Department of Labor. Overtime Protection

Today the Department of Labor announced a proposed rule that would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation.  Failure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year.  For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.  Today's proposed regulation is a critical first step toward ensuring that hard-working Americans are compensated fairly and have a chance to get ahead.

Missouri Employers and Workers Compensation Retaliation

After a somewhat lengthy delay, I've returned to the world of blogging.  As time allows!

For Missouri employers, a note of warning.  The Missouri Supreme Court has lowered the Standard of Proof for Workers Compensation retaliation claims.  On April 15, 2014, in Templemire v W & M Welding, Inc., the Missouri Supreme Court continued its pro employee interpretation of the employment at-law doctrine by significantly reducing the casualty standard for a workers compensation retaliation claims.  Prior to this ruling Missouri law had long required an employee to prove that the alleged retaliatory motive was the "exclusive factor" for the adverse action.   Such as  a termination.

Unemployment and Older Workers

The unemployment rate for workers aged 55 and over was 5 percent in July, according to the most recent data available from the Bureau of Labor Statistics.  That's still higher than historical averages but it's much lower than the overall unemployment rate of 7.4 percent, and below the unemployment rate for any younger group of workers.

Workers aged 55 and over also are the only ones to have seen their ranks grow substantially since 2007, the year the nation went into recession.  There were 31.6 million employed people aged 55 and over in July, according to the BLS, up from 25.9 million in July of 2007.  That's partly demographics:  As baby boomers age, more are becoming part of the 55-plus group.

The unemployment rate for Americans 55 and older is lower than for any other age group the government tracks, and far below the national average.  But if an older workers loses a job, the length of time that person will stay unemployed is typically much longer than for any other age group.

The government is scheduled to release August unemployment numbers on Friday, and forecasters are expecting the economy to have added around 200,000 jobs.

Working Families Flexibility Act (H.R.1406)

(Not to be confused with the Flexibility For Working Families Act)

Over heavy opposition by the Democrats, a hotly debated bill was passed May 8th by House Republicans that will potentially loosen federal overtime laws.  The bill would amend long-standing labor laws (the 75 year old FLSA) by allowing private-sector employers to offer compensatory time off in lieu of time-and-a-half pay for overtime.  (The protections under FLSA were put in place to prevent employers from abusing the system and avoiding paying overtime to workers who put in more than 40 hours per week.)

The supporters of the bill have pitched it as an update to federal law, with the obligatory fluff that "it's about helping working moms and dads, providing the ability to commit time at home," per Rep. Martha Roby (R-Ala). 

Under the bill, employees may use their comp time only at the employer's convenience.     If a business is necessarily inflexible when it comes to scheduling time off as the business may relay on a small number of employees for an entire function, then comp time may not be a viable alternative.  For the small employer, the concern may be the potential lost productivity and the additional paperwork for tracking comp time accrued and used.

Yes, the bill has put in provisions to protect against abuse, and only offers the workers a chance to opt for the extra time off if that's what they want.  But I side with the Democrats that such an option is ripe for abuse by unscrupulous employers.  The bill is a potential way for extra work to be imposed on workers with no additional cost to the employer. 

Vicki Shabo is the Director of Work and Family Programs of the non-partisan National Partnership for Women and Families.  Her organization is staunchly opposed to H.R. 1406 and sees it as a wolf dressed in sheep's clothing.  "This is a dangerous proposal that pretends to be something that will help working families.  It will take money out of worker's pockets for overtime pay that they otherwise would have received in wages and instead replace it with possibly an empty promise or a mirage of time that's out in front of them that they may never be able to take."

"For the record, there are many ways for Congress to improve both worker pay and work life balance, including raising the minimum wage, instituting paid sick leave, ending discriminatory pay practices, easing the formation of unions and promoting advance notice for worker scheduling,  The House bill ignores what is helpful and embraces what is harmful."  The New York Times, May 10, 2013.

I highly doubt that this bill will go much further. The White House stated in early May that the president would be advised to veto such legislation on the grounds that it would weaken protections in the Fair Labor Standards Act.

Legal Mistakes by HR (Part 3)

Employers often mandate pay secrecy restricting employees from discussing wages with their coworkers.  The school of thought being that salary discussions would affect morale and company productivity.   Here's the potential legal mistake:

3.  Mandating confidentiality of wage information.  Remember the National Labor Relations Act?  Under Section 7 of the NLRA, employees may now legally discuss wages in the workplace with limited exceptions.     By maintaining a policy or practice that restricts employee freedom in this regard, an employer violates Section 8(a)(1) of the Act.

Now, here's where the "limited exceptions" comes into play.  Employees are legally allowed to have such discussions, but the law does not require that employers allow employees to do so during assigned work hours.  Caution:  If you prohibit employees from discussing pay during assigned work hours, ensure that you are placing the same prohibition on other conversations that are unrelated to work.  Other limits pertain to the content of discussions (protected information) as well as how the employee came into possession of the information (unauthorized access to employee information), etc.

Review your policies and practices to ensure you're not in violation. 
 

Exel and EEOC

An Atlanta jury awarded $500,000 ($25,000 in compensatory damages and $475,000 in punitive damages) in a sex discrimination suit against Exel, Inc., a Westerville, Ohio-based warehouse and distribution company.

According to the EEOC's suit filed in U.S. District Court of the Northern District of Georgia, Excel, Inc. violated Title VII of the Civil Rights Act of 1964 by refusing to promote a female, Contrice Travis, to an inventory supervisor position in 2008.

During the course of the trial, the EEOC presented evidence that:

1. Male employees were routinely promoted after verbally requesting consideration from open positions while Travis, who was indisputably recognized as the most knowledgeable in inventory control, was denied the inventory supervisor position.
2. Travis's former supervisor testified that when he recommended Travis for the position, the general manager informed him that he would never put a woman in that position.
3. Travis was told that the inventory supervisor position would not be filled.
4. The male selected for the position was told by management and a human resources official that the position would be filled, but that he would be selected only if he kept it a secret.
5. The selectee, Michel Pooler, required training by Travis because he had no inventory experience.

This isn't the first, or last,  potential violation by Exel.

On April 9th of this year, The Columbus chapter of the Council on American-Islamic Relations filed a federal employment discrimination lawsuit.  The plaintiff, Yusuf Sufi, was fired by Exel in May, 2012.   The federal complaint states that Sufi repeatedly asked Exel to provide him with an accommodation under which he could attend his Friday afternoon prayer services.   His employment was ultimately terminated by Exel in May 2012 when he asked for the accommodation a second time.  (It appears that Exel missed the memo.  Both state and federal law requires employers to accommodate the religious practices of their employees unless it creates an undue burden on the company.)

"This is not the first time Exel has discriminated against employees when they have asked for religious accommodation. Our office filed 18 charges of discrimination with the EEOC last month relating to the denial of religious accommodation for Muslim employees who worked at the same facility at which Mr. Sufi worked," said CAIR-Ohio Legal Director Jennifer Nimer. "This pattern of discriminatory behavior continues to be a problem at Exel." 

A massive review and overhaul of Exel's practices, policies, training and personnel needs to occur.   Both management and human resources have failed on a massive level.  Human resources is there to protect employee rights and employer rights.   In the case of Ms. Travis, HR took the side of the wrongdoer and supported a discriminatory selection process.  Human Resources didn't take steps to eliminate discrimination or reduce company liability in either case.

Pending Legislation in Texas

Below is a small sampling of employment-related legislation filed in the Texas Legislature.   If passed and signed into law, these will have a tremendous impact on Texas employers.

HB238/SB237
Prohibition of employment discrimination on the basis of sexual orientation or gender identity or expression.

HB321
Deferred adjudication may not be used as a factor in employment decisions, housing or issuance of state licenses.

HB667
Puts leave for foster children on same basis as leave for biological or adopted children.

HB950
Incorporates federal law in the Lily Ledbetter Fair Pay Act of 2009.

HB1829
Relating to safe patient handling and movement practices at hospitals and nursing homes.  No retaliation or discrimination toward staff members who refuse to participate in unsafe handling of patients.

HB1188
Relating to limiting the liability of persons who employ persons with criminal convictions.  Tightens up on standards for proving negligent hiring and supervision of employees with prior convictions.

HB494/SB741
Extends to two years the time limit for filing a wage claim with Texas Workforce Commission.

SB340
If TWC finds bad faith on employer's part for failure to pay wages, it "shall" impose a penalty (instead of "may").

Happy Birthday to the Equal Pay Act

50 years ago today the Equal Pay Act was signed by President John F. Kennedy.  While equal pay is the law, the nation still faces gender wage disparities.  In 2012, women generally earned 77 percent of men's wages.  For African-American and Latina women, the number is even lower.    We have made progress, but it's not enough.

The Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work.  The jobs need not be identical, but they must be substantially equal.  Remember that job descriptions and titles are irrelevant. 

On the front line of this battle is the EEOC who has made enforcing equal pay laws one of its six priorities as outlined in the Strategic Enforcement Plan.

Mother-Friendly Employers

While driving home I heard a radio commercial advertising Mother-Friendly Employers here in Texas.  We've come a long way.  Who would have thought that companies would advertise their support of breastfeeding in the workplace?  Or that a work-site might obtain "Mother-Friendly" designation?

The Texas House of Representatives passed HB 741 in early May.  HB 741 requires public employers, school districts, cities, counties and state agencies, to accommodate employees who need to express breast milk at the work place.  Under current law, working mothers who are hourly employees have federal protections in place for when they need to express milk in the workplace.  (The Federal Health Care Reform Bill, signed in March 2010, contained an amendment to the FLSA requiring employers to give breaks for nursing.)  However, salaried employees have no protections in state or federal law.  House Bill 741 seeks to close this loophole.

Equity in Pay, In the Animal Kingdom?

What makes us human?  What separates us from other primates?  Scientifically, we have similar anatomy and yes, behavior. Sometimes traits that we view as uniquely human are anything but.   As with humans, within primate groups there is always a pecking order.  A primate is either dominant or submissive which has a direct relationship to ranking in the group.  Access to food, feeding competition mates, etc., is also dependent on ranking. 

What happens in a clinical environment when a Capuchin monkey is asked to do the same job as a second Capuchin, but for different pay?  It appears that we humans are not as unique as we think we are.   It turns out that primate behavior reflects some of the same traits as it does for us humans.  Monkeys reject unequal pay too!

A Capuchin was asked to give a rock to a researcher in exchange for a treat.  The Capuchin complies and receives a cucumber in return.  Initially the Capuchin is perfectly happy with the treat and continues to participate in the test.  But then the Capuchin observes a second Capuchin receiving a grape, a far more attractive reward, for performing the same job.  When confronted with this unequal pay for equal work, the monkey becomes outraged!  Now we have a clear indication of how monkeys respond to concepts of unfairness!

The link is here if you want to laugh.  The UpWorthy.  "2 Monkeys Were Paid Unequally; See What Happens Next."

http://www.upworthy.com/2-monkeys-were-paid-unequally-see-what-happens-next

Tortious Interference?

Employee John Doe has been working for XYZ  for two years, being recognized as nothing more than one of the many cogs in the wheel.    As a result of John's role within the company, he frequently comes into contact with a large number of company clients.  Then one day, something extraordinary happens. One client, Acme, realizes that John is a rising star!  After ensuring that no non-solicitation is being violated with XYZ, Acme extends an offer of employment to John.  John is excited about this new opportunity. It's the next logical step in his career and a nice increase in his compensation.  After all of the necessary pre-employment requirements are completed and the hire date is set, John submits his resignation to XYZ.    But this story doesn't stop here and there's no Cinderella ending.

The President of XYZ is astounded.  Why would you quit?  You're one of our rising stars.  Those last six words astound John, he's never heard them.   The President offers him more money to stay.  The office he'd like to have.   But in John's eyes, this recognition comes a bit too late.  After a lengthy discussion, John is more dedicated than ever to begin his new career with Acme.

Behind the scenes, the following happens.  While no non-solicitation exists in their contract, the President of XYZ calls Acme and schedules a meeting with them.  After a heated meeting and threats of pulling business, Acme is forced to rescind the offer of employment to John Doe.  John, somewhat reluctantly, remains in the employ of XYZ. 

Two months later, still at XYZ, John Doe hasn't received that proposed increase and the office has gone to another employee. 

Would you view this as Tortious Interference by XYZ?   Tortious Interference:  n.  Encouraging a breach, infringing on another's agreement, interfering with contract or contractual commitments, wrongful interference with business relationships.  For there to be liability under this tort you must show some improper or illegal actions as an intermeddler. You must evaluate whether actions, or contemplated actions, can be construed to have an appearance of impropriety.

For the laymen, tortious interference occurs when a person damages another person's contractual relationships or other business relationship on purpose.  Liability ensues where proof of economic injury exists.  The wrongful interference with some right or economic opportunity belonging to a person which causes that person some monetary loss.  Interference with prospective economic advantage.

 

What is your call on this?  Tortious Interference or No?

 

Fair competition is always legal.  An employee may leave employment and avail himself of whatever expertise he has acquired from his former employer.  As long as there is no use of former employer's trade secrets.

For "John Doe."

Concerted Activity

When you think of the term "concerted activity" there is often an automatic assumption that a union, or union activity, is involved.  But that's not always the case.  Section 7 of the NLRA states "Employees shall have the right to self-organize, to form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities. . . " 

 

Protected concerted activity sometimes has nothing to do with unions at all.   Employees who get together and complain to management about their pay or benefits is engaged in concerted activity.   Concerted activity can include internal complaints of discrimination, discriminatory harassment complaints, etc., all of which is protected by Section 7 of the NLRA.  

Is Gender Bias Alive And Well?

Gender Bias n. unequal treatment in employment opportunity (such as promotion, pay, benefits and privileges), and the expectations due to attitudes based on the sex of an employee or group of employees.  Gender bias can be a legitimate basis for a lawsuit under anti-discrimination statutes.

 

Gender bias begins at an early age.  From the pink or blue outfits children receive at infancy, the influence of toy selections, to how teachers respond to a child in school, or the books we read them at bedtime. (An April, 2011 study of gender bias in literature examined nearly 6,000 children's books published from 1900 to 2000.  Of those, 57% had a central male character compared with only 31% female protagonists.  Presumably animals of an indeterminate gender led the rest.)  So how do we respond to gender bias in the workplace?

 

First let's understand that gender bias is more subtle than sex discrimination.    Bias occurs because of personal values, perceptions and outdated, traditional views about men and women.  We may encounter gender bias in many forms and degrees.   For example, both men and women tend to view women who express anger more negatively than they view men who express anger.  Even when the members of both sexes use the same words and body language to express that anger.  Gender bias exists where men or women are evaluated or perceived differently depending on whether their actions violate expectations of how they should act or expectations of what behaviors are required for a role they have assumed.  Whether the subject of bias is male or female, the effects of gender bias can be devastating.

 

Beginning in as early as 1982,  state judiciaries began to address gender bias by creating a variety of research committees and task forces.  Since that time, attention around gender bias in the workplace has continued to grow in every industry.

 

Then:

"Gender bias exists in many forms throughout the Massachusetts court system.  Sexist language and behavior are still common, despite an increased understanding that these practices are wrong."  New England Law Review.  Volume 24, Spring 1990.

"The New Mexico Supreme Court is greatly concerned over manifestations of gender bias in the court environment within the State of New Mexico."  "In 1987, the State Bar of New Mexico established The Task Force on Women and the Legal Profession and requested that the Task Force examine the needs of women lawyers, their acceptance by the Bench and Bar in general. . . . . The Final Report, issued November 2, 1990, documented gender bias not only directed toward women lawyers, but affecting female litigants, witnesses, and court employees."

The State of Florida, Gender Bias Study Commission:  Executive Summary, found that "during it's two years of hearing and study, that gender bias -- discrimination based solely on one's sex -- is a reality for far too many people involved in the legal system.  (1990)

In 2011, a team at Yale University asked 127 professors at six U.S. research universities to judge the merits of college graduates.  The graduates were applying for a position as a lab manager before heading to graduate school.  While using identical resumes, of which half were obviously female applicants, the participates were significantly more likely to hire the man, and at a higher salary.  Interestingly enough, the bias was equally strong among both the female and male scientists and did not vary by age, race or discipline. (www.sciencemag.com)

 

Now:

"The Supreme Court's decision on the Walmart case - in which five justices, all male, sided with the company in denying 1.5 million female employees the right to pursue a class-action sex-discrimination lawsuit - showed a truly stunning obliviousness to the way gender bias actually plays out in the workplace."  The Daily Beast.  "The Supreme Court's Cluelessness on Gender Bias."  June 22, 2012.

 

MSLGroup currently has a class action lawsuit pending alleging gender pay discrimination.  The $100 million class action lawsuit was filed in February 2011 and represents women who worked at the agency from 2008 until the date of judgement.  Of the 33 total plaintiffs, two are current MSL employees.  One, Sheila McLean, is currently a SVP and a 12-year veteran of the firm.  The lawsuit alleges that MSL paid female professionals less; did not promote women at the same rate as male counterparts; and conducted discriminatory demotions, terminations and reassignments for female staffers during the agency's 2009 reorganization.

 

After all the steps we have taken, all the studies, polls, research papers, etc., gender bias is still alive and well in the workplace.  As an employer, you need to be aware if gender bias exists in your workforce.  Train your employees to identify it, and to acknowledge it.  Secondly, call attention to the bias.  Make a commitment to eliminating it in your workforce.

 

 Title VII prohibits discrimination "because of" an employee's sex. As an employer we may not take adverse action against an employee because of their sex. Sex can not play a role in any aspect of their employment including hiring, transfers, promotions, pay, disciplinary action, suspensions, and discharges. It's also important to understand that while Title VII was originally understood to apply only to women, that is no longer the case. It also prohibits discrimination against men. For example, when a male employee is denied a promotion in favor of a female employee, and the male can prove that the reason was "because of his sex," there may be claim for sex discrimination.

Employee Turnover

Granted, it's early in December and maybe a bit early to begin calculating my 2012 turnover rate.  I'm concerned that the organization is developing a revolving door when it comes to the employees.   After calculating I find my turnover is at 20.48%.    Should I panic? 

  

Turnover can be a result of many factors and oftentimes it isn't about the money. It's about the environment. The employee can be unhappy, feel under appreciated. They may experience supervisor conflict, or the supervisor may have poor leadership skills.  Employee pay may be unequal or substandard.   If their skills are in demand, they may be lured away by other employers.  Perhaps the employee feels that he/she has no future in the organization.

 

When an organization must replace an employee, the organization will incur direct and indirect expenses.  Expenses such as recruiting, new hire training, loss of productivity, etc.  To replace even an entry level employee can cost up to 25% of his/her salary.  And then there are other hidden costs of high turnover.   Surviving employees have to absorb the work of the departing employees,  may experience increased stress levels, feel demoralized and ultimately move on as well. 

Take a look at your turnover.  Is it beneficial or harmful?  What steps can you take to halt and/or reduce employee turnover?

 

 

Moonlighting Policies

In light of the economy and U.S. unemployment situations, moonlighting has a new appeal for employees.   Employees are working second jobs to make ends meet or just to pay down debt.  And with the holiday season upon us, more people are becoming multiple jobholders.

 

According to the Monthly Labor Review, May 2012,  from 2010 - 2011, the multiple job-holding rates in Texas increased from 3.8 to 3.9%.  In 2011, a Elance survey found that 36% of respondents were starting or operating a business while working full or part time traditional jobs. 

 

To protect business interests, should the employer implement a moonlighting policy?  Well, typically employers won't prohibit employees from moonlighting - unless there is a direct impact to business. One must consider that prohibiting someone from having a second job, where there is no harm to the employer, and taking action against the employee, may have unfortunate legal ramifications. If an employer fires an individual for having an outside job, where there has been no negative impact to the employees duties, performance, etc., a jury might later suspect that the employer was motivated by some form of illegal discrimination.

 

So let's talk about your policy.  At the minimum a Moonlighting Policy should contain:

• Statements addressing conflicts of interest.  Any policy should clearly state that employees are not permitted to accept or engage in any activity / employment that would conflict with the interests of the primary employer.
• Statements addressing interference with the primary job.  Interference may be experienced via impact to the employees performance.  Additionally, the employee may be unable to work overtime due to a commitment to the second job.   Is there an increase in absenteeism or tardiness?
• Your approval for outside employment.  Ultimately the employees true commitment should be to their primary job.

A carefully written policy may protect your organization without intruding too far into employees' personal lives.  And remember, many state laws protect employees' personal lives.  Be cognizant of Lifestyle Discrimination Laws of which some laws address a specific activity and others encompass a wide array of off-duty conduct.  For instance, California, Colorado and New York prohibit discrimination based on any lawful activity by an employee off the premises and during non-working hours.  At this time Texas does not have lifestyle-discrimination laws.

 

Whether or not you decide to institute a Moonlighting policy, clearly communicate your expectations to your employees.

We'll Miss The Twinkies

Talks between Hostess management and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union failed on November 20th.  If a favorable agreement had been reached, over 18,000 jobs would have been saved.  It is unfortunate, but Hostess brand began terminating most of its 18,000 employees last week.  This action came after Hostess won court approval to shut down and start selling assets.

CEO Gregory Rayburn said 15,000 workers would be fired as soon as possible so that they could begin receiving unemployment benefits.  The Court ordered the Company to implement a non-executive employee retention plan to ensure the Company has the necessary personnel to implement the wind down.  Approximately 3,200 employees will stay on temporarily to clean plants and begin to wind down operations.  Employee headcount is expected to decrease by 95% within the first 16 weeks.  The closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, and 570 bakery outlet stores could take up to three months. 

WARN Act
In May, Hostess Brands Inc. mailed out WARN Act notices to its employees.  The WARN Act requires companies to give workers sixty (60) days notice before closing a facility or performing a mass layoff.  Spokeswoman Anita-Marie Laurie stated Hostess wanted to notify employees that a "sale or wind down of the company is possible in the future." 

On November 21st a former employee, Mark Popovich, filed for damages on behalf of himself and all employees laid off by Hostess.  "We believe Hostess violated the federal WARN Act as well as state laws.  These employees deserved better," said Charles A. Ercole, who filed the Complaint for Mr. Popovich.   Failure to give sixty (60) days advance notice violates the federal Worker Adjustment and Retraining Act. 

Hostess has a different viewpoint believing that the multiple notices issued throughout 2012 and the court declaration to layoff workers are sufficient to excuse it from WARN Act liability.

There are a lot of different versions as to who is to blame for the failure of Hostess and the loss of so many jobs.  Whether mismanagement or a union failing to make concessions, there are now 18,000 people facing unemployment.  The largest number of employees impacted are based in Irving, Texas.  I'm sad to say I haven't been able to find any information relating to job fairs for the Irving employees.    Texas, let's get moving on that shall we?  The Utah Department of Workforce Services and Ogden/Weber Technology College is hosting a job fair this Thursday for former Hostess employees. 

Hostess, previously with annual sales of about $2.5 billion, had been making 500 million Twinkies annually prior to the shutdown.  We'll miss the Twinkies. . . .

Exempt / Non Exempt

If your organization is struggling with the exempt / non exempt issue, the below article by Business Management Daily provides some good advice.

'Explosive' growth in wage lawsuits; cases hit all-time high

U.S. employees filed a record 7,064 federal wage-and-hour lawsuits in the fiscal year ending June 30, "a continuation of the explosive growth in these suits that has marked the past decade,” according to attorney analysts at the Seyfarth Shaw law firm.

The three most common triggers: misclassification of employees, unpaid off-the-clock work and miscalculation of overtime pay. In its recent report, the firm said that class actions under the FLSA are dominating the legal scene. Another notable trend is the increase in back-wage suits on behalf of higher-income employees, such as those in financial services.

In both types of suits, the key is the time an employee puts in outside regular work hours. Companies should be particularly careful about hourly employees working extra time while off the clock. Even five or 10 minutes worked voluntarily off the clock can add up to a large verdict when multiplied out over a period of years.

Advice: Make it clear to all hourly employees that you prohibit any work over breaks, or before and after shifts.

In one recent lawsuit, a company allowed administrative staff to track their own hours on time sheets. It also allowed them to take comp time. It could only rely on handwritten time records when disputes arose over how much time employees had worked, how much the em­­ployer owed them and whether some of the comp time should have been overtime. In such cases, the employer loses because it's the employer's responsibility to keep proper records.

Record-keeping requirements for exempt employees differ from those for nonexempt workers.

Exempt records to keep

Because you don't pay exempt em­­ployees by the hour, you shouldn't track the exact number of hours they work on a daily basis. Doing so might appear to a wage-hour auditor as if you are indeed basing pay on the number of hours worked, which might raise the question of whether the employee is truly exempt.

However, just because a worker is exempt doesn't mean your company is freed from keeping records on him. With exempt workers, you should keep records that describe the workweek and the wages paid for that period. Specifically, you should keep the following records concerning exempt staff:

• Personal information, including name, home address, occupation, gender, birth date for workers under age 19 and the person's workplace identification number
• Time of day and day of the week when the workweek begins
• Total wages paid each pay period
• Date of payment and the pay period covered by each payment.

Your records for exempt employees also can track the days employees use for sick, vacation and personal leave.

 

Exempt records to keep

Because you don't pay exempt em­­ployees by the hour, you shouldn't track the exact number of hours they work on a daily basis. Doing so might appear to a wage-hour auditor as if you are indeed basing pay on the number of hours worked, which might raise the question of whether the employee is truly exempt.

However, just because a worker is exempt doesn't mean your company is freed from keeping records on him. With exempt workers, you should keep records that describe the workweek and the wages paid for that period. Specifically, you should keep the following records concerning exempt staff:

• Personal information, including name, home address, occupation, gender, birth date for workers under age 19 and the person's workplace identification number
• Time of day and day of the week when the workweek begins
• Total wages paid each pay period
• Date of payment and the pay period covered by each payment.

Your records for exempt employees also can track the days employees use for sick, vacation and personal leave.

Nonexempt records to keep

With nonexempt, hourly employees, you need to collect more details:

• Personal information, including name, home address, occupation, gender, birth date for workers under age 19 and the person's workplace identification number
• Time of day and day of the week when the workweek begins
• Regular hourly pay rate for any week when overtime is due (include an explanation of the way wages are paid—such as per hour, per day, per week, per commission—plus the amount and nature of each payment that's excluded from the regular rate)
• Hours worked each day and week
• Total daily or weekly straight-time earnings (not counting overtime)
• Total weekly overtime earnings
• Total additions to or deductions from the employee's wages each pay period, plus an explanation of the nature and dates of those additions or deductions
• Total wages paid each pay period
• Date of payment and the pay period.

If employees are working under a special certificate that allows you to pay below minimum wage—such as a "training” wage for students—your records must note that fact, too.

And for how long

The FLSA requires you to keep the following records for at least two years:

• Basic employment and earnings records
• Work-time schedules (timecards)
• Wage rate tables
• Order, shipping and billing records
• Records of additions to or deductions from wages paid.

In addition, keep these records for at least three years:

• Payroll records
• Employee agreements, such as collective bargaining agreements and individual contracts
• Sales and purchase records.

Yes, Congress has tinkered with the FLSA over the years.

Yes, the Labor Department has issued pages of regulations, interpretations and examples.

Yes, these changes are often confusing for employers and workers alike.

Is that an excuse for misunderstanding the law? No.

The FLSA is complicated and full of traps for unwary employers. And attorneys who represent unhappy workers are ready to take advantage of any misstep you take. Your best protection is awareness. Make sure you understand the fine points of the law, and work to ensure that your business is in compliance.

Employee Satisfaction

Earlier this year an on-line survey by Accenture reflected that 57% (women) and 59% (men) were dissatisfied with their jobs.  While dissatisfied with their jobs, more than two-thirds (69%) said they would stay with their current employer.    I guess that’s a good news / bad news scenario.    The workforce is stable, but it's dissatisfied. 

I’m a firm believer that employees are the key to either the success or failure of an organization.  What happens when those employees decide it's just too much anymore and they seek other opportunities?   Are you willing to loose this intellectual resource?  What will the impact to the organization be?

As an employer, proactive steps should be taken to determine where employee dissatisfaction stems from.  

1. Survey your employees to find out their needs.  Are there little hassles they they are experiencing day to day?   What would make them more satisfied in their work?  Smart employers will listen to new ideas, be open to change.  Provide employees with the opportunities to present ideas for new processes, new efficiencies, to management.
2. Provide training and advancement opportunities.  Is there a career path for employees?  Do they have an opportunity to grow and/or expand their skills?  Achievement can be more important to one employee than another. 
3. Address any compensation concerns.  Is there a perception of “fair pay?” 

 

From the Ground Up, The Performance Appraisal

We all know how important a PA process is even if the annual process is about as much fun as a root canal.  It's a necessary evil for all businesses.  Employees need formal feedback.  When they don't have it they feel ignored. If they feel ignored, do you think they'll be motivated to go the extra mile?  Probably not.

Now, take a company with 100+ employees that has no PA program in place, and the fun begins.  The entire PA process has to be developed from the ground up. 

Process:  What type of process should be used?  An on-line appraisal?  Paper-based appraisal?  Electronic or manual tracking program?   What type of rating system will be used?  Should a software program be purchased?

Manager Training:  The value of the PA process.  Legal aspects.  Manager PA preparation.  Conducting the PA.  Rater Errors.  Setting Goals/Objectives.  What are the do’s and don’ts of the PA?  And, most importantly, what is the definition of leadership? 

Timing:  Focal/Common Review Dates or Anniversary Review Date?  What are the pros/cons of each?  What option is best for the organization?  For the employees?   Will the performance appraisal process be tied to annual compensation increases?

Assessment:   What are the competencies that should be addressed?  Adaptability?  Analytical skills?  Conflict resolution?  Dependability?  Motivation?  Teamwork?  Will the competencies be different for salaried and hourly employees?

Objectives:  Develop a training program for the managers.  Discuss SMART objectives.  Why are objectives necessary?  What are the company goals?

Performance Improvement Plan:  Develop a process that will tie to the PA.  Train managers in the proper application and development of a PIP.   Discuss potential liabilities in a PIP.  Can I have different completion dates for different employees on a PIP?  What if the employee doesn't successfully complete the PIP? 

Salary Increases:  Merit increase?  Equity pay adjustment?  Discretionary pay increase?  COLA?    Do the managers require training in identifying the different types of increases?  Develop an approval and reporting process for any compensation adjustment.  Are there salary bands in place?  Do we need to develop competitive pay bands? 

The above are just a few of the issues that will need to be addressed.  And I'm sure the list will grow!

Final Pay

Contrary to popular belief, employers are NOT required by Federal law to give former employees their last paycheck immediately.   However, states may regulate the timing of final pay so employers are always cautioned to check their state regulations.

In Texas, the timing of final pay is regulated by the Texas Payday Law, Section 61.014.  Under the Texas Payday Law, the timing of final pay is based upon the circumstances of the employees termination.   Did the employee resign or was the employee terminated?

In those situations where an employee voluntarily resigns, quits, retired or other wise leaves employment voluntarily, the final pay is due on the next regularly-scheduled payday following the effective date of resignation.  However, if the employee is laid off, fired, or in any way involuntarily separated from employment, the final pay is due within six (6) calendar days of the discharge.

 

States differ with respect to the handling of final pay.  For instance, in California if an employee is fired, s/he must receive their check immediately.  If the employee quits, s/he must receive their final check within 72 hours.  For Connecticut, final pay is due on the next business day if the employee is fired.

 

One of the most frequent questions I am asked pertains to withholding funds from an employee due to loans, cost of company equipment, etc.  As an employer, legally you can NOT make such a deduction unless you have the employees written authorization prior to making such a deduction.  Additionally:

• Depending on the state where you and/or your employee reside, there may be additional restrictions.
• Even where deductions are authorized, the employer may not reduce the worker's final check below the applicable minimum age.

In closing, carefully check your state laws to ensure that you handle an employee's final pay properly.