Title Goes Here
Presented By:
Tracy A. Miller2415 E. Camelback RoadSuite 800
Phoenix, Arizona 85016
(602) 778-3704
LEGAL UPDATE / WAGE & HOUR ISSUES
A LOOK AT THE NUMBERS:Number of FLSA Lawsuits Filed in Federal Courts
7,064 7,764
6,785 6,786
6,120
5,210
2008 2009 2010 2011 2012 2013
23.5%of total
Employmentsuits
25.2%of total
Employmentsuits
25.5%of total
Employmentsuits
29.2%of total
Employmentsuits
37.8%of total
Employmentsuits
42%of total
Employmentsuits
Recent Trends� Increased DOL enforcement activity:
� Hired new wage and hour field investigators to implement new strategies for securing worker protections
� Fiscal Year 2014� Budget Requests of an additional $3.4 for the Wage & Hour
division to support greater enforcement of the FLSA and the FMLA.
� In 2010, the revitalized Wage & Hour Division (WHD):� Formally launched the “We Can Help” campaign nationwide to
increase visibility and accessibility on behalf of the 135 million workers “we protect”
� 2011 Apps for smartphones to track time worked from DOL
Recent Trends
� In 2011 DOL started using Administrative subpoenas.
� Employees working remotely or from home.
� The Blackberry (I-Phone, I-Pad, Android) dilemma
� Employees working remotely or from home.
� The Blackberry (I-Phone, I-Pad, Android) dilemma
� Employees working remotely or from home.
� The Blackberry (I-Phone, I-Pad, Android) dilemma
Recent Trends
� Workers misclassified as independent contractors
� Is the worker economically dependent on business to which services are provided?
� DOL, IRS and some states coordinating information and investigations.
� 60% of DOL investigations in Phoenix involve independent contractors
Who Is An Employee?
Department of Labor:
“The employer-employee relationship under
the FLSA is tested by ‘economic reality’ rather
than ‘technical concepts.’…. The U.S.
Supreme Court has on a number of occasions
indicated that there is no single rule or test for
determining whether an individual is an
independent contractor or an employee for
purposes of the FLSA.”
Source: Fact Sheet #13: Employment Relationship Under
the Fair Labor Standards Act
Who Is An Employer?
� FLSA contains a broad definition of
“Employer”:
“…Any other person who acts, directly or
indirectly, in the interest of the employer to
any such employees of such employer.”
What This Means To You
� Supervisors and Managers can be sued
individually for wage and hour violations
under the FLSA.
� Supervisors and Managers may have to
pay out of their own pocket/bank accounts
if they are found liable.
SUPERVISORSUPERVISORSUPERVISORSUPERVISORS
Recent Trends
� Failing to properly recalculate overtime when making non-discretionary payments
� Overtime is earned on a weekly basis
� Many bonuses are paid for monthly, quarterly or accrued performance
� Weeks and months do not necessarily correspond
� Failing to compensate for pre-shift and post-shift activities such as computer boot-up and power-down, shift exchanges and safety
meetings.
April 2011 FLSA Final Rule
� States in preamble that additional non-salary and non-overtime compensation is inconsistent with payment on a fluctuating workweek basis.
April 2011 FLSA Final Rule (Cont.)
� Clarifies Tip Pool Rules
� Tip pools - No limit on the amount of allowable mandatory employee tip pool contributions.
� Cannot include those who do not customarily and regularly receive tips.
� Imposes significant new notice and record-keeping obligations in connection with tipped employees.
Trends in Investigations
� WHD is instructing investigations to
impose civil money penalties (CMPs)
in first investigations if criteria for
willful violation can be established.
� WHD is imposing liquidated damages
– not in Phoenix yet.
� Renewed interest in records.
� Beware of tolling agreements.
Hours Of Work
� FLSA requires all employees to be paid at least the minimum wage for all hours worked.
� Non-exempt employees must also be paid the overtime rate of time and one-half their regular rates of pay for all hours worked in excess of 40.
The Employer Is In Control And
Must Enforce The Rule
In all cases, it is the duty of the employer to
exercise its control to see that the work is not
performed if it does not want it to be performed.
The mere promulgation of a rule is not enough.
Management has the power to enforce the rule
and must make every effort to do so.
29 C.F.R. § 785.13
What are “Hours Worked”?
� Hours of work include all time that the
employee is required, suffered, or permitted
to work.
� Includes:
� Employee’s normally scheduled hours
(i.e., employee’s normal shift).
� All “off the clock” time spent
performing job-related activities that
benefit the employer.
Examples Of
Off-The-Clock Work
� Employee in manufacturing plant sets up his
machine before clocking in.
� Employee clocks out and continues to work.
� Employee put on protective gear before
clocking in.
� Secretary works during lunch.
� Secretary stops at the post office on the way
home.
� Paralegal checks e-mail at home.
� IT responds to e-mail.
Examples Of
Off-The-Clock Work
� Booting up computer before clocking in.
� Clocking out before shutting down
computer system.
� Taking a 15 minute lunch.
� Taking or making phone
calls before or after normal
work hours.
� Attending a safety meeting
before clocking in.
Common Compensable Time Issues
� Travel Time
� On-Call Time
� Rounding Clock Time
� Donning & Doffing Time
� Breaks and Meal Periods
� “Off the Clock” Work
� Training Time
Common Compensable Time Issues:
Travel Time
� Is travel time to and from work compensable? No -- unless:
� Employee works during commute.
� Employee begins working before leaving home (possibly -- this refers to a continuous work day).
� Any traveling during normal work hours is considered work time.
� Same day travel to and from another company facility? Yes.
� Overnight travel away from home? No -- except for time that cuts across normal work hours.
Common Compensable Time Issues:
On-Call Time
� “Waiting to be engaged or engaged to wait.”
� Whether on-call time counts as work hours
depends on the “degree of constraint on
employee’s time.”
� Employee must be able to use time effectively
for his or her own purposes for it not to be
compensable time.
� Not compensable time if employee is “merely
required to leave word where he or she can be
reached.”
� Example: Nurses required to report in
uniform 20 minutes after receiving a
call.
� Nurses lived an average of 18 minutes
from hospital.
� Nurses called in 40 percent of the time.
� Found to be too restrictive.
Common Compensable Time Issues:
On-Call Time
Common Compensable Time Issues:
Rounding
� May round to nearest quarter hour.
� 5:53 -- can be round forward to 6:00
� 5:52 -- can round back to 5:45
� Units clock: 25 units equals 15 minutes.
� 88 units -- round forward to 100
� 87 units -- round back to 75
Unpaid Interns
� Voluntary work directly related to the
employee’s job is compensable.
� If the employee works at the end of a shift
and desires to stay and finish a project, the
time is compensable.
� Employee cannot volunteer to work over
without being compensated.
Common Compensable Time Issues:
Breaks & Rest Periods
� Bona fide meal periods
� In order to be considered non-compensable, meal period should be at least 30 minutes.
� Employees must also be totally relieved of any compensable activity
Common Compensable Time Issues:
Training Time
� Time spent attending lectures, meetings, and training programs need not be counted as hours worked, provided the following conditions are met:� Meetings are held outside normal work
hours.
� Attendance is voluntary.
� Course is not directly related to employee’s job.
� Employee does no productive work during meeting.
Overtime Is Paid
On The “Regular Rate”
� Overtime must be at one and one-half times
the regular rate.
� The “regular rate” consists of “all
remuneration for employment.”
� All remuneration for “time worked and effort
expended that relates to the employee’s
quantity or quality of work.”
Usually Included In
The Regular Rate
� Shift differential
� Attendance bonus
� Production bonus
� Quality bonus
� Commission
payments
� Retention bonus
� On-call pay
� Installment-paid
sign-on bonus
� Longevity bonus
� “Quantity- or
quality-” related
contest prizes
Usually Excluded
From Regular Rate
� Gifts
� Discretionary bonuses
� Suggestion awards
� Pay for time off
� Show-up pay
� Bonuses as percent of total wages
� “Premium” pay
� “Traditional” benefits
� Sign-on bonus “paid up front”
Title Goes Here
Presented By:
Tracy A. Miller2415 E. Camelback RoadSuite 800
Phoenix, Arizona 85016
(602) 778-3704
LEGAL UPDATE / WAGE & HOUR ISSUES