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.

Wage and hour lawsuits outnumber all other class actions combined

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.

When wicked winter weather grounds your workforce

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.

Overtime lawsuit could pack a huge financial wallop for UPS

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.

Can salaried employees receive overtime pay?