We Pay Our Employees: Why are They Suing Us? Brett Holubeck Cruickshank & Alaniz

Transcription

1 We Pay Our Employees: Why are They Suing Us? Brett Holubeck Cruickshank & Alaniz

2 To earn HRCI & SHRM credit Stay on the webinar for the full 60 minutes Watch the webinar using your unique URL NOVAtimewill review attendance records and certificates of attendance and Activity ID numbers to all attendees who meet the above requirements ATTENDEES WHO DO NOT STAY FOR 60 MINUTES OR USE THEIR UNIQUE URL WILL NOT RECEIVE CREDIT

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4 About Our Speaker Brett Holubeck Attorney with Cruickshank & Alaniz L.L.P. Earned his J.D. from the University of Iowa his Masters from University of Nevada, Las Vegas, and his B.A. from the Ohio State University Supports clients facing investigations concerning wage and hour, discrimination, retaliation, and harassment charges by government agencies

5 FLSA Trends In 2015, Halliburton paid nearly $18.3 million to just over 1,000 employees or about $18,000 per employee. In 2007, Walmart paid $33.5 million to settle violations for overtime involving about 86,000 workers. In 2013, employers paid $4.5 million on average to settle wage and hour cases. One study found that 76% of low wage workers were not properly paid for overtime

6 Fair Labor Standards Act

7 Fair Labor Standards Act Coverage Enterprise Coverage: Annual volume of sales or business done of at least $500,000 and at least 2 employees Non-Profits are not generally covered unless they engage in ordinary commercial activities that result in sales made or business done that meets the $500,000 threshold (running a gift shop, thrift store, a restaurant etc.) Individual Coverage: Based on the nature of work Employee that engages in interstate commerce or produces goods for interstate commerce Involves the movement of persons or things across state lines They must perform these

8 Compensable Time Authorized or unauthorized does not matter: Standard is suffer or permit to work Travel time between job sites Employer required training and conferences Breaks <20 minutes Before and after work activities (checking job locations, fueling cars, picking up mail at P.O., putting away tools at the end of the day) Waiting or standing by for work Meal time if an employee is not free from work duties

9 Travel Time & Work on the Road If you have employees who travel frequently for you using their own vehicle, consider adopting IRS mileage reimbursements If they are nonexempt, also address whether they are allowed to use cell phones or check on weekends or outside of normal work hours Your policy should clearly state and, if they are, they should be paid for that time.

10 FLSA nightmare T-Mobile Failed to pay technicians for off-theclock work 24/7 on-call policy Double pay for hours in the 24/7 period Minimum wage violations Improper meal and rest breaks for workers that had a 10 hour long shift. Trouble ahead The result: A $19 million settlement

11 Exempt or Non-Exempt From Overtime

12 Exempt vs. Non-Exempt To be classified as exempt from the FLSA's minimum wage and overtime compensation requirements, an employee's job duties and responsibilities and his compensation must satisfy both: The salary basis test. The duties test.

13 Current Overtime Rule Must pay overtime pay for hours worked in excess of 40 per workweek at time and a half unless they meet an exemption The regular rate used to calculate overtime cannot be less than minimum wage even for employees that use the tipped rate. Overtime for waiters and waitresses must be calculated by giving them time and a half of the minimum wage ($7.25 federally) Salary threshold is $455 per week or $23,660 per year for white collar exemption (executive, administrative, professional, and computer employees) $100k for highly compensated employees

14 Executive Exemption Must be paid on a salary basis at a rate of not less than $455 per week Primary duty must be managing the enterprise or a department Direct two full time employees or their equivalent Have authority to hire or fire other employees or their suggestions for firing, hiring and promoting must be given a particular weight Ex. Managers, Some Assistant Managers, Payroll Manager, HR Manager, Accounting Manager, Building & Grounds Director, CEO, and Business Operations Manager

15 Administrative Exemption Must be paid at least $455 a week on salary or fee basis Primary duty must be performing office or non-manual work directly related to the management or general business operation Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance Must be more than just a typist Ex. HR Generalist, Internal Auditor, Budget ACAnalyst, Buyers

16 Professional Exemption Salary basis of not less than $455 per week on salary or fee basis Primary duty must be the performance of work requiring advanced knowledge, intellectual in character, and requires consistent exercise of discretion and judgment Must be in a field of science or learning Knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction Common fields of science or learning include medicine, law, theology, accounting, actuarial computation, engineering, architecture, pharmacy, and various types of chemical, physical and biological sciences

17 Bonuses and Overtime Non-discretionary bonuses trigger overtime liability Discretionary (i.e. Christmas/Holiday Bonus) do not trigger overtime Forgotten part of overtime calculations

18 FLSA Automotive Seller Exemption Encino Motorcars, LLC v. Navarro Salesmen primarily engaged in servicing automobiles. Exempt there is no reason to give [them] anything other than a fair (rather than a narrow ) interpretation.

19 Labor Laws and Wages

20 Labor Laws: Joint Employer Standard Unfixed. One of the recently appointed NLRB Board Members should have recused himself for participating in the lawsuit as an attorney Back to the Browning-Ferris rules which focus on the potential to control rather than exercising actual control. Only further underscores the recommended action: Have very clear contractual relationships with your staffing companies. You are paying them -keep them under your thumb

21 Review Your K with Staffing Co. Assume you are Joint Employer to: Security, Sanitation, Production Major Contract Issues: 1. Indemnification 2. Insurance 3. Duty to Defend 4. Qualifications, I-9s, Safety Training 5. Class action waivers Or just assume you are 100% liable

22 Miscellaneous Wage Violations

23 For Maintenance/Mechanics Do your Maintenance employees use their own tools? Do you even merely allow it Check your Tool policy Several states require you to pay 2x the minimum wage if you don t provide all of the tools required for the employee.

24 Tip Pool Problems Did you read page 801 of the Appropriations Bill? No!?! Prohibits employer from requiring employees to share their tips with the employer (including supervisors)whether or not the employer takes a tip credit. Allows employers that pay employees the minimum wage and don t use the tip credit to require tipped employees to share tips with cooks, dishwashers, and other back of the house employees.

25 Fighting Off the Clock Work

26 Donning and Doffing Donning & doffing can actually be solved. Stop thinking of it as a legal issue and think of it as an operational issue You must capture all clothes changing time on a time card How? Step 1: Use actual time Step 2: Strategic time clock placement. If you place your time clocks in front of the locker room (before donning takes place), you eliminate any argument that clothes changing occurs off the clock For the meal break Autodeduct the 30 minutes Have EEs record actual time (but round) Always pay actual time and discipline for violations

27 Fighting Off-The-Clock Work I (we) worked, without compensation, before our shift, after our shift, or during our lunch; pay me (us). Allen v. City of Chicago Employer is not liable for off-the-clock overtime if: There is a policy and process that requires employees to report off-the-clock work; employee(s) ignore the policy and do not report the off-the-clock work that they are claiming they are owed as unpaid overtime; and the employer does not prevent nor discourage employees from reporting off-the-clock work and unpaid overtime.

28 DOL PAID Program Permits employers to report FLSA violations to the Department of Labor Resolution without liquidated damages Employees do not have to accept payment

29 Questions Brett Holubeck Cruickshank & Alaniz

30 How NOVAtime can help DOCUMENTATION Supervisors and Human Resources Document and file any complaints and issues electronically Supports FLSA weighted overtime calculation when an employee works on multiple jobs

31 How NOVAtime can help Employees FMLA request validation On-screen compliance form entry Administrator Configurable workflow / to-do list Reminders sent via the notification engine Calendar / Analytics integration

32 How NOVAtime can help Supports automated overtime calculation Minimum wage enforcement Time tracking with audit trail of in-out punch locations If required, audit trail may be used to help prove compliance with regulations such as FMLA, ADA, FLSA, etc.

33 How NOVAtime can help Job and activity tracking Travel time with location tracking On call compliance enforcement

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36 Thank you for attending! CRUICHKSHANK & ALANIZ LLP Brett Holubeck State Hwy 249, Ste. 272 Houston, TX (281) NOVATIME TECHNOLOGY, INC. Kyle Glave, Sales Director Eastern Region 9680 Haven Ave. Rancho Cucamonga, CA (909) x-7152 (O) (404) (M)