Tag: labor law compliance

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Salt Bae Sued: Rethinking Time & Attendance for Salaried Employees

Summary

  • Former cooks at Salt Bae’s New York steakhouse sue for unpaid overtime

  • Fair Labor Standards Act classifies over $913 a week as exempt from overtime pay

  • Organizations should not overlook the importance of tracking salaried employee time and attendance

 

The fateful day has finally arrived; our beloved meat-mincing and salt-slinging internet hero Salt Bae, also known as Nusret Gökçe to his parents, has fallen out of the good graces of online society. 

First launched into internet stardom in 2017 via a viral video of him eccentrically sprinkling salt onto strips of freshly sliced steak, Gökçe has since built an empire for himself out of artisanal steakhouses and social media influence. This empire started to crumble on August 9, however. Five of Gökçe’s former employees just sued him for denying them overtime pay after they consistently worked 70-90 hour weeks. 

These are some excessive hours to work with no overtime pay, even for steakhouse grillers. So what happened? Well, unlike many in the restaurant industry, the five employees were salaried. They made $1,125 a week, or around $58,500 a year. The chain also classified the grillers’ positions as managerial so as to avoid paying them for overtime.

Citing the Fair Labor Standard Act, the lawsuit claims that Gökçe’s restaurant owes the five salaried employees overtime pay for consistently working them over 40 hours a week in positions misleadingly designated as managerial in nature. 

Crazy stuff right there. Who knew that such a suave, sunglass-wearing, meat connoisseur could have incredibly manipulative intentions behind closed doors? Where is the outrage? Shall the public riot? 

Not so fast.

It is worth understanding what the Fair Labor Standards Act actually says about overtime for salaried employees. As of 2016, only salaried employees who make up to $913 per week, or $47,476 per year, qualify for overtime pay. If an employee makes more than this, they are classified as exempt from overtime pay. Taking what we know from this recent lawsuit against Gökçe, it is clear that the former grillers made over $47,476 a year in salary, meaning that they are potentially exempt from overtime pay according to the Fair Labor Standards Act.

But wait, there’s more. 

On the other hand, the FLSA provides an exemption, of sorts, to…the exemption. You see, the $913 per week ceiling only applies to “white-collar” workers – people in executive, professional, or managerial roles according to Maduff & Maduff, LLC. The FLSA says that “blue-collar” salaried employees can still qualify for mandatory overtime pay no matter how much they make in salary. Blue-collar in this case is defined by the FLSA as “workers who perform work involving repetitive operations with their hands, physical skill and energy.” Examples would include carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, etc. 

So, the natural question is this: are artisanal steak grillers technically blue-collar workers? 

Well, I don’t know. I will let the lawyers bicker over the answer in the coming weeks. What I do know, however, is that this whole mess brings up an interesting subject regarding how employers track time and attendance for their salaried employees.

You see, it was revealed that Gökçe’s restaurant chain did not keep records of the five mens’ working hours or wage statements throughout their employment. Obviously, this negligence does not help matters for the chain. When labor lawsuits like this come up, a company must have access to a paper trail that shows how many hours employees have worked and how much they have received in pay. Now, this practice may seem obvious for hourly employees; however, it is not so obvious for salaried workers.

 

Reasons for tracking salaried employee hours

Automated workforce management solutions should not be seen as exclusive to hourly workers; they can encompass all aspects of a company in any industry. Whether your salaried employees are exempt from overtime pay or not, you should consider attempting to track all their hours worked. While I should note that legally you are not required to do so, it still may be beneficial for your company. Here are a few reasons why:

 

One: Overtime Pay

This one is straightforward. If you have salaried employees who make $47,476 a year or less, they are non-exempt and legally entitled to overtime pay whenever they work over 40 hours a week. Using an automated time and attendance system like Workforce.com allows for companies to accurately and easily track how many hours all employees work, both hourly and salaried. 

Also Read: Management tips on overtime equalization and tracking hours

Two: Paid Time Off

If your employees receive PTO as part of their salaries, tracking daily time and attendance is essential for figuring out how much time they accrue as well as how much they have used.

Also Read: Managing employee time-off requests: A guide for business owners

Two: Labor Compliance

In the event of a lawsuit, you want to be sure you have records of how salaried employees have been compensated and classified. Without proof of good practice, a business is extremely vulnerable to legal trouble. Moreover, labor laws are constantly changing; it is a company’s responsibility to stay up to date on them. For instance, the FLSA policy on the ceiling for mandatory overtime is going to be subject to change every three years. If you are accurately tracking your salaried employees’ hours, you will be much better prepared for future changes to the overtime exemption ceiling. 

Three: Understanding Labor Costs

Since salaried employees don’t have clear-cut hours they need to work, it can be hard to track when they arrive, leave, and how much value they provide to the firm relative to the amount of compensation they receive. By keeping time and attendance records via an automated workforce management platform, managers can get a clearer understanding of their labor costs as well as employee productivity. Just keep in mind that legally, this can not lead to reductions in pay. Tracking hours like this should simply be used as a device for understanding employees and improving productivity. 

Also Read: How to reduce labor costs and attract quality staff in a post-Covid market

Four: Employee Burnout

Similar to identifying labor costs, knowing how many hours salaried employees are working as well as the times they start and stop work is important to managing employee burnout. An exhausted and stressed employee working odd hours is never good for productivity or company culture.

Five: Internal Communication

Using workforce management software to track salaried employee hours also opens the door for rich communication options. With Workforce.com, employees and managers alike can easily message one another, receive instant notifications, and give feedback on a vast array of subjects. Having a transparent and unified system to track time and attendance allows for salaried employees and managers to be on the same page regarding hours worked; this leads to open and honest internal communication. 

 

These are only five simple ways tracking time and attendance for salaried workers can benefit a company. To discover if this is something that might work for you, it may be worth chatting with a representative or booking a free trial. 

Let’s all learn from Salt Bae. Nobody, even a peak internet meme persona, can evade common workforce management issues all on their own. Give time and attendance tracking for salaried employees a try with Workforce.com. 

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The 10-minute guide to 2021 labor law compliance

Labor laws are a potentially lethal minefield for companies, particularly in today’s turbulent labor market, as the cost of labor law compliance failures can be enormous.

Labor law fines tend to stack per infraction so with large employee numbers the financial risk can grow exponentially, as with the recent high profile example of New York City suing Chipotle (https://edition.cnn.com/2021/04/29/business/chipotle-nyc-lawsuit-labor-law/index.html) for $151 million over 600,000 labor law violations accumulated within the city. In Tennessee, a home health care provider misclassified fifty workers as independent contractors rather than employees and was hit with a $358k penalty (https://www.workforce.com/news/worker-misclassification)by the Department of Labor to make up back wages and overtime.

Ignorance of the law is no defense, so even in situations where labor law compliance is complicated by different federal, state, and city rulings, it’s up to companies to stay on top of what is required. In situations where federal and local laws differ (i.e., the state minimum wage is higher than the federal), companies are expected to adhere to whichever is most stringent (i.e., they would have to pay the higher state minimum wage, not the federal).

It’s all too easy to make labor law compliance mistakes, but awareness of your responsibilities and impeccable record keeping will help to protect your company. Here are the key areas to keep in mind.

Minimum wage

Minimum wage laws are getting a lot of attention at the moment, with President Biden’s executive order raising the salary for federal workers to at least $15 per hour being seen by many as a prelude to a nationwide rise in minimum wage levels. Compliance with these laws can seem cut and dried, but there are aspects unique to some industries that you should be aware of if they affect you.

For example, industries where workers earn tips have a unique minimum wage law to follow, called Minimum Tipped Wage. “Minimum tipped wage makes it quite a bit more complicated,” says Workforce’s chief strategy officer Josh Cameron. “In hospitality or anything where you earn tips, you can pay the staff a minimum wage much lower than the normal one. So it would be $7.50 an hour if they’re not tipped, but it’s $2.50 if it’s tipped. As long as they get enough tips to get them over that—it’s called the tip credit—then they can receive the lower $2.50 per hour from their employer.”

There are reasons to keep on top of minimum wage laws beyond the threat of fines. For example, 29 states currently require a minimum wage higher than the federal standard, and you are obliged to pay the higher sum. Underpaid workers are unlikely to show any loyalty to a company, and underpayment can cause PR problems as well. “An underpayment scandal can bring companies to their knees,” says Andrew Stirling, head of product compliance at Workforce.com. “Customers can decide to take their business elsewhere. People are less likely to visit a restaurant or shop that has been reported for underpaying their people.”

Paid and unpaid breaks

One of the areas of labor law compliance with the least clarity is breaks for workers, making it especially important for companies to err on the side of caution. The legal requirements can be found on the Department of Labor website, but there are significant areas of ambiguity to watch for:

  • Federal law does not require companies to offer lunch or coffee breaks.
  • Where short breaks are allowed by a company, short breaks (i.e., toilet use) of up to 20 minutes should be paid.
  • Breaks of 30 minutes or longer (i.e., lunch) are considered outside of workable hours and do not need to be paid.
  • Waiting time or on-call time does not count as a break and should be paid.

“There’s this gray area,” says Josh Cameron. “Say you take a break for 21 minutes, is that paid or unpaid? Is it okay to make that unpaid? If you’re a lawyer looking at this, it’s really an opportunity because you can say, ‘This employee always had a 23-minute break, always had an 18-minute break, and they never got paid for it. Maybe they should have been.’ That’s something that employers should really be aware of and keep an eye on.”

This is an area where accurate and exhaustive employee data can really help, and if your company still relies on timecards and manual spreadsheets or pen and paper logs to track breaks, you could be leaving yourself open to big problems in the future.

Paid and unpaid leave

Thirteen states, plus Washington DC, currently require private companies to offer paid sick leave. The Families First Coronavirus Response Act added an additional responsibility for companies with less than 500 employees to allow workers to take paid time off if infected with COVID-19, to isolate following contact with an infected person, or to care for a family member. The same act also introduced a tax credit to offset the loss for affected companies.

California, New Jersey, Rhode Island, and Washington have all passed laws that also require paid family leave, and President Biden’s administration has set its sights on a federally mandated period of 12-weeks paid leave that would allow, for example, parents to take time off to care for newborn babies or other family needs.

For now, the only federal law involving medical and family leave is the Family and Medical Leave Act, which requires employers with more than 50 staff to offer 12 workweeks of unpaid, job-protected leave in a 12-month period for:

  • The birth of a child, adoption, or fostering of a child
  • A seriously ill spouse, child, or parent
  • A serious health condition that makes the employee unable to perform the essential functions of his or her job
  • Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or Military Caregiver Leave—26 weeks in a 12-month period to care for an injured or seriously ill spouse, son or daughter, parent, or other next of kin who is a covered service member

This is an area of labor law compliance that is only going to become more prominent in the coming years, so shrewd managers should ensure they are on top of current requirements, which are largely dependent on where you operate and how many staff you have, and be prepared for change.

Healthcare

Another area of labor law that has been fraught with political debate, the Affordable Care Act requires that if an employee works more than 30 hours a week over any single year look-back period, then the employer must provide health insurance. While the ACA is a federal law, the portion of the medical insurance that the employer has to pay is determined by the state. In New York, for example, the employer must pay 80%.

The 30 hours a week cut-off requires particularly careful management where shift workers are concerned, as their hours may fluctuate over time. “This whole area is a big pain point,” explains Josh Cameron. “It’s a very difficult conversation to have with an employee that has become eligible for healthcare, then loses that eligibility the next year. Taking it away from someone feels very harsh to the employee.”

Keeping track of employee hours and keeping accurate records is yet again a vital part of compliance for companies here. Qualifying for healthcare is a strong motivator for retaining staff, but for those companies that are concerned about shouldering the additional costs, Workforce.com can be calibrated to warn managers when employees reach the 30 hours threshold and can even prevent managers from publishing schedules that extend past 30 hours.

Predictive scheduling

A recent addition to the labor law conversation, predictive scheduling laws – also sometimes known as “fair workweek” – place restrictions on how shifts are assigned and require companies to give advance notice of new schedules.

Two states – Vermont and Oregon – and eight municipalities – San Francisco, Berkeley, Emeryville, San Jose, Seattle, New York City, Chicago, and Philadelphia – have passed such laws, and more states and cities are considering legislation in this area. The specifics of the laws vary from region to region, but the core principles are:

  • A minimum notice period for upcoming schedules (usually two weeks) with compensation for workers who are not given enough notice of their schedule or changes to that schedule
  • A ban on “clopening,” meaning that a staff member working the closing shift cannot be scheduled to work the opening shift the next day
  • Mandatory rest periods that vary from between 9 to 11 hours between shifts

Failing to maintain compliance with these laws is expensive. The Chipotle example mentioned earlier, in which NYC sued the fast-food chain for $151 million, was caused by hundreds of thousands of predictive scheduling infractions across its many locations in the city.

Even if your business is not based in a state or city with predictive scheduling laws, it is still worth adopting the principles behind them. Partly because these laws may yet impact your business, but also because they have had a notable improvement on staff retention and job satisfaction.

Discrimination laws

There are thankfully few employers looking to openly discriminate in their hiring processes these days, but you should still be aware of which groups the law applies to when hiring and firing, as well as setting the terms of employment and how much people are paid.

  • The Equal Opportunity in Employment Act covers all the areas of discrimination that are forbidden. This concise PDF from the Department of Labor spells out everything employers should know.
  • The Americans with Disabilities Act (ADA) applies to companies with 15 or more employees and makes it illegal to discriminate in employment on the basis of a person’s disability. This also requires companies to make “reasonable accommodation” to allow a disabled person to work there, including making modifications to the working environment to not only allow disabled people to work there but also participate in the application process.
  • Ever since the Civil Rights Act of 1964, there have been several laws and amendments which make it illegal to discriminate against anyone because of their Ethnicity, Gender, Race, or Religion. Nationality is also a protected category, so, for example, it would be illegal not to hire someone because they were from Poland, regardless of their race or ethnicity.
  • The Age Discrimination in Employment Act offers protection to employees and applicants on the basis of their age. This law applies to anyone aged 40 or older, a far younger cut-off than many companies realize.

Labor law compliance is easier with good record keeping

If this all seems like a lot to keep track of, you’re not alone. The USA has relatively light-touch regulations for businesses compared to Europe, for example, but that doesn’t mean the task of staying compliant with labor laws can’t feel overwhelming—especially if you’re new to management and dealing with all of this legislation for the first time.

Regardless of which law is involved, one of the recurring causes of labor law breaches is poor record keeping. There’s one surefire way to ensure that your labor law compliance is rock solid, and that’s to keep excellent data. While it’s possible to maintain your records the old-fashioned way, with paper and pen or spreadsheets, the potential for human error is high.

When the cost of non-compliance can be so steep, using dedicated staff management software like Workforce.com to track staff hours and automatically flag labor law compliance issues offers much-needed peace of mind.

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Top 5 workforce management tech trends in 2021

Organizations were forced to rethink operations in 2020 and shift their strategies overnight, prompting new investments in workforce management technology. So, what’s to come in 2021? 

We’ve compiled a list of the top 5 and specific workforce.com technology features we predict will be key trends this year. These include COVID recovery, labor compliance, automated scheduling, advanced workforce analytics and increased cloud and mobility functionality. 

Labor compliance and minimum wage changes

The Biden administration is pushing to raise the federal hourly minimum wage to $15 by 2025. While legislation has yet to be passed, organizations will be preparing for minimum wage changes and complying correctly. Companies that fail to comply are at risk of facing stiff financial penalties and negative public attention.

Webinar: What the Biden administration means for the minimum wage laws

Staying abreast of these changes will be crucial, and organizations will be looking to have an automated system in place that will make the transition easier. Organizations will require solutions that can simplify and automate labor law compliance. They will need a proactive platform that accounts for all applicable federal, state and local labor regulations from employee scheduling to payroll processing.

Workforce.com continues to invest in our fully automated and user customizable compliance engine, pioneered in Australia to manage the world’s most complicated and expensive wage laws and costs. Instead of manually updating or having to calculate different wages for schedules, overtime and payroll, organizations will be able to have changes automatically forecasted and updated. We predict labor compliance to continue to become increasingly complicated due to political, regional and union influence.

Higher wages will also mean increased labor cost and a need for companies to be smarter around how they schedule, track and spend on wages. Workforce management features that can boost employee productivity while providing wage oversight for owners and front-line teams to proactively manage will be key.

A way to address this will be the Workforce.com Live Wage Tracker, which provides a real-time view of staff count, exact costs and where there may be overspending per shift factored for compliance. It equips frontline managers to make decisions quickly and adjust staffing levels accordingly throughout the day. With this, businesses can be more efficient in controlling their labor costs and optimizing real-time operations.

live wage tracker

Also read: The rundown on wage law compliance: What organizations should know

COVID-19 recovery and employee well-being

As the world recovers from COVID-19 and shift work industries return to normal, it will remain paramount for organizations to have a workforce management platform in place for ensuring employee health, safety and feedback.

As workers return to their shifts in numbers, clear communication will be vital to responding to queries and staying agile as a team. Workforce.com innovations this year include the live 360-degree shift feedback and ratings feature so comments can be gathered from employees after each shift and proactively managed. Their responses enable managers to quickly address issues and apply necessary changes to future shifts. This tool promotes transparency and will provide an avenue for employees to speak up and be heard.

Watch: Introducing shift feedback and ratings

Tracking accurate time and attendance but minimizing contact with communal punch clocks will also continue to remain a priority for organizations. Instead of these older physical devices we predict an accelerated rise of next-gen mobile, app, GPS and tablet clocking in solutions that addresses these concerns.

For instance, with workforce.com GPS Clock ins instead of just one device for clocking in, staff will be able to use this feature to clock in on their own mobile device. Employees who are on the go can also use it to accurately log their start and end times, as well as their break and location while on shift. This results in a lower hardware and maintenance cost of ensuring accurate timesheets while reducing multiple touches to a communal device.

 GPS clock in

Workforce.com has also developed a completely free tool called Reopen to help businesses manage their capacity and social distancing requirements as they open. By allowing customers to make an appointment online, this will assist businesses in managing the number of people within their premises at a particular time. Organizations will be able to set opening hours, and customers can book in a time slot using their phone.

Auto employee scheduling

We predict further advancements in automated employee scheduling in 2021 with an introduction of advanced algorithms and automatic demand prediction, shift building and shift filling. The future of auto-scheduling looks to be creating ‘win-win’ shifts for employees and employers that drive maximum efficiency whilst optimizing for employee choice and flexibility

Demand prediction is considered the first key step in auto-scheduling. The more applicable information that can be collected about how busy it’s forecasted to be, the more accurate and confident the staff coverage. Workforce.com can currently integrate with any existing business system (I.e POS, MES, HMS, ERP’s etc) to capture this demand data and predict staffing requirements. This can then be adjusted for location unique factors such as events, weather, seasonal changes, trends and manager discretion.  

I.e., This Super Bowl will be 20 percent busier than last year. Next Tuesday will be as busy as the average of the last three Tuesdays. Next Friday will be 40 percent less busy because it will be raining.

Once managers have confidence in their demand prediction, shift building is the next step. Software like Workforce.com can help managers create shift patterns for the amount of work that needs to be done, while keeping in mind regulations that set limits on how few or many people can be working at a given time. Still, managers need to ascertain certain information from employees to help make this possible, such as by approaching employees and getting hard numbers on how long it takes to complete basic tasks within their shifts. 

Shift filling is where the most innovation comes in where managers will be able to effortlessly fill shifts factoring multiple constraints, such as labor costs, qualifications, roles and labor laws. If an employee is unavailable, managers can offer that shift to other available staff. Workforce.com can then show managers how much a potential shift swap costs, enabling them to stay on budget. 

Being smart at shift building and shift filling against projected business demand will ultimately both make employees more satisfied and help control budget efficiency. Managers will be able to accomplish this with the right tools that give them the best potential technology and algorithms while also giving them the opportunity to put the employee in the process. Technology built on this win-win philosophy will be the future of automated employee scheduling with both employee and employer achieving desired outcomes.

These advancements in “one-click scheduling” are predicted to drastically save on manager administrative time, optimize labor cost and reduce over/under staffing.

Advanced workforce analytics and open APIs

Increased adoption of the workforce.com open API is expected to bring huge advancements in workforce analytics and promote internal innovation, integration and personalization. By leveraging the power of connectivity, enterprises can quickly eliminate the chaos of using multiple applications leading to rapid innovation and deeper insights into their workforces. 

Companies that can efficiently discover patterns, spot potential problems and optimize their workforce quickly will stay ahead in 2021. This is only possible when organizations have access to their data and have the mechanisms to generate reports that are clear, easy to understand and make the most sense for stakeholders such as HR, payroll, managers and employees. 

With Workforce.com’s advanced reporting suite and API, organizations will be able create custom reports and workflows for efficient analysis. Companies can choose to use customizable built-in reports or create their own by pulling information from any data point. 

Also read: Labor analytics and reporting starts with access to the right data

Cloud, mobility and ease of use

2021 will continue the rise of native SaaS cloud applications over clunky enterprise workforce management software with organizations preferring improved frontline manager/employee mobility options and ease of use. Employees should love to use the tools provided or they generally won’t use them at all.

Simple and modern UI has long been missing from workforce management solutions with organizations needing to solve their problems and complete tasks in the easiest and quickest way possible. Workforce.com remains the leader in workforce management design as we continue to invest in simplicity and ease of use to increase employee engagement, usability and lower support and implementation issues.

It’s also becoming paramount for organizations to lead with a mobile first strategy for their workforce management. Workforce.com will continue to expand our employee mobile app that staff and managers can use to clock in, see timesheets, create schedules and communicate with the rest of the team. employee mobile app

Implementation expectations adhere to these ease of use and quick-to-learn principles with organizations expecting higher standards and tighter deadlines when rolling out or switching from a legacy solution. Workforce.com implementation is now easier and faster ensuring that users can start using the platform in no time reaping benefits of upgrading faster.

In 2021 we predict an increased migration to cloud computing services like workforce.com due to increased functionality, reliability, scalability, security, continual R&D and decrease in cost.

There are currently 300,000 users on the Workforce.com platform, with a 4.75 app star-rating average and 99 percent client retention. Find out why and try Workforce.com today.