On December 22, 2017, the Tax Cuts and Jobs Act was signed into law bringing significant changes to US tax law. One provision of the Act may further incentivize individuals to work as independent contractors instead of as traditional employees.

The new provision allows for independent contractors, and for service providers structured as a partnership or other flow-through entities, the potential to deduct up to 20% of their revenue from their taxable income. And while some companies might view the opportunity to re-classify individuals from employees to independent contractors as a “win–win” scenario, it could create substantial legal exposure for employers.


Continue Reading New Tax Law Could Incentivize Employees To Become Independent Contractors – Employers Should Proceed With Caution

On January 5, 2018, the Department of Labor did away with its previous six-factor test and announced a new “primary beneficiary” test to determine whether interns and students working for “for-profit” employers are entitled to minimum wages and overtime pay under the Fair Labor Standards Act. Employers are required to pay employees for their work, but in some circumstances, interns may not actually be employees under the FLSA, and therefore, can be unpaid. The DOL stated that the new test “allows increased flexibility to holistically analyze internships on a case-by-case basis.”

The new “primary beneficiary” test looks at whether the intern or the employer is the primary beneficiary of the relationship. Several circuit courts, including the Second and Ninth, have previously favored the “primary beneficiary” test, viewing it as being more up to date and aligned with the underlying purpose of an unpaid internship.


Continue Reading DOL Approves New Test For Unpaid Interns Offering The Potential Of Increased Flexibility For Employers

Medical care providers have been experiencing an uptick in Fair Labor Standards Act lawsuits based on automatically deducted meal periods. Recently, a nurse filed a collective action lawsuit against St. Luke’s Health System Corporation and various affiliates, claiming that they failed to pay nurses for work performed during meal breaks. Specifically, the nurse alleges that St. Luke’s automatically deducts 30 minutes from each shift for meal periods, assuming that its nurses are able to find a 30-minute block of time to eat. The nurse further claims that, in reality, nurses remain on duty when attempting to eat, and that their meal periods are frequently interrupted. Given the potential for large liability and the likelihood of copycat lawsuits, employers—particularly medical care providers—should examine their meal period policies to ensure the policies are compliant with the Fair Labor Standards Act.
Continue Reading Food for Thought—Does Your Automatic Meal Period Policy Violate the Law?

Starting last summer, employers began preparing to comply with the Obama administration’s revisions to the Fair Labor Standards Act (FLSA) regulations for the executive, administrative, and professional overtime exemptions (“white collar” exemptions). If implemented, the revised overtime rule would dramatically expand the number of workers eligible for overtime pay and would impact most U.S. employers.

As Hurricane Harvey strengthens and threatens Texas and the Gulf Coast, it’s a good time for Texas employers to consider potential pay-related issues that can arise from inclement weather. Be it rising floodwaters or hurricanes in the Gulf (and the endless news coverage of the same), here are 5 tips to help your business when employees are absent due to inclement weather.
Continue Reading Employee Pay During Inclement Weather: Five Tips to Stay Afloat

U.S. Secretary of Labor Alexander Acosta announced in a June 7, 2017 press release that the U.S. Department of Labor (DOL) has withdrawn two of its recent administrator’s interpretations. One of the administrator’s interpretations, issued in 2015, focused on the misclassification of employees as independent contractors under the Fair Labor Standards Act (FLSA) and indicated

While no one knows exactly how Donald Trump’s election as President will impact labor and employment laws in the country, it is a safe bet that there will be changes. Because Trump was virtually silent on the campaign trail regarding the specifics of any employment law policies, we are left to speculate on any upcoming changes.  We provide a brief overview of our best educated guesses on what changes could be in store given the election results.  Given Trump’s position on government enforcement and his pro-business stance, there is an expectation of changes to several employment-related laws.
Continue Reading What Trump’s Election Means for Employment Laws

Internal pay audits are rarely enjoyable. Depending on the scope, these audits can be complex and require detailed analysis.  However, in the current legal climate, an internal audit can be extremely valuable and greatly reduce, or even eliminate, potential liability for wage and hour claims as well as pay equity claims.  As previously reported on this blog, increased scrutiny into pay equity discrimination, changes in EEO-1 reporting requirements, the Department of Labor’s joint employment efforts, and the updated FLSA exemption rules continue to place companies at greater risk of government audits, fines, and lawsuits.

Many employers may have already reviewed and updated their policies in anticipation of the changes to the “white collar” FLSA exemptions, which go into effect on December 1, 2016. But if your company has not yet done so, or to the extent you have not conducted a more comprehensive internal audit, your company should strongly consider doing so as soon as possible for several reasons.
Continue Reading Don’t Wait! Now Is the Time to Conduct an Internal Wage & Hour Audit