FLSA – Page 2 – Workforce

February 8, 2021February 23, 2021

Have you felt the pain of a wage-and-hour investigation or lawsuit?

For the past three years, the Department of Labor has been trying to get employees PAID for their unpaid overtime and minimum wages.

That’s PAID, as in the Payroll Audit Independent Determination program, a creation of the Trump administration that allowed employers to self-report FLSA violations to the Department of Labor without risk of litigation, enforcement proceedings, or liquidated damages.

As of last week, however, the PAID program is history, as the DOL announced its immediate end.

From the DOL’s news release:

“Workers are entitled to every penny they have earned,” said Wage and Hour Division Principal Deputy Administrator Jessica Looman. “The Payroll Audit Independent Determination program deprived workers of their rights and put employers that play by the rules at a disadvantage. The U.S. Department of Labor will rigorously enforce the law, and we will use all the enforcement tools we have available.”

Pay close attention to that last sentence: “The U.S. Department of Labor will rigorously enforce the law, and we will use all the enforcement tools we have available.” The era of federal agencies playing nice with employers through education and outreach is over. At least for the next four years, businesses should expect agency priorities to be enforcement, not education.

This means that if you have not recently audited all of your employment practices, your time is running out.

In the context of the FLSA, the question is not whether companies need to audit their wage and hour compliance, but whether they properly prioritize doing so before someone calls them on it.

It is immeasurably less expensive to get out in front of a potential problem and audit on the front-end instead of litigating or settling a claim on the back end. The time for companies to get their hands around these issues is now, and not when employees, their lawyers, or the DOL start asking the difficult questions about how employees are paid.

September 23, 2020September 23, 2020

DOL proposes rules to ease employer classification of workers as independent contractors

employment law, labor law, overtime records

The Department of Labor announced Sept. 22 a proposed rule amending its regulations on how to determine whether a worker is an employee covered by the Fair Labor Standards Act or an independent contractor not covered by the FLSA. This proposed rule is significant because the FLSA lacks clear guidance on these important definitions, which has left employers struggling, scrambling, and risk-taking to properly classify workers for purposes of paying overtime and other wage/hour obligations.

In this rulemaking, the DOL proposes to:

Adopt an “economic reality” test to determine a worker’s status as an FLSA employee or an independent contractor. The test considers whether a worker is in business for themselves (independent contractor) or is economically dependent on a putative employer for work (employee)
Identify and explain two “core factors”: the nature and degree of the worker’s control over the work; and the worker’s opportunity for profit or loss based on initiative and/or investment. These factors help determine the economic realities if a worker is economically dependent on someone else’s business or is in business for themselves; and
Identify three other factors that may serve as additional guideposts in the analysis: the amount of skill required for the work; the degree of permanence of the working relationship between the worker and the potential employer; and whether the work is part of an integrated unit of production.

You can download the entire proposed rule here, and it is open for public comment for 30 days.

As explained by Wage and Hour Division Administrator Cheryl Stanton, “The rule we proposed today continues our work to simplify the compliance landscape for businesses and to improve conditions for workers. The department believes that streamlining and clarifying the test to identify independent contractors will reduce worker misclassification, reduce litigation, increase efficiency, and increase job satisfaction and flexibility.”

I could not agree more. These business-friendly rules would be a significant benefit to employers seeking guidance on a crucial issue that continues to be the focus on costly class action litigation nationwide.

July 22, 2020July 22, 2020

Coronavirus Update: Telemedicine and the FMLA

Earlier this week, the Department of Labor published a three new sets of FAQs—COVID-19 and the FLSA, COVID-19 and the FMLA, and updated FAQs on the FFCRA.

By and large the FAQs don’t break new ground. But one of the FMLA questions caught my attention.

12. Due to safety and health concerns related to COVID-19, many health care providers are treating patients for a variety of conditions, including those unrelated to COVID-19, via telemedicine. Telemedicine involves face-to-face examinations or treatment of patients by remote video conference via computers or mobile devices. Under these circumstances, will a telemedicine visit count as an in-person visit to establish a serious health condition under the FMLA?

Typically, for a non-inpatient medical issue to qualify as a “serious health condition” under the FMLA, one must receive either in-person treatment by a health care provider two or more times within 30 days of the first day of incapacity, or in-person treatment by a health care provider on at least one occasion that results in a regimen of continuing treatment under their supervision.

Does a telemedicine visit count as one of these “in-person” visits? According to the DOL, the answer is “yes” (at least for the rest of 2020).

Yes. Until December 31, 2020, the WHD will consider telemedicine visits to be in-person visits, and will consider electronic signatures to be signatures, for purposes of establishing a serious health condition under the FMLA. To be considered an in-person visit, the telemedicine visit must include an examination, evaluation, or treatment by a health care provider; be performed by video conference; and be permitted and accepted by state licensing authorities. This approach serves the public’s interest because health care facilities and clinicians around the nation are under advisories to prioritize urgent and emergency visits and procedures and to preserve staff personal protective equipment and patient-care supplies.

Telemedicine has served a crucial role during this pandemic to ensure that individuals receive the medical care that they need without needlessly exposing themselves to COVID-19 by visiting a health care provider in person. I’m thrilled to see that the DOL is adapting by counting certain telehealth visits as “in-person” visits for purposes of the FMLA.

June 28, 2020June 14, 2020

Overtime and FLSA outside sales exemption

Eugene Martinez was a sales representative for Superior HealthPlan, Inc. Martinez’s duties included soliciting Medicare Advantage Plans. Superior classified Martinez as an independent contractor pursuant to the terms of his sales agreement. Martinez subsequently filed a lawsuit against Superior, alleging that he was misclassified as an independent contractor and was entitled to overtime pay under the Fair Labor Standards Act. Superior filed a motion for summary judgment regarding Martinez’s FLSA claim, arguing that even if Martinez was an employee he would not be entitled to overtime pay because he fell under the FLSA’s outside sales exemption.

The U.S. District Court for the Western District of Texas held that Martinez was not entitled to overtime pay because the outside sales exemption applied. The court assumed that Martinez was an employee for purposes of argument and focused on Martinez’s actual job duties for Superior. The court noted that Martinez spent virtually every weekday in sales appointments away from Superior’s offices. The court deemed that the FLSA’s outside sales exemption applied and Martinez to the extent that he should have been classified as an employee and was not entitled to overtime pay. Martinez v. Superior HealthPlan, Inc., 371 F. Supp. 3d 370 (W.D. Tex. 2019).

IMPACT: Companies that employ sales representatives should be aware of the fact that such employees are not automatically exempt under the FLSA. Under the FLSA, an employee may be classified as exempt from overtime pay if he or she is paid above the FLSA’s earnings threshold and his or her duties meet one or more exempt “duties test” categories (i.e., executive, administrative, professional or outside sales exemptions).

June 15, 2020June 29, 2023

Ease compliance concerns with workforce management software

compliance; workforce management software

Ask an HR pro how to reduce compliance risk and you’re likely to get one of two responses: a long, silent stare from beneath a furrowed brow or a finger pointing directly to a floor-to-ceiling shelf of thick binders and the two-word utterance of, “Start there.”

In other words, addressing how to reduce compliance risk is complicated. It can’t be digested over a bagel and coffee or assimilated during a five-minute confab in the conference room.

Many workplace laws, regulations and guidance governing compliance risk date back to the early 20th century. Sorting through federal, state and local workplace regulations is a skill that develops over a career through a variety of sources. A key tool among those sources is workforce management solutions designed to navigate and track the daunting web of regulatory compliance issues that employers face on a daily basis.

Configured for national, state and county labor laws, Workforce.com’s workforce management software integrates with existing human capital management and payroll systems to help reduce compliance risk through seamless workforce automation. To remain compliant and stay protected from unnecessary and costly litigation, there are several issues that employers should be aware of.

Employee classifications

Accurately classifying workers continually draws the attention of state and federal agencies that are laser-focused on enforcement. The risks of worker misclassification can be costly and subject companies to fines and back taxes that can total as much as 100 percent of the employment tax due.

When some employees work more than 40 hours per week, labor laws state that based on that worker’s classification employers are responsible for paying overtime.

Workforce management software helps employers determine who is eligible for overtime and track employees’ hours, as the federal Fair Labor Standards Act divides workers into exempt and non-exempt status.

Exempt workers: Typically receive a salary and employers are not obligated to pay exempt workers overtime.
Non-exempt workers: Typically receive hourly pay and are eligible for overtime if they work past 40 hours in a week.

Employee leave

Sorting through the specific types of paid leave that are required by law and those provided voluntarily by employers can be confusing. The Family and Medical Leave Act regulates reasonable amounts of unpaid, job-protected leave such as the birth of a child or to care for a sick family member.

The FMLA and the Fair Labor Standards Act, however, does not regulate sick pay, vacations and paid time off. That time away is voluntarily provided by the employer yet still must be tracked.

Employee safety

You know those safety kits scattered through the office? Virtually all employers must follow the Occupational Safety and Health Administration’s regulations preventing and responding to emergencies in the workplace. Employers must have a first-aid kit on site, and they also must let employees know about hazardous materials in the workplace, although Phil from accounting’s syrup-thick coffee is exempt. Though it probably shouldn’t be.

Employee pay

Payroll is one of the most regulated functions in an organization that must meet federal, state and local requirements, according to the American Payroll Association.

Government agencies require:

Tax withholding and reporting.
Timely pay of employees to meet wage and hour law requirements.
Withholding child support and garnishments from wages.
Ensuring new employees are eligible to work in the U.S.

Wage and hour settlements continue to be a costly compliance issue for businesses. Investing now in workforce management solutions beats spending more money later should a lawsuit arise. Technology can help HR professionals and executives solve the vexing problem of how to reduce compliance risk.

With increased government scrutiny and potential for fines and penalties, it is more important than ever to ensure workforce compliance. Workforce.com tracks compliance and regulatory obligations, ensures accurate pay and maintains a detailed audit trail.

May 4, 2020June 29, 2023

Labor compliance software sorts through complex legal issues

Labor compliance software is an innovative way to manage the overwhelming alphabet soup of laws, regulations and agencies that govern the workplace.

HR practitioners must recognize the regulatory distinctions of the FMLA and FLSA and navigate the nuances between the ADA and ADAAA. What are the latest regulations surrounding the ACA? Can a misstep with COBRA come back to bite them? And SOX … is that a professional baseball team or a law protecting corporate whistleblowers?

If assessing guidance from agencies including OSHA, DOL and EEOC wasn’t enough to cope with, labor compliance software is a must-have now as the coronavirus invades organizational policies. HR leaders and corporate counsel must quickly familiarize themselves and understand the implications of implementing workplace laws surrounding a new bowl of alphabet soup — PPP, FFCRA and the CARES Act.

The value of labor compliance software

Maintaining corporate compliance with government regulations isn’t easy. Besides knowing what agencies actually do and how regulations affect employers, labor laws are dense, complex and confusing. A single unintentional compliance misstep by an organization can lead to a costly and time-consuming lawsuit with the potential to disrupt or even bankrupt a small, growing organization.

Compliance solutions allow organizations to avoid a trip to court and more easily comprehend constantly changing federal, state and local legislation. Employers can disseminate policies to employees, provide guidelines for regulatory enforcement and manage confidential documents all while saving money by easing time-consuming, onerous reporting rules.

Workforce management systems typically assist with traditional compliance issues while a specialized compliance solution takes employers beyond the basics and provides expert guidance on critical regulations. It can be like having a team of legal experts at your fingertips with minimal expense.

Labor compliance software also allows businesses to communicate company and legislative policies to their employees.

Key areas for compliance software

Regulatory software helps an HR department remain in compliance across all organizational departments. According to peer-to-peer software review site G2, there are business functions and the germane laws that can be undertaken by labor compliance software:

Benefits — Affordable Care Act (ACA); Consolidated Omnibus Budget Reconciliation Act (COBRA); Health Insurance Portability and Accountability Act (HIPAA); Genetic Information Nondiscrimination Act (GINA); Fair Labor Standards Act (FLSA); Family and Medical Leave Act (FMLA).

COVID-19-related policies — Coronavirus Aid, Relief, and Economic Security Act (CARES Act); Families First Coronavirus Response Act (FFCRA) and Payment Protection Program (PPP).

Labor and employment relations — Labor union updates (AFL-CIO, AFGE, SEIU, etc.); Department of Labor (DOL); Equal Employment Opportunity Commission (EEOC); National Labor Relations Board (NLRB); Office of Federal Contract Compliance Programs (OFCCP).

Payroll — Fair Labor Standards Act (FLSA); Federal Insurance Contributions Act (FICA); Federal Unemployment Tax Act (FUTA); Sarbanes-Oxley Act (SOX).

Risk — Employee safety is a top priority for all organizations. Compliance software can manage and track guidance and enforcement by the Occupational Safety and Health Administration (OSHA).

Companies needing compliance software

No organization is immune from U.S., state and local labor laws. True, regulations often vary depending on factors including employee count. A four-person mom-and-pop shop does not face the same labor compliance regulations as a multinational company.

Yet it is crucial that company policies remain up to date and comply with changes in legislation. Despite the expense a lawsuit can present, many smaller organizations are hesitant to call on legal resources simply based on costs. Those concerns can be streamlined by compliance software.

Small companies have difficulty keeping up with changes in compliance because they lack the manpower, and HR departments are already stretched thin or responsibilities are divided among employees as collateral duty. There is no point person to track and update compliance regulations.

Compliance is particularly crucial to navigating the maze of workplace issues. Municipalities and some states have instituted fair workweek policies in the past two years with more on the horizon.

In the wake of the #MeToo movement, mandatory sexual harassment prevention training is compulsory in six states. Compliance training, employee handbooks and more can be structured and simplified with a compliance solution.

Small and midsize organizations in particular have difficulty keeping up with HR compliance regulations as new legislation is continually introduced. When the HR team is small (or even just one person), their bandwidth quickly becomes strained.

Sorting through the alphabet soup of labor regulations can be an eye-glazing exercise for employers. Labor compliance software helps them to spell out attractive cost-savings, easy-to-use solutions and avoid unintentional noncompliance.

April 8, 2020June 29, 2023

If you require employees to wait in line for a coronavirus fever check, pay them for waiting

Bloomberg Law asks whether employers are “responsible for paying workers for the time it takes to record their body temperatures before entering the workplace.”

To me, this question doesn’t require a legal analysis but a common-sense application of basic decency. If your employees are queuing before entering work because you are requiring them to pass a temperature check, pay them … period.

Since this is a legal blog, however, I might as well look beyond common sense and examine the laws impacted by this issue—the ADA and the FLSA.

The ADA typically prohibits employers from taking employees’ temperatures as an unlawful medical examination. Because the WHO has classified coronavirus as a pandemic, however, just about all medical exam issues under the ADA are temporarily moot. According to the EEOC, among other coronavirus prevention measures, employers may measure employees’ temperatures. This issue, at least for now, is pretty cut and dry.

The FLSA issue is a little more nuanced. In Integrity Staffing Solutions v. Busk, the Supreme Court held that the FLSA only requires employers to compensate employees for time spent performing “preliminary” (pre-shift) and “postliminary” (post-shift) activities that are “integral and indispensable” to an employee’s principal activities. What activities are “integral and indispensable?” Those that are (1) “necessary to the principal work performed” and (2) “done for the benefit of the employer.”

In Busk, for example, the Court held that post-shift security screenings were not “integral and indispensable” for an Amazon warehouse employee, because such screenings are not “an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment,” and the employer “could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”

According to the Bloomberg Law article, employers could look to Busk to argue that pre-shift temperature checks, even if mandatory, are not “integral and indispensable” and therefore can be unpaid. (For what it’s worth, I think a just as good, or better, argument is that preliminary temperature checks to protect employees from a deadly virus are integral, indispensable, and compensable.)

Busk or no Busk, this isn’t a “what does the law allow” issue; this is a “what’s right is right” issue. If you’re requiring your employees to queue in a line to take their temperature before you’ll let them enter the workplace, pay them. Don’t be cheap and don’t count pennies.

Your employees are scared. They are risking their own personal health and safety, and that of everyone who lives in their homes, to keep your essential business up and running. They could just as easily stay home, limit their exposure, and collect unemployment.

What they need is your compassion, not your penny-pinching. Times are tough for everyone. I get it. But your business shouldn’t go belly up if you pay each employee for a few extra minutes of time each day, especially when the federal government is going to reimburse you through your Paycheck Protection Program loan. (You did apply for your loan, right?)

At the end of this pandemic, many businesses will no longer exist. If there’s such a thing as karma, one of the deciding factors in which ones survive will be how they treated their employees.

* * *

Don’t forget that I’ll live on Zoom tomorrow, April 9, from 11:30 am – 12:30, open paid sick leave and eFMLA issues, and taking your coronavirus questions. And Norah has said she will drop in and share another song. You can access the Zoominar here: https://zoom.us/j/983559955

March 17, 2020July 24, 2024

How do I compensate hourly workers during the coronavirus pandemic?

No doubt there are lots of questions regarding compensation for hourly employees during the COVID-19 pandemic.

Many employers want to do right by their hourly workers and offer them fair compensation while they temporarily shutter their workplace or curtail operations. Meanwhile, there are uncertainties regarding who gets paid and who doesn’t.

One valuable resource that offers clarity for employers regarding hourly employees is on the Department of Labor website. The comprehensive “U.S. Department of Labor Issues Workplace Guidelines for Coronavirus Outbreak, Including Specific Guidance on FMLA, FLSA and FECA” provides detailed information valuable for remaining in compliance as well as offering insight to compensating employees.

Under the Fair Labor Standards Act direction is this guidance:

Pay to Non-Exempt Employees During Business Closures. Under the FLSA, employers are obligated to pay non-exempt employees only for the hours worked, not hours the employee otherwise would have worked if the employer’s business had not closed. If telecommuting or working from home is provided as a reasonable accommodation, the employer must pay non-exempt workers the minimum wage, and at least time and one half the regular rate of pay for overtime hours, for hours telecommuting or working from home. For more information on this topic, please see our previous post on employers’ considerations in response to coronavirus (available here).

Kate Bischoff, a Minneapolis-based employment attorney and HR consultant, suggested that employers first must decide what positions are crucial to maintaining operations.

“Then, there’s really no good way to go about it,” Bischoff said. “Fairness would dictate that you furlough/lay off the part-timers first, then the least senior, but there’s no good way.”

Also read: Solving the concern over clean time clocks with a mobile solution

Other considerations include what to do about volunteers, she added, and those who may be in the high-risk groups (over 60 or with pre-existing conditions).

“But make sure there isn’t a disparate impact on any protected group more than others, like married people, minorities and women. We’re in uncharted waters,” Bischoff said.

According to a spokeswoman for Portland, Oregon-based Think HR, employers and managers may offer paid time off to those employees who are unable to work due to a decrease in business, and they may select whom to offer this PTO to based on seniority, full-time status, employee classification, or job type.

“There are no hard and fast rules for deciding what groups to include or where to draw the line on tenure,” she said. “Employers, however, should take care not to violate (or appear to violate) anti-discrimination law, and they may want to consider how their decision will affect employee morale presently and in the future. Employers should also keep in mind that pay requirements may change as new laws are passed in response to the pandemic.”

Insurance and risk-management consultancy Gallagher just released its guidance on Coronavirus Pandemic Preparedness that includes five steps to minimize business disruption and safeguard employees.

“As pandemics spread it is important now, more than ever, to have an actionable business plan in place to help guide your employees and your business through the uncertainty of pandemics,” the report states.

Cleanliness is a given.

If employees must clock in at the workplace,keep the keyboard or time clock as clean as possible.

Employers working with Chicago-based employment law attorney William R. Pokorny are taking a variety of different approaches.

“Those that have some amount of paid time off or paid sick leave, either employer-based or as required by state and local paid sick leave laws, are for now having people use their available leave,” Pokorny said. “Some are extending additional leave — for example, 14 days — specific to the coronavirus situation. The leave is generally paid out based on the employee’s regularly scheduled work hours, so someone who usually works 20 hours in a week would get 20 hours of sick leave for a week. It varies widely by employer.”

Bischoff added that even employers trying to do the right thing for their hourly workers may not be doing enough.

“Trying to do the right thing is hard at this point,” she said. “Employers need to do what they can for their people.”

March 11, 2020June 29, 2023

6th Circuit Court gives employers relief on the evidence employees must present to prove off-the-clock work

The difficulty in defending certain wage-and-hour cases is that employers are often asked to prove a negative.

“I worked __ number of hours of overtime,” says the plaintiff employee. “Prove that I didn’t.”

If the hours are for unclocked work, the employer often lacks documentation to refute the employee’s story. Which, in turn, leads to a case of “I worked/no you didn’t.” That, in turn, creates a jury question, the risk of a trial, and a settlement (since very few employers want to risk paying the plaintiff’s attorneys’ fees if the employee wins).

In Viet v. Le, the 6th Circuit Court of Appeals provides employers much needed relief from these extorting lawsuits.

For several years, Quoc Viet worked for Copier Victor, owned by Victor Le. Le treated and paid Viet as a 1099 independent contractor. When their business relationship soured, however, Viet sued for unpaid overtime under the FLSA, claiming that he was an employee owed overtime. The only evidence Viet submitted in support of his unpaid overtime claim was his assertion that each week he worked “60 hours per week.”

The 6th Circuit concluded that without additional substantiation, the employer was entitled to summary judgment.

The district court correctly held that Viet’s testimony was too “equivocal, conclusory, and lacking in relevant detail” to create a genuine dispute of material fact under Rule 56. Begin with Viet’s estimate of his average weekly schedule. He claimed that he typically worked 60 hours per week.… Viet did not fill in his general 60-hour estimate with specific facts about his daily schedule. Without Viet’s general estimate, his deposition testimony would leave a jury simply guessing at the number of hours he worked in any given week.…

All told, Viet could withstand summary judgment only if we adopted a legal rule that conclusory estimates about an employee’s average workweek allow a rational jury to conclude that the employee worked overtime.…

Viet argues that Le and Copier Victor failed to identify evidence showing that he worked less than 40 hours per week. Yet Viet bears the burden to prove that he worked overtime during every week for which he seeks overtime pay.

What evidence about the number of hours an employee works will suffice to create a jury question? According to the Viet court, a coherent description of “their day-to-day work schedules or the time it takes to complete their duties so that a rational jury could find that they worked more than 40 hours in the weeks claimed.”

They do not need to “recall their schedules with perfect accuracy,” but they must do more than “simply turn a complaint’s conclusory allegations about overtime work into an affidavit’s conclusory testimony about overtime work and expect to get a jury trial.”

A common-sense solution for a difficult issue. Go forth and litigate; Viet will provide much-needed assistance in FLSA cases.

January 14, 2020June 29, 2023

DOL Provides Employers Much Needed Clarity on Joint Employment

Joint employment is a legal theory in which the operations of two employers are so intertwined that each is legally responsible for the misdeeds (and the liabilities that flow from those misdeeds) of the other. It’s also a legal theory with which federal agencies and courts have struggled over the past several years.

The struggle started at the NLRB’s broad expansion of the definition of “joint employment,” continued with OSHA, and ended with the Department of Labor, in early 2016, announcing a similar broadening of the definition for wage and hour claims.

More recently, however, more measured and business-friendly federal agencies have ratcheted back these expansions. In December 2017, the NLRB announced that it would require “actual … joint control over essential employment terms” for a finding of joint employment. A few months earlier, the DOL pulled its joint employment rules, leaving the issue in limbo in wage and hour claims.

Earlier this week the DOL announced a final rule to update the regulations interpreting the definition of joint employment under the FLSA.

According to the DOL:

In the final rule, the department provides a four-factor balancing test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The balancing test examines whether the potential joint employer:

Hires or fires the employee;

Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;

Determines the employee’s rate and method of payment; and

Maintains the employee’s employment records.

The DOL adds that this rule “will add certainty regarding what business practices may result in joint employer status,” promote “uniformity among court decisions by providing a clearer interpretation of joint employer status,” and “improve employers’ ability to remain in compliance with the FLSA.” I cannot agree more.

This rule (available here) becomes effective on March 16, 2020.