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"Zinsergram" Legal UpdatesZinser Law Logo

Zinsergrams are a series of columns by L. Michael Zinser, attorney at The Zinser Firm, P.C., focusing on legal issues faced by the newspapers of New York State.


U.S. Department of Labor Overtime Rule Litigation Update

March 22, 2017

As we have previously informed the readers of this column, the U.S. Department of Labor immediately appealed the nationwide injunction to stop the implementation of the agency’s final Overtime Rule. That appeal was filed with the U.S. Court of Appeals for the Fifth Circuit.

In the original briefing schedule, briefing was to be completed on January 31, 2017. Prior to that date, the Department of Labor had filed a Motion to extend by 30 days the due date for its Reply Brief – i.e. until March 2, 2017. The Court granted that Motion.

On February 17, 2017, the Department of Labor filed another Motion to extend by an additional 60 days the time for filing its Reply Brief. The Department of Labor’s reason for requesting the second extension was to “allow incoming leadership personal adequate time to consider the issues…”

On February 22, 2017, the Court granted the Department of Labor’s Motion, making May 1, 2017 the new due date for the Reply Brief. This is very good news. By May 1, there will certainly be a new Secretary of Labor, who will then have the authority to stop or withdraw the appeal and accept the decision of the lower court. Let us hope that happens.

Download the full column here (PDF). 


New York Newspapers Have Major Legislative Success

November 30, 2016

After a more than two-year battle, the New York News Publishers’ Association (NYNPA) and its members have succeeded in passing legislation to make it much easier to prove the independent contractor status of newspaper carriers under the State’s unemployment, workers’ compensation, and wage and hour laws.

The impetus for legislative action was the New York Department of Labor’s aggressive position against independent contractor status in the unemployment benefit and tax arena. In 2000, NYNPA had negotiated with the Department of Labor “Guidelines for Determining Worker Status: Newspaper and Shopping Guide Publishing Industry.”
For several years, the Guidelines worked very well. Publishers could rely upon the Guidelines with certainty to structure their independent contractor relationships. The New York Department of Labor recognized those independent contractor relationships in compliance with the Guidelines.

Beginning around 2010, the Department of Labor began ignoring its own Guidelines to aggressively pursue employee status for newspaper carriers. Publishers fought back, achieving independent contractor victories at the initial level, only to see those victories reversed by the Appeals Board – which stated that it was not bound by the Guidelines.
           

It was at that point that NYNPA decided it needed to act. In 2015, the industry was successful in persuading both the Assembly and the State Senate to pass favorable legislation. Unfortunately, Governor Andrew Cuomo vetoed the legislation in November of that year.

The articulated reason for Governor Cuomo’s veto was that, if the legislation went into effect, the State of New York would lose its Federal Unemployment Tax Act (FUTA) credit from the federal government. This was just false information fed to the administration by labor-friendly bureaucrats in the U.S. Department of Labor. Fortunately, the Cuomo administration eventually realized that its veto was not based on the facts.

In 2016, NYNPA introduced new legislation that was actually more favorable than the legislation vetoed in 2015. That legislation provides:

  1. For purposes of unemployment benefits and tax, the legislation tracks the federal Direct Seller Amendment in the Internal Revenue Code. A newspaper carrier is excluded from the statute if the parties have a written contract; the contract compensation to the newspaper carrier is based on sales or output and not hours worked; and the written contract provides that the independent contractor will not be treated as an employee for federal tax purposes.
  2. For purposes of workers’ compensation law, newspaper carriers who deliver newspapers to the consumer are not covered, provided they meet the above-three requirements contained in the federal Direct Seller Amendment.
  3. For purposes of the state wage and hour law, newspaper carriers are excluded on the same basis that they are excluded under the federal Fair Labor Standards Act.

Under the leadership of NYNPA President Diane Kennedy, the industry mobilized to get the legislation passed. Publishers wrote letters to the Governor and their state legislators, and they had face-to-face meetings at every opportunity. The bill eventually passed by large majorities in both the Assembly and the State Senate.
On November 28, 2016, Governor Cuomo finally signed the new legislation. This is a great victory for the newspaper industry in the State of New York. It was a Churchillian fight in which the industry just would not give up! It was a real team effort.

Editor’s Note: Michael Zinser, representing Gannett Co., Inc.; Advance Publications; Community Newspaper Holdings, Inc.; and other Publishing Companies, worked closely with NYNPA throughout this two-year process. Zinser was the primary drafter of the legislation.

Download the full column here (PDF). 


Update on Litigation Filed to Stop the DOL Overtime Rule

November 4, 2016

As reported previously, on September 20, 2016, a coalition of more than 55 Texas and national business groups, including the U.S. Chamber of Commerce, filed a lawsuit in federal court in Texas. The lawsuit asks the court to vacate and set aside the Department of Labor’s new Overtime Rule, set to take effect December 1, 2016. Further, it asks the court to issue an injunction, postpone the effective date of the Overtime Rule, and to maintain the status quo, pending the court’s review of the lawsuit. A second lawsuit was also filed by the Attorney Generals of Nevada, Texas and 21 other states to enjoin the new Rule.

On October 19, 2016, the federal court consolidated the two cases. On November 16, 2016, the court will hold a hearing to consider the Motion for a Preliminary Injunction filed by the Attorney Generals of Nevada, Texas, and 21 other states. One possible result of this hearing is that the court will enjoin and halt the December 1, 2016 implementation of the Rule.
The business groups have filed a Motion for Summary Judgment. That Motion was filed on October 14, 2016. The court has scheduled a hearing on November 28, 2016 to hear arguments on that Motion.
The Judge assigned to the case is Amos L. Mazzant, III. He was appointed to be a Judge of the U.S. District Court for the Eastern District of Texas on December 19, 2014 by President Obama.

Update Report on Congressional Action to Limit The U.S. Department of Labor Overtime Rule

This writer previously reported on Representative Kurt Schrader’s bill to phase in the overtime threshold over a four-year period. This legislation now has seven bipartisan cosponsors and counting.

Senator Lamar Alexander (Republican-Tennessee) has introduced Senate Bill 3464, which also would gradually phase in the Department of Labor’s Overtime Rule over five years, starting with a salary threshold increase to $35,984 on December 1, 2016; the bill provides for salary threshold increases in 2018 and 2019, but no increase in 2017. The bill provides for the Department of Labor’s $47,476 threshold to take effect on December 1, 2020. Like the House bill, this legislation would also prohibit the automatic annual increases to the salary threshold dictated by the Department of Labor’s Final Rule.

Last week, the U.S. House of Representatives passed H.R. 6094 by a vote of 246 to 177 to delay the effective date of the final overtime regulations from December 1, 2016 until June 1, 2017. Republican Senators James Langford (Oklahoma), Lamar Alexander, and Susan Collins (Maine) have introduced companion legislation to the House’s delay bill.

I urge you to contact your Member of Congress and U.S. Senators, urging them to support the above-described legislation.

Download the full column here. (PDF)


Getting Ready for the New FLSA Overtime Rule: Newspaper Q&As

June 13, 2016

            As readers will know from my previous column, the U.S. Department of Labor recently finalized its Proposed Rule to increase the salary threshold necessary for employees to be classified as exempt from overtime. The Final Rule, which goes into effect on December 1, 2016, has prompted many questions from newspapers. Here are a few I have recently received regarding potential exemptions from the new Rule:

Question – Our District Managers regularly deliver down routes, including home delivery. Could our newspaper use the Section 13(d) exemption from minimum wage and overtime requirements to avoid the higher salary requirements of the U.S. Department of Labor’s new Rule?

Answer – Two reported newspaper cases – one from 2008 and one from 2012 – make a compelling argument that the delivery of down routes by Circulation Department District Managers may be enough to make the Section 13(d) exemption applicable.

The net result is that the increased salary requirements of the new DOL Rule would not apply. Assuming analogous facts, these cases could be relied upon. They have not been overruled or reversed. There has not been a lot of litigation under Section 13(d).

            In both cases, the job description of the District Manager-type position included responsibility for delivering non-contracted routes in the absence of a contracted independent contractor. The two courts focused on the precise language of the Section 13(d) exemption:

The provisions of Sections 6, 7, and 12 (minimum wage, overtime, and child labor) shall not apply with respect to any employee engaged in the delivery of newspapers…

The 13(d) exemption is different than the exemption for bona fide Executive, Administrative, Professional, and Outside Sales positions. That provision in the statute provides that the Secretary of Labor may “define and delimit” those terms by regulations pursuant to the Administrative Procedure Act. No such proviso is present in the statutory language of the 13(d) exemption.

Thus, the Secretary of Labor has promulgated regulations imposing a “primary duty” requirement for the Executive, Administrative, Professional, and Outside Sales positions. A part of those regulations has included a salary requirement. Those regulations specifically provide that the salary requirement does not apply to the Outside Sales exemption. Therefore, with respect to the Section 13(d) exemption, the statutory language is distinct and different. It contains neither a “primary duty,” nor a salary requirement.

The cases make the following points:

  • “Engaged in” is a much lesser requirement than “primary duty.”
  • A minimal amount of participation is required to constitute “engaging in” an activity.
  • If the activity is “regular and reoccurring” even though “small in amount,” it qualifies.
  • So long as the employee is consistent in performing the exempt duty, he is exempt from the provisions of the Fair Labor Standards Act.
  • The District Manager must deliver newspapers (including shopping news) to a subscriber’s address.

In these cases, the plaintiff District Managers delivered down home delivery routes as infrequently as twice a week. This regularity, as well as job descriptions and mileage logs kept by the District Managers, appeared to be key to the decision.

Based upon these facts and the analysis of these two cases, many newspaper Circulation Department District Managers could qualify for the Section 13(d) exemption. At this time, I have not located any stated position of the U.S. Department of Labor with respect to these cases.

This article addresses only the federal law. Individual states may have Wage and Hour laws that must be checked as well.

Download the full column here (PDF). 


Best Practices for Agency Questionnaires

January 8, 2016

State Departments of Unemployment will sometimes send a newspaper a multi-page questionnaire trying to determine the independent contractor status of a newspaper carrier. You may wonder, "Is the newspaper obligated to complete this form and send it back to the Unemployment Department?"

The answer is, unequivocally, "No." Typically, this form is routed to Human Resources. Human Resources should immediately contact Circulation Management for assistance.

A common mistake is that Human Resources reflexively completes the form without consulting Circulation Management or legal counsel. There are often errors such as completing the question asking for "wage information." With counsel, the answer will be, "There are no wages because this person is an independent contractor."

Rather than completing the form, the best practice would be to write a comprehensive position paper setting forth in persuasive terms why the individual is an independent contractor and not an employee. Particular care should also be taken to review your state's statute. Each state has a unique statute. Many states have a newspaper-specific provision that will be helpful to you in defeating the claim.

Remember: these forms are "loaded" with questions designed to elicit "employee" evidence. That is why completing the form is a problem. In many cases, completing the form leads to an administrative hearing that could have been avoided if the response had been handled through a persuasive position paper, carefully quoting any applicable newspaper industry-specific exclusions.

Other points of interest in this column include:

  • U.S. Department of Labor Proposed Rule on Overtime: An Update
  • Secret Recording in the Workplace and,
  • Distributing Carrier Contact Information

Download the full column here (PDF). 


Does the National Labor Relations Act protect the mere act of an employee clicking the "like" button on Facebook?

October 30, 2015

The answer in a recent case is, "Yes." A former employee of a sports bar posted the following on Facebook:

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can't even do the tax paperwork correctly!!! Now I OWE money ... Wtf!!!!
Two current employees clicked the "like" button, and one commented, "I owe too. Such an asshole."
The Employer argued that the employees should have lost the protection of the Act because their statements contained obscenities viewed by customers. 

The U.S. Court of Appeals for the 2nd Circuit, upholding the NLRB, disagreed:
Almost all Facebook posts by employees have at least some potential to be viewed by customers. Although customers happened to see the Facebook discussion at issue in this case, the discussion was not directed toward customers and did not reflect the employer's brand. The Board's decision that the Facebook activity at issue here did not lose the protection of the Act simply because it contained obscenities viewed by customers accords with the reality of modern-day social media use.

Because the case involves current employees complaining about tax withholding, it was viewed as protected activity. This type of case will have to be judged on a case-by-case basis. Not all employee comments on Facebook will be protected. At some point, employees cross the line of
disloyalty when they disparage the Employer's product or the Management team in a public manner.


NLRB Issues Long-Awaited Joint Employer Decision

September 8, 2015

In a broad sweeping 3-to-2 Decision in Browning-Ferris, the Obama NLRB recently rewrote the decades-old test for determining who is the “Employer.” Under the previous caselaw, a Company had to exercise direct control over wages, hours, and working conditions to be an “Employer.” Now, under the new standard, the Company is a “Joint Employer” if it exercises “indirect control over working conditions, or if it reserves the authority to do so.”

The Board majority redefined and expanded the test that makes two separate, independent entities a “Joint Employer” of certain employees. In direct defiance of legislative history and Supreme Court decisions, the Board majority incorporates theories of “economic realities” and “statutory purpose” that extend the definition of “Employee” and “Employer.”

The NLRB continues to base its approach on the philosophy, “We are going to do what we want – stop us if you can!”

Download the full column here (PDF).


April 14, 2015 “Quickie Election” Rule Implementation on the Horizon

March 11, 2015

There is lots of activity surrounding the NLRB “Quickie Election” Rule and its projected April 14, 2015 implementation date.

NLRB Activity

This month, the National Labor Relations Board is having a major training session in Washington, D.C. to train its agents on how to implement the new rule. Every Regional Office of the NLRB will send staff to the March 16, 2015 training session for educational purposes.

Download the full column here (PDF).


Circulation Management Contracting Checklist

February 17, 2015

In my last column, I focused on the contracting process. This month, I want to follow up on that subject by sharing a document called the "Circulation Management Contracting Checklist."

The Circulation Management Contracting Checklist can greatly help prove independent contractor status when executed by the Circulation Manager and contractor at the time of contracting. After reviewing this form, I think readers will agree it demonstrates that both parties entered into a contract with the intention of creating an independent contractor relationship.

Download the full column here (PDF).


Contracting Practices to Avoid

January 19, 2015

This column will review some practices that I have discovered at various newspapers while conducting independent contractor audits or preparing for litigation. These are practices that I recommend you avoid.

Download the full column here (PDF).

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