Farm exemptionGiven the revised FLSA white-collar exemption regulations, and the associated December 1, 2016 hoop-la about the new $47,476 threshold, it is easy to get tunnel vision with those exemptions. If an employee doesn’t fit in them, they must be paid minimum wage and overtime, right? Not necessarily! Since they are often typical to a specific industry, I don’t even often think of them unless a client fits the mold. So, that is why I thought I would blog about the other, often forgotten exemptions. Yes, there are many other exemptions from either minimum wage, overtime, or both.  I won’t write about any one of these in detail, but certainly gives me ideas for future blogs (teaser!). Here they are:

  • Commissioned sales employees (must be retail or service establishment [these two terms are VERY specific and have their own exemptions] and more than half of income is commissions and average 1.5 times minimum wage)
  • Computer professionals (must make at least $27.63 per hour)
  • Drivers, driver’s helpers, loaders and mechanics employed by a motor carrier with duties affecting safety of operation of vehicles in interstate or foreign commerce (this gets sticky)
  • Farm workers on small farms (no more than 500 “man-days” (at least 1 hour of work in a day) of labor in any 3 month period during the previous calendar year)
  • Salesmen, partsmen and mechanics at automobile dealerships (this is actually under a lot of interpretations these days so be careful – ex.-  a mechanic shop may not be treated the same as a automobile dealership – even if related to the dealership)
  • Seasonal and recreational establishments
  • The DOL provides a list of others who are exempt from overtime (OT), minimum wage (MW) or child labor laws (CL) – while I try not to regurgitate material already available on the internet, this is too handy to not share:
    • Aircraft salespeople – OT
    • Airline employees – OT
    • Amusement/recreational employees in national parks/forests/Wildlife Refuge System – OT
    • Babysitters on a casual basis – MW & OT
    • Boat salespeople – OT
    • Buyers of agricultural products – OT
    • Companions for the elderly – MW & OT
    • Country elevator workers (rural) – OT
    • Workers with disabilities – MW
    • Domestic employees who live-in – OT
    • Farm implement salespeople – OT
    • Federal criminal investigators – MW & OT
    • Firefighters working in small (less than 5 firefighters) public fire departments – OT
    • Fishing – MW & OT
    • Forestry employees of small (less than 9 employees) firms – OT
    • Fruit & vegetable transportation employees – OT
    • Homeworkers making wreaths – MW, OT & CL
    • Houseparents in non-profit educational institutions- OT
    • Livestock auction workers – OT
    • Local delivery drivers and driver’s helpers – OT
    • Lumber operations employees of small (less than 9 employees) firms – OT
    • Motion picture theater employees – OT
    • Newspaper delivery – MW, OT & CL
    • Newspaper employees of limited circulation newspapers – MW & OT
    • Police officers working in small (less than 5 officers) public police departments – OT
    • Radio station employees in small markets – OT
    • Railroad employees – OT
    • Seamen on American vessels – OT
    • Seamen on other than American vessels – MW & OT
    • Sugar processing employees – OT
    • Switchboard operators – MW & OT
    • Taxicab drivers – OT
    • Television station employees in small markets – OT
    • Truck and trailer salespeople – OT
    • Youth employed as actors or performers – CL
    • Youth employed by their parents – CL

Also, keep in mind that these are federal FLSA exemptions. Minnesota state law may provide for more protection for employees and thus, the employee may be entitled to overtime (after 48 hours) and/or minimum wage, and/or not be allowed to work as a child in certain positions.

For example, while the FLSA exempts an automobile dealership salesperson, parts person or mechanic, Minnesota state law only allows the exemption if the individual is “paid on a commission or incentive basis” (otherwise the laws read exactly the same). So, you can see how 7 short words can change an entire scope of an exemption between federal and state law. This is why I get heartburn when Minnesota employers determine an exemption by Google search alone! Accordingly, if you think one of the above may apply, I would highly encourage you to dig deeper to be sure you know how the federal, state and courts are interpreting the exemption that you think may fit. And as I often say, if it seems too good to be true, it probably is.

FBAThe National Labor & Employment Law Section is proud to sponsor its third-annual
Minneapolis seminar, “Employment Law in a Nutshell.” This seminar is being cosponsored by the Younger Lawyers Division (YLD), the Law Students Division (LSD), and the Minnesota Chapter of the FBA. The seminar is a live, half-day CLE and will take place on the afternoon of Wednesday, August 31, 2016 at the University of St. Thomas School of Law in Minneapolis (Room 321), 1000 Lasalle Ave., Minneapolis, MN 55403.

The event will focus on the basics of labor and employment law, featuring three hour-long presentations:

1:00 pm Welcoming Remarks
Corie Tarara, Seaton | Peters | Revnew
Vice Chair of the FBA Labor & Employment Law Section

1:15 – 2:15 pm Anti-Discrimination, Harassment and Retaliation
Doug Micko, Teske Micko Katz Kitzer & Rochel, PLLP

2:20 – 3:20 pm Wage and Hour & Employee Leave Rights
Betsy Chesney, Cornell Smith Mierl & Brutocao, LLP (Austin, Texas)
Treasurer of the FBA Labor & Employment Law Section

3:30 – 4:30 pm Panel Presentation: Minnesota Employment Law Basics
Barbara D’Aquila, Norton Rose Fulbright
Thomas Marshall, Engelmeier & Umanah PA

4:30 – 6:00 pm Social Hour (Pizza & Beverages provided, Cash Bar)
Sponsored by the FBA Labor & Employment Law Section

This CLE is designed for all attorneys and law students who have any interest in employment and labor law; not only labor and employment practitioners. Lawyers and students in all practice areas, as well as members of the judiciary, are encouraged to attend. 3.0 Minnesota CLE credits have been applied for.  Cost is $25 for FBA members, $35 for non-members and FREE to law students!

In addition, the L&E Section is proud to sponsor a social hour with pizza, beverages and a cash bar following the seminar. All participants are encouraged to attend the event and stay to meet and discuss the topics afterward with each other. Please register for this event by completing the attached registration form and sending the registration fee (payable to the Federal Bar Association) to:

Corie Tarara
Seaton Peters Revnew
7300 Metro Blvd # 500
Minneapolis, MN 55439

I hope you can make it to this exciting event!

VoteIn a huge turn of events, on August 22, 2016, Hennepin County District Court Judge Susan M. Robiner resurrected the $15 minimum wage ballot question for the City of Minneapolis to put on the November 8, 2016 ballot. The case, brought by individuals related to 15 Now MN, is styled Vasseur et al. v. City of Minneapolis et al., Court File No. 27-CV-16-11794, (Minn. Fourth Judicial District, Aug. 22, 2016), and the decision can be found here. The ballot question, drafted by the City of Minneapolis Attorney, will be as follows:

“Proposal to Amend the Minneapolis City Charter to require a $15 Minimum Wage for Employees Working in Minneapolis.

Shall the Minneapolis City Charter be amended to require all employees working within the geographic boundaries of the City of Minneapolis to be paid a $15 minimum wage by their employers, regardless of the employers’ geographic location, to be phased in starting at $10.00 as of August 1, 2017 and increasing to $15 by the year 2020 for employers with 500 or more employees and by the year 2022 for employers with fewer than 500 employees and increasing thereafter based upon the non-seasonally adjusted consumer price index as published by the U.S. Department of Labor, such charter provisions to be enforced by the City of Minneapolis and permitting private civil actions in a court of law?”

How Did We Get Here?

As you may recall, because my blog is just so memorable…on July 28, 2016, I wrote about Vote for 15 MN’s petition to the City of Minneapolis to amend its Charter to require a $15 minimum wage by 2020 for large employers, and 2022 for small employers.  Accordingly, if you want to read all about the implications of the proposed amendment you can find it that post (in other words, I won’t regurgitate it in this post though it is all applicable again).  However, later that day, the City of Minneapolis Attorney publicly filed a memorandum declaring that the proposed Charter was inappropriate for a ballot referendum, as I wrote about here. That has now been undone.

Judge Robiner’s opinion summarized her legal analysis supporting the ballot question thus:

  • “No Minnesota case law supports the City’s claim that general welfare legislation may only be proposed through initiative and referendum;
  • No Minnesota case law supports the City’s claim that ‘all local municipal functions’ means only ‘the form, structure, and functioning of the municipal government’;
  • Minnesota cases have allowed district courts to enjoin elections only where the proposed charger amendment was unconstitutional or conflicted with state law neither of which are even argued by the City; and,
  • For a court to enjoin a ballot initiative based on its content when that proposal has garnered the proper number of signatures and proceeded properly could reasonably be seen as overreaching its specific role under Minn. Stat. § 204B.44 and its general role in a government that respects separation of powers.”

What’s Next?  

Well, the Court ordered the City of Minneapolis to prepare a ballot for the November 8, 2016 election that includes the Vote for 15 MN proposed amendment. In order to pass, at least 51% of voters must vote in favor of the amendment.  If that happens, the first wage increase will be August 1, 2017. It appears 15 Now MN has set up a National Day of Action for $15/hour on September 12, and will start knocking on doors on September 17. However, the City may also appeal Judge Robiner’s Order to the Minnesota Court of Appeals. Since I was dead wrong on how this would turn out in my first post, I’m not even going to make a prediction on this third post!  Stay tuned…

minwage_posterWith the August 1, 2016 increase in Minnesota’s minimum wage, employers should be sure to replace your Minnesota minimum wage poster – which is a required posting. You can download it for free here.  If you have one of those 21-in-1 or whatever posters, you can certainly just tape this on top of the old – no need to buy a completely new poster. However…there are two more to go.

On the Federal front, the FLSA minimum wage poster has also changed effective August 1 (and thus must be posted) – that poster can be downloaded for free here. Finally, the Employee Polygraph Protection Act poster must be updated – that can be found here.

interview-1018333_1920Minnesota employers with a location in Massachusetts should take note that Massachusetts passed a new Pay Equity Act yesterday, which, among other things, makes it unlawful to ask applicants about their salary history effective January 1, 2018. Specifically, the Pay Equity Act provides:

“(c) It shall be an unlawful practice for an employer to:

(1) require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages;

(2) screen job applicants based on their wage, including benefits or other compensation or salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history;

(3) seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee…”

I won’t go much beyond that, as this won’t apply to many Minnesota employers,  but if it does apply to your business, you can find the full text here. I would not be surprised if we see something like this down the pipeline here in Minnesota in the future.

CookUnless you’ve been sleeping for the past decade, you know that Minnesota is an at-will employment state. Thus, either an employee, or an employer, may terminate the employee’s employment at any time, with or without notice. But what happens if an employee is terminated for not sharing tips with other employees? Despite not losing tips (the employee didn’t share the money as requested, after all), the Minnesota Court of Appeals held in Burt v. Rackner, Inc. d/b/a Buny’s Bar & Grill (MN App. June 27, 2016), that the employee’s termination of employment for refusing to share tips resulted in lost employment, and thus, he had an actionable claim to recover future lost wages:

Where an employer requires, as a condition of employment, that an employee consent to working rules expressly prohibited by the MFLSA, the employee is authorized by the statute to sue for damages normally associated with a wrongful-discharge cause of action.”

In other words…although the server’s employment was “at-will”, because his employment was terminated for failing to follow the employer’s directives to share tips, which were in violation of the Minnesota Fair Labor Standards Act (MnFLSA), he was “wrongfully discharged” contrary to law. Thus, an exception to at-will employment is born.

Recall, the MnFLSA prohibits employers from requiring employees to share tips. Minn. Stat. 177.24, Subd. 3. This is not new. Though most servers will share tips out of respect for their teammates in the back of the house, an employer cannot require tip sharing or tip pooling. Often, the back of the house will self-regulate this bad form, whether conscious or subconscious (providing faster service and help to those who share tips). What is new, is the Court holding that an employee can sue an employer when that employee is fired for refusing to comply with an employer’s illegal condition of continued employment based on a violation of the MnFLSA.

In this case, the employee did not lose any wages – he didn’t share after all – but he was fired for not sharing wages (which he can’t be required to do by an employer) and thus, he lost future wages.  The takeaway? Employers should not require tip-sharing or terminate an employee for failing to share tips. Chances are the employee will figure it out soon enough with the help of his or her teammates in the back of the house.

Well, I didn’t see this coming.  As I wrote about earlier today, the group 15 Now MN petitioned the City of Minneapolis to amend its Charter to require a $15 minimum wage by 2020 for larger employers, and by 2022 for small employers. The City of Minneapolis Attorney publicly filed her memorandum today, declaring that the proposed charter amendment was really an ordinance in disguise, as the charter does not allow voter initiatives for the passage of ordinances by a ballot referendum. If the City Council does not listen to her advice, and places it on the ballot anyway, her draft ballot question can be found here.

Interestingly, the City Attorney noted that the memorandum did not address whether the City even has the authority through legislative action of the City Council to adopt such an ordinance that is higher than state law.  She noted such question was addressed in a separate memorandum subject to the attorney-client privilege.  Thus, the fight is clearly not over.

If you have enjoyed reading my blog as much as I have enjoyed writing it, please consider nominating it for the ABA Journal’s Blawg 100 Amici!  I may be small, but help me be mighty! Nomination can be made at the ABA Journal’s website here. Continue Reading Do You Love My Blog?! Shameless Plug For the ABA Journal Blawg 100 Amici!

Mlps SkylineOn July 20, 2016, the Vote 15 Now MN group presented a petition for a proposed amendment to the Minneapolis City Charter which would incrementally increase minimum wage for work performed in Minneapolis starting August 1, 2017. By August 1, 2020, minimum wage for employers with 500 or more employees (nationwide) who work more than 25 hours per year in Minneapolis, would be paid no less than $15 per hour. For smaller employers, it would be stepped up slower, with a August 1, 2022 target date. Keep in mind, that Minnesota increases its state minimum wage for larger employers to $9.50 and small employers to $7.75 effective August 1, 2016, as I previously wrote about here.

To put this into perspective, a full-time (40 hour) worker would make a minimum wage of $31,200 – more than the current threshold for an exempt employee. The December 1, 2016 threshold for exempt employees ($47,476) is the equivalent of $22.83 per hour.  Thus, Minneapolis employees who work 54 hours or more per week each week on average, would hit the new salary threshold of $47,476.  Now, they would still have to meet the duties test, but I’m just saying…there may be some tension in those industries where an hourly employee who works a lot of hours could in fact be paid more than a “white collar” employee who is paid just above the threshold.

How Did It Get to This Point?

On June 29, 2016, Vote 15 Now MN submitted a citizen’s petition with (purportedly) 20,684 signatures of Minneapolis registered voters, to amend the City Charter on the November 8, 2016 ballot (the Presidential General Election). On July 14, the Charter Commission transmitted the petition to the City Council. On July 20, the City Clerk verified that the petition was sufficient and in compliance in its Audit Report. Notably, the City Clerk determined that of the supposed 20,684 signatures, only 40% – 8,418, were validated as being a registered voter with the correct address (the group needed 6,868 to be considered). The remaining 12,266 signatures were not found on the voter list, a blank line, missing or incorrect address, line crossed off, duplicate signature or a missing, incorrect, or illegible signature.

The Proposed Charter Amendment

The amendment proposes to amend Charter Article IV, City Council, § 4.1, Function, by adding paragraph (g), Minimum Wage.  The meat of the amendment is thus:

“(A) Employers with 500 or more employees shall pay each employee expected to work 25 or more hours in a calendar year within the geographic boundaries of the City for each hour worked within the geographic boundaries of the City an hourly minimum wage of no less than:

(I) Starting August 1, 2017: $10.00,

(II) Starting August 1, 2018: $11.75,

(III) Starting August 1, 2019: $13.50,

(IV) Starting August 1, 2020: $15.00,

(V) Starting August 1, 2021, and each August 1 thereafter, the hourly minimum wage shall be adjusted to keep pace with the rising cost of living.

(B) Employers with fewer than 500 employees shall pay each employee expected to work 25 or more hours in a calendar year within the geographic boundaries of the City for each hour worked within the geographic boundaries of the City an hourly minimum wage of no less than:

(I) Starting August 1, 2017: $10.00,

(II) Starting August 1, 2018: $11.00,

(III) Starting August 1, 2019: $12.00,

(IV) Starting August 1, 2020: $13.00,

(V) Starting August 1, 2021, $14.00,

(VI) Starting August 1, 2022: $15.00,

(VII) Starting August 1, 2023, and each August 1 thereafter, the hourly minimum wage will not be less than the minimum wage set by subsection (2)(A)(V) of this section 4.1(g).”

To determine employer size, the number of employees includes all employees (full or part-time) that work for the employer anywhere in the United States. If an employer is a franchisee (typically fast-food), all employees employed by other franchisees of the same franchisor are included.

An employer would not be allowed to apply gratuities towards this minimum wage. And if an employer fails to pay the minimum wage?  The employee will have a private right of action to bring a lawsuit in court, and may recover back wages plus two times (2x) the backwages amount as damages, as well as attorneys’ fees, costs and interests, as well as an administrative penalty and other legal and equitable relief.

What’s Next?

The City Council must determine the language for the November 8 ballot question, but has deferred this to the City Attorney to draft with a deadline of today, July 28, 2016. If the City Attorney determines it is proper for placement on the ballot, the Committee of the Whole will then review and recommend the final action on August 3, 2016 for the City Council vote on August 5. If passed (which I wholly expect it to) and put on the ballot in November, then at least 51% of voters must vote in favor of the amendment. If adopted, the amendment takes effect 30 days after the election, which means the first wage increase will be August 1, 2017.

When isn’t an asset purchase an asset purchase?  When the purchase of the assets are intended to run the business as a going concern.  So said the Eighth Circuit Court of Appeals on July 5, 2016, in Day v. Celadon Trucking Services, Inc.  So, what’s the big deal?  Well, on a 10,000 foot level, in a typical asset purchase (versus stock purchase), employees may or may not be hired by the new entity. In this case, the buyer, Celadon Trucking Services, Inc., decided to hire 201 of the 658 employees of the seller, Continental Express, Inc.  The rest remained employed by the seller to terminate. Unfortunately, the seller did not provide the remaining employees with the required 60 day Worker Adjustment and Retraining Notification (“WARN”) Act notice for a mass layoff. Thus, the terminated employees sued the buyer (deep pockets since the seller was broke), seeking damages under the WARN Act.

Here is where things take a detour, and to those of us on the employer side, defies logic at first blush.   Continue Reading 8th Circuit Holds That A Buyer In An Asset Purchase May Be Liable Under the WARN Act For the Seller’s Failure to Provide Advance Notice of Mass Layoff