(July 30, 2007)

Effective last week, the federal minimum wage was increased to $5.85 per hour (from $5.15).  Although this has no practical effect for employers in North Carolina, since North Carolina’s minimum wage is already $6.15, those employers with operations in other states need to ensure compliance with the federal minimum wage hike in those states.  Also, all employers will need to post a new copy of the labor laws poster to reflect the new federal minimum wage.

Releases of FMLA Claims Usually Invalid in North Carolina

Almost two years ago, we informed you of a court decision that held that employers in certain states, including North Carolina, cannot obtain valid waivers of FMLA claims from employees without obtaining prior approval of either a court or the Department of Labor (“DOL”).  The court’s decision rested on the following regulation from the FMLA: “Employees cannot waive, nor may employers induce employees to waive, their rights under the FMLA.”  The decision was revisited, in part because the DOL itself disagreed with the court’s reading of the regulation.  (Click here to view our alert from August 2005.)

Earlier this month, the court reinstated its earlier decision, again holding that employees cannot waive their FMLA claims without prior approval of either a court or the DOL.  The implications for employers in the Fourth Circuit, which includes North Carolina, are significant.  For instance, if you are undergoing a restructuring and asking all affected employees to sign a general release in order to receive an enhanced severance package, those employees could later bring an FMLA claim, notwithstanding the general release.  On a more individualized basis, if you are entering into a general release agreement with a single employee who has not currently raised an FMLA claim, and you have any reason to believe that there may be the potential for an FMLA claim to be made in the future, it is recommended that you consult with your employment counsel to create the most comprehensive release possible, which may include involving a court and/or the DOL to obtain approval of a waiver of any FMLA claims. Of course, if you are trying to settle an existing FMLA claim, it is strongly advised that you seek advice from your employment counsel.

For questions regarding this Alert or other employment matters, contact Bryn Wilson at 919.783.1117 or bwilson@poyners.com or Susie Gibbons at 919.783.2813 or sgibbons@poyners.com.