Wage and Hour Quiz 8/13/2018. Employment Law Seminar 2018 Hawaii s most well attended and comprehensive employment law and personnel seminar

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1 Employment Law Seminar 2018 Hawaii s most well attended and comprehensive employment law and personnel seminar Tuesday, August 14, 2018 Hawaii Convention Center Issues Affecting Retail & Hospitality Businesses Afternoon Breakout Session:1:00 1:50 p.m. Hawaii Convention Center, Room 306 Download session handouts at: Jennifer L. Gitter Associate Employment Compliance, Employment Litigation, Labor Relations Jeffrey S. Harris Director Employment Compliance, Employment Litigation, Labor Relations Weiwei He Associate Employment Compliance, Employment Litigation, Labor Relations Wage and Hour Quiz Jeffrey S. Harris, Esq. Jennifer L. Gitter, Esq. Weiwei He, Esq. 1

2 Question 1: Employee or Intern? Students of a company s cosmetology and hair design school agree the school will not pay for the hours they work. However, they receive hands on training in the salons and academic credit for the hours they work. The work allows the students to clock the hours they need to sit for the state licensing exams. The school requires its students to work for no longer than necessary to complete their hourly hands on training requirement for the state licensing exams. The students do not routinely displace the work of paid employees as the school maintains staff to instruct students, run the salons, operate front desks, inventory and stock the dispensary, handle the logistical needs of the salons, and perform nighttime janitorial services. The students have no expectation of employment with school upon graduation. Are the students employees under the FLSA? Question 2: Volunteers Individuals work for a nonprofit religious foundation for religious and evangelical reasons. The foundation derives income from the operation of service stations, retail and grocery outlets, and other commercial business. Although the individuals expect no compensation from the foundation for their work, they expect the foundation to provide them food, shelter, clothing, transportation, and medical benefits for the long periods they work there. Are the individuals employees? Question 3: Employees Engaged in Commerce Warehouse employees handle out of state goods that are then delivered to in state consumers. Are the employees engaged in commerce or the production of goods for commerce covered by the FLSA? 2

3 Question 4: Enterprise Coverage An employer provides security services to film production companies, solely inside a state. Is the employer an enterprise engaged in commerce or in the production of goods for interest commerce covered by the FLSA, because the films are intended for national and international distribution? Question 5: Executive Exemption An employee works for a shipping company and is paid a salary of $35,000 per year. The employee has the primary duty of managing the company s Human Resources department.. The manager customarily and regularly directs the work of one full time employees and three half time employees, and the manager s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. Does the executive exemption cover the manager? Question 6: Administrative Exemption An employee works for a construction company and is paid a salary of $24,000 per year. The employee has the primary duty of managing company s equipment, which includes purchasing new equipment, assigning equipment to job sites, and scheduling repairs. The employee is authorized to assign equipment to job sites based on the employee s judgment of the job site s needs and the needs of the company s other projects, and to schedule repairs without review. However, the employee is not authorized to purchase new equipment without a manager s approval. Does the administrative exemption cover the employee? 3

4 Question 7: Professional Exemption An employee works for a pharmaceutical company and is paid a salary of $50,000 per year. The employee has primary duty of researching and conducting experiments related to chemical substances. While the employee attended college, the employee only has a degree in performing arts; the employee does not have a degree in chemistry. Does the professional exemption cover the employee? Question 8: Salary Basis An employee is paid $50,000 per year, and the employer considers the employee exempt from the FLSA. The employer generally makes no deductions from the employee s pay. The employer does make deductions from the employee s pay when the employee is absent from work for one or more full days for personal reasons other than sickness or disability, for absences of one or more full days due to sickness or disability if the deduction is made in accordance with the employer s bona fide plan of providing compensation for salary lost due to illness, to offset amounts employees receive as jury or witness fees, for military pay, for penalties imposed in good faith for infractions of safety rules of major significance, and for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. The employee recently took FMLA leave. The employee returns to work on a Monday, and submits her resignation letter on Wednesday. The employer immediately accepts the employee s resignation. During her employment, did the employer satisfy the salary basis requirement? Was the employee required to pay the employee her salary during her FMLA leave? Is the employer required to pay the employee for a full week of work during her last week, even though she only worked three days? Question 9: Common Carriers A tour bus company does not pay its employees overtime compensation. Does this violate the FLSA? 4

5 Question 10: Seaman s Exemption An employee works for an international shipping company that is based in Hong Kong but has headquarters and does business in the United States. The employee works on a shipping vessel and is responsible for operating the vessel s radio and is subject to the supervision of the vessel s captain. The employee also assists in loading and unloading freight at the beginning and end of the voyage, but the employee s primary duty is operating the radio. The vessel is not registered, enrolled, and licensed by the Bureau of Customs, and is not numbered under any provision of Federal law or any State numbering system. Is the employer required to pay the employee overtime? Is the employer required to pay the employee minimum wage? Question 11: Vehicle Sales and Service Employees A car dealership does not pay automobile service advisers overtime. Does the exemption from overtime for any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements cover them? Question 12: Other Exemptions Are there a number of other exemptions, for agriculture, domestic service, small circulation newspapers, newspaper delivery, fishing and seafood, forestry, hospital employees with a designated 14 consecutive day and seasonal amusement or recreation? 5

6 Question 13: Minimum Wage What is the current Federal minimum wage? What is the current minimum wage under Hawaii law? Which minimum wage applies to Hawaii employers? Question 14: Tip Credit An employer takes tip credit against minimum wage for employees who make tip credit of $.75 per hour, paying them $9.35 per hour. Does this comply with the minimum wage requirement? Question 15: Cost of Food and Lodging A company in the business of running week long management training retreats that operates year round employs some staff who live on site. The company provides the on site staff with housing and meals. The company deducts the actual cost of goods and lodging from the employees minimum wages. Does this comply with the minimum wage requirement? When making the deductions, may the company deduct the price for the same food and lodging paid by customers? 6

7 Question 16: Equal Pay An employer relies on prior salary, in combination with other factors, to set an employee s initial compensation. Can that justify paying the employee less than other employees performing work which requires equal skill, effort and responsibility and which is performed under similar working conditions? Question 17: 40 Hour Workweek A non exempt employee works sixty hours in one workweek, and ten hours the next workweek. The employer credits twenty hours from the first workweek to the second workweek to avoid the 40 hour per week limit on regular pay. Does this comply with the FLSA? Question 18: Hours Worked A janitor begins to organize his cleaning cart fifteen minutes prior to the start of his shift. The employer does not pay the janitor for that time worked,, even though the employer has reasons to believe the work is occurring. Does this violate FLSA? 7

8 Question 19: Duty of Management An employee in charge of scheduling other employees comes in thirty minutes before his shift once a week to make schedules. The company instructed the employee one time that he needs to make the schedules during his shift, and that he should not come in before his shift. The employee ignores the company s instructions and continues to come in early once a week. The company knows the employee continues to come in early, but does not take further action. Are the additional hours worked by the employee compensable hours worked? Question 20: Postliminary Activities An employer does not compensate a car alarm installation employee for the ten to fifteen minutes or more he takes after returning home to upload data about his work to the company using a portable data terminal. Does this violate the FLSA? Question 21: Continuous Workday The car alarm installation employee has any time between 7:00 p.m. to 7:00 am. to upload the work data. Since he is completely relieved of duty from the time he makes the last installation and has hours in which to complete the upload task, is the employer excused from paying for a continued workday? 8

9 Question 22: Commuting Time An employee who is in charge of stocking and organizing the company s products that were delivered by another employee at various grocery stores has different work locations every day. The employee s commute from home to work varies, and can be as short as ten minutes and as long as one hour. The employer does not compensate for travel to and from home and work. Does this comply with the FLSA? Question 23: Lectures, Meetings, and Training Programs An employee attends meeting outside regular working hours, voluntarily, about a subject not directly related to the employee s job (training the employee for another job or teaching the employee a new skill as opposed to making the employee more efficient in the job) and does not perform any productive work. Is the meeting time hours worked? Question 24: Bonuses An employer includes certain bonuses in the regular rate for the purpose of computing the regular rate. The bonuses include production bonuses, bonuses paid for performing work in less than an established time, bonuses paid when certain types of merchandise are sold by the employee, cost of living bonuses, attendance bonuses and bonuses paid to attract the employee to perform unattractive takes. Is this necessary? 9

10 Question 25: Discretionary Bonuses An employer decides at the end of some years to give bonuses to its best hourly employees, some of whom have worked overtime. The employer does not rely on any particular performance metrics, but bases bonus decisions on who does the best job. The payment and the amount of the bonus is entirely at the employer s discretion. The employer has never announced this practice to employees, but various employees have received bonuses six out of the past ten years. The employer does not include the bonus in the regular rate. Does this comply with the FLSA? If the employer is required to include the bonuses in the calculation of the employee s regular rate, how is the calculation performed? Question 26: Meals and Lodging Provided for the Employee s Benefit and Convenience An employer does not include value of lodging provided for the employees benefit and convenience in computing the regular rate. Does this violate the FLSA? Question 27: Employee Benefits, Vacations, Paid Leave, and Expense Reimbursement An employer does not include contributions to benefit plans, paid vacations, leave or other hours not worked, and reasonable expense reimbursement in regular rate. Does this comply with the FLSA? 10

11 Question 28: Fluctuating Workweek Under an employment contract providing a fixed salary for a fixed number of hours per week in excess of the 40 hour maximum, the employer divides the fixed hours by the fixed salary to determine the regular rate. The employer pays half the regular rate for each hour up to the fixed number and one and half the regular rate for each our over the fix number. Does this comply with the fluctuating workweek method? Question 29: Weekly Commission Payments A retail clothing store pays its employees an hourly wage plus 2% commissions on clothing sales made. Several employees work overtime during one workweek. How should the employer calculate the employees regular rates for the purposes of determining overtime payments? Question 30: Other Commission Payments When it is not possible to allocate commission among workweeks, the employer assumes the employee earned an equal amount of commission week or each hour during the computation period. Does this comply with the FLSA? 11

12 Question 31: Recordkeeping An employer fails to keep and preserve record of employees working time and regular rate of pay, among other things. An employee sues the failing to pay overtime. Can the employer claim there is no evidence of the precise amount of time worked and regular rate earned by the employee to avoid liability? Question 32: Enforcement Will a USDOL investigator who finds a violation of the minimum wage or overtime provisions of the FLSA limit their demand for relief to those amounts, or also seek liquidated damages and in some cases an additional penalty? Are there additional penalties under state law? Question 33: Limitations Are claims for back wages under the FLSA limited to two years prior to commencement of the suit, or three years if the violations are willful? 29 U.SC 255(a). Is the statute of limitations under state the same as under the FLSA? 12

13 Question 34: Individual Liability Are individual managers liable under the FLSA, if they have the power to hire and fire the employees, supervise and control the employees work schedules or conditions of employment, determine the rate and method of payment, and maintains the employment records? Is the manager an employer under the FLSA? Question 35: Criminal Exposure May criminal sanctions be levied against an employer who wilfully violates the FLSA? Is any officer of a corporation who knowingly permits the corporation to violate the FLSA exposed to criminal liability? 13