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Notes from the Field

The Timekeeper — Thu, 11 Dec 2008 15:56:17 +0000

Just a few bits and pieces from the judicial world that might be of interest to those of us dealing with time and attendance / wage and hour issues:

Wal*Mart Settles

News comes that Wal*Mart has settled a wage-and-hour lawsuit in Minnesota for $54 million. The suit alleged that Wal*Mart managers forced employees to work off the clock without pay, and that the company failed to maintain accurate time and attendance records.

The judge has already ruled the company was guilty, and Wal*Mart has already been assessed $6.5 million in back pay. This settlement just takes care of the separate “penalty phase” of the trial. Considering if they’d gone to trial and been assessed the maximum legal penalties, this case could have cost them $2 billion (yep, with a “b”), $54 million seems like getting off cheap in comparison.

SkyWest Wins (Sortof)

From Law.com, we learn that collective bargaining agreements and Federal law may, at least in some situations, trump state wage and hour laws.

In a suit before U.S. District Judge Dana Sabraw of the Southern District of California, Tiffany Blackwell, who worked for SkyWest from November 2002 to December 2004, claimed (among other things) she received no meal breaks, or meal breaks of less than 30 minutes, or late meal breaks, all of which violate California wage and hour law.

However, Judge Sabraw granted summary judgment in favor of SkyWest — meaning those allegations don’t even proceed to trial — on most of the points at issue. First, the judge ruled that because Blackwell was a member of Skywest’s Frontline Association, an organization that represents ticket agents in labor negotiations, the collective bargaining agreement they negotiated with SkyWest under the Railway Labor Act pre-empted her claims for unpaid overtime wages, meal and rest periods.

And if that weren’t enough, the judge also found the Airline Deregulation Act overrode the claims made under state law. She wrote, “Here, SkyWest has offered uncontroverted evidence that meal and break periods may conflict with federal aviation safety and security regulations. Thus, requiring SkyWest to provide Agents meal and rest periods could result in cascading flight delays, increased risk of death or serious injury to passengers and damage to aircraft, and security breaches.”

Wow. Who knew letting a ticket agent grab a sandwich could have such dire consequences? Live and learn.

However, all is not lost for Blackwell. The judge did allow some of her claims to go forward to trial, specifically: Blackwell claims that SkyWest deducted 30-minute meal breaks from her paychecks, even when she didn’t get a meal break, resulting in off-the-clock work that violated the state’s minimum wage laws (of course, regular readers here already know about the pitfalls of the “standard lunch deduction”), and that the company deducted from her paycheck costs associated with employee travel benefits without her authorization.

And From the Other Coast…

In a further development in the case I just linked to above, where New York hospital workers were suing because the hospitals where they worked were deducting a standard lunch period from their pay, even when their lunch period was shorted or even eliminated by work emergencies…

Well, I’m still following up on this one to get the details, but apparently a judge has ruled that a collective bargaining agreement mandating arbitration for grievances does not prevent the employees from proceeding with their wage and hour lawsuit.

So if you were hoping you could insert a mandatory arbitration clause in your labor contract and use that as a “get out of court cases free” card, might want to consult with your lawyer. Your protection may not be as absolute as you think.

Time and Attendance, Powered by the Sun

The Timekeeper — Sat, 06 Dec 2008 20:35:27 +0000

Well, here’s a new one! Acroprint Time Recorder Company has come out with what they say is the industry’s first solar-powered employee time clock.

According to the company’s website, the solar-powered SP125 is functionally equivalent to their standard Model 125, a heavy-duty manual side-print punch clock, except that the SP125 is powered by a battery that charges up with a small solar panel.

Yeah, I know lots of companies are migrating to software-based time and attendance tracking, whether they install and run something on their own computers or sign up for a web-based service. And there’s a lot to be said in favor of automated time and attendance (not the least of which is the potential to download employee time directly to your payroll software or service — saves a lot of clerical errors!). But sometimes, especially in more rugged, dirty or harsh environments, a traditional time recorder is the only reasonable alternative. (Computers don’t necessarily do so well in, say, a dusty cement plant or outdoors at a construction site.)

The clock should work with pretty much any standard time card, but here’s something else to consider. Acroprint also offers what they call GreenGuard time cards, which contain 30% post-consumer recycled content. They recommend pairing these GreenGuard cards with the SP125 for “a complete eco-friendly solution.”

Cool.

Another Reason to Maintain Accurate Time Records

The Timekeeper — Sat, 06 Dec 2008 20:00:40 +0000

As if there weren’t enough reasons already to maintain accurate time and attendance records… how about avoiding the payment of unemployment benefits to a fired employee?

Consider the case of Cuccia v. Martinez & Ritorto, P.C.

The New York Supreme Court recently upheld a decision by the Unemployment Insurance Appeal Board denying unemployment compensation to a legal secretary who was fired from her job for being repeatedly late to work. The Court noted, “…continued lateness, despite prior warnings, has been held to constitute disqualifying misconduct…”

Thing is, unless you’ve got good time and attendance records, how can you know (much less prove) an employee has repeatedly been late to work?

If you have no time records at all for your salaried non-exempt and hourly workers and you’re looking for something you can implement in a matter of minutes, time sheets would better than nothing. All you need is a timesheet form and a photocopier, or some spreadsheet software such as Microsoft Excel. But they aren’t ideal. Hand-written or spreadsheet-based time sheets are notoriously inaccurate. People often wait to fill them out until just before it’s time to hand them in… and, seriously, who’s going to remember (and report) that they came in three minutes late last Monday, when nobody actually saw them arrive?

Look, there’s software available for less than $100 that will accurately track your employees’ arrival and departure times. For a little more money, a biometric system will definitely ensure the employee is physically present for each punch. If you prefer, you could find software or subscription services that will allow them to clock in and out using their telephone or a web browser, so even telecommuting or remote workers’ time can still be accurately tracked.

The point is, tracking employee time and attendance can be useful in more ways than you might expect. And with all the alternatives available, you’ve really got no excuse… so get out there and get tracking!

Hat tip to the Adjunct Law Prof Blog for bringing this to my attention!

Staying Out of Trouble in Hard Times

The Timekeeper — Sat, 06 Dec 2008 18:54:33 +0000

Well, with the news last week of another half a million jobs lost, employment issues are top of mind for a lot of business owners and their employees. Payroll is the largest expense for many businesses, so it’s one place business owners almost invariably look when trying to cut costs.

Some unscrupulous business owners might think now is the time, when employees may be afraid of losing their jobs, to take advantage of the situation and shave a few bucks illegally off their payroll expenses. I’d strongly advise against this. Not only is it a really bad idea to avoid paying your employees money they’re legally owed, you may discover employees aren’t too scared to file complaints against you after all — or you may one day wake up to the Department of Labor knocking on your door to conduct an audit, even if your employees don’t complain.

Sadly, good intentions aren’t a guarantee of safety. Even well-meaning companies can inadvertently find themselves in hot water if they’re not careful.

According to the Ohio Employment Law blog a recent report on litigation trends reveals 47% of the companies surveyed reported they were sued in a labor or employment case in 2008. As one of the most “popular” types of labor and employment lawsuits, wage and hour lawsuits alone are up by 19%. And in tough times, it’s likely these types of suits will only increase even more.

If you’ve read here for any length of time, you know back wage awards and penalties in these types of suits can easily reach amounts that can swamp the budgets of a small business.

There are three main areas for you to look out for to help keep your business out of trouble. Of course, nothing is a guarantee, but focus on these three and you’ll be ahead of the game.

Independent contractor vs employee: It’s tempting to classify people as independent contractors for a number of reasons. There’s less paperwork and taxes to worry about — not to mention that you get yourself off the hook for that pesky employer portion of the FICA withholding. But be careful… there are specific Department of Labor and IRS rules about who can be considered a contractor and who cannot. Get on the wrong side of this and you can be facing big penalties.
Exempt vs non-exempt: As we’ve seen time and time again on this blog and elsewhere, it’s not the job title, it’s the actual job duties that determine if a person is exempt from overtime regulations. There are specific federal and state rules and criteria employees have to meet to be considered exempt. And even if your employees meet the criteria, if you have policies in place that treat them as non-exempt, you can still find yourself in trouble.
Local, state and federal wage and hour laws: Even after you get your employees properly classified, you’re still not out of the wage and hour woods. There are all sorts of rules and regulations covering how, how much, and when you have to pay your employees. For instance, did you know that in Massachusetts you can’t pay hourly workers monthly or even semi-monthly (twice a month)? Nope, you have to pay them every two weeks or more often. These rules are different from place to place, sometimes from one town to the next. Get them wrong and you could find yourself in court.

In times of layoffs and restructurings, these issues can be especially problematic. Even if someone was properly classified previously, if their duties change as they assume tasks other (laid-off) employees used to cover, their job classification may need to be revised. Some cost-cutting measures — such as flexible or alternative work schedules — might raise regulatory issues you haven’t had to deal with before.

Folks, I really don’t want to find myself writing about you in 2009 for having lost a big lawsuit or being hit with a big judgement. If you haven’t conducted an internal wage and hour audit lately, it’s time to talk to your lawyer about scheduling a review. Make sure your current procedures — and any new policies you might be thinking about — are in compliance with all applicable regulations. Check that your employee handbook isn’t potentially going to get you in trouble. Verify that everybody’s classification is still appropriate and that you’re paying them correctly.

Let’s be careful out there, mmmmkay?

Update: If you’re contemplating cost saving measures like reduced work weeks, shared jobs, salary reductions or layoffs, you might want to take a look at this document: Wage and Hour Perils of Layoffs, Reduced Workweeks and Other Payroll Reduction Measures (PDF format) prepared by the law firm of Vedder Price. Hope this helps!

Lunch, Interrupted

The Timekeeper — Fri, 05 Dec 2008 04:09:10 +0000

Or, Beware The Standard Lunch Deduction

Most of the time and attendance tracking software I’m familiar with includes the option of taking a standard deduction for your employees’ lunch. In a common implementation, once an employee has been at work for a certain length of time, the software automatically deducts your standard lunch deduction from their worked hours total, even if they didn’t actually clock out for lunch. Basically, the software assumes your employees are taking their full lunch breaks and reduces their total hours worked accordingly.

In any case, you want to be really, really careful before you decide to implement this feature. Trust me on this one. Really, really careful. And if you do decide to activate it, be sure to monitor that your employees really are taking the full lunch break that you’re deducting for.

And if, for some reason, they don’t… adjust their elapsed time so they do get paid for all the time they work.

Because if you deduct for, say, a half-hour of lunch, and your employee only gets to take 20 minutes because they get called back to work early to deal with some emergency — or worse yet, they end up working through lunch for some reason — you owe that employee for the time they worked. If your system deducts it automatically and you don’t add it back in, they won’t get paid for all their worked time. And if you don’t pay them and this sort of thing happens often enough, you could find yourself in hot water in the event of a labor audit, or if your employees get fed up and complain.

Case in point: Crouse Hospital and St. Joseph’s Hospital Health Center in Syracuse, New York, and Faxton-St. Luke’s Healthcare in Utica and New Hartford got hit last month by class-action lawsuits brought by a few hundred employees who claim their employers deducted for the full lunch period even when they didn’t get a full lunch period (which is, apparently, a common occurrence for hospital staff).

Attorney Patrick Solomon, a partner in the law firm of Dolin, Thomas, and Solomon, LLP (the firm bringing the class action suits) warns employers against enabling this feature. “It is a recipe for disaster for you,” he said.

As a long-time employee of a company in the time and attendance industry, I mostly concur. It’s not an automatic disaster, but it probably isn’t going to save you all that much time… because you have to constantly monitor everyone to make sure you don’t miss paying people for worked time.

In this case, the lawyers estimate it’s possible trying to save a few minutes by implementing a standard meal deduction may well cost these employers millions.

Millions!

H/T to the Kentucky Employment Law Blog for bringing this story to my attention!

Dec. 5, 2008: Telecommuting and Wage & Hour Law (Teleseminar)

The Timekeeper — Mon, 24 Nov 2008 14:00:48 +0000

Do you have employees who telecommute one or more days a week? Do you have employees asking for a telecommute option, either to reduce their commute time, save on gas or achieve better work/life balance? Do you want to offer telecommuting as a benefit to your employees?

From George’s Employment Blawg:

“Many employers offer their employees the opportunity to work from home on either a regular or temporary basis. While the flexibility of a telecommuting arrangement can benefit both the employer and the employee, allowing a nonexempt employee to work at home can lead to a minefield of wage and hour issues that an employer must carefully navigate to avoid potential liability.”

On December 5 at 1:00pm Eastern, Lorman Education Service is offering a teleseminar, Wage and Hour Issues Surrounding Telecommuters. You can attend live — and if you can’t attend on December 5 (or if you just want a permanant copy for future reference), you can order a CD recording of the conference (or both).

Now, I’m not endorsing or recommending this and I have no personal experience with Lorman Educational Services, but from reading the teleseminar description, it sounds like something that might be useful to companies that have telecommuting employees. And one thing I’m all about here is educating employers to help y’all avoid those pesky wage and hour lawsuits. So you might want to at least check it out.

Better yet, thanks to George’s Blawg, you can attend at a discount. Click here to visit the George’s Employment Blawg post and learn more about this seminar. Scroll down to the bottom of the article and follow the link there to receive a 10% discount on teleseminar registration. (Note: you need to follow the link in the blog post to get the discount.)

2009 Outlook: Employers Be Alert

The Timekeeper — Wed, 12 Nov 2008 14:12:54 +0000

So what is 2009 going to bring? With a new administration on the way in Washington, a lot of people are wondering. And, specifically, around here we’ve been pondering what this could mean for wage and hour / time and attendance issues.

From what I can see, for employers who already try to do right by their employees, it’s going to be pretty much business as usual. Of course, you want to make sure to check things out periodically with your lawyer to make sure your well-meaning policies don’t inadvertently run afoul of the law. But in general, if you were operating on the up-and-up before, you don’t have much to worry about now.

Where it starts to get interesting is for employers who have been cutting corners a bit, being a tad more, uhmmm… “aggressive” in their interpretation of wage and hour regulations. And it should be getting downright scary for those types who have been cheating employees out of earned overtime, paying less than minimum wage and deliberately misclassifying employees to avoid paying OT and withholdings.

“More Aggressive” DOL

According to the Washington Labor & Employment Wire, we can probably expect a more aggressive Wage and Hour Division of the DOL under an Obama administration.

In a July 27, 2008 letter to the Department of Labor, President-elect Obama set forth his vision for a WHD that listens to worker advocacy organizations and more actively initiates its own investigations. President-elect Obama also indicated his desire to expand the scope of WHDâ€™s activities, criticizing the Bush administrationâ€™s emphasis on only four industries (agriculture, accommodation and food services, manufacturing, and health care and social services). He also indicated his desire to increase funding for the WHD in order to actualize the enhanced role he envisioned for it. With the support of a Democratic Congress, the Obama administration could make this vision a reality.

Already Happening?

If anybody needs further convincing, how about this announcement I found on the Talking Union blog?

Apparently, today (November 12) at noon, at the US DOL - Frances Perkins Building at 200 Constitution Avenue NW in Washington DC, a press conference will be held by Kim Bobo, Executive Director of Interfaith Worker Justice to discuss her new book, Wage Theft in America: Why Millions of Americans Are Not Getting Paid — And What We Can Do About It.

In what has been described as “the crime wave no one talks about,” billions of dollars worth of wages are stolen from millions of workers in the United States every year. The scope of these abuses is as staggering as it is wrong — paying employees far less than the legal minimum wage, purposefully misclassifying employees as independent contractors, illegally denying workers overtime pay — and only now are people beginning to take notice. Kim Boboâ€™s major new book Wage Theft in America offers a sweeping analysis of the crisis and provides concrete solutions, with special attention to what the new presidential administration should do about the problem.

Just in case you didn’t notice the first time… this press conference — while not an “official” government-sponsored event — was organized by members of the American Federation of Government Employees union Local 12 who work at the Department of Labor, and is being held in the Department of Labor building.

Brace Yourselves for More Litigation

According to the Collabrus Expert Compliance Blog, “a 2008 survey sponsored by international law firm Fulbright & Jaworski L.L.P, indicates that U.S. companies now anticipate an rise in new actions and government probes,” and wage and hour actions head the list.

While many types of cases have seen a decrease over the past couple of years, companies have been seeing an increase in wage and hour lawsuits. Wage-and-hour litigation was the largest single issue cited by employers as a concern for the coming year.

Beyond lawsuits, companies also indicated they were seeing an increase in government actions as well. The folks behind the survey concluded both government actions and lawsuits will likely continue to increase in the coming year. (This is entirely in line with other predictions I’ve read elsewhere.)

Of course, it’s possible even if you’re doing everything “by the book” you might get caught up in a lawsuit anyway. You can either ignore the possibility and get caught by surprise, or you can follow the wise advice of the Boy Scouts and “Be Prepared!”

So, what can you do? Well, when’s the last time you conducted a wage and hour audit? When’s the last time you sat down with your lawyer to review your employee handbook and employment policies and practices? If it’s been more than a year or two, it’s time to do it again. Sure, you need to track time and attendance accurately and make sure you pay everyone fairly for all the hours they work, but wage and hour compliance is not just about overtime. If you’ve got all your I’s dotted and T’s crossed, you’ve got a much better chance of surviving any DOL investigation or wage and hour lawsuit than if you’re just “winging it.” Take this seriously. The survival of your business may depend on it.

Cook Awarded Nearly $85K for Unpaid Overtime and Retaliation

The Timekeeper — Sat, 08 Nov 2008 21:05:21 +0000

Think you can’t get in much trouble over one employee’s complaint? According to a press release from Texas RioGrande Legal Aid a Rio Grande Valley restaurant chain will have top pay a former cook of theirs, Jose Lopez, $84,520 for unpaid overtime and retaliation.

Lopez was reportedly a cook at Dannyâ€™s Mexican Restaurants, owned by Daniel and Graciela Ramirez, for ten years. He filed suit in July 2007 claiming the restaurant didn’t pay him overtime. Worse, he said they fired him when he demanded they pay him the wages he was owed.

According to Lopez, he worked up to 74 hours a week, but was only paid his regular rate of $7 per hour. He said the restaurant had workers use multiple time cards to avoid officially recording overtime, destroyed wage and hour records and paid workers in cash — at only their regular hourly wage, not time and a half overtime — for their extra hours.

The jury found not only did the restaurant fail to pay the required overtime, but that the violations were willful. Further, they found Lopez was fired as retaliation for his wage demands. He was awarded $84,520 for unpaid overtime, lost income, and damages.

Seems like a pretty expensive lesson… and I wonder how many other employees of this restaurant chain will now feel empowered to file a complaint, too?

Small Companies, Big (Potential) Liabilities

The Timekeeper — Sat, 08 Nov 2008 20:31:54 +0000

Think if you’re a small company, you’re too small for lawyers to bother with when it comes to filing wage and hour lawsuits against you? Think again… According to this article from the HR Daily Advisor, “there’s a new breed of plaintiff lawyer out there.” According to Phillip Russell, a member of the national employment law firm Constangy, Brooks & Smith, LLP, these lawyers aren’t focusing on companies with 1,000 employees; they’re looking for 10 or 15 employees working off the clock and not getting overtime.

Even with just a few employees not getting required overtime over a period of time, it can be worth it for both the employees and the lawyer to bring suit. For FLSA violations, even one employee working off the clock can be enough to warrant a claim.

The problem is, it’s easy for employees to end up working off the clock. It can go on for a long, long time — maybe employees don’t realize what they’re entitled to under the law, or maybe they’re afraid to report it. Sometimes employees put in extra hours on their own, thinking they’re “helping out.” Even if employers and employees have the best of intentions, all it takes is one complaint.

Russell points out it’s the employer’s job to make sure employees get paid for the hours they work. To ensure you don’t end up in trouble inadvertently, you may want to consider spelling it out in your policies that employees are not to work “off the clock,” or you may want to mandate they have to leave their workspace during lunch and break periods to ensure they don’t work through them. It may even require taking disciplinary action against employees if they continue to work extra unpaid or “off the clock” hours.

There’s Hard Headed, and Then There’s This Guy

The Timekeeper — Wed, 29 Oct 2008 19:16:11 +0000

OK, so let’s say you got caught in not one, but five federal DOL audits for not paying minimum wage or overtime. And you’d been ordered by the courts in 2003 and again in 2005 to pay back wages to your beleaguered employees to the tune of a total of nearly $150,000 plus interest.

What on earth would make you think at that point it was a good idea to not only largely ignore those court orders, but continue to violate the provisions of the FLSA?

See, that’s the position in which Manuel Jaime, co-owner of several El Maguey Mexican Restaurants in Missouri reportedly found himself not too long ago. In an article unfortunately apparently no longer available on their website, the Lee’s Summit Journal reported the U.S. District Court for the Western District of Missouri had found Jaime in civil contempt for violating provisions of previous consent orders and had imposed some fairly draconian penalties.

Lest one think court orders could be allowed to slide with impunity, consider the situation in which Mr. Jaime now finds himself:

The amount of the outstanding balance related to the earlier court order was doubled as compensation to his employees for the delay in their payments.
He’s still on the hook for the remaining balance of the later court order.
He has to pay all attorney fees and court costs.
He has to help the Wage and Hour Division figure up all the additional back wages he owes for violations since February 2007 — and pay double the amount computed.
He can’t open any additional restaurants or renew any liquor licenses until he’s paid all the back wages in full.
And he has to set up a process for employees to file anonymous complaints about any future FLSA violations at all businesses he owns, manages or controls.

Wouldn’t it just have been easier (and cheaper) to pay the back wages the first time around? Or better yet, install a good time and attendance system and make sure you pay everybody correctly to start with?

I’m just sayin.