HR Forum: FLSA

Showing posts with label FLSA. Show all posts

8 important tips when hiring temps

For many small businesses, hiring temps is the perfect solution during seasonal upswings (the holidays are right around the corner!) or when extra help is needed because someone is out on maternity or disability leave. Or perhaps you’re looking to fill a recently vacated position but want to “test the waters” first: A temporary worker can be offered a full-time position if you’re happy with his or her performance after a certain period of time.

While there are many advantages to hiring temps, there are precautions to consider, as well. Keep the following in mind when hiring temporary workers:

1)
Temporary employment involves a set period of time, such as days, weeks, months, the duration of a special project or the length of time a permanent employee is out. Generally speaking, an employee is either full-time or part-time, regardless of temporary status. This matters because certain federal and state employment laws apply to employers based on the number of employees – and may or may not count temps in the total.

2)
When you work with a staffing agency, the agency is responsible for recruiting, screening, testing and hiring workers; handling timekeeping, payroll and related taxes; and providing unemployment and workers’ compensation insurance. If you decide to use an outside agency, you’ll typically pay a fee that includes the candidate’s hourly rate and the agency’s markup to cover the above services.

3)
Even if the agency oversees the above services, you are considered the temp’s co-employer. As such, you need to be mindful of workplace issues like safety, preventing discrimination and harassment, and wage and hour compliance under the Fair Labor Standards Act (FLSA).

4)
If you hire the temp directly, you will need the individual to fill out an I-9 form and provide the appropriate documentation verifying his or her eligibility to work in the United States. The temp also must fill out a W4 so you can process the correct withholdings for payroll.

5)
At the very beginning of the temp relationship, specify the pay rate, pay period, pay day, eligibility for benefits (if any) and length of employment. Remember that if a temporary, non-exempt employee works more than 40 hours in a workweek, he or she is entitled to overtime pay for those hours.

6)
You are not required to provide paid time off (vacation, sick or personal days) to temporary employees. You don’t have to extend health insurance either. Many employers consider this a significant cost savings - and benefit - to hiring temps.

7)
Whether you’re working with an agency or hiring a temp on your own, it’s important to explain the job, the skills needed and your basic expectations. Take the time upfront to work through these details to ensure a good fit and avoid problems down the road.

8)
This should go without question, but always treat your temp workers with the same respect and care you do your permanent staff. Tammy is not “just a temp,” but an important part of your workforce, if even for a short amount of time.

SHRM encourages lawmakers to update FLSA to meet changing needs

The Society for Human Resource Management (SHRM) recently came before the U.S. House Subcommittee on Workforce Protections with an urgent message: Update the 73-year-old Fair Labor Standards Act (FLSA) to satisfy the demands of today’s workplaces.

According to Nobumichi Hara, an HR executive and SHRM member who testified at the Congressional hearing, “The FLSA reflects the realities of the industrial workplace in the 1930s and not the workplace of the 21st century.”

As senior vice president of human capital for Goodwill of Central Arizona in Phoenix, Hara drew on his own experience to illustrate some of the FLSA limitations he’s encountered with Goodwill employees. Specifically, he expressed concern that the FLSA doesn’t permit employers to provide flexible workplace benefits, such as flextime, telecommuting and compressed workweeks, to millions of nonexempt (or hourly) workers.

In his closing remarks, Hara shared the sentiment of many who testified – that reform of the FLSA would encourage employers to better meet the needs of their employees.

8 essential tips when hiring temps

For many small businesses, hiring temps is the perfect solution during seasonal upswings or when extra help is needed because someone is out on maternity or disability leave. Or perhaps you’re looking to fill a recently vacated position but want to “test the waters” first: A temporary worker can be offered a full-time position if you’re happy with his or her performance after a certain period of time.

While there are many advantages to hiring temps, there are precautions to consider, as well. Keep the following in mind when hiring temporary workers:

1) Temporary employment involves a set period of time, such as days, weeks, months, the duration of a special project or the length of time a permanent employee is out. Generally speaking, an employee is either full-time or part-time, regardless of temporary status. This matters because certain federal and state employment laws apply to employers based on the number of employees -- and may or may not count temps in the total.

2) When you work with a staffing agency, the agency is responsible for recruiting, screening, testing and hiring workers; handling timekeeping, payroll and related taxes; and providing unemployment and workers’ compensation insurance. If you decide to use an outside agency, you’ll typically pay a fee that includes the candidate’s hourly rate and the agency’s markup to cover the above services.

3) Even if the agency oversees the above services, you are considered the temp’s co-employer. As such, you need to be mindful of workplace issues like safety, preventing discrimination and harassment, and wage and hour compliance under the Fair Labor Standards Act (FLSA).

4) If you hire the temp directly, you will need the individual to fill out an I-9 form and provide the appropriate documentation verifying his or her eligibility to work in the United States. The temp also must fill out a W4 so you can process the correct withholdings for payroll.

5) At the very beginning of the temp relationship, specify the pay rate, pay period, pay day, eligibility for benefits (if any) and length of employment. Remember that if a temporary, non-exempt employee works more than 40 hours in a workweek, he or she is entitled to overtime pay for those hours.

6) You are not required to provide paid time off (vacation, sick or personal days) to temporary employees. You don’t have to extend health insurance either. Many employers consider this a significant cost savings -- and benefit -- to hiring temps.

7) Whether you’re working with an agency or hiring a temp on your own, it’s important to explain the job, the skills needed and your basic expectations. Take the time upfront to work through these details to ensure a good fit and avoid problems down the road.

8) This should go without question, but always treat your temp workers with the same respect and care you do your permanent staff. Tammy is not “just a temp,” but an important part of your workforce, if even for a short amount of time.

How the recently updated FLSA regulations may impact your business

On May 5, 2011, a handful of updated Fair Labor Standards Act (FLSA) regulations went into effect, according to the final rule published in the Federal Register a month earlier. While many expected these long-awaited revisions to address issues with the 2008 proposed rule, the final changes offer clarification more than actual new requirements.

The FLSA updates are especially relevant for employers who use the FLSA “tip credit” to meet minimum wage requirements, as well as those with salaried, nonexempt employees compensated under the fluctuating workweek payment method.

To keep you on track with the latest guidelines, here’s a summary of the key changes:

Tip credit – In general, the FLSA requires employers to pay employees a minimum wage of $7.25 per hour. However, a “tip credit” provision allows you to pay tipped employees below minimum wage, as long as the wage and the employees’ tips equal at least the minimum wage when combined. Under the final rule, an employer using a “tip credit” must inform employees of its use in advance, as well as explain the direct cash wage the employee is being paid and the additional amount the employer is using as a credit against tips received.

Tip pools – Regarding tip pooling (placing all tips in a common pool for disbursement), the pool can only include employees who “customarily and regularly” receive tips. If non-tipped employees are in the pool, you cannot take a tip credit and must instead pay the full minimum wage. Under the tip pooling provision, you must also:

•    Notify employees of any mandatory tip pool contributions
•    Only take a tip credit for the amount of tips each employee ultimately receives
•    Avoid retaining any of the employees’ tips for any other purpose

Fire protection activities – The final rule eliminates the “20 percent rule” for employees engaged in fire protection activities, such as firefighters, paramedics, emergency medical technicians, rescue workers, ambulance personnel and hazardous material workers. These individuals are no longer included among the exempt employees who may spend up to 20 percent of their working time on nonexempt, non-fire protection work. This 20 percent provision now applies to law enforcement personnel only.

Proposed changes that didn't make the cut ...

Just as significant as the new regulations that passed were those that didn’t. The DOL rejected a handful of proposals (or clarifications to existing regulations), including:

“Fluctuating workweek” method of calculating overtime for salaried, nonexempt employees – The fluctuating workweek method of overtime allows employers to pay a fixed salary to nonexempt employee whose hours vary from week to week – and to only pay the employee at a rate of one-half the regular hourly rate for any overtime hours worked in a week. Under an earlier proposal, bonus or premium payments would have been included in calculating the regular rate. This was dismissed, however, since critics feared it would lead employers to reduce fixed weekly salaries and shift the bulk of wages to bonus and premium pay.

Granting of requested compensatory time – Also dismissed was a proposal to allow public-sector employees to grant compensatory time requested “within a reasonable period” of the request, instead of the specific dates submitted. The DOL upheld its longstanding position that employees are entitled to use compensatory time on the dates they request, as long as it doesn’t cause undue disruption to the business.

Overtime exemption for certain employees – The DOL will not allow the following to qualify for an overtime exemption: service managers, service writers, service advisers, service salesmen, sellers of boats, trailers and aircraft, partsmen, and mechanics servicing trailers or aircraft.

Meal credits – Finally, the DOL will not permit an employer to count the cost of a company-provided meal toward the employee’s minimum wage, whether or not accepting the meal is voluntary.

Remember:
While many of these FLSA updates are specific to certain businesses and industries, others have more far-reaching application. Now is the time to carefully review the changes to ensure you’re in compliance with the latest rules.

You've gathered the absence data ... but now what?

Today's post comes from G.Neil's HR News Weekly:

You’re well-versed in the Fair Labor Standards Act (FLSA) time and pay laws, you keep careful records of each employee’s attendance and you’ve even identified your company’s biggest attendance issues. But that’s where it stops, according to a Liberty Mutual survey of 300 human resource and benefits professionals conducted in April 2011.

The survey found that employers are making the effort to stay informed and track attendance, but they’re not using the numbers to address the bottom-line impact of employees missing work. Specifically, 53% of respondents ranked compliance with state and federal leave laws as their greatest concern, yet nearly 50% didn’t know the cost of absence within their own workplaces.

That can be an expensive mistake! The U.S. Department of Labor (DOL) calculates that uncontrolled employee absence costs employers $100 billion per year, based on 2009 data.

“While employers are clearly aware of how important it is to comply with leave regulations — and are therefore tracking these leaves — many haven’t taken steps to use the data they collect to proactively manage absence and control the total financial impact on their companies,” says Heather Luiz, disability product manager for Liberty Mutual Group Benefits. insurancenewsnet.com

From at-a-glance tracking sheets to software, G.Neil offers a variety of practical tools to help you manage attendance, employee vacations, sick time and other time off.

Beyond the tracking, it's up to you to review the data and look for weaknesses in employee attendance. Is it a certain handful of employees who call in sick or come in late month after month? It may be time for these employees' managers to have a heart-to-heart talk with them about what is going on and what they expect going forward. If your attendance rules are clear and you enforce them consistently, this type of counseling shouldn't pose any problems.

Managing medical leave - and preventing FMLA abuse - can be a little trickier. In addition to the administrative side of FMLA leave (requiring leave request forms and medical certifications, for example), you'll need to track used and available FMLA time based on the latest federal regulations.

Employee or independent contractor? Proposed bill to target misclassification

Today's post comes from G.Neil's HR News Weekly:

Mistakenly classifying employees as independent contractors not only violates the Fair Labor Standards Act (FLSA), but it also deprives workers of certain rights.

The Payroll Fraud Prevention Act recently introduced in the Senate would take a firm stance against employers who misclassify workers. The bill would require employers to:

•    Keep records clearly indicating the status of each worker as an employee or non-employee
•    Notify workers of their classification as an employee or non-employee
•    Pay steeper penalties for misclassifying workers and violating their overtime and minimum wage rights

The bill would also provide protections to workers who are fired or otherwise discriminated against for trying to be reclassified as employees. Further, the DOL’s Wage and Hour Division (WHD) will conduct audits on industries that frequently misclassify workers.

In a press release, Ohio Senator Sherrod Brown stated,

“Intentionally treating workers as subcontractors when they really are employees is payroll fraud: it cheats workers, taxpayers and other businesses that play by the rules.”

Need help determining whether a worker is an employee or an independent contractor? Check out easy-to-use software for guidance.

Top 3 employment law trends to keep on your radar

Running a business these days is certainly no picnic, thanks to the still-struggling economy and near-constant employment law risk. Management must maintain that perfect balance of awareness and action - or find themselves on the receiving end of a costly, potentially crippling lawsuit.

According to Shanti Atkins, Esq., president and CEO of ELT, the biggest employment law concerns plaguing employers today are:

1) Discrimination. And the claims aren't predominantly sexual harassment anymore, but also sexual orientation, religious and disability discrimination. Are your anti-harassment and anti-discrimination policies in order and, even more important, are you training your managers and staff - thoroughly and regularly?

2) Violence and bullying. Did you know that approximately 20 percent of all violent crime occurs in the workplace? This is no time to ignore bullying and other threatening behavior that could escalate into something more dangerous. Be on the lookout for early warning signs and encourage employees to report concerns immediately so that you can respond appropriately.

3) Wage and hour violations. Perhaps the biggest risk of them all, wage and hour class action lawsuits have expoded. In fact, these claims account for a whopping 84 percent of all employment class action lawsuits. Just as alarming, the Department of Labor (DOL) estimates that more than 80 percent of employers are out of compliance with federal and state wage and hour laws. Not knowing is no excuse. Make sure you're educated on the latest Fair Labor Standards Act (FLSA) guidelines and that you carefully explore any gray areas.

Wage and hour lawsuits outnumber all other class actions combined

According to a 2010 survey of more than 1,800 legal and HR professionals, one-third of respondents were hit with a wage and hour claim in the past year. At the same time, more than half of respondents shared that their organization has increased spending for wage and hour compliance.

Shanti Atkins, the President and CEO of ELT, the workplace compliance training company that conducted the survey, explains the dramatic rise in claims: “Employers are being hit from two sides. On one, there is a better funded, more fully staffed Dept. of Labor (DOL) that has made fighting wage theft one of its key priorities. On the other side are aggressive plaintiff law firms that literally salivate at these easy-to-identify and easy-to-win, lucrative class actions.”

To complicate matters further, the DOL reports that more than 80% of employers are out of compliance with federal and state wage and hour laws! The top Fair Labor Standards Act (FLSA) that get employers in trouble are:

• Misclassifying a non-exempt employee (eligible for overtime) as salaried/exempt
• Not paying overtime to non-exempt employees for all hours worked, including unauthorized overtime
• Making improper salary deductions from exempt and non-exempt employees

Go here for clear guidelines on how to comply with FLSA regulations – and practical forms and recordkeeping tools to keep you on track.

Federal agencies to bump up enforcement in 2010

Last year a number of federal agencies increased their compliance enforcement efforts, including the Department of Labor (DOL), Internal Revenue Service (IRS), Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA) and Department of Homeland Security (DHS). Recent actions by these agencies suggest that this trend will continue in 2010:

• Designed to raise employee awareness of their rights under the Fair Labor Standards Act (FLSA), the recently launched, DOL-sponsored We Can Help campaign will undoubtedly increase the number of employee wage and hour complaints to the agency. The campaign is actively targeting the country’s lowest-paid workers, regardless of citizenship status, and encourages them to submit information, including pay stubs and hours of work, via the agency’s website. In addition, the DOL received a significant uptick in funding for 2010, and is requesting more in its proposed 2011 budget.

• Immigration enforcement is a priority for the Obama administration, and the DHS is following through with plans to conduct 25,000 on-site inspections at companies who employ workers with H-1B visas – an increase of nearly 20,000 over the previous year.

• Secretary of Labor Hilda Solis has promised more OSHA inspections, and employers can expect to see a shift to a more aggressive, citation-based approach from OSHA. Last year, between July and September, OSHA performed nearly 700 inspections and issued over 1,000 violations that resulted in $1.6 million in fines.

Enforcement efforts like the We Can Help campaign and others underscore the importance of maintaining strict compliance with federal regulations, including those covering labor, safety, tax, immigration and employment law. Stay tuned for more updates as they come.

Misclassifying employees can be a seriously costly mistake

Incorrectly classifying employees as actual employees or independent contractors is a legal risk that can cost your business millions. The federal government is cracking down on the issue, and many states are pushing to make worker misclassification a crime.

Two businesses learned this lesson the hard way. SOH Distribution Co., Inc. and G & A Snack Distributing, Inc. – subsidiaries of Snyder’s of Hanover, Inc. – misclassified nearly 1,500 delivery drivers as independent contractors rather than full-time employees. The employees took action, resulting in a $10 million court settlement to be distributed among the drivers.

Get expert guidance on properly classifying employees with ComplyWare™ FLSA software, which includes a convenient Classification Wizard and the latest FLSA regulations.

Survey reveals heavy financial burden of class action lawsuits

Based on the sixth annual Workplace Class Action Litigation Report by Seyfarth Shaw LLP – a leading law firm handling complex employment litigation – employers should be aware of several key trends that occurred in federal and state courts last year:

• Class action filings seeking recovery for unpaid wages and 401(k) losses increased. More age discrimination and Worker Adjustment and Retraining Notification (WARN) lawsuits were filed, too, due to workers being displaced in layoffs.

• Wage and hour litigation outpaced all other types of employment-related cases, especially in CA, FL, IL, NJ, NY, MA, MN, PA and WA.

• The Obama Administration’s renewed focus on regulation and enforcement, mostly through the DOL and EEOC, continues to increase exposure for employers.

• Massive settlements were seen in several nationwide class actions, as plaintiffs’ lawyers pushed for greater damages. The top 10 employment discrimination settlements in 2009 totaled $86.2 million, while the top 10 wage and hour settlements reached $363.6 million.

Just one major, costly lawsuit could be devastating to your business. Stay on the right side of the law and reduce your risk with legally compliant products and services – from Poster Guard® Compliance Protection to the latest FMLA, FLSA, OSHA and HIPAA compliance materials.

Unpaid internships a "no-no" with Department of Labor

While job openings are certainly scarce during these recessionary times – and companies are looking for ways to cut costs - those aren’t excuses for doling out unpaid internships to young people eager to get a foot in the door. Federal and state regulators are concerned that employers are abusing internships and using them, in a sense, for free labor.

In fact, the DOL plans to crack down on employers who offer unpaid internships, taking the position that interns are entitled to wages under the Fair Labor Standards Act (FLSA). And to support that position, the previously flexible interpretations of whether or not to pay interns are about to get much stricter.

"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," said Nancy J. Leppink, director of the Department's Wage and Hour Division.

In general, for an unpaid internship to be lawful under the FLSA, the intern must be properly classified as a "trainee" rather than an "employee." To help you determine this, the DOL has developed a six-factor test.

Interns are likely to be deemed “trainees” if:

1) The training is similar to what might be offered in an academic institution or vocational school.
2) The training is for the benefit of the trainees.
3) The trainees do not displace regular employees, but work under their close supervision.
4) The employer derives no immediate benefit from the training, and occasionally the employer's operations may be impeded by the training.
5) Trainees are not entitled to a job at the end of the training period.
6) The employer and trainees understand that the trainees are not entitled to wages for time spent in training.

In the meantime, legal experts offer this advice: Assume that all unpaid internships are unlawful, and carefully tailor your training programs for new or prospective employees to avoid liability.

Previous post:

Unpaid internships: A rip-off or legitimate resume booster?

Breaks for breastfeeding workers under the health care reform act

Due to the exhaustive coverage in the past week and a half, most of us are well aware of the key changes that will occur under the recently signed Patient Protection and Affordable Care Act. But with all the attention the sweeping changes are getting, some of the smaller, less controversial, developments are flying under the radar.

Take breaks for breastfeeding mothers, for example. Under the new health care reform bill, employers covered by the Fair Labor Standards Act (FLSA), must provide “reasonable” breaks to mothers to express milk for their infants up to one year old.

The FLSA amendment also requires employers to furnish a private space, other than a restroom, for mothers to express milk. (Employers with fewer than 50 employees, however, may be excused from this requirement if it would “impose an undue hardship by causing the employer significant difficulty or expense.”)

While many states already require unpaid breaks and private areas for breastfeeding mothers, the health care reform bill will make it a federal requirement for employers.

For advocacy groups like the National Women’s Law Center, this is an important development for working women. As Kelli Garcia, a Fellow with NWLC and contributor to its blog, shares:

Not all mothers are able or want to breastfeed. Sometimes, it’s because there are too many barriers that make breastfeeding challenging for new mothers. Thanks to this law, fear of losing your job because you need to take a break to pump or fear of exposing yourself to your co-workers because you cannot find a private place to express breast milk will no longer be among those barriers.

Garcia adds that although it would be even better if employers were required to provide paid breaks for mothers to pump, the law is a step in the right direction.

In the meantime, lawmakers are working to define what is “reasonable” break time and appropriate private space, as well as the penalties for violating the requirements.

What about your company? Are you in a state that already requires this benefit to breastfeeding mothers? And if so, what have you done regarding scheduling and space to make these requirements a win-win for you and your employees?

Independent contractor vs. employee: Proposed bill would toughen classification standards

In mid-December, 2009, Senator John Kerry introduced a bill in the Senate that focuses on employers misclassifying workers as independent contractors. The bill, called the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S.2882), would amend Section 530 of the Revenue Act of 1978.

The “safe harbor provision” of Section 530 gave businesses some leeway in classifying workers as independent contractors for employment-tax reasons. If certain requirements were met and the business had a “reasonable basis,” it could treat an individual as an independent contractor without having to resort to the IRS’ 20-factor common-law test.

But that could change with Kerry’s proposed legislation. Under the Taxpayer Responsibility, Accountability, and Consistency Act, a business would have a “reasonable basis” for classifying a worker as an independent contractor (and not be held to the common-law test) only if it met these two new standards:

1) The employer didn’t treat any worker in a substantially similar position as an employee since December 31, 1977

2) The independent contractor classification was based on a written statement from the Department of Treasury that the worker was not an employee, or on an IRS examination that concluded the worker was not an employee

The bill would also require you to issue a Form 1099 to anyone your business pays more than $600 annually, in addition to giving workers classified as independent contractors the right to obtain a determination of their status from the Secretary of the Treasury.

So what’s your status, Gladys?

If a worker is classified as an employee, you are required to withhold income taxes, and pay Social Security, Medicare and unemployment taxes. With independent contractors, however, you do not have these same obligations.

Yet if you misclassify an employee as an independent contractor, you may pay dearly down the road.

Basically, the questions in the IRS’ common-law test fall under three categories:

1) Behavioral control – Does your business direct or control how a person’s work is done through instructions, training or other means?

2) Financial control – Do you direct or control the business aspects of a person’s job, such as reimbursing expenses or providing supplies?

3) Type of relationship – What is the relationship between your business and the worker, such as written contracts or employee-type benefits like insurance and vacation pay?

In most cases, if your level of control extends to what is done by an individual – as well as how it is done – then that worker is an employee and not an independent contractor. An independent contractor, as a sole proprietor, directs many aspects of the business relationship.

Getting this right is critical – and could become more so under the Taxpayer Responsibility, Accountability, and Consistency Act. Misclassify a worker and you could be looking at a substantial tax bill and penalties from the IRS. There’s also the possibility of a misclassified independent contractor suing you for not providing the necessary overtime, meal periods or rest breaks that an employee would receive.

$1 million in back wages nothing to cluck about for poultry processor

The U.S. Department of Labor (DOL) recently reached a settlement agreement in a back wage case against the country’s largest poultry processor - Texas-based Pilgrim’s Pride Corp. Under the terms of the agreement, Pilgrim’s Pride will pay more than $1 million in overtime back wages. The recovered wages affect nearly 800 former and current processing workers at the Dallas facility, where the company failed to pay its employees for all hours worked under Fair Labor Standards Act (FLSA) guidelines.

Of particular interest in this case was the fact that employees were not properly paid for the time spent “donning and doffing” work-related protective gear.

Donning and doffing – now that’s a term you don’t hear everyday. Basically, employers must pay employees for the time spent on preliminary and/or post-shift activities that are an “integral and indispensable part” of the employees' principal activities. Especially relevant in the food-processing industry, this includes the time it takes employees to put on and take off protective gear, like smocks, gloves and rubber boots.

Regarding the Pilgrim’s Pride case: "These low-wage workers were not paid for time donning and doffing at the beginning and end of the workday and before and after meals," said Cynthia Watson, regional administrator for the Labor Department's Wage and Hour Division's Southwest Region.

The takeaway for employers, then, is that you take stock of your current pay practices to be certain you’re complying with this FLSA requirement. Just as important as providing the appropriate protective gear to your staff is paying them for the time it takes to don and doff the gear!

When wicked winter weather grounds your workforce

“Oh the weather outside is frightful/But the fire is so delightful/And since we’ve no place to go/Let it snow! Let it snow! Let it snow!”

No place to go? What about employees trying to get to their jobs! What are they supposed to do when the wind is howling, the snow is drifting and the roads are icing over?

With much of the country dealing with the blustery weather that is so common in the months of January and February, now might be a good time to review your HR rights and responsibilities when crippling snowstorms are in the forecast.

The main issue for most employers is whether or not they must pay employees who don’t - or can’t - come to work because of weather conditions. And if you can charge them with vacation or other PTO for missed work.

Like many pay issues, this depends on the exemption status of the employee. Under FLSA guidelines, employers should use discretion before docking the pay of exempt employees who miss work for weather-related reasons. Basically, if you remain open during bad weather and an employee does not report to work, you may make pay deductions for full-day absences only. (If the employee works any part of the day, you must pay him or her for the entire day.) Yet if you shut down your business, you should pay exempt employees their regular salaries. Keep in mind, however, that you have the right to require employees to use accrued time off to cover the missed work – assuming they have vacation or PTO available to them.

Regarding non-exempt hourly employees, it’s up to you whether to pay them for snow days. Basically, the FLSA doesn’t require you to pay them for hours they would have worked if severe weather wasn’t a factor. But again, you may require non-exempt employees to use vacation or PTO to cover their absence. Also, it’s up to you whether you allow hourly employees to make up any weather-related lost work.

Next order of business: Does your employee handbook contain a severe weather policy? If not, you’ll want to develop one ASAP that covers:

Closing the business – How you’ll determine whether to shut down for severe weather (snowfall more than six inches, local school districts are closed, etc.)

Communication – How you'll communicate a business closure to your employees (call-in number, website with instructions, etc.)

Employees with children - Whether employees who are able to report to work, but who have children whose schools or daycare facilities are closed, may bring their children to work

Telecommuting - Whether employees who are unable to report to work may work from home - and the conditions surrounding this arrangement (such as remaining accessible via computer or telephone)

A final note: While not a policy issue, you may also want to provide a list of cold-weather precautions for your employees, such as how they can protect themselves in frigid temperatures, safe-driving trips (including emergency tools to stow in their vehicle, like a snow scraper, flares and flashlight) and what to do in case of an accident.

Uh-oh! Overtime oversight puts employer in the legal hot set

A few months back, I talked about how overtime lawsuits are on the rise (Can salaried employees receive overtime pay?), and that employers need to be especially careful with how they classify their employees (exempt vs. non-exempt).

Well, I just learned of a recent court case that highlights just how important it is to get this right. As the blog post, Court of Appeals affirms overtime ruling for non-exempt worker under FLSA, explains, “The Second Circuit has ruled in favor of a worker who was denied overtime pay, ruling that the Fair Labor Standards Act does not exempt workers whose job skills are not customarily the product of advanced educational training.”

Here are the details of Young v. Cooper Cameron Corp.: Andrew Young was a highly skilled “Product Design Specialist II” with 20 years of engineering-type experience when he was hired. His work at Cooper Cameron involved complicated technical expertise and responsibility, including designing hydraulic power units for oil drilling rigs. Like his fellow PDS IIs at the company, however, Young did not have any formal education beyond a high school diploma.

When he lost his job in 2004 in a reduction in force (RIF), he sued the company for the overtime he’d been denied due to his classification as an exempt professional.

The court ruled in his favor.

Why? The issue lies with the definition of “professional capacity,” a legal standard that exempts an employee from overtime pay under the FLSA. According to FLSA regulations, an exempt professional is someone “whose primary duty consists of the performance of work requiring knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized instruction and study.”

The judgment in Young’s favor was due largely to the fact that although Young had technical expertise, his job did not require a prolonged course of specialized intellectual study. Plus, none of the other product design specialists at Cooper Cameron had advanced degrees – they were all high school graduates with no college training.

Not a good day in court for Cooper Cameron. Young was wrongly classified as an exempt professional and as such, was entitled to overtime pay under FLSA. (To make matters worse, the court found that the company did not act in good faith when it classified Young, changing his job title from a non-exempt position to a title that “sounded” more professional.)

Don’t let the overtime rules overwhelm you! Check out the ComplyRight Now E-Guide Determining Exempt vs. Non-Exempt Employees, for help figuring out whether an employee is exempt or non-exempt – and to steer clear of FLSA-related employee lawsuits like this.

Overtime lawsuit could pack a huge financial wallop for UPS

Remember last week’s post on overtime pay – and the spike in employee lawsuits to recover “lost” overtime wages? And how important it is to properly classify employees as exempt or non-exempt, according to FLSA regulations? Well, no one is feeling the pain of this more than UPS right now.

Filed August 19 in federal court, a class action lawsuit claims that United Parcel Service (UPS), the world’s largest package delivery service, failed to pay as much as $100 million in overtime wages to its account managers. The plaintiff, a UPS employee since 2005, says she has regularly worked 60 hours a week but was only paid a straight salary. She adds that UPS misclassified her and other account managers as outside salespersons or administrative employees exempt from overtime pay. And therein lies the problem:

The suit says UPS' account managers don't make sales or obtain contracts nor do they perform managerial type work, and therefore shouldn't be classified as outside salespersons or administrative employees. (The Boston Globe)

To make matters worse, the lawsuit also claims that account managers were not given mandatory meal and rest breaks – and that UPS doesn’t keep accurate records of hours worked.

As a result, UPS is facing a potential jury trial, more than $100 million in damages and the payment of attorneys' fees. The class-action suit also seeks to represent other UPS employees facing a similar situation.

So I’ll wrap up today’s post with the same suggestion as last week: Check out the ComplyRight Now E-Guide, Determining Exempt vs. Non-Exempt Employees (and other FLSA compliance tools) for help figuring out whether an employee is exempt or non-exempt. With overtime lawsuits growing at a breakneck pace, now is the time to be absolutely certain you’re following FLSA exemption rules to the letter of the law.

Can salaried employees receive overtime pay?

Towering billboards and catchy advertisements shout the message: “Unpaid overtime hours? Wronged by your employer? You may be entitled to money!”

Class action lawyers are enjoying a brisk business targeting employees who believe they haven’t received their entitled overtime pay – and helping them recover these “lost” wages in court. With the Department of Labor (DOL) estimating that a staggering 70 percent of employers aren’t in compliance with the Fair Labor Standards Act (FLSA) in some manner, now is the time to review one of the biggest areas of vulnerability for employers: misclassifying employees as exempt vs. non-exempt.

The DOL states that:

The FLSA, which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.

Determining those employees “who are not otherwise exempt” is the tricky part, however. Problems may arise if it appears you’re avoiding paying an employee overtime pay by misclassifying the non-exempt employee as an exempt employee. In some cases, salaried employees are entitled to overtime pay; the distinction is whether the employee is “exempt” according to FLSA requirements. While most exempt employees must receive a salary, salaried workers aren’t necessarily exempt from being paid overtime for working more than 40 hours in a week.

Generally speaking, employees who work in an executive, administrative or professional capacity - as well as certain employees in computer-related positions and outside salespeople -are exempt. To qualify for an exemption, these employees must meet certain tests regarding their job duties and be paid a salary of at least $455 per week. Job titles do not determine exempt status. Rather, an exemption applies when an employee’s specific job duties and salary meet all the DOL regulations.

Check out the ComplyRight Now E-Guide, Determining Exempt vs. Non-Exempt Employees, for help figuring out whether an employee is exempt or non-exempt – and to steer clear of FLSA-related employee lawsuits.

Unpaid interns and the FLSA, what you need to know before hiring summer help

Spring is here and summer fast approaching, along with droves of college students hoping to turn their free time into a few months of valuable on-the-job training.

Whether it's because they're simply looking for work experience, or they need to earn a few more college credits, many students are willing to intern for little to no money at all.

While many companies may see at it as the perfect opportunity to get some extra help around the office, there are a few legal issues to consider before agreeing to something for nothing.

Intern or employee?

The Fair Labor Standards Act (FLSA) requires that nonexempt employees receive at least minimum wage for all hours worked and must also receive time-and-a-half pay for all hours worked more than 40 during the workweek.

While the FLSA doesn't define what an intern is, nor provide an exemption from minimum wages or overtime for interns, it does define an employee as "any individual employed by an employer." The definition of "employ" under the FLSA "includes to suffer or permit to work."

Under federal law, for-profit organizations must pay workers unless the position fits six criteria:

The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;

The training is for the benefit of the trainee;

The trainees do not displace regular employees, but work under close observation;

The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;

The trainees are not necessarily entitled to a job at the completion of the training period; and

The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.

To ensure compliance, employers offering unpaid internships should structure the position in a way that the intern receives the full benefit of the experience.

Employers can take it a step further and establish a written agreement between the business and the intern outlining the terms of the unpaid internship. The document should contain a clear definition of the position, including that it is a learning experience.

If you're not careful, hiring an unpaid intern that later turns out to qualify as an employee could potentially cost your company thousands in unpaid wages and hefty legal fines. When in doubt, pay interns at least minimum wage to avoid legal problems.

Unpaid internships that do not match all six of the DOL's criteria could also lead to legal problems involving workers' compensation, employee benefits, discrimination laws, federal and state taxes, and unemployment insurance coverage.

Failing to comply with wage and hour laws can lead to serious FLSA administration errors that could cost your business thousands in fines. Tools like the FLSA Compliance Kit can help you navigate through every FLSA regulation from child labor laws to timekeeping discrepancies.

Any additional advice for companies hiring unpaid interns for the summer? Please leave a comment and share your tips.

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