Tag Archives: U.S. Department of Labor

DOL Unveiled Alliance with Franchise Restaurant to Improve Wage-and-Hour Compliance

By: Sheila Raftery Wiggins

The U.S. Department of Labor unveiled its alliance with a sandwich franchisor to help improve the franchisee owners’ compliance with wage-and-hour laws. Under this agreement, the franchisor agreed to share data and swap ideas about promoting compliance with labor laws and co-developing training materials for distribution to franchisee owners. The agreement also includes a commitment to “explore ways to use technology to support franchisee compliance, such as building alerts into the payroll and scheduling platform that [the franchisor] offers as a service to its franchisees.” WARNING: Agreements like these may support a joint employer determination. Whether this agreement is truly a “recipe for success” is in the fine details.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.

Commission, Incentive Pay and Nondiscretionary Bonus Are Impacted by DOL’s New Regs

By: Sheila Raftery Wiggins

The U.S. Department of Labor’s new regulations are effective on Dec. 1, 2016. The new regulations impact exempt employees, federal overtime pay and minimum wage requirements.

Significantly, nondiscretionary bonuses, commissions and incentive payments may be used to satisfy up to 10 percent of the minimum standard salary requirement if these payments are paid on a quarterly or more frequent basis.

Highly compensated employees (“HCEs”) are exempt from federal overtime pay and minimum wage if the employee currently has a minimum salary threshold of $100,000 per year. HCEs must receive at least the full standard salary amount each pay period on a salary basis without regard to the payment of nondiscretionary bonuses and incentive payments. Yet, nondiscretionary bonuses and incentive payments (including commissions) will count toward the total annual HCE compensation requirement.

If an employee does not earn enough in nondiscretionary bonuses and incentive payments (including commissions) in a given quarter to retain their exempt status, the employer may provide a “catch-up” payment at the end of the quarter to make up for the shortfall (up to 10 percent of the standard salary level for the preceding 13-week period).

ACT PROMPTLY: Consider your business, the structure of the incentive pay and how employees are classified – less than six months until the Dec. 1, 2016 regulations are effective.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.