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How to Avoid Costly Wage and Hour Pitfalls for Healthcare Employers with a Distributed Workforce

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These days, healthcare providers–whether nursing facilities or home health agencies–are searching for ways to do more with less. This is especially true with the Electronic Visit Verification (EVV) mandates that are taking place throughout the country. You need a time and attendance system that allows you to streamline work processes and maximize labor resources…while managing your complex world of multiple shifts, intricate pay rules, and perhaps even mobile employees.

EPAY’s flexible BlueforceTM system does all this, while helping you:

Cut Costs - Your world is more competitive than ever. With Blueforce, you can expect to reduce labor costs by 5% or more, so you can bid more competitively and still boost profits.

Stay in Compliance - Our system factors in labor laws and union rules, as well as industry-specific regulations. It flags potential conflicts, so you can nip compliance issues in the bud.

Stay in Control - Blueforce does more than manage time and attendance. Its valuable workforce management tools–like labor budgeting and scheduling software–can help run your business more efficiently.

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How to Avoid Costly Wage and Hour Pitfalls for Healthcare Employers with a Distributed Workforce

  1. 1. How to Avoid Costly Wage & Hour Pitfalls for Healthcare Employers with a Distributed Workforce Featuring Seyfarth Shaw LLP
  2. 2. Welcome Today’s Host Michelle Lanter Smith Chief Marketing Officer EPAY Systems, Inc. mlsmith@EPAYsystems.com 773-499-7512 2
  3. 3. EPAY Systems -- designed to meet the needs of your complex, distributed workforce • Reduce your labor costs by 5% or more • Keep you in control and in compliance 3
  4. 4. Today’s Discussion Federal court filings of wage and hour class and collective actions have increased more than 500% since 2000. Are you at risk? 4 ©2012 Seyfarth Shaw LLP
  5. 5. Our Speakers Alexander J. Passantino Senior Counsel, Seyfarth Shaw LLP Labor & Employment apassantino@seyfarth.com (202) 463-2400 Kristin G. McGurn Partner, Seyfarth Shaw LLP Labor & Employment kmcgurn@seyfarth.com (617) 946-4800 5 ©2013 Seyfarth Shaw LLP
  6. 6. Ask Your Questions To ask a question, simply type your question in the “Question” box on the right side of your screen. ©2013 Seyfarth Shaw LLP 6
  7. 7. Today’s Discussion: Are you at risk? FLSA Cases in Federal Court 1993-2012 ©2013 Seyfarth Shaw LLP 7
  8. 8. Overview: Trends for 2013 • • • • Litigation trends o Aggressive plaintiffs’ bar and agency Increased agency enforcement Compliance Risks “Riskiest” times of day o Pre & Post Shift o Meal Times o Travel time 8 ©2013 Seyfarth Shaw LLP
  9. 9. Trends • • Aggressive plaintiffs’ law firms collaborate; create consortiums to jointly file class/collective suits Plaintiffs’ firms employ an industry-specific approach to wage & hour litigation o One firm successfully targets an industry, quickly followed by other plaintiffs’ firms who target employers in the same industry o In healthcare, they obtain information from unions and state licensing boards to contact your employees 9 ©2013 Seyfarth Shaw LLP
  10. 10. Trends Continued • Aggressive outreach to identify potential plaintiffs o email blasts to employees of targeted companies o ads on Facebook, Twitter o contact with employees who self-identify as healthcare workers 10 ©2013 Seyfarth Shaw LLP
  11. 11. Sophisticated Outreach © 2013 Seyfarth Shaw LLP 11
  12. 12. Kindred Healthcare Industry Epidemic Maxim Healthcare Services Faxton-St. Luke’s Healthcare Resurrection Healthcare The Bronx- Lebanon Hospital Center Northwestern Memorial Healthcare Thorek Memorial Hospital Heritage Enterprises Petersen Healthcare Children’s Memorial Hospital Jefferson Health System West Penn Allegheny Health System Tenet Health System Philadelphia Pittsburgh Mercy Health System Albert Einstein Healthcare Temple University Health System Genesis Healthcare Corp Jackson Park Hospital Center for Rehabilitation and Development St Lehigh Valley Hospital and Health Network Luke’s Rehabilitation Hospital of Shreveport Maxim Healthcare Services Revolutionary Nurses University of Pittsburgh Medical Center The Community Hospital of Brazosport Jackson Park Hospital Foundation Westchester City Health Care Montefiore Health System Mount Sinai Medical Center NYU Hospitals Center NY Presbyterian Healthcare System Continuum Health Partners Memorial Sloan Kettering Cancer Center NY City Health and Hospitals Corporation Smith Thomas Williams Healthcare Anaheim General Hospital Kaleida Health Kindred Healthcare Mercy Health System White Memorial Center Bayada Nurses Clearlake Hospital The Trustees of the University of PA The Fremont-Rideout Health Group Prime Healthcare Methodist Hospital of Children’s Hospital of Orange County Southern California Alliance Health Services Children’s Hospital Kaiser Hospitals Valley Presbyterian Hospital Catholic Healthcare West Tenet Hospitals Sharp Healthcare College Health Enterprises Huntington Memorial Presbyterian Inter Community Hospital Sutter Health St. Vincent Hospital Edcare Mgmt Inc. Allied Hospital Services Rehabilitation Associates PC Healthcare Services Group Infinia Healthcare Kindred Healthcare Lincoln Park Hospital CareGroup Psychiatric Solutions UMass Memorial Health Care Pathways Community Healthcare St. John Health Vibra Healthcare © 2013 Seyfarth Shaw LLP Best Nurses Too Inc Catholic Health Systems Access Nurses MediSys Health Network American Laser Centers of California Sovereign Healthcare of West Palm Beach Northbay Healthcare Corporation Healthcare Plans Inc. Milwood Healthcare The Ritz Community Healthcare Inc. Concentric Healthcare Solutions Healthcare Labor Force Associates Legacy Good Samaritan Hospital The Nursing Solutions Agency VIP Home Nursing & Rehabilitation Service Long Island Health Network Frontier Healthcare Group Circle Family HealthCare Network Partners Healthcare System Havenwood Nursing Marion Community Hospital Long Island Jewish Health System Dallas County Hospital District St. Joseph’s Hospital 12 United Healthcare Services Inc. Odyssey Healthcare of Houston Crouse Health Foundation
  13. 13. Top 10 Private W&H Settlements Last Year 1. $99 Million – misclassification of pharma sales reps 2. $40 Million – wage claims related to financial services merger 3. $35 Million – timeliness of payments in financial service company 4. $21 Million – misclassification of pharmacy ass’t store managers 5. $20 Million – New York City misclassification of police sergeants 6. $19 Million – misclassification of recruiters 7. $15.6 Million – misclassification of bankers, managers, specialists 8. $15.5 Million – failure to provide meal breaks 9. $14 Million – misclassification of retail store managers 10. $12.9 Million – independent contractor misclassification 13 ©2013 Seyfarth Shaw LLP
  14. 14. Increased WHD Enforcement Capabilities Number of W age and Hour Division Investigators, 1987 to 2011 1,100 1,050 1,006 1,000 970 951 952 942 938 950 942 938 949 950 945 898 900 893 865 850 835 850 804 800 809 788 800 773 751 781 750 732 731 700 650 600 1987 1989 1991 1993 1995 1997 1999 Applied Econom ic Strategies , us ing U.S. Departm ent of Labor, Wage and Hour Divis ion data. 14 ©2013 Seyfarth Shaw LLP 2001 2003 2005 2007 2009 2011
  15. 15. Increased Agency Enforcement • • • DOL targeted healthcare industry 250 new investigators Studying compliance rates through audits of metropolitan healthcare institutions 15 ©2013 Seyfarth Shaw LLP
  16. 16. New Rule for Home Care • • • • Effective January 1, 2015 Relates to companionship services employment Third-Party Employers must pay OT Performance of any medically-related service that requires training results in loss of exemption 16 ©2013 Seyfarth Shaw LLP
  17. 17. Common Claims • • • • • • • • • Off-the-Clock Work (pre- or post-shift) Automatic Meal Period Deductions Staffing Ratios/Census Allegedly Prevents Meal/Rest Training Pagers Controlled Standby Regular Rate of Pay Calculations Independent Contractor Misclassification Joint Employer within System or with Registry 17 ©2013 Seyfarth Shaw LLP
  18. 18. Mistake #1 • • Employees must pay for their own uniforms Key issues: o Are the uniforms generic or elaborate? o Do employees authorize the deduction? o Does the deduction make their pay fall below minimum wage? o Are they responsible for cleaning the uniform? ©2013 Seyfarth Shaw LLP 18
  19. 19. Simple Safeguards • • • Receive authorization for the deduction (if required by state law). Do not count a uniform as a credit against wages. Make sure that the cost of uniform deductions does not reduce pay below minimum wage. ©2013 Seyfarth Shaw LLP 19
  20. 20. Mistake #2 • • Employees must show up and wait to clock-in Key Issues: o How long in advance of the shift are they required to arrive at the job site or central location? o Are employees free to use this time for their own purposes? o Are they disciplined or prevented from working if they do not show up at the required time? o Waiting to work- working does not require exertion. 20 ©2013 Seyfarth Shaw LLP
  21. 21. Simple Safeguards • • • Only require people to be at work by their scheduled start time. If employees are required to be at work by a certain time and employees are there by that time, pay the employees starting at that time. Only discipline individuals who are tardy for their scheduled start time, not the early arrival requirement. 21 ©2013 Seyfarth Shaw LLP
  22. 22. Mistake #3 • • All required time is not included in the calculation of hours worked Key issues: o Pay for pre- and post-shift activities (donning & doffing; charting; patient families) o Is the activity “integral and indispensable” to employees’ principal work activities (and therefore compensable)? o Do the employer’s rules or the nature of the work require it? o If an employee continues to work voluntarily after the end of his shift and the employer knows or has reason to know, that time is considered working time 22 ©2013 Seyfarth Shaw LLP
  23. 23. Donning and Doffing      “Non-unique” gear, integral, indispensable Typically must take place at work to be compensable If “first principal activity” may make subsequent transportation time compensable Custom and usage under CBA Clothes changing regulations 23 ©2013 Seyfarth Shaw LLP
  24. 24. Simple Safeguards • • • Do not let hourly employees start working until they are on the clock (but don’t require them to be there before they are allowed to clock in). Pay attention and make sure that people are not working after they clock out. Have employees verify each pay period that they have been paid for all time worked.  Facilitate transition between shifts (e.g. adequate staffing, supportive culture, recorded reports)  Delegate functions for which license is not required 24 ©2013 Seyfarth Shaw LLP
  25. 25. What Else Should We Consider? • Regular Rate Calculation o Bonuses o Shift, Weekend and Unit Differentials  Proper calculation of OT when employees work at two or more rates o Standby/On-Call Pay o Reporting Pay  Charitable organization exemptions by state law 25 ©2013 Seyfarth Shaw LLP
  26. 26. What Else Should We Consider? • Overtime Calculation o Work Week v. Back-To-Back Work Week o Proper Use of Credits o Aggregation of Hours at and Travel to Multiple Network/Center Facilities 26 ©2013 Seyfarth Shaw LLP
  27. 27. What Else Should We Consider? • Time Records o Feasibility of Employee Affirmation/Certification (paper or electronic)  e.g. I hereby certify that the hours I recorded working today are complete and accurate … I was authorized and permitted to take meal and rest periods … I accurately recorded all work time o Open Communication o Consistent Messaging o Reporting Mechanism for and Prompt Response to Complaints o Recordkeeping Protocols 27 ©2013 Seyfarth Shaw LLP
  28. 28. Mistake #4 • • Employees are not paid for training Key issues: o Do you require employees to attend companysponsored trainings? Or is it voluntary? o Does the training provide employees with skills that are transferrable? Or is the training specific to your company? o If you don’t pay it, how do we track the time? Could be a recordkeeping issue if a lawsuit is filed. 28 ©2013 Seyfarth Shaw LLP
  29. 29. Simple Safeguards • • If the company-sponsored training is mandatory, pay for it. Otherwise, make sure that both managers and employees understand that the training is voluntary. o Policies should clearly state that the training is voluntary  Mandated v. licensure, off shift, voluntary, unrelated to job, non-work  On the clock for mandatory training 29 ©2013 Seyfarth Shaw LLP
  30. 30. Polling Question • Do you use an automatic meal period deduction? 30 ©2013 Seyfarth Shaw LLP
  31. 31. Mistake #5 • • Automatically deducting for meal periods, even if not taken Key issues: o Do they actually take a break? o Completely relieved from duty? o If they get interrupted during their meal period, are they paid for the interruption? 31 ©2013 Seyfarth Shaw LLP
  32. 32. Meal Periods o Federal law   Short rest periods (usually 20 min or less) count as hours worked (including smoking breaks) Bona fide meal periods generally need not be compensated  Employee completely relieved from duty  Freedom to leave work station  Break location away from work station •  Not relieved if required to perform any duties, active or inactive No private right of action for break per se – agency enforcement o State Law 32 ©2013 Seyfarth Shaw LLP
  33. 33. Missed and Interrupted Breaks • Document Reminders  Orientation, departmental procedures, staff meetings o Schedule Breaks Where Feasible o Impose Staffing Standards/Requirements to Impact Meal/Rest Periods; Floating/Covering; Staggered shifts   Watch automated deductions, interruptions, standard time card entries, skipping to make up for tardy, leaving early in lieu of break, no comp time  e.g. sign/clock in and out for meal periods – documented compliance Exceptions for emergencies o Review of Time Records o Use of Waivers 33 ©2013 Seyfarth Shaw LLP
  34. 34. Simple Safeguards • • • • Implement a policy that only uninterrupted meal periods are unpaid. Implement a system to allow employees to document if they did not take or did not get their full meal period. Keep records. Have employees verify that any time deducted each pay period is accurate. 34 ©2013 Seyfarth Shaw LLP
  35. 35. What Else Should We Consider? • System and Practices that Ensure Accuracy     Consistent use of time clocks and/or cards Sufficient number of clocks, located near commencement of work Documented reinforcement:  Clearly articulated policy regarding beginning/ending work day in accordance with scheduled shifts  Explicit manager approval for work before/after shift  Clearly articulated break expectation, exception process, employee involvement  Prohibition on work off the clock Consistent monitoring by managers with accountability; documented changes; limited authority to change 35 ©2013 Seyfarth Shaw LLP
  36. 36. Mistake #6 • • Failure to take a strong stand against off-the-clock work Key issues: o Failure to properly compensate for all hours worked = most frequently cited violation by WHD (in terms of numbers of employees affected) in the course of its investigations o A number of states have recently enacted anti-wage theft laws 36 ©2013 Seyfarth Shaw LLP
  37. 37. Simple Safeguards • • • Implement strong policies and set expectations. Train managers to look out for and report off the clock work. Train employees on your policies. 37 ©2013 Seyfarth Shaw LLP
  38. 38. Hours Worked • Hours Worked o Pagers, Blackberries, Cell Phones, and Remote Access   Left behind during break, interruptions reported and break paid Off-site work reported o Off-Shift Work  Weekend/Night Shift Supervision 38 ©2013 Seyfarth Shaw LLP
  39. 39. Polling Question • True/False: All managers are exempt and do not need to be paid overtime. 39 ©2013 Seyfarth Shaw LLP
  40. 40. Mistake #7 • • We call them “manager” or “supervisor,” so they don’t get overtime Key Issues: o Recommendations for hiring/firing given particular weight? o Too much work like those who are supervised? o Sufficient pay distinction between hourly employees and manager or supervisor?  Easy case to certify as a collective/class action. ©2013 Seyfarth Shaw LLP 40
  41. 41. Mistake #8 • • The employee didn’t work any overtime for a single employer, so no overtime pay is due Key Issues: o All hours worked on behalf of system must be included in determining hours worked, even if worked in different facilities/employers o Employees likely to be jointly employed by staffing company and client o Reimbursement/charge rates and practices have no impact on overtime obligations 41 ©2013 Seyfarth Shaw LLP
  42. 42. Polling Question • True/False: Employers can avoid all of these overtime problems simply by using independent contractors. 42 ©2013 Seyfarth Shaw LLP
  43. 43. Mistake #9 • • Everyone’s an independent contractor Key issues: o How much control is there over their work? o How long have they been working with you? o Are they providing a special service or skill? o Does the worker invest in their own equipment and materials? Provide their own employees? o Is the work an integral part of your business? 43 ©2013 Seyfarth Shaw LLP
  44. 44. Simple Safeguards • • • • Auditing pay practices & exempt status at direction of counsel. Review pay practices. Review exempt status classifications. Know state laws where you operate. 44 ©2013 Seyfarth Shaw LLP
  45. 45. Mistake #10 • • Not paying separated employees all of their earned “wages.” Key issues: o Did the employee use all of his or her earned vacation time? o Did the employee earn a bonus or commission, or even a portion of one? o How are vacation days, commissions, and bonuses “earned”? 45 ©2013 Seyfarth Shaw LLP
  46. 46. Simple Safeguards • • • Your benefit plans should clearly describe how employees earn vacation, commissions, and bonuses. In Illinois (and other states), ensure that employees do not forfeit any earned vacation, bonuses, or commissions upon separation. Make sure you know the requirements of each state where you have employees, because there are differences. 46 ©2013 Seyfarth Shaw LLP
  47. 47. EPAY Systems Michelle Lanter Smith Chief Marketing Officer EPAY Systems, Inc. 47
  48. 48. EPAY -- In Time with You Complex pay rules? Mobile workforce, union contracts, multiple job assignments? No problem! Uniquely flexible 48
  49. 49. Reduce your labor costs Eliminate erroneous pay calculations, time rounding, and management inconsistencies Eliminate buddy punching Reduce costs associated with paper checks. Save an average of $2.87 per pay period/per employee. or more! Biometric time clocks with camera and finger print reader 49
  50. 50. Minimize Compliance Risk • • • • • • Audit Trails Overtime Meal Breaks Pay Differentials Privacy and Security Reduce Workers Comp Claims • Did you have an accident free day? 50
  51. 51. Over 40,000 customer sites 51
  52. 52. Easy, Anywhere Time Tracking Blueforce adapts to how YOU do business 52
  53. 53. Connect With Us Connect with EPAY on: o LinkedIn – follow our company page at EPAY Systems o Twitter -- @EPAYsystems o Sign up for our e- newsletter at EPAYsystems.com 53 ©2013 Seyfarth Shaw LLP
  54. 54. Upcoming Education Compliance Webinar Series with Seyfarth Shaw LLP • • Understanding the Affordable Care Act: Should You Pay or Play? Oct. 29th: 12:00 cst How to Avoid Costly Wage & Hour Pitfalls for Employers in the Hospitality Industry. Nov 6: 12:00 cst Register at www.EPAYsystems.com 54 ©2013 Seyfarth Shaw LLP
  55. 55. Thank You! 55 ©2013 Seyfarth Shaw LLP

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