Title Goes Here

Presented By:

Tracy A. Miller2415 E. Camelback RoadSuite 800

Phoenix, Arizona 85016

(602) 778-3704

LEGAL UPDATE / WAGE & HOUR ISSUES

A LOOK AT THE NUMBERS:Number of FLSA Lawsuits Filed in Federal Courts

7,064 7,764

6,785 6,786

6,120

5,210

2008 2009 2010 2011 2012 2013

23.5%of total

Employmentsuits

25.2%of total

Employmentsuits

25.5%of total

Employmentsuits

29.2%of total

Employmentsuits

37.8%of total

Employmentsuits

42%of total

Employmentsuits

Recent Trends� Increased DOL enforcement activity:

� Hired new wage and hour field investigators to implement new strategies for securing worker protections

� Fiscal Year 2014� Budget Requests of an additional $3.4 for the Wage & Hour

division to support greater enforcement of the FLSA and the FMLA.

� In 2010, the revitalized Wage & Hour Division (WHD):� Formally launched the “We Can Help” campaign nationwide to

increase visibility and accessibility on behalf of the 135 million workers “we protect”

� 2011 Apps for smartphones to track time worked from DOL

Recent Trends

� In 2011 DOL started using Administrative subpoenas.

� Employees working remotely or from home.

� The Blackberry (I-Phone, I-Pad, Android) dilemma

� Employees working remotely or from home.

� The Blackberry (I-Phone, I-Pad, Android) dilemma

� Employees working remotely or from home.

� The Blackberry (I-Phone, I-Pad, Android) dilemma

Recent Trends

� Workers misclassified as independent contractors

� Is the worker economically dependent on business to which services are provided?

� DOL, IRS and some states coordinating information and investigations.

� 60% of DOL investigations in Phoenix involve independent contractors

Who Is An Employee?

Department of Labor:

“The employer-employee relationship under

the FLSA is tested by ‘economic reality’ rather

than ‘technical concepts.’…. The U.S.

Supreme Court has on a number of occasions

indicated that there is no single rule or test for

determining whether an individual is an

independent contractor or an employee for

purposes of the FLSA.”

Source: Fact Sheet #13: Employment Relationship Under

the Fair Labor Standards Act

Who Is An Employer?

� FLSA contains a broad definition of

“Employer”:

“…Any other person who acts, directly or

indirectly, in the interest of the employer to

any such employees of such employer.”

What This Means To You

� Supervisors and Managers can be sued

individually for wage and hour violations

under the FLSA.

� Supervisors and Managers may have to

pay out of their own pocket/bank accounts

if they are found liable.

SUPERVISORSUPERVISORSUPERVISORSUPERVISORS

Recent Trends

� Failing to properly recalculate overtime when making non-discretionary payments

� Overtime is earned on a weekly basis

� Many bonuses are paid for monthly, quarterly or accrued performance

� Weeks and months do not necessarily correspond

� Failing to compensate for pre-shift and post-shift activities such as computer boot-up and power-down, shift exchanges and safety

meetings.

April 2011 FLSA Final Rule

� States in preamble that additional non-salary and non-overtime compensation is inconsistent with payment on a fluctuating workweek basis.

April 2011 FLSA Final Rule (Cont.)

� Clarifies Tip Pool Rules

� Tip pools - No limit on the amount of allowable mandatory employee tip pool contributions.

� Cannot include those who do not customarily and regularly receive tips.

� Imposes significant new notice and record-keeping obligations in connection with tipped employees.

Trends in Investigations

� WHD is instructing investigations to

impose civil money penalties (CMPs)

in first investigations if criteria for

willful violation can be established.

� WHD is imposing liquidated damages

– not in Phoenix yet.

� Renewed interest in records.

� Beware of tolling agreements.

Hours Of Work

� FLSA requires all employees to be paid at least the minimum wage for all hours worked.

� Non-exempt employees must also be paid the overtime rate of time and one-half their regular rates of pay for all hours worked in excess of 40.

The Employer Is In Control And

Must Enforce The Rule

In all cases, it is the duty of the employer to

exercise its control to see that the work is not

performed if it does not want it to be performed.

The mere promulgation of a rule is not enough.

Management has the power to enforce the rule

and must make every effort to do so.

29 C.F.R. § 785.13

What are “Hours Worked”?

� Hours of work include all time that the

employee is required, suffered, or permitted

to work.

� Includes:

� Employee’s normally scheduled hours

(i.e., employee’s normal shift).

� All “off the clock” time spent

performing job-related activities that

benefit the employer.

Examples Of

Off-The-Clock Work

� Employee in manufacturing plant sets up his

machine before clocking in.

� Employee clocks out and continues to work.

� Employee put on protective gear before

clocking in.

� Secretary works during lunch.

� Secretary stops at the post office on the way

home.

� Paralegal checks e-mail at home.

� IT responds to e-mail.

Examples Of

Off-The-Clock Work

� Booting up computer before clocking in.

� Clocking out before shutting down

computer system.

� Taking a 15 minute lunch.

� Taking or making phone

calls before or after normal

work hours.

� Attending a safety meeting

before clocking in.

Common Compensable Time Issues

� Travel Time

� On-Call Time

� Rounding Clock Time

� Donning & Doffing Time

� Breaks and Meal Periods

� “Off the Clock” Work

� Training Time

Common Compensable Time Issues:

Travel Time

� Is travel time to and from work compensable? No -- unless:

� Employee works during commute.

� Employee begins working before leaving home (possibly -- this refers to a continuous work day).

� Any traveling during normal work hours is considered work time.

� Same day travel to and from another company facility? Yes.

� Overnight travel away from home? No -- except for time that cuts across normal work hours.

Common Compensable Time Issues:

On-Call Time

� “Waiting to be engaged or engaged to wait.”

� Whether on-call time counts as work hours

depends on the “degree of constraint on

employee’s time.”

� Employee must be able to use time effectively

for his or her own purposes for it not to be

compensable time.

� Not compensable time if employee is “merely

required to leave word where he or she can be

reached.”

� Example: Nurses required to report in

uniform 20 minutes after receiving a

call.

� Nurses lived an average of 18 minutes

from hospital.

� Nurses called in 40 percent of the time.

� Found to be too restrictive.

Common Compensable Time Issues:

On-Call Time

Common Compensable Time Issues:

Rounding

� May round to nearest quarter hour.

� 5:53 -- can be round forward to 6:00

� 5:52 -- can round back to 5:45

� Units clock: 25 units equals 15 minutes.

� 88 units -- round forward to 100

� 87 units -- round back to 75

Unpaid Interns

� Voluntary work directly related to the

employee’s job is compensable.

� If the employee works at the end of a shift

and desires to stay and finish a project, the

time is compensable.

� Employee cannot volunteer to work over

without being compensated.

Common Compensable Time Issues:

Breaks & Rest Periods

� Bona fide meal periods

� In order to be considered non-compensable, meal period should be at least 30 minutes.

� Employees must also be totally relieved of any compensable activity

Common Compensable Time Issues:

Training Time

� Time spent attending lectures, meetings, and training programs need not be counted as hours worked, provided the following conditions are met:� Meetings are held outside normal work

hours.

� Attendance is voluntary.

� Course is not directly related to employee’s job.

� Employee does no productive work during meeting.

Overtime Is Paid

On The “Regular Rate”

� Overtime must be at one and one-half times

the regular rate.

� The “regular rate” consists of “all

remuneration for employment.”

� All remuneration for “time worked and effort

expended that relates to the employee’s

quantity or quality of work.”

Usually Included In

The Regular Rate

� Shift differential

� Attendance bonus

� Production bonus

� Quality bonus

� Commission

payments

� Retention bonus

� On-call pay

� Installment-paid

sign-on bonus

� Longevity bonus

� “Quantity- or

quality-” related

contest prizes

Usually Excluded

From Regular Rate

� Gifts

� Discretionary bonuses

� Suggestion awards

� Pay for time off

� Show-up pay

� Bonuses as percent of total wages

� “Premium” pay

� “Traditional” benefits

� Sign-on bonus “paid up front”

Title Goes Here

Presented By:

Tracy A. Miller2415 E. Camelback RoadSuite 800

Phoenix, Arizona 85016

(602) 778-3704

LEGAL UPDATE / WAGE & HOUR ISSUES