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This week’s stories include ...
1. High Court Rules Auto Service Advisors Exempt from OT Our top story: The Supreme Court of the United States rejects a narrow construction for Fair Labor Standards Act (“FLSA”) overtime exemptions. The U.S. Court of Appeals for the Ninth Circuit held that certain auto service advisors were not exempt because their position is not specifically listed in the FLSA auto dealership exemption. For this ruling, the Ninth Circuit relied on the principle that such exemptions should be interpreted narrowly. In a 5-4 decision last week, the Supreme Court found no “textual indication” in the FLSA for a narrow construction. Applying a “fair interpretation” standard instead, the Supreme Court ruled that the exemption applies to service advisors because of the nature of their work. Paul DeCamp, from Epstein Becker Green, has more:
“What the Court did in Encino Motorcars was to overturn about 73 years of its own precedent. For the retail auto industry, we now have a ruling that under federal law, service advisors are exempt from overtime. Now, most car dealerships have several service advisors, and, so, the exempt status of these individuals will affect the payroll at these companies. There may still be issues under state law, but for now, this is a significant victory for the industry. More generally, this change in how the courts are going to look at FLSA exemptions across the board can affect virtually every industry in our economy.”
2. Congress Restricts Tip Pooling Congress rejects part of the Department of Labor’s proposed tip-pooling rule. Under the recently signed Consolidated Appropriations Act, Congress has amended the FLSA to address tip pools. The amendment prohibits employers from keeping employees’ tips or distributing any portion of the tips to managers or supervisors. Non-tipped, back-of-the-house employees, like cooks and dishwashers, may participate in tip pools when the employer pays at least the minimum wage and does not take a tip credit. The amendment also provides for enhanced damages and penalties when employees are deprived of tips.
3. New Record for Dodd-Frank Whistleblower Awards The Securities and Exchange Commission (“SEC”) shows whistleblowers the money. The agency announced that it recently issued the largest whistleblower awards under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in history, affirming the payout of over $49 million to two whistleblowers and over $33 million to a third for information that led to successful securities law prosecutions. Dodd-Frank established the whistleblower "bounty" program in 2010, and the SEC reports that it has awarded more than $262 million so far, to 53 whistleblowers.
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4. New Jersey Court Extends Unemployment to Resigning Employee
A New Jersey court allows unemployment benefits for employees who quit. The state’s Appellate Division has ruled that employees who choose to leave their jobs may be eligible for unemployment benefits in limited circumstances. The panel found that a counselor who resigned was still eligible for benefits because her employer threatened termination. The employee had unexpected child care issues that would have affected her ability to work assigned shifts. If she did not show up to work and was then fired, she would have been eligible for benefits. The panel ruled that the employee was eligible for unemployment benefits despite her resignation.
5. Tip of The Week
Dr. Leo Flanagan, Co-Managing Partner for The Center for Resilience, offers some tips for building employee engagement through resilience:
“Burnout across the U.S. workforce has risen to 50%. That means every one of two employees that work for you is emotionally exhausted, cynical, and feels like what they do doesn't make a difference. Employee engagement has been stuck at 30% for two decades. These two facts alone explain why worker productivity in the U.S. has been stagnant. The answer to both of these issues is to build the resilience of your workforce. You can screen candidates for your opening positions for resilience and hire those who are the most resilient. At the same time, you can develop the resilience of your existing employees reliably and efficiently. Have your employees take a very simple online assessment, less than 15 minutes, that gives their burnout readings and their resilience profile. And that'll tell them and you exactly what they need to do to become more resilient and therefore more productive. And finally, build a culture of resilience.”