Jackson Lewis P.C. | jacksonlewis.com
2020 Wage &
Hour Developments: A Year in Review
WAGE & HOUR DEVELOPMENTS
:
A YEAR IN REVIEW
Jackson Lewis P.C. | jacksonlewis.com 2020 Wage & Hour Developments: A Year in Review
INTRODUCTION
The laws governing wages and hours of work affect
nearly everyone. How employees are paid, whether as
hourly non-exempt, salaried-exempt, tipped, or
commissioned sales workers, and how much they are
paid, are questions of deep interest to employees and
employers alike. And because the laws regulating
wages generally apply only to employees, as opposed
to independent contractors, who is an employee is also
a significant issue of concern. All these issues were
addressed this year by the U.S. Department of Labor
(DOL), the U.S. Circuit Courts of Appeal, and state
legislatures. In this annual review, we look back at some
of the significant developments in the laws governing the
payment of wages and the limitations on hours of work
at both the federal and state level.
The minimum wage continues to be a key issue. While
the federal minimum wage remains at $7.25 per hour
(the level set in July 2009), states, cities, and
municipalities continue their march toward increasing
the minimum wage, whether by legislation or at the ballot
box. More than 20 states will increase their minimum
wage rates in 2021, with California having the highest
statewide minimum wage at $14.00 per hour (for
employers with more than 25 employees). The small city
of Emeryville, California (population approx. 12,000)
boasts the highest minimum wage for any city at $16.84
per hour, while among large cities Seattle, Washington
leads the pack at $16.69 per hour (for large employers);
New York City’s minimum wage is $15.00 per hour.
Looking ahead to 2021, President-Elect Biden has
stated an intent to increase the federal minimum wage.
Currently, 19 states continue to apply the federal
minimum wage.
On the regulatory front, the DOL was particularly busy in
2020 through the first week of 2021. Implementing an
amendment to the FLSA regarding tipped workers, the
DOL issued new regulations permitting directly tipped
workers (e.g., servers) to share tips with non-tipped
workers (e.g., cooks and dishwashers), so long as an
employer does not utilize a tip credit. In the same Final
Rule, the DOL also formally rescinded the so-called
“20% Rule,” limiting the amount of time a tipped
employee can spend performing allegedly non-tipped
duties. However, the Final Rule is not yet effective and
may be stymied by the Biden Administration. And it
remains to be seen how much deference courts will give
to this new rule.
The DOL also issued a new Final Rule defining joint
employment (although that Rule was enjoined by a New
York federal district court) and another Final Rule,
proposed in 2020 and published during the first week of
January 2021, addressing independent contractor
status under the FLSA. That Final Rule likewise is not
yet effective and may be overridden by the Biden
Administration or the Democratically-controlled
Congress. The DOL also issued new detailed
regulations explaining how to calculate the “regular rate”
of pay for non-exempt employees, giving employers
more leeway in offering certain “perks” without having to
include the value of those perks in determining the
overtime rate.
At the state level, Colorado had some of the most
significant developments, rolling out a new law
governing wages and hours that breaks from federal law
in several respects, and providing greater protection to
employees than required by the FLSA (see infra), while
Florida (via the ballot box) and Virginia (via legislation)
joined the list of states that will raise their minimum wage
rate to $15.00 per hour within the next few years.
In light of several late-breaking wage and hour
developments during the final days of the Trump
Administration, this report will cover developments
through January 8, 2021.
NOTABLE FEDERAL COURT CASES
Unlike most years, in 2020 the U.S. Supreme Court did
not issue any decisions that focused either directly or
indirectly on wage and hour issues. Additionally, with
federal courts effectively shut down for the greater part
of the year due to the COVID-19 pandemic, fewer
decisions in general flowed from the courts of appeal
and district courts. There were, however, a few notable
decisions addressing wage and hour issues.
