Wages
Labor Department – The Wage and Hour Division (WHD) released four opinion letters clarifying how overtime pay rules apply in various scenarios. One addresses joint employment arrangements determining that hours worked for two operationally integrated businesses must be combined when assessing overtime eligibility. In that letter, the agency clarified that under the Fair Labor Standards Act (FLSA), “horizontal joint employment” may occur when employers share employees and are “sufficiently associated” with each other regarding those employees’ work. If a joint employer relationship exists, both entities will need to consider an employee’s total hours for the workweek to confirm that the employee has received the FLSA minimum wage and determine the employee’s entitlement to overtime pay. An employee’s hours worked for all joint employers must be totaled together for the workweek, and each employer is jointly and severally liable wages owed under the FLSA. Opinion letters are formal, written guidance from Labor Department officials explaining to the public how the agency would apply the law to a specific set of facts. While the letters are not binding on courts, they do serve as a powerful compliance tool and can be used as persuasive authority in defending against a legal claim. More details.
Montana – The state labor department announced a new minimum wage for 2026. Effective Jan. 1, the new minimum wage will be $10.85/hr, up from its current $10.55/hr. The state has no tip credit. More details.
Vermont – The state labor department announced an increase to the state’s minimum wage. Effective Jan. 1, 2026, the minimum wage will increase from $14.01/hr to $14.42/hr – an increase of $0.41. The server wage equals 50 percent of the full minimum wage and will increase from $7.01/hr to $7.21/hr. More details.
Labor Policy
EEOC – The U.S. Senate confirmed Brittany Pannucio to the Equal Employment Opportunities Commission (EEOC), ensuring a quorum for the first time since President Trump fired two Democratic commissioners earlier this year. Panuccio fills the seat vacated in Dec. by Keith Sonderling, who was named deputy labor secretary in March, and gives Republicans a majority. Her term expires July 1, 2029. Trump nominated Panuccio in May to serve as a commissioner. She previously worked as an attorney advisor in the civil rights office of the Department of Education, as well as a special counselor in the agency’s general counsel office during the first Trump Administration. The new Commission is expected to shift focus by scrutinizing diversity, equity, and inclusion (DEI) initiatives, religious liberty, and discrimination, narrowing disparate impact enforcement, revisiting LGBTQ+ guidance, and scaling back algorithmic bias initiatives.
U.S. Senate – In addition to the confirmation note above, two other important posts were confirmed this week as well. Andrew Rogers, who was serving as acting general counsel at EEOC, was confirmed as Wage and Hour Division administrator. Additionally, Jonathan Berry will serve as the labor department’s chief attorney. Berry authored the chapter on the Labor Department in the conservative policy blueprint Project 2025. More details.
U.S. Senate – The Health, Education, Labor & Pensions (HELP) Committee advanced the nominations of Crystal Carey to be general counsel of the National Labor Relations Board (NLRB) and James Murphy to be a member of the Board. The nomination of Scott Mayer to the Board has been temporarily tabled. During a hearing last week, Mayer, who is the general counsel for Boeing, got into a heated exchange with Sen. Josh Hawley (R-MO) regarding the company’s ongoing dispute with unionized workers at its St. Louis area facilities. More details.
California – The governor signed legislation allowing Uber and Lyft drivers to join a union and bargain collectively for better wages and benefits. The agreement includes a bill for collective bargaining backed by the Service Employees International Union (SEIU) along with a measure sponsored by Uber and Lyft that would significantly reduce the companies’ insurance requirements for accidents caused by underinsured drivers and would ultimately reduce costs for passengers. Last July, the California Supreme Court ruled that app-based ride-hailing and delivery services like Uber and Lyft can continue treating their drivers as independent contractors not entitled to benefits like overtime pay, paid sick leave, and unemployment insurance. It upheld a voter-approved ballot measure passed in 2020 that reversed a 2019 law mandating that Uber and Lyft provide drivers with benefits. The collective bargaining bill would allow the more than 800,000 rideshare workers in California to join a union while still being classified as independent contractors. Currently, independent contractors are excluded from the National Labor Relations Act, a federal law that grants workers collective bargaining rights and protections. More details.
California – the U.S. District Court for the Eastern District of California issued a preliminary injunction in California Chamber of Commerce et al. v. Bonta et al., temporarily blocking enforcement of SB 399. The statute bans employers from holding captive audience meetings, which are mandatory employer-sponsored meetings that discuss religious or political matters, including unionization. California is one of at least 12 states that have passed captive audience laws at the urging of labor unions. Plaintiffs in the case argued that SB-399 is preempted by the National Labor Relations Act and infringes upon employers’ rights under the First Amendment of the U.S. Constitution. In its preliminary injunction, the court agreed. Enforcement of SB–399 will remain suspended until litigation at the district court level concludes and may potentially be permanently enjoined based on the final outcome. More details.
Key Takeaway
- As the government shutdown continues, many normal agency functions important to the industry – particularly at the Labor Department – will be put on hold. The Wage & Hour Division (WHD) will cease most regulatory and enforcement activities, with the exception of matters which affect health and safety (such as child labor violations). During the shutdown, WHD will not conduct standard wage and hour investigations, conduct compliance audits or provide technical assistance. All administrative hearings will be paused. Similarly, the National Labor Relations Board (NLRB) will not process new representation petitions, conduct elections or investigate unfair labor practice charges. The Board also will not conduct any administrative hearings during the shutdown. The EEOC will also pause pending investigations and mediations. Many states, particularly California and New York among others, will look to intensify their own state-level enforcement of labor laws so employers need to remain vigilant.
Podcast
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