The Department of Labor Announces the Final Overtime Salary Threshold Rule

On Wednesday, March 17, 2016 the Department of Labor announced the new overtime exemption salary threshold.  For an employee to be exempt from the general overtime requirements the Fair Labor Standards Act requires the employee meet one of a number of different duties test by performing certain work duties and in most cases be paid a salary at or above a certain threshold. Currently the threshold is $455 a week which is $23,660 a year. The new salary threshold will be $913 a week, or $47,476 a year. In addition, the new rule also creates an automatic mechanism to update the salary threshold every three years, beginning January 1, 2020. Each update will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage Census region, estimated to be $51,168 in 2020.

The rule will go into effect December 1, 2016.

I am very pleased with the new rule. Even though the Obama administration was shooting for around $50,400 and with inflation the new threshold would have to be around $51,000 to match the overtime salary threshold at its highest point in the 1970s, the final number is a huge gain.

The Department of Labor calculates 4.2 million workers will become newly eligible for overtime. The Economic Policy Institute put the number of newly eligible workers and workers who will be assisted by the new rule closer to 13 million.

The automatic update to the threshold is almost as important as the update to the amount itself. Before this change, the salary threshold had been last updated in 2004 and before that in the mid 1970s. The new rule will ensure the salary threshold doesn’t diminish via inattention and inflation.

Republicans and industry groups will attack the new rule with everything they have. The New York Times seems to think Republicans may have to reconsider their normal opposition to anything that might help working people.

“With Donald J. Trump as their presumptive presidential nominee, however, the issue is fraught with risk for Republicans. Any attempt to repeal the regulation could exacerbate an already palpable split between Mr. Trump’s blue-collar supporters and the party’s establishment donors and politicians.”

This different political dynamic might mean the rule can be implemented on schedule without serious legislative or judicial delays.

Please see the DOL’s fact sheet here.


An Interesting Move by the National Labor Relations Board in the Ongoing Fight Over Employee/Independent Contractor Misclassification

I just saw a very interesting news report about an action by the National Labor Relations Board (NLRB) that may be an important move in the current fight over the classification and misclassification of employees and independent contractors. With concerns about the “gig economy” (i.e. Uber etc.) and other forms of informal, “non-employee” employment becoming a topic of conversation this action by the NLRB is a welcome response to people pushing the Administration to do more to ensure our employment laws are being followed in letter and in spirit.

As I have previously discussed, misclassifying a worker as an independent contractor rather than an employee is not necessarily in and of itself a violation of any law. Usually the issue is an employer is not following employment laws, like the requirement to pay overtime, because the employer is treating their workers as independent contractors rather than employees. One would then sue the employer for failure to pay overtime.

The problem is in certain situations it might be the case that even though the employer misclassified their workers as independent contractors they didn’t violate any employment laws while doing so meaning the misclassified employees may not have a private right of action against the employer. This could happen if, for example, the misclassified employees only worked 32 hours a week meaning they didn’t work overtime and they were paid $8 an hour meaning they earned at least minimum wage for all hours worked. In that situation an employee may be able to contact the IRS and other federal and state agencies but they may not be able to sue the employer themselves.

That is one reason why the NLRB’s move is potentially so important. The NLRB filed a complaint against a company operating intermodal transport at a port in California. The complaint alleges what are know as “Section 8(a)(1)” violations which is when an employer somehow restrains the rights of employees under Section 7 of the National Labor Relations Act (NLRA) to engage in concerted activity in regards to their job and working conditions.

The complaint claims the company, by misclassifying their drivers as independent contractors instead of employees, was preventing those employees from engaging in concerted activity as allowed by Section 7 and thus committing a violation of Section 8(a)(1) of the NLRA.

If this complaint is successful it would be a huge weapon for misclassified employees. The very act of misclassifying an employee as an independent contractor would by itself be a violation of the law without requiring an employee to show anything else. The logic underlying the complaint seems to be by misclassifying employees as contractors the employer is trying to prevent employees from getting together to discuss wages and job conditions because by classifying the workers as contractors they are not protected by the NLRA and its rights under Section 7 as the NLRA only protects employees.


Filing this complaint also shows the NLRB is aggressively fighting for workers and their rights. It is another reminder of how important it will be to elect a President this year who will support the NLRB in their fight like President Obama.


If you are a worker in Atlanta or in Georgia and you believe you have been misclassified as an independent contractor please contact attorney Benjamin Kandy at ben@bkandylaw.com or 678 824 2251 for a consultation.

As always, this is not legal advice and does not give rise to any attorney-client relationship. If you are in a state other than Georgia go to NELA.org to find a good employment lawyer near you.

Republicans are Making a Last Ditch Effort to Stop the Overtime Salary Threshold Increase

As I have reported previously President Obama and the Department Of Labor have instituted an update to the salary threshold for an overtime exemption under the Fair Labor Standards Act. Currently the white collar exemptions to the overtime and minimum wage laws require an employee be paid a salary of at least $455 a week. This number was last increased by President George W. Bush in 2004.

The DOL rule raises the salary threshold to  equal the 40th percentile of weekly earnings for full-time, salaried workers, bringing it to a projected level of $970 per week, or about $50,440 annually.

The rule is in the last stage of discussions and may be in effect later this year.

Of course the Republican party is fighting hard to prevent anything that might help American workers. On March 17 the GOP senate introduced the Protecting Workplace Advancement and Opportunity Act. The act would nullify any rule changes by the DOL and require any change to the current white collar exemptions be made by statute rather than administrative rule changes.

Hopefully President Obama will use his veto power to stop this bill from becoming law if it passes the House and Senate. The DOL rule change will be one of President Obama’s greatest accomplishments. And it is another reason why electing the Democratic Party candidate as President is so vitally important.



The Tip Credit Makes an Appearance on the Campaign Trail

So far this election season there has not been much said about how the candidates might change our current employment laws. I think we might still be at the stage of the campaigns where candidates are trying to tell a broader narrative and they will fill in the details later on.

However, at least one of the candidates has made statements that make me excited about the future of America’s employment laws.

The most important, specific employment law proposal I have heard so far has come from Hillary Clinton.

As I have explained elsewhere, currently individuals who regularly receive more than $30 a month in tips can be paid a “tip credit” minimum wage of $2.13 an hour with tips making up the difference between $2.13 and the regular minimum wage of $7.25.

Employers love being able to pay less than the regular minimum wage. Even though the employer is supposed to pay the tipped employee the difference if the tips plus cash wage do not add up to $7.25 for all hours worked in a work week, it rarely happens that way.

At a New York City rally earlier this month Clinton said :

““It is time we end the so-called tipped minimum wage. We are the only industrialized country in the world that requires tipped workers to take their income in tips instead of wages. That’s shameful.”

It appears Clinton is proposing all employers be required to pay their employees the full federal minimum wage regardless of whether the employee receives tips from customers.

Of course the restaurant industry will fight Clinton’s proposal tooth and nail. There will probably be the usual cries of firings and business closings as far as the eye can see. At least eight states have abolished the tip credit under their state laws. Funnily enough, restaurants still exist in those states.


Don’t Quit Your Job Just Yet!

Happy New Year everyone! Usually this time of year I write a “employment law new year’s resolutions” post. This year I can’t think of a good list of tips and pointers. But I do have one thing I have been thinking about lately regarding how best to leave one job and transition into another.

As I have written about in previous posts, many employers are asking their employees to sign lots of paperwork before they start a new job. This paperwork usually includes minor acknowledgments or releases. However, nowadays the paperwork more often than not will include a number of restrictive covenants, arbitration agreements, and waivers of the right to bring a lawsuit as part of a collective or group.

Restrictive covenants might prevent you from engaging in your profession within a certain area for a number of years. Arbitration agreements force you to allow an arguably biased private judge to decide your case. And waiving your right to engage in a collective action gives the employer a license to steal from you in amounts small enough that it would be difficult or inefficient to get a lawyer to represent you.

The increase in amount and the “severity” of today’s paperwork impacts what one needs to do when they plan on leaving a job to start a job at a different company.

The problem begins when you wait until your first day at the new job to find out exactly what you will be asked to sign. When the HR rep drops a stack of paperwork in front of you and tells you to sign, what are you supposed to do? Are you going to complain or refuse? Will you ask them to change a clause or provision in the agreements? Maybe. But what leverage do you have? All you can do if they refuse to allow you not to sign something or change something is to threaten to not take the job. But you are now in the position of having quit your previous job, so if you actually refuse to sign and leave you don’t have any job. Someone in the position of having no job unless they sign some paperwork will probably just suck it up and sign the paperwork no matter what it all says.

A better course of action is to do anything that might maximize your leverage, which in this case is do everything possible to allow you to be able to walk away from a bad agreement.

A way to do this is to ask the prospective new employer to send you all the pre-employment paperwork before you give notice at your current job. This means you can see what you will be asked to sign with time to think about what you are being asked to sign. Getting the paperwork while you still work at your old job also allows you to ask for the new job to make changes to what they are asking you to sign. It is much easier to make those asks when you are able to legitimately walk away because you still have your old job.

Negotiating is a lot about how much and what type of leverage each party brings to the table. Maximizing your leverage helps you to get the best possible agreement. Don’t throw away your leverage by quitting your old job to soon.

If you are in Georgia and have a question about your rights at work contact Atlanta employment lawyer Ben Kandy.

This post does not create, and is not intended to create, an attorney/client relationship between the reader and attorney Benjamin Kandy. If you have any questions about your rights speak to an attorney in your state. Please see our disclaimer page.





My Previous Employer Won’t Give Me My Last Paycheck. What Can I Do!?

I get calls all the time from people who did not receive their last paycheck from their previous employer. It seems like employers can feel like they can “punish” employees they don’t like by withholding their last check. The assumption appears to be because the amount owed is usually relatively small the employee won’t bother, or won’t be able to afford to hire a lawyer to help them get their money.

I’m happy to say those employers are very, very wrong. There are a number of ways an employee can get their last paycheck that will cost the employer a lot more than just paying the money when it was owed.

Method One – A Contracts Claim:

The first way one can get their last paycheck is by bringing a contracts claim against their previous employer. In Georgia, an employment agreement is only a contract if it includes a term of service (e.g. “This agreement is to last from January 1st to December 31st of this calendar year.”) so without a specifying a term in the agreement an employer can change an employee’s pay, working conditions, hours, etc. moving forward at any time. However, an employer can’t change an employee’s pay retroactively. For example, if you were being paid $500 a week and paychecks were distributed on Friday afternoons an employer can’t tell you on the Friday that your paycheck will be $400 for the previous week. The employer would have to tell you on the Friday that starting next week you will be paid $400 instead of $500 a week.

If the employer changes an employee’s pay retroactively the employee can bring a claim saying essentially “we had an agreement that I would work a certain amount and you would pay me a certain amount. I did the work but you didn’t pay me the amount we agreed.”

A problem with bringing this kind of claim is, at least in Georgia, each side will probably be responsible for paying their lawyer. In the US the default rule is each side pays their own attorney as opposed to Britain for example where the loser pays the winner’s attorney’s fees. Because the employee would be responsible for paying their lawyer it is very possible it will cost more in attorney fees to get the final paycheck than the amount of money owed. It is also unlikely an attorney will work on a “no win, no fee” basis when the amount in question is small.

Method Two – A Minimum Wage Claim

Another type of claim that can help an employee get a final paycheck, or even more, is a minimum wage claim. Under the Fair Labor Standards Act (“FLSA”) most hourly workers and many salaried workers must be paid at least the minimum wage for each hour worked. If an employer fails to pay an employee their last paycheck then they failed to pay the employee at least the minimum wage for the hours they worked in the final pay period.

Because the national minimum wage in the US is only $7.25 an hour you might think anyone who makes more than that will receive less than they are owed for their final paycheck if they bring a minimum wage claim. But the FLSA has what is called a liquidated damages provision which requires an employee who has to go after their unpaid minimum wage an extra amount of damages equal to the unpaid minimum wage. Essentially, the employee is owed their unpaid minimum wage times 2.

This means if you earn less than $14.50 an hour (7.25 minimum wage times 2 = 14.5), you will receive more money if you bring a minimum wage claim than a contract claim.

The other reason a minimum wage claim is such a strong tool is because the FLSA has what is called a “shall pay” attorney’s fee provision. This means the employer must pay the employee’s attorney’s fees when the employee brings a minimum wage claim under the FLSA. Even if the employee is owed one hour of unpaid minimum wage the employer has to pay for what it cost the attorney in fees to collect that one hour.

Because of the strong attorney’s fee provision an employee may be able to find an attorney to help them even if the employee is only owed a small amount of money. The FLSA was designed to make sure lawyers had an incentive to help employees recover even the smallest amount of unpaid minimum wage or overtime.

Even if you are normally exempt from the minimum wage or overtime laws and are paid a salary you might still be able to bring a minimum wage claim. In fact, a minimum wage claim might be especially valuable to people paid a low salary.

To be exempt from the minimum wage and overtime requirements an employee must be paid at least $455 a week in salary and meet certain duties tests. Because an employee can (at the moment) be paid is little as $455 a week to be exempt, their hourly rate can get really, really low. For instance, $500 a week working 50 hours a week is an effective hourly rate of $10

Because most of the exemptions from the FLSA require the employee be paid at least $455 a week in salary, when an employee does not receive their final paycheck they can not be considered exempt. If the employee is not paid anything for a pay period then they could not have been paid at least $455 a week in at least one workweek, depending on the length of the pay period. So an employee who is not given their final paycheck is not exempt from the minimum wage requirements and must be paid at least $7.25 an hour for all hours worked plus an equal amount in liquidated damages.

That’s not all. If the employee who did not receive their last paycheck also worked more than 40 hours then they are also owed overtime. Overtime would be time and a half the hourly rate which is minimum wage. 7.25 *1.5 = 10.88. So the employee would be owed $10.88 for every hour over 40 worked in a workweek that is supposed to be covered by the missing paycheck. Finally, the employee would be owed liquidated damages as well in an amount equal to the unpaid overtime.

As you can see, there are a number of different ways to get your money when your employer won’t give you your final paycheck. It is also well worth your time.

If you are in Georgia, particularly the Atlanta metro area, and you did not receive your last paycheck call or email employment law attorney Ben Kandy.


Georgia and Ban the Box

A criminal record can be a real hindrance for individuals leaving jail or prison and trying to integrate back into their communities. Almost every job today does a criminal background check before hiring a potential employee. Some jobs even ask about and check for past arrests to disqualify applicants.

Past criminal histories make it very difficult for many people to get a job. There has been a push around the country for “ban the box” laws making it illegal for employers to use an applicant’s prior criminal history as an automatic disqualifier for a job.

I’m usually not a huge fan of Georgia Governor Nathan Deal, but credit where credit is due. Governor Deal signed an executive order on February 23rd, 2015 prohibiting agencies from using a prior criminal history as an automatic disqualifier for job applicants.

Ban the box has the ability to make a real impact on lots of lives. Not being able to get a job makes it almost certain an ex-prisoner will re-offend. Even though Governor Deal’s order only applies to state agencies, it will still help all Georgia’s ex-offenders in other ways. One result of criminal backgrounds being an automatic disqualifier for many jobs is shady and unethical employers take advantage of desperate job seekers. I recently worked on a case where the employer hired people from halfway houses specifically because they thought those people wouldn’t complain about unpaid overtime. Making it possible for ex-offenders to get state jobs means those unscrupulous employers have less desperate workers to steal from.

Georgia has joined fourteen states in prohibiting state agencies using criminal history as an instant disqualifier for state jobs. Hopefully it will help lower recidivism and strengthen communities.


Benjamin Kandy is an Atlanta employment lawyer. Nothing herein is intended to create an attorney client relationship.



What is the Difference Between “At Will” and “Right to Work”?

Sometimes I will be speaking to a potential client about what they think was an unlawful termination and they will say something like “I know Georgia is a right to work state” or “even though Georgia is a right to work state…”. I have to stop them because they are confusing two different concepts.

At will and right to work are unrelated concepts that have somehow become intertwined in the public consciousness. Every state in the US is “at will”, but not every state is “right to work”.

At will employment is something I have written about before. In essence, at will employment means both employer and employee can end the employment relationship at anytime for any reason. At will employment was developed during the late 19th century and became the general rule across the US by the 20th century. The at will doctrine governs the relationship with between the employer and the employee.

In contrast, right to work has nothing to do with the relationship between the employer and the employee. Right to work is a relatively new concept that has been part of a conscious push by business interests to weaken the power of labor unions. In a nutshell, right to work law allow non-union members in union organized workplaces avoid paying certain union dues.

Right to work laws originate out of the changes to the National Labor Relations Act of 1931 made as part of the Taft-Hartley Act of 1947. Taft-Hartley allowed individual states to outlaw “union security” which created the conditions to implement right to work laws.

Currently 25 states have right to work law on the books. In these states the law can invalidate contracts made between the employer and a union. In the other 25 states there are no right to work laws, but every state employment is still at will.

It’s not a huge deal to mix up at will and right to work. I’m not a big fan of the concept of at will employment, but it has a history. Right to work has a short but dishonorable history rooted in anti-union feelings fuelled by up anti-communism (and racism). Mixing at will and right to work gives right to work laws some of the historical credibility of at will employment. It kind of makes right to work seem old and “the way it has always been” when in fact many states’ right to work laws were only passed in the last couple of decades.

Hopefully this article has helped to explain the difference between at will employment and right to work laws. If you are in Georgia and have questions please contact employment law attorney Benjamin Kandy.



CNAs and other Home Health Care Aides Get a Break. DC Circuit Court Upholds the DOL’s Changes to the “Companionship Exemption” Under the FLSA

A while back I wrote about the Department of Labor’s proposed changes to the “companionship exemption” under the Fair Labor Standards Act(“FLSA”). The FLSA contained an exemption to the rules regarding overtime pay for individuals who performed personal care services in their client’s private homes. This overtime exemption meant home health aides, CNAs, and other similar workers were not paid overtime if they worked outside of a facility like a nursing home. I was excited about the DOL’s proposed changes. The most important change was the exemption could no longer apply to workers hired by a third party like an agency. Home health care assistance is a huge and growing field serviced primarily by women with many of the workers being immigrants and people of color. The exemption meant these workers could work long, long weeks and get paid as little as a flat rate of $7.25 for all hours worked.

Unsurprisingly home health care agencies and lobbying groups quickly attacked the new rule and sued the DOL. I wrote about how the challengers were successful in having the DOLs new rule struck down by a federal district court judge.

Well I am very happy to announce the DOL appealed and the D.C. Circuit Court overturned the first judge’s decision. The Court’s August 21st decision upheld the DOL’s regulation. Specifically, the court held the Department has the authority to interpret the FLSA statute in regards to the companionship exemption. Therefore the Department is allowed to interpret the statute to mean home health care aides hired through a third party are no longer exempt from being paid overtime.

Of course, there could be an appeal to Supreme Court. Other than that it appears as if home health care aides employed through a third party will soon need to be paid overtime for all the hard work they do.



Some New Guidance on the Independent Contractor Vs. Employee Question

The gig economy; it seems like we hear more and more about people to working as independent contractors for companies like Lyft or Uber. There has been some push back from state and local government. Now the federal government has put in their own two cents in regards to the independent contractor vs employee question.

David Weil, the administrator of the Department of Labor’s Wage and Hour Division released an opinion letter on July 15th clarifying the Department’s view on when a worker is an employee or an independent contractor.

According to the Department, for the purposes of the FLSA the test for determining whether a worker is an employee or independent contractor is multi-factorial “economic realities” test rather than the common law control test. It is also important that “The application of the economic realities factors must be consistent with the broad “suffer or permit to work” standard of the FLSA.”

The economic realities test requires a court to look at:

  1. the nature and degree of the employer’s control over the time, manner and method of the worker’s work;
  2. the worker’s opportunity for profit or loss;
  3. the worker’s investment in equipment, materials or their own employees;
  4. whether the worker’s position required special skill;
  5. whether the services provided by the workers were an integral part of employer’s business; and
  6. whether the relationship was permanent.

The ultimate question is one of economic dependence. “Each factor should be considered in light of the ultimate determination of whether the worker is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is its employee).” It is more than just the day to day control considered under the common law control test. An individual can be an other person’s employee even if the employer does not exercise much day to day control over how the individual performs their work.

The opinion letter concludes with this remark:

“In sum, most workers are employees under the FLSA’s broad definitions. The very broad definition of employment under the FLSA as “to suffer or permit to work” and the Act’s intended expansive coverage for workers must be considered when applying the economic realities factors to determine whether a worker is an employee or an independent contractor.”

This opinion letter confirms the department is making correct classification a priority. It is also clear that most people who work for someone else are employees.

If you are currently classified as an independent contractor please speak to an attorney. Most independent contractors are actually employees. Your employer might even use a different word for your relationship than independent contractor. The Department has seen an increasing number of instances where employees are labeled something else, such as “owners,” “partners,” or “members of a limited liability company.”

Here in Atlanta, Georgia there are plenty of companies trying to get around worker protections by classifying their workers as something other than employees.

If you have any questions about your employment relationship and you are in the State of Georgia, call or email Atlanta employment law attorney Benjamin Kandy.