white-collar overtime exemption regulations. As a result, the new regulations will not be going into effect on December 1, 2016.

In May 2016, the Department of Labor revised various white-collar overtime exemption regulations to:

  • increase the minimum salary requirement from $455 per week ($23,660 annually) to $913 per week ($47,476 annually);
  • increase the minimum annual compensation requirement for the highly-compensated employee exemption from $100,000 to $134,004; and
  • create a process to automatically update the minimum salary and compensation levels every three years, beginning on January 1, 2020.

In September 2016, twenty-one states filed a lawsuit to challenge the legality of the new regulations. On the same day, more than 50 state and national business organizations filed a separate lawsuit challenging the regulations. Both cases were filed in the Eastern District of Texas and were later consolidated.

The plaintiffs filed an Emergency Motion for Preliminary Injunction to prevent the new regulations from going into effect on December 1, 2016. Though a number of arguments were made, Judge Mazzant, who was nominated by President Obama, ultimately determined that the DOL exceeded its delegated authority and ignored Congress’s intent by promulgating and attempting to implement the new regulations.

According to Judge Mazzant, Congress unambiguously intended the white-collar exemptions to depend on an employee’s duties rather than an employee’s salary. By significantly increasing the minimum salary level, the new regulations essentially supplant the well-established duties test. If the intent is to replace the duties test with a salary requirement, then only Congress can make the change, not the DOL.

Judge Mazzant noted that the new regulations would also be invalid because they are not based on a permissible construction of the FLSA and do not comport with Congress’s intent. The broad purpose of the white-collar exemptions was to exempt from overtime those engaged in executive, administrative and professional capacity duties. However, the DOL essentially created a de facto salary-only test by significantly increasing the minimum salary level.

Judge Mazzant ultimately concluded that the public interest is best served by a nationwide preliminary injunction that preserves the status quo until the case can be fully resolved on its merits. Since the DOL is currently prohibited from implementing and enforcing the new regulations, employers don’t have to change their wage and exemption practices for white-collar employees, at least for now.

The ultimate fate of the new regulations is uncertain. Though the preliminary injunction is temporary, this case can languish in court for more than a year. The DOL is currently considering all legal options. In the meantime, the Obama administration that initially directed the DOL to update the white-collar overtime exemption regulations will be replaced by a Trump administration that may direct the DOL otherwise.

Since the level of uncertainty and confusion surrounding the white-collar overtime exemptions has reached new heights, employers may benefit from having Employment Practices Liability Insurance to protect against various employment-related claims. Limited coverage for wage and hour claims may be available.

Please contact us if you would like to learn more about complying with the FLSA’s new (old) white collar overtime exemption regulations.

To receive regular updates about developments which may affect your business, subscribe to Setnor Byer Insurance & Risk’s weekly risk management news brief.