Fair Labor Standards Act Requirement Buried in Health Care Reform

An unheralded and little discussed portion of the Patient Protection and Affordable Care Act, signed into law by President Obama on March 23, 2010, amends the Fair Labor Standards Act (FLSA). 29 U.S.C. section 207(r)(1) now requires employers to provide “a reasonable break time for an employee to express breast milk…” This requirement continues for one (1) year after the birth of the employee’s child. The amendment also requires employers to provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public…” in which to express breast milk. Fortunately, employers are not required to compensate employees for this break; however, several concerns are immediately raised by the amendment. For example, what is a reasonable break? 10 minutes? 30 minutes? An hour? This is an issue that will be determined by the courts or through regulations issued by the Department of Labor as the law is not clear. Additionally, some employers may find it difficult to provide a place that is shielded from view and free from intrusion.

This requirement applies to every employer. If an employer has fewer than 50 employees, it may be excluded from the requirements of the amendment, but only if permitting the breaks would cause an “undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.” This means the burden is on the employer to demonstrate an undue hardship.

The amendment specifically provides that it will not preempt state laws that afford greater protections to employees. Ohio and Florida currently have no such laws. Interestingly, the Supreme Court of Ohio ruled in August 2009 that an employee terminated for taking unauthorized breaks to pump breast milk was not discriminated against by her employer. Allen v. totes/Isotoner Corp., 129 Ohio St.3d 216. The outcome of this case would be drastically different today given the amendment and the requirement to provide a reasonable break.

Author: Jon Secrest


Municipality May Adopt Overtime Exemption Without Giving Notice to Employees

On March 17, 2010, the First Circuit Court of Appeals issued its decision in Calvao v. Framingham, First Cir. Case No. 09-1648, affirming summary judgment for the town of Framingham, Massachusetts.

Framingham police officers filed a class suit against their employer, claiming that the town had failed to pay sufficient overtime wages in violation of the Fair Labor Standards Act (FLSA). The plaintiffs asked that the district court issue declaratory judgment that Framingham was not eligible for the FLSA’s public safety exemption because the town failed to give notice to affected employees. Under the FLSA, nonexempt employees other than public safety personnel are generally entitled to payment “at a rate not less than one and one-half times” their regular wages for any time worked in excess of 40 hours in a seven day period. However, the public safety exemption sets a higher threshold number of hours that must be worked in a 28 day work period, or a proportional number of hours in a shorter work period of at least seven days, before public safety personnel are entitled to overtime compensation. The Secretary of Labor set the limit for law enforcement personnel to 171 hours over a 28 day period, or about 43 hours every seven days.

In affirming the district court’s decision to grant summary judgment to the town of Framingham, the court of appeals first discussed the history of the exemption at issue. The court emphasized that nothing in the relevant statute specifies that a public employer is required to provide notice to employees. Furthermore, the court’s review of the legislative history of the exemption revealed that Congress explicitly rejected a proposal that would have mandated employee agreement before the exemption was adopted. Based on its analysis, the court specifically rejected the plaintiffs’ argument that Framingham was not eligible for the public safety exemption because it had not given notice to the police officers’ union or individual police officers prior to adopting the exemption.

Author: Ryan Bonina


HIRE Act Provides Incentives for Employers

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law. The HIRE Act affords private sector employers (including not-for-profit agencies and private colleges and universities) a Social Security payroll tax exemption if the employer hires individuals after February 3, 2010 who have been unemployed for at least 60 days. This savings will apply to the eligible employer’s portion of the tax paid between March 18, 2010 and January 1, 2011 and an eligible employer can receive up to $6,622 per qualified worker it hires during the relevant time period. Importantly, there is no limit to the number of qualified workers an employer may hire to take advantage of the HIRE Act. However, eligible workers must attest in writing that they have not been employed for more than 40 hours in the past 60 days.

Employers will also receive a tax credit in the lesser amount of $1,000 or 6.2% of the wages paid if they retain the qualified new employee for at least 52 consecutive weeks. To be eligible for that credit, an employer must pay the qualified new employee, during the second half of that 52-week period, at least 80% of what it paid the employee during the first half of that 52-week period.

The HIRE Act also includes a provision extending the small business “expensing” tax break for another year. This allows small businesses to write off up to $250,000 of certain capital expenditures in lieu of depreciating those costs over time. Without this one-year extension, the deduction would have only been $125,000 with the rest of the costs recovered over time through depreciation.