Wage and Hour Attorney's Best Tips for Staying Out of Trouble


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Staying in compliance isn’t easy when you manage a distributed workforce. Statistically, your risk of a wage and hour lawsuit has never been greater.

But your firm can protect itself, and we’ve lined up the experts at Seyfarth Shaw LLP—the leading wage and hour law firm—to show you how.

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Wage and Hour Attorney's Best Tips for Staying Out of Trouble

  1. 1. Wage & Hour Attorneys’ Best Tips for Staying Out of Trouble Featuring Seyfarth Shaw LLP
  2. 2. Welcome Today’s Host Michelle Lanter Smith Vice President of Marketing 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
  5. 5. Our Speakers Noah A. Finkel Partner, Seyfarth Shaw LLP Labor & Employment nfinkel@seyfarth.com (312) 460 -5000 Rebecca P. Bromet Partner, Seyfarth Shaw LLP Labor & Employment rbromet@seyfarth.com (312) 460 - 5000 5
  6. 6. Ask Your Questions To ask a question, simply type your question in the “Question” box on the right side of your screen. 6
  7. 7. Overview: Trends for 2013 • • • • • Litigation trends o Continued aggressive plaintiffs’ bar Increased agency enforcement FLSA exemptions o Administrative exemption o Executive exemption Regular Rate of Pay o Calculating overtime properly Off-the-clock work o Donning & doffing o Travel time o BlackBerries and PDAs ©2012 Seyfarth Shaw LLP 7
  8. 8. National Wage & Hour Litigation Trends • • • • Aggressive plaintiffs’ law firms have created consortiums, jointly filing class/collective suits In recent years, plaintiffs’ firms have employed an industry-specific approach when it comes to wage & hour litigation o One firm successfully targets an industry and is quickly followed by other plaintiffs’ firms who target other employers in that industry Aggressive outreach efforts to identify potential plaintiffs o Outside companies sending email blasts to employees of target companies o Ads on Facebook, Twitter 7064 lawsuits filed under the Fair Labor Standards Act (“FLSA”) in 2012 o Record high number o State wage-and-hour actions raise this number significantly o Of all state and federal class or collective actions filed in the U.S., vast majority are wage and hour claims ©2012 Seyfarth Shaw LLP 8
  9. 9. Top 10 Private W&H Settlements in 2012 1. $99 Million – Novartis (misclassification of pharma sales reps) 2. $40 Million – Merrill Lynch (wage claims related to merger) 3. $35 Million – H&R Block (timeliness of payments) 4. $21 Million – Rite Aid (misclassification of ass’t store mgs) 5. $20 Million – City of New York (misclassification of police sergeants) 6. $19 Million – Robert Half (misclassification of recruiters) 7. $15.6 Million – HSBC Bank (misclassification of bankers, managers, & specialists) 8. $15.5 Million –Conoco Phillips (failure to provide meal breaks) 9. $14 Million – Family Dollar (misclassification of store managers) 10. $12.9 Million – Spearmint Rhino Cos. Worldwide, Inc. (independent contractor misclassification) ©2012 Seyfarth Shaw LLP 9
  10. 10. FLSA Cases in Federal Court 1993-2012 ©2012 Seyfarth Shaw LLP 10
  11. 11. WHD Continues To Be Aggressive • • • • Increase in targeted investigations in low-wage/high risk industries Increase in corporate-wide investigations Assessment of liquidated damages, penalties, and other sanctions Grass Roots Campaign: o Continued push of “Bridge to Justice” and “We Can Help”   Partnering with community and worker organizations to increase employee awareness Referring certain cases to private attorneys to initiate litigation ©2012 Seyfarth Shaw LLP 11
  12. 12. 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. D epartm ent of Labor, Wage and H our D ivis ion data. ©2012 Seyfarth Shaw LLP 12 2001 2003 2005 2007 2009 2011
  13. 13. Mistake #1 • • They are office workers and receive a salary, so they are not entitled to overtime Key issues: o Whether the employee primarily performs office or non- manual work directly related to the management or general business operations of the employer or the employer's customers ((Inside) Sales = production work o Whether the employee exercises discretion and independent judgment with respect to matters of significance in the performance of their primary duties ©2012 Seyfarth Shaw LLP 13
  14. 14. Mistake #2 • We call them “manager,” so they are not entitled to 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  Easy case to certify as a collective/class action. ©2012 Seyfarth Shaw LLP 14
  15. 15. Mistake #3 • “They work a lot with computers, so they are exempt” • Key issues: o Computer employee exemption actually is quite narrow  developers, designers, certain testers o Administrative exemption can apply, but is work too technical? Or, are there right-and-wrong answers? o Beware of state law – this exemption is not available in all states or may be defined differently ©2012 Seyfarth Shaw LLP 15
  16. 16. Mistake #4 • Not including all required compensation in • the regular rate for purpose of calculating overtime compensation (easy to certify) Key issues: o Shift differentials, on-call payments, commissions o Bonuses included unless, purely discretionary, or percentage of total (including overtime) earnings o Certain types of pay for time not worked can be excluded if paid at a premium rate ©2012 Seyfarth Shaw LLP 16
  17. 17. Mistake #5 • Failure to take a strong stand against offthe-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 o What can be done?  Strong policies, training of management and employees ©2012 Seyfarth Shaw LLP 17
  18. 18. Mistake #6 • Not including all required time in the calculation of hours worked o Pay for pre- and post-shift activities (donning & doffing; o o o o o computer boot up, etc.) Is the activity “integral and indispensable” to employees’ principal work activities (and therefore compensable)? Do the employer’s rules or the nature of the work require it? Waiting to work- you don’t have to exert yourself to be working Is the time de minimis (and can you count on this)? 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 ©2012 Seyfarth Shaw LLP 18
  19. 19. Mistake #7 • Not paying for time spent working outside of normal hours on phones & computers • Key Issues: o o o o Does the employer require the use of phones after hours? Are employees required to check and respond to email? Do employees record this time? How are employees paid for this time? ©2012 Seyfarth Shaw LLP 19
  20. 20. Mistake #8 • Not paying for travel time • Key Issues: o Home to work, or vice versa, typically is not compensable o Between job sites is compensable o Complex rules for out-of-town travel o State laws add a twist ©2012 Seyfarth Shaw LLP 20
  21. 21. Mistake #9 • Not paying trainees or interns o Interns are employees unless:       similar to school training or for educational credit for the benefit of the employee no displacement of regular employees and closely supervised employer gains no advantage and operations even impeded no entitlement to job at end understanding that no wages owed ©2012 Seyfarth Shaw LLP 21
  22. 22. Mistake #10 • • Not auditing pay practices & exempt status Key Issues: o o o o Has the company reviewed its pay practices? Has the company reviewed its exempt status classifications Compliance with state laws? Conducted at the direction of counsel to establish privilege? ©2012 Seyfarth Shaw LLP 22
  23. 23. EPAY Systems Michelle Lanter Smith Vice President of Marketing EPAY Systems, Inc. 23
  24. 24. EPAY -- In Time with You Complex pay rules? Mobile workforce, union contracts, multiple job assignments? No problem! Uniquely flexible 24
  25. 25. Reduce your labor costs Biometric time clocks with camera and finger print reader Eliminate erroneous pay calculations, time rounding, and management inconsistencies Eliminate buddy punching Reduce payroll administration time 25
  26. 26. Minimize Compliance Risk • • • • • • Audit Trails Overtime Meal Breaks Pay Differentials Privacy and Security Reduce Workers Comp Claims • Did you have an accident free day? 26
  27. 27. Over 40,000 customer sites 27
  28. 28. Easy, Anywhere Time Tracking Blueforce adapts to how YOU do business 28
  29. 29. Upcoming Education • Public Demonstration: Time & Labor Management for the Distributed Workforce. Feb 14: 10:00 cst • New Time & Attendance Technologies for Tracking the Mobile Workforce Webinars. March 7: 10:00 cst Register at www.EPAYsystems.com 29
  30. 30. Upcoming Education Compliance Webinar Series with Seyfarth Shaw LLP • How to Avoid Costly Wage & Hour Pitfalls for Construction, Engineering, and Landscaping Employers. March 13: 12:00 cst • How to Avoid Costly Wage & Hour Pitfalls Employers in the Staffing and Security Industries. May 8: 12:00 cst • California Wage & Hour Labor Law--Avoiding Common Pitfalls with a Distributed Workforce. June 26: 12:00 cst • How to Avoid Costly Wage & Hour Pitfalls for Healthcare Employers with a Distributed Workforce. Sept 25: 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 30
  31. 31. Thank You! Noah A. Finkel Partner, Seyfarth Shaw LLP Labor & Employment nfinkel@seyfarth.com (312) 460-5913 Rebecca P. Bromet Partner, Seyfarth Shaw LLP Labor & Employment rbromet@seyfarth.com 31
  32. 32. Connect with us Take the Survey! • Yes, send me the Free Report: How to Find the Best of Breed • • Time Tracking System for a Distributed Workforce Yes, send me Today’s Slides Please contact me, I’d like to know more or I have a question Get a Bonus! • Receive Seyfarth Shaw’s newly published report: Trend Watch: The Savvy Employers’ Guide to Wage & Hour Lawsuits. Connect with EPAY: o o o LinkedIn – follow our company page at EPAY Systems Twitter -- @EPAYsystems Sign up for our e- newsletter at www.EPAYsystems.com Connect with Seyfarth Shaw LLP: o o Wage & Hour Litigation Blog http://www.wagehourlitigation.com/ Twitter - @SeyfarthShawLLP 32
  33. 33. Thank You! 33