What You Need to Know: State Law Update 2012

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Gulliver A. Swenson of Ryan, Swanson & Cleveland PLLC's presentation on State Law Update

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What You Need to Know: State Law Update 2012

  1. 1. What You Need to Know: State Law Update Gulliver A. Swenson
  2. 2. 2 What is an independent contractor?  Anfinson v. FedEx Ground Package System  The Court of Appeals adopts the “economic realities” test instead of the common law test to determine whether relationship is employer-employee or employer/independent contractor. The factors of economic realities are:  The permanence (or lack of it) in the relationship  The skill required to perform the work  The worker’s investment, if any, in equipment  The worker’s opportunity for profit or loss  The degree of control over the worker  Whether the service of the worker is integral to the business  Affirmed by Washington Supreme Court
  3. 3. Minimum Wage Act  Litchfield v. KPMG  Issue – Who qualifies as professional exempt for the Minimum Wage Act (MWA’s) overtime requirements ©2012 by Ryan, Swanson & Cleveland, PLLC 3
  4. 4. Minimum Wage Act (cont.)  MWA requires an employer to compensate its employees at least one and one-half times the employees usual hourly wage for all hours worked in excess of 40 hours per week  Overtime pay does not apply to employees working in bona fide executive, administrative, or professional capacity ©2012 by Ryan, Swanson & Cleveland, PLLC 4
  5. 5. Minimum Wage Act (cont.)  Deptartment of Labor & Industries (“L&I”) defines “bona fide professional capacity” as: 1. Earns more than $250 a week 2. Performs work requiring advanced knowledge acquired through a prolonged course of intellectual study, and 3. Consistently exercises discretion ©2012 by Ryan, Swanson & Cleveland, PLLC 5
  6. 6. Minimum Wage Act (cont.)  Litchfield was an audit associate  Argued that had to be a CPA or have the experience necessary to be a CPA under Public Accountancy Act  Court rejected bright line test because L&I regulations recognize that some accountants that don’t hold a CPA license may still qualify as exempt ©2012 by Ryan, Swanson & Cleveland, PLLC 6
  7. 7. Minimum Wage Act (cont.)  Fiore v. PPG  When an employee’s duties consist primarily of individual retail sales and manual labor is the employee “promoting sales” so as to be exempt from minimum wage requirements ©2012 by Ryan, Swanson & Cleveland, PLLC 7
  8. 8. Minimum Wage Act (cont.)  Fiore was a Territory Manager for a painting company that sold its paint at Lowes; Fiore was responsible for 11 stores in Washington  His duties were: 1. talk to Lowes’ customers 2. set up displays 3. manage the chip rack 4. work with Lowes’ employees ©2012 by Ryan, Swanson & Cleveland, PLLC 8
  9. 9. Minimum Wage Act (cont.)  Dept. of L&I defines “administratively exempt” as an employee who: 1. Earns more than $250 a week 2. primary duty consists of the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employers customer, and 3. Consistently exercises discretion ©2012 by Ryan, Swanson & Cleveland, PLLC 9
  10. 10. Minimum Wage Act (cont.)  Significant manual labor defeat exemption  Must be work of substantial importance directly related to management policies or business operations  Advising management, planning, negotiating, representing the company, purchasing, promoting sales, and conducting business research ©2012 by Ryan, Swanson & Cleveland, PLLC 10
  11. 11. Minimum Wage Act (cont.)  PPG provided Fiore with knee pads, ear plugs, a mallet, a hammer, a crowbar, a wrench, and screwdrivers  He was one of 167 “Territory Managers”  Fiore was NOT an exempt employee  $24k in damages; $500k in attorney’s fees ©2012 by Ryan, Swanson & Cleveland, PLLC 11
  12. 12. Thank you! Gulliver A. Swenson Ryan, Swanson & Cleveland swenson@ryanlaw.com (206) 654-2204

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