Nevada Gaming Regulators Begin Overseeing Las Vegas Nightclubs and Dayclubs

Posted in Club Venue Employee Regulations, Nevada

The nightclub and dayclub industry has become big business for casinos along the Las Vegas Strip. State gaming regulators are now requiring resort operators to take a more stringent approach in monitoring activity inside club venues. These new regulations came out of the 2015 Nevada Legislative session and were approved by the Nevada Gaming Commission.

Under the new regulations, casinos will designate an employee to oversee and monitor the clubs. That employee must be licensed under state gaming regulations as a key employee. Also, promoters and independent hosts for the clubs will have to file written agreements and register with the Nevada Gaming Control Board.

Clubs are a big draw for Las Vegas tourists, particularly the younger customer base that spends time on the Strip enjoying the many lucrative non-gaming entertainment attractions, rather than gambling. According to the Nevada Gaming Control Board, more than 60 percent of the total revenue generated by Las Vegas resorts last year came from non-gaming sources, such as hotel rooms, shopping venues, restaurants, entertainment attractions, and clubs.

Other U.S. jurisdictions and tribal gaming markets are beginning to mirror Las Vegas’s push to add non-gaming attractions. Other gaming regulatory bodies may elect to adopt club venue regulations like Nevada’s.

The club venue regulations identify certain acts as unsuitable methods of operation and expand the requirements for reporting criminal violations. The clubs are also required to file annual reports on their activities.

Additionally, the club venue regulations impose a new registration requirement upon all club venue supervisors, managers, security and surveillance personnel, servers, server assistants, bussers, restroom attendants, and anyone employed or contracted to offer hosting or VIP services.

Security and safety requirements are also included. Operators must assess their calendars on a regular basis to consider the impact on attendance and determine the appropriate number of security personnel needed for an event.

Clubs must also abide by certain requirements for emergency medical support depending on the anticipated size of their events.

Nevada Gaming Commission Chairman Tony Alamo Jr. said the clubs have been good for the gaming industry, providing an economic “shot in the arm.” However, he also said that the clubs need to be controlled and regulated. “I believe these regulation changes do what we set out to do,” Chairman Alamo said.

 

Fore more information on the regulation of casinos and nightclubs in Las Vegas, please subscribe to this blog or see our Gaming blog, “Covering the Spread.”

D.C. Lawmakers Join California and New York Raising the Minimum Wage to $15

Posted in Legislation, State Law, Wage & Hour

The District of Columbia Council recently passed a law to increase the minimum wage for employees to $15 by 2022. The District of Columbia joins other states in raising its minimum wage to rates higher than the current federal minimum wage of $7.25. The current minimum wage in the District ($10.50) is scheduled to rise in July to $11.50. Pursuant to the recently passed legislation, the minimum wage is set to increase yearly by $.70 until it reaches $15 in 2022. After that, the minimum wage will increase automatically in an amount that will be tied to inflation.

The legislation, which is expected to be signed by Mayor Muriel Bowser, does not provide for as drastic an increase for tipped workers.  The base pay for tipped workers increases from $2.77 per hour to $5 by 2022.  After that, further increases also will be tied to inflation.

Department of Labor Issues Final Rule Revising Sex Discrimination Guidelines for Federal Contractors

Posted in Department of Labor, Discrimination

On June 14, the U.S. Department of Labor (DOL) issued the final rule updating the Office of Federal Contractor Compliance Program’s regulations prohibiting discrimination on the basis of sex. The updated regulations prohibit federal contractors with contracts or subcontracts totaling $10,000 or more within a 12-month period (absent other exemptions) from discriminating against employees with regard to pay and working conditions on the basis of pregnancy, sex-stereotypes, gender identity and transgender status.

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Recent Florida Supreme Court Decisions on Workers’ Compensation Could Lead to Higher Premiums

Posted in Benefits, Compensation, Disability, Litigation, Workers' Compensation Act

In two long-awaited decisions, the Florida Supreme Court declared several provisions of the state’s workers’ compensation statutes unconstitutional, weakening legislative reforms approved in 1994 and 2003 intended to curb the system’s growing costs and higher premiums for employers and businesses. The rulings, in Castellanos v. Next Door Company and Westphal v. City of St. Petersburg were released almost two years after the Court first heard oral arguments in the cases. The decisions struck down Florida laws that restricted the fees for claimants’ attorneys to a statutory formula tied to the benefits secured by the claimant and limited the recovery of benefits to 104 weeks for temporary total disability, respectively.

Castellanos v. Next Door Company

On April 28, 2016, the Florida Supreme Court held that the state’s strict adherence to its workers’ compensation statutory fee formula for the award of fees to claimant’s attorneys was an unconstitutional violation of both state and federal due process rights.

Castellanos was heard by the Supreme Court after lower courts upheld the award of $164.54 for 107.2 hours of legal work performed by claimant’s counsel, even though those courts found that the legal work performed was reasonably necessary to secure the claimant’s workers’ compensation benefits. The actual amount of benefits secured was $822.70, resulting in a fee for the claimant’s attorney of $1.53 per hour. However, the Court found the claimant in Castellanos had no avenue to challenge the reasonableness of the $1.53 hourly rate under the statute, even when it determined that his attorney had to dedicate significant time and effort in pursuing the case and refuting numerous defenses raised by the employer and its carrier.

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Roundtable Discussion – New DOL Overtime Regulations

Posted in Department of Labor, Event, FLSA

On Tuesday, June 21, 2016, in Greenberg Traurig’s Las Vegas office, and Wednesday, June 22, 2016, in Greenberg Traurig’s Phoenix office, GT will host a Roundtable Discussion regarding the new regulations issued by the DOL. These regulations will likely go into effect in a few weeks, changing one of the key components of federal wage and hour law that determines eligibility for overtime exemption.  This discussion will be presented by GT attorney and Chair of the Phoenix Labor & Employment Practice, Laurent Badoux. Click here for more information.

To learn more about the new DOL Regulations, please see our previous GT Alert, and our previous blog posts:

Virginia Letter Ruling Finds Nexus Based on Employee Working From Home

Posted in State Law, Tax, Telecommuting

The Virginia Department of Taxation recently issued a letter ruling which determined that an employee working from home within the state creates corporate income tax nexus.

Letter Ruling

The Virginia Department of Taxation (the Department) recently responded to a request for a letter ruling regarding the issue of whether a single employee working from a home office in Virginia creates corporate income tax nexus for an out of state corporation. Va. Dep’t Tax, Pub. Doc. No. 16-15 (Mar. 3, 2016). The taxpayer is an S corporation headquartered outside of Virginia that provides Internet-based templates for customers to produce their own websites.

The taxpayer has a single employee residing in Virginia and working from a home office. The employee is primarily responsible for bookkeeping and accounting matters, human resources and payroll, customer support conducted entirely by email, and legal consultative matters. The employee does not develop software, program computers, work on website templates, or solicit new customers.

The Department determined that the employee’s administrative and accounting activities from a home office within Virginia are sufficient to create nexus for Virginia corporate income tax purposes. The Department supported its position based on the positive Virginia payroll factor from the compensation paid to the Virginia employee. While the Department noted that de minimis activities within Virginia do not create nexus, it lacked sufficient factual information for a full examination of whether the employee’s activities within Virginia are de minimis compared to the taxpayer’s overall operations.

Considerations for Employers with Telecommuters

On a multistate basis, there is a split among states regarding whether an employee working from home providing nonsolicitation activities creates nexus, and potential challenges to states’ assertion of tax filing obligations may be available depending on the facts. In addition, states may have different requirements depending on the tax type at issue (e.g., corporate tax, sales and use tax, payroll tax).  

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The New Overtime Regulations and Their Impact on the Salary Basis Test

Posted in Compensation, Department of Labor, Employee Classifications, FLSA, Legislation

As we previously discussed here, the United States Department of Labor (DOL) recently changed the Fair Labor Standards Act’s (FLSA’s or the Act’s) Salary Level and Salary Basis tests for the white collar exemptions to the Act’s overtime requirement.  Effective Dec. 1, 2016, employees must be paid at least $47,476 annually and $913 per week in order to meet the Act’s white collar exemptions.  Highly Compensated Employees (HCEs) must be paid at least $134,004 annually and at least $913 per week of that annual amount must be paid in the form of a salary.  All employees must also satisfy various “duties” tests, in addition to the aforementioned Salary Level and Salary Basis requirements.  Under the new rule, however, employers will be able to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy a portion of the Salary Level and Salary Basis tests for all white collar exemptions other than the HCE exemption.

Changes to the FLSA’s Non-Discretionary/Incentive Payment Scheme

The new rule specifies that employers may now satisfy up to 10 percent of the Salary Level and Salary Basis tests using a variety of nondiscretionary or incentive payments.  In other words, employers may use $4,747.60 annually and $91.30 per week in nondiscretionary incentive payments tied to productivity and profitability to satisfy those two tests, respectively.  In order to take such a credit, employers must make bonus payments on a quarterly or more frequent basis.  Employers can also make a one time “catch-up” per quarter to cover any shortfall from the previous quarter as long as the catch-up payment is not more than 10 percent of the Salary Level requirement.  If the employer does not make the catch-up payment and the employee does not earn enough to satisfy the Salary Level and Salary Basis tests, the employee is entitled to overtime pay for any overtime hours worked that quarter.  Employers of HCEs may use nondiscretionary bonuses and incentive payments (including commissions) to count toward the HCEs’ total compensation, but HCEs must receive no less than $913 per week ($47,476 per year) in salary.  Nondiscretionary bonuses and incentive payments can make up the rest of an HCE’s required compensation.

Under the new regulations, all of these amounts will now be adjusted every three (3) years to ensure that the Salary Level and Salary Basis match the 40th percentile wage in the lowest wage region in the United States and the HCE Salary Level matches the 90th percentile wage nationally.

The “duties” test is difficult to satisfy and employers should not assume that they are in compliance with that test without a thorough review.  What is more, bonus payment must be included in determining the employee’s regular and overtime rates of pay.  These payments will significantly increase the employee’s regular rate of pay.  There has been wide spread litigation alleging misclassification of employees as a result of changes in technology, reorganizations, and other business factors which change employees’ duties over time.  Employers should expect an increase in FLSA suits as of Dec. 1, 2016 – such suits will bring additional scrutiny of an employers’ workforce Should an employer pay its employees bonuses in an attempt to satisfy the Salary Level and Salary Basis tests and not satisfy the “duties” test, it will have potentially increased a nonexempt employee’s prospective damages for earned but unpaid overtime by increasing the employee’s regular and overtime rates of pay.  Employers should consider auditing employee job descriptions and the duties their employees actually perform to ensure compliance.

The ARB Potentially Broadens Protected Activity Under Sarbanes-Oxley

Posted in Litigation, Retaliation, Sarbanes-Oxley

Just when employers thought that the anti-retaliation provision of the Sarbanes-Oxley Act of 2002 (SOX), 15 U.S.C. § 1514A, already covered a broad range of protected conduct, the Department of Labor’s Administrative Review Board (ARB), the appellate body that reviews Administrative Law Judge (ALJ) decisions, potentially broadened the scope of conduct that is protected from retaliation under SOX’s anti-retaliation provision.

In Timothy C. Dietz  v. Cypress Semiconductor Corp., ARB 15-107 (Mar. 30, 2016) the ARB affirmed an ALJ ruling that awarded a former program manager for Cypress more than $250,000 in back pay and benefits under the SOX anti-retaliation provision, 15 U.S.C. § 1514A, finding protected activity where the employee raised state law violations that could demonstrate fraudulent conduct.

Background

In 2012, Complainant Timothy Dietz (Dietz) worked for Ramtron International Corporation (Ramtron). In September 2012, Cypress acquired Ramtron and ultimately hired Dietz as a program manager. Cypress required certain employees to participate in a Design Bonus Plan (Bonus Plan). Dietz was not subject to the plan, but many of the former Ramtron employees, including those who worked under Dietz’s supervision at Cypress in Colorado, were subject to it.

Under the Bonus Plan, Cypress deducted 10 percent of participants’ salaries. These deductions were mandatory. At the end of each calendar quarter, Cypress calculated the employees’ “bonus” and some employees received less than the amount that was deducted from their compensation. Payouts were based on team performance and not individual performance. Cypress communicated this plan to the former Ramtron employees via a website, email, and video conferencing. None of the former Ramtron employees were notified about the Bonus Plan prior to taking their jobs with Cypress.

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The DOL Issues Broader Fiduciary Adviser Definition: What Does it Mean for You?

Posted in Department of Labor, ERISA

Since the enactment of ERISA in 1974, there has been a dramatic shift in the retirement savings marketplace from employer-sponsored defined benefit plans to participant-directed 401(k) plans, coupled with the widespread growth of Individual Retirement Accounts and Annuities (IRAs). In fact, 401(k) plans did not exist at the time the Department of Labor (DOL) published its ERISA fiduciary rules governing retirement investment advice in 1975, while IRAs were just introduced in the same year. Until recently, these rules had not been meaningfully changed since 1975.

The DOL believes that many investment professionals, consultants, brokers, insurance agents, and other advisers operate within compensation structures that are “misaligned with their customers’ interests and often create strong incentives to steer customers into particular investment products.” According to the DOL, these conflicts of interest result in the loss of billions of dollars a year for retirement investors. Specifically, the White House Council of Economic Advisers has determined that conflicts of interest lead, on average, to 1 percentage point lower annual returns on retirement savings or a total of $17 billion of losses every year for America’s families.

To learn more, please read the GT Alert “The DOL Issues Broader Fiduciary Adviser Definition: What Does it Mean for You?”

 

 

U.S. Department of Labor Issues Final Rule Boosting Minimum Salary for Overtime Exemptions

Posted in Department of Labor, FLSA

On May 18, 2016, President Obama and U.S. Department of Labor Secretary Thomas Perez announced the issuance of the Final Rule updating the salary requirements of the Fair Labor Standards Act’s overtime exemptions.  The increase in salary standard, which will go into effect on Dec. 1, 2016, boosts the minimum salary level for exempt status from $455 per week to $913 per week, or from $23,660 per year to $47,476 per year (reduced from the initially proposed figure of $50,440 per year).  In addition, the Final Rule raises the requirement for the highly compensated employee exemption from $100,000 to $134,004 per year.  Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.  The Final Rule also establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the percentiles used to determine the current increases.  The Department of Labor announced that the increased salary levels will extend overtime pay protections to over 4 million workers within the first year of implementation.   For further information please check the U.S. Department of Labor’s summary of the Final Rule.

PLEASE NOTE:  For employers who wish to maintain the level of a previously exempt employee’s total annual compensation, but not wish to boost the salary to the minimum required to maintain the exemption, there are steps which may be taken with regard to hourly rates and bonuses which can accomplish this objective while at the same time paying overtime pay.  Please contact one of our Labor and Employment Group attorneys to discuss various options regarding compliance under the Final Rule.

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