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Payment of Wages
Session Ends; HEC Legislative Digest Updated After Adjournment Sine Die
Written by admin
Tuesday, 07 May 2013 11:17

The long days and late nights at the Capitol are over, and the 2013 Legislative Session has come to an end.

The Hawaii Employers Council (“HEC”) has an updated Legislative Digest for bills that were passed by the Legislature during the 2013 legislative session.  Fortunately for employers, only a few employment-related bills survived this legislative session.  A quick summary of the fate of employment bills from this year is as follows…

Bills that have already been signed into law by the Governor include:

  • Notice Period for UI Appeals Hearings
  • Pay Records and Pay Stubs

Bills that have been sent to the Governor for his approval (or veto) include:

  • Breastfeeding Break Time
  • Workers’ Compensation (“WC”) Medical Fee Schedule Study
  • Definition of “Small Employer” for Health Insurance

Bills that did not pass this year include:

  • Minimum Wage
  • Successor Employers and Employee Retention
  • Paycheck Withholdings for Restitution Cases
  • Organ Donor Leave
  • Social Media Password Privacy
  • Unemployment Insurance Contribution Rates Changes
  • Paid Sick and Safe Leave
  • Elimination of IMEs for WC Cases
  • Meal Breaks
  • Discrimination against Unemployed Individuals
  • Abusive Workplaces
  • GET Increase

In the next couple months, I will be giving several presentations on the 2013 legislative session, including HEC’s 2013 Legislative Update on June 21, 2013.  I will also be doing in-house presentations for several of HEC’s members and industry roundtable groups.  If you are able to join us at any of those presentations (and would like to find out what “OTBD” means), I hope to see you there.

To view the updated Legislative Digest, as well as an article highlighting several of the bills mentioned above, you can visit HEC’s website here:  HEC Offers Final Bill Summary for 2013 Session.

 
Minimum Wage Bill Dies At 11th Hour and 45th Minute
Written by admin
Saturday, 27 April 2013 07:27

Wow.  In a surprising turn of events last night, the legislature shelved a bill that would have resulted in several increases to the state’s minimum wage over the next several years.  Thus, the state’s minimum wage will remain at $7.25, at least for another year.

Throughout the entire 2013 legislative session, it was almost a certainty that the legislature was going to pass a bill raising the state’s minimum wage.  At the beginning of session, both the House and Senate introduced several bills that proposed an increase to the state’s minimum wage.  In addition, Governor Abercrombie proposed a minimum wage increase in his State of the State address.  Finally, even President Obama has proposed an increase to the minimum wage (at the federal level.)  Therefore, on the issue of an increase to the minimum wage, it appeared the question was not “if” but rather “when, and by how much?”

Towards the end of the 2013 legislative session, one bill relating to the minimum wage – SB 331 SD2 HD1 – remained.  This bill was introduced by the Senate, amended twice by the Senate, and then amended once by the House.  The latest version of the bill proposed an increase of $0.50 for the next three years (effective January 1, 2014, 2015 and 2016), and then a $0.25 increase on January 2017.  Thus, the proposed minimum wage scale was as follows:

  • January 1, 2014 – $7.75
  • January 1, 2015 – $8.25
  • January 1, 2016 – $8.75
  • January 1, 2017 – $9.00

Unlike former versions of this bill (and some other bills), the latest version of this bill did not tie future increases to the minimum wage with inflation.  The bill also had a blank ($___) amount for the state’s tip credit, which is currently just $0.25.

During conference, the Senate and House Conference Committee members met on SB 331 HD1 five times.  The last meeting occurred last night, Friday, April 26, 2013 at 5:45 pm, just 15 minutes before the legislature’s self-imposed deadline for passing all bills out of conference.  At that final meeting, House Conference Chair Mark Nakashima noted that (a) the proposed minimum wage increase signified a 24% increase from the current minimum wage and (b) the parties had spent 90-95% of their time on discussions over the proper amount of the tip credit, and as a result, were unable to reach a resolution on the amount and timing of the minimum wage increases.

In response, Senate Conference Chair Clayton Hee said it was a “damn shame” that they could not reach agreement on the minimum wage bill.

 
HEC Legislative Digest Updated After First Crossover
Written by admin
Thursday, 14 March 2013 10:01

The Hawaii Employers Council has an updated Legislative Digest, following First Crossover.  Some of the bills that are still alive address the following areas of law:

  • Successor Employers and Employee Retention
  • Social Media Privacy for Employees and Job Applicants
  • Breastfeeding for Employees
  • Paid Leave for Organ, Bone Marrow, or Stem Cell Donation
  • Minimum Wage Increases
  • Workers’ Compensation Medical Fee Schedule Increases

If you would like to view the Legislative Digest, you can view a copy here:  HEC Legislative Digest.

 
Pharmaceutical Sales Reps Exempt Under FLSA, For Now
Written by admin
Tuesday, 01 March 2011 11:30

The Ninth Circuit Court of Appeals recently ruled that Pharmaceutical Sales Representatives (“PSR”) constituted “outside salesmen” who were exempt from overtime under the Fair Labor Standards Act (“FLSA”).

Specifically, in Christopher v. SmithKline (9th Cir., Feb. 14, 2011), a PSR sued his employer under the FLSA alleging a failure to pay overtime.  The employer responded that the PSR was not entitled to overtime because he was an “outside salesman” under the FLSA.  The district court agreed with the employer and ruled that the PSR was not entitled to overtime under the FLSA.  The court also noted that the PSR was not an hourly employee, but instead earned salaries well above the minimum wage – sometimes up to $100,000 a year – and received bonuses in lieu of overtime as “an incentive to increase their efforts.”

On appeal, the PSR argued that he did not engage in “sales” as defined by the FLSA.  The Ninth Circuit Court of Appeals rejected this argument, and noted that the phrase “other disposition” in Section 3(k) of the FLSA’s definition of “sale” was open-ended and applied to the activities that were performed by PSR’s.  The court also recognized that PSR’s were hired for their sales experience, were trained in sales methods, encouraged physicians to prescribe their products, and received commissions-based compensation.  The court then explained that the fact that the “buyer” in such transactions is really the physician, and not the ultimate end-user (the patient), because it is the physician who makes the decision on what medication to prescribe to a patient.  Therefore, pharmaceutical sales are “unlike conventional retail sales” and, in this context, the “sale” is “the exchange of non-binding commitments between the PSR and physician at the end of a successful call.”

The Christopher decision is good news for pharmaceutical companies, for now.

Just yesterday, in a case involving the same issue, the U.S. Supreme Court declined to review a decision by the Second Circuit Court of Appeals in Novartis v. Lopes (2nd Cir., July 6, 2010).  In that case, the court ruled that pharmaceutical sales representatives did not “sell” drugs, and therefore, were not outside salesmen who would be exempt from overtime under the FLSA.  The fact that the Supreme Court declined to review the decision in Novartis is very interesting, because it could mean that the high Court is content to let the decision stand.  If the Supreme Court later accepts an appeal for the Christopher case, however, it could be bad news for pharmaceutical companies because it could mean that the high Court might be inclined to reverse the Ninth Circuit’s decision.  We will need to stay tuned to see what happens with this case.

You can read a copy of the Christopher decision here, and a copy of the Novartis decision here.

 
Time Spent Donning and Doffing Uniforms Not Compensable
Written by admin
Wednesday, 12 May 2010 21:41

The Ninth Circuit Court of Appeals recently issued a decision in Bamonte v. City of Mesa (9th Cir. March 25, 2010), where the court addressed whether the City of Mesa was required to compensate police officers for time spent donning and doffing their uniforms and accompanying gear.

The court ruled that, because the police officers had the option of donning and doffing their uniforms either at work or at home, time spent on such activities was not compensable under the Fair Labor Standards Act.  The police officers argued that it was “preferable” to don and doff their uniforms and gear at the police station.  The court, however, responded that the officers were not required to donn or doff their uniforms at work, and could choose to donn and doff their uniforms at home (for which time spent is generally not compensable.)

In reaching its decision, the court also noted that the three stage inquiry in determining whether certain activities are compensable are (1) whether the activity constituted “work”; (2) whether the activity was an “integral and indispensable” duty; and (3) whether the activity was de minimis.  In this case, the donning and doffing of uniforms was not “integral and indispensable” because the police officers were not required to perform such activities while at work.