Tag Archives | wage and hour

Holiday wage and hour traps to avoid

By on December 7, 2011 in Our Blog

In addition to cheer and holly, the holiday season is a time for the unwary employer to succumb to wage and hour pitfalls.  Why?  Simply because this is such a busy time of year for many employers.  Retailers earn a huge chunk of annual revenue this time of year.  Other employers need more hands on deck to deal with end-of-the-year administrative issues.  Many employers hire seasonal workers, or simply have existing employees putting in more hours.

When it comes to seasonal hires, employers should not assume they can be classified as “independent contractors” instead of employees.  Most likely, they are employees, plain and simple, despite the fact that they are hired for a short period of time.  Thus, all the attendant minimum wage and overtime rules apply.  To qualify as independent contractors, they would need to satisfy all of the requirements set forth by the Department of Labor.

As for existing(non-exempt) employees, employers need to take extra care to ensure hours are accurately recorded for purposes of overtime pay.  Inaccurate time cards can pose a big problem, especially if the employer has a system that automatically clocks employees out.  So add an extra layer of scrutiny to wage and hour practices this time of year – it’s well worth it.

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The Paycheck Fairness Act: what employers need to know now

By on September 29, 2010 in Our Blog

The Paycheck Fairness Act — which is up for consideration by the Senate after passing the House — would significantly alter the Fair Labor Standards Act (“FLSA”), and not in a good way for employers.  Much has been written about Paycheck Fairness (see The Ohio Employer’s Law Blog for a good synopsis), with virtually all members of the business community staunchly opposed.  The Obama administration, on the other hand, supports the bill, and Secretary of Labor Hilda Solis recently advocated for its passage in a live webcast.  

What’s the big deal about the bill?  In a nutshell, it does not simply ensure “paycheck fairness” between men and women.  It would make it much more difficult for employers to defend against wage discrimination claims, allow for unlimited damages, and make class action status far easier to obtain.  Employers should stay tuned as the debate continues and the Senate moves closer to consideration.

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Is your “intern” entitled to minimum wage?

By on May 24, 2010 in Our Blog

As we previously cautioned, unpaid internships can run afoul of the Fair Labor Standards Act, and the Department of Labor is stepping up enforcement efforts as more college grads are offereing their services for free in a tough job market.

The issue is whether the intern should be considered an “employee” under the FLSA and therefore subject to wage and hour laws like overtime and minimum wage. To aid employers in making this determination, the DOL recently issued Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, which sets forth 6 criteria employers must apply to determine whether an intern should in fact by paid as an employee:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you are uncertain as to whether the criteria are met, keep in mind that the DOL defines the employment relationship “broadly.”  

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Gas station attendants strike oil in wage and hour lawsuit

By on April 27, 2010 in Our Blog

The Department of Labor recently obtained nearly $4 million in back wages for gas station employees in New Jersey.  Raceway Petroleum and its individual owner will pay $1.95 million in overtime compensation and $1.95 in liquidated damages to over 700 former and current employees.  The judgment arises from a 2006 class action lawsuit filed by the DOL that alleged the gas station failed to keep accurate time records and failed to pay overtime for obviously non-exempt employees.  Over twenty five current and former employees testified in a three week jury trial.  In addition to its hefty financial obligation, Raceway must also provide extensive training on compliance under the FLSA.

This case highlights several important points for employers.  First, the DOL means business when it comes to FLSA violations.  In the words of Secretary of Labor Hilda Solis, this case “should send the message that the Labor Department will not tolerate employers that do not comply with the law in violation of worker rights.”  Second, it is incumbent on employers to meticulously record hours worked.  The failure to do so can be devastating. At trial, employees testified to working 100 hour weeks, and the employer had no means to disprove the testimony.  Third, personal liability can attach to FLSA violations.  Finally, wage and hour training should be a priority.  Better to do it proactively than to be ordered to do it by a court.  

For more thoughts on the state of wage and hour law and best practices in avoiding liability, take a look at Jon Hyman’s post yesterday on wage and hour audits.

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Beware the unpaid internship. Most of them are illegal, per the Department of Labor.

By on April 5, 2010 in Our Blog

The Department of Labor is taking an aggressive look at unpaid internships.  In recent years, as it has become harder and harder for college students to find paying work in their fields of choice, many have accepted unpaid internships, either to get a foot in the door or to round out their resumes.  In the majority of cases, though, the employers that avail themselves of this free labor are breaking the law, according to the DOL.  In response, the agency is stepping up enforcement nationwide.

According to the DOL’s acting director of the Wage and Hour division, “if you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.”  While non-profits can avail themselves of unpaid labor in the form of volunteers, for-profit employers do not have this option, except in very narrow circumstances.

For unpaid internships to comply with wage and hour laws, they must meet established criteria.  For example, the internship is supposed to be similar to the training provided in an academic or vocational setting.  It is also not permitted to displace regular paid workers.  And, the employer is to derive “no immediate advantage” from the intern’s work.  

In increasing cases, internships do not come close to meeting these criteria.  Some states, such as California and Oregon, have sought and obtained significant amounts of back pay for unpaid interns who they claim were really employees in disguise.  Another significant problem with interns is that they are not protected by the employment discrimination laws.  Thus, there have been legal disputes about whether an individual claiming harassment or the like was an intern or an employee.

If you are considering using unpaid internships over the coming summer months or at any time, consult with counsel to make sure you don’t run afoul of the law.

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Employment Discrimination a Focus for 2010

By on November 17, 2009 in Our Blog

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Employers need to be extra vigilant in reviewing their hiring and firing policies in preparation for the year ahead. Lawsuits and agency charges are on the rise due to increased government initiatives including:

  • The Obama administration has declared the enforcement of workplace laws a high priority.
  • Workplace discrimination claims jumped 15% in 2008, the single biggest year-to-year jump in EEOC history.
  • The EEOC and the Department of Labor are using hefty increases for enforcement activities in 2010.
  • The EEOC plans to grow its staff by 300 employees including investigators, attorneys and mediators.
  • Systemic discrimination, which is more difficult and expensive to defend, is a primary focus.

We recommend an annual review of hiring and firing policies. This can be part of an HR self-audit, which is a relatively inexpensive way to avoid potentially staggering costs. Sindy and Allison West, our colleague on the west coast, are speaking in a Webinar on Thursday, November 19th, at 2:00 eastern time: HR Self-Audits: Spot and Fix HR Practices That Lead to Lawsuits. Sindy and Allison will lay out a blueprint for hitting the most important areas of vulnerability and conducting a rock-solid audit. The 60-minute session will cover:

  • How to review particular areas of vulnerability, ranging from:
    • anti-discrimination policies
    • hiring and firing procedures
    • compensation plans
    • wage-and-hour policies
    • documentation practices

  • A step-by-step guide of what a solid audit should include;
  • Developing a comprehensive audit strategy, including gaining executive buy-in;
  • Best practices in documenting the audit results; and
  • Next steps once the results are in.

Employers who are diligent in reviewing and training will avoid claims and maintain a more efficient and productive workplace.

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“We will not rest until the (wage and hour) law is followed by every employer”

By on September 9, 2009 in Our Blog

U.S. Secretary of Labor Hilda Solis made this statement last week, in response to a report released September 2, 2009 that revealed, among other things, the wage and hour laws are not protecting many American workers.  Researchers at the National Employment Law Project, UCLA, the University of Illinois – Chicago, Cornell, and Rutgers University surveyed over four thousand workers in low-wage industries in Chicago, L.A. and New York.  The results – reported in the New York Times and blogged about by Jon Hyman last week – were startlingly dismal.  In a nutshell, hordes of workers are not paid minimum wage or overtime, not given legally required meal breaks, and not paid at all for hours worked off-the-clock.

The Department of Labor promised to change these statistics.  ”I am committed to the vigorous enforcement of our laws and will make use of the full weight of my authority to find and prosecute violators,” Solis stated.  To that end, she plans to hire 250 more wage and hour investigators by the end of 2010.

If you have not recently audited your wage and hour practices, there is no time like the present.

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