The U.S. Department of Labor recently issued three new opinion letters on overtime pay under the Fair Labor Standards Act. Opinion letters cover specific fact situations presented by employers, workers or other parties and are only legally binding on the party who requested the letter. However, employers may be able to claim safe harbor if they rely on an official opinion letter.
With the "gig economy" in full swing, state and federal agencies have an incentive to scrutinize whether workers are properly classified as independent contractors or employees. After all, employers are not responsible for paying half of an independent contractor's payroll taxes or the unemployment insurance and workers' comp required by law. And, independent contractors lack many workplace protections that employees are entitled to receive.
Under the federal Fair Labor Standards Act, non-exempt employees are entitled to the premium overtime rate of 1-1/2 times their regular rate of pay for all hours worked past 40 in a single workweek. The regular rate of pay is determined by adding up all earnings, including non-discretionary bonuses and some other payments, and dividing by the number of hours worked.
In 2016, the Obama administration's Labor Department proposed a change to the overtime rule in the federal Fair Labor Standards Act. That change would have increased the exempt salary threshold, which is the minimum amount employees must earn in order to be classified as exempt from the FLSA's overtime requirement. However, the change was blocked by an appellate court. Now, the Trump administration's DOL is considering its own changes to the overtime rule, and employer and employee groups testified about their concerns at an Oct. 17 hearing at the DOL.
As of July 1, 2018, the minimum wage for the state of Maryland, District of Columbia, and Mongtomery County, Maryland all increased. The following increases immediately take effect as of Sunday:
In the first ruling under federal law involving Uber, a U.S. District Court Judge in Pennsylvania has just ruled that limousine drivers for UberBLACK are independent contractors under the Fair Labor Standards Act. The FLSA sets the minimum wage and overtime rules for covered employees -- but independent contractors are not covered by the law. Therefore, much FLSA litigation centers around who is legally an employee and who is a contractor.