Companies can run into major problems if they fail to pay their employees for all compensable work time. The complexity of the FLSA’s rules and different state requirements—like strict California meal break laws—can cause confusion among employers as to whether certain time counts as compensable work hours. As a result, employers are frequently defending against costly wage and hour lawsuits. With big verdicts, record settlements, increasing worker awareness, and widespread public attention to how employees are paid, it’s no surprise that the number of wage and hour lawsuits is increasing. Given these factors, employers should tread carefully when determining payment for employees. View the webinar slides to see how EPAY Systems and Seyfarth Shaw dive into the legal requirements for paying employees for meal and rest breaks, travel time and on-call time.

1. Do I Have to Pay for
That?
NAVIGATING THE COMMON PITFALLS OF WAGE AND
HOUR LAWS
August 24, 2017

2. WWW.EPAYSYSTEMS.COM 2
About the Speakers
Webinar Host
Michelle Lanter Smith
Chief Marketing Officer
EPAY Systems
Featured Speaker
Chelsea Mesa
Partner
Seyfarth Shaw, LLP
Featured Speaker
Cheryl Luce
Associate
Seyfarth Shaw LLP

3. Agenda
• Introduction
• Refresher on Time Worked Basics
• Meal and Rest Breaks
• Travel Time
• On-Call Pay/Reporting Time Pay
• How EPAY Can Help
• Questions

4. EPAY Systems Overview
CHICAGO BASED
TECH COMPANY
FOUNDED 2001
SERVING HOURLY
WORKFORCE
ENVIRONMENTS
PROVIDER OF COMPLETELY UNIFIED,
FULL SERVICE HCM SOLUTIONS
75,000+ WORKSITES
FREE PREMIUM CUSTOMER
SUPPORT
24 HOURS/DAY
7 DAYS/WEEK
365 DAYS/YEAR
INDUSTRY LEADER
UNIQUELY FLEXIBLE CLOUD
BASED TIME & LABOR
MANAGEMENT TECHNOLOGY
99%
CUSTOMER
RETENTION
4WWW.EPAYSYSTEMS.COM

5. Legal Disclaimer
The contents of this presentation should not be construed as legal advice or a
legal opinion on any specific facts or circumstances.
These materials are intended for general information purposes only, and you are
urged to consult a lawyer concerning your own situation and any specific legal
questions you may have.
5WWW.EPAYSYSTEMS.COM

6. Refresher on Time
Worked Basics

7. Compensable Time
FEDERAL STANDARD
• Includes all time that employers
“suffer or permit to work”
• If the employer is aware that
employee is working, the time is
compensable
• The reason is immaterial and
includes voluntary work
• Most states mirror or incorporate
this standard
CALIFORNIA
• “The time during which an
employee is subject to the control
of an employer, and includes all
of the time the employee is
suffered or permitted to work,
whether or not required to do so”
• Stricter standard, as we’ll see
when discuss standby and on-
call reporting time pay

8. 8
• Pre-shift and post-shift work
o Federal standard: “principal work activity”
o California standard: control test
• Problem areas:
o Work during meal periods
o Taking work home
o After-hours calls
o Mobile devices
o Donning and doffing
o Bag checks
“Off the Clock”
Work

9. Payment of Overtime
WWW.EPAYSYSTEMS.COM 9
All non-exempt
employees earn
overtime in
accordance with
applicable state and
federal law

10. 10
Payment of
Overtime:
When Is It
Owed?
• Federal / FLSA
o all hours worked over 40 in a
work week
• States that require overtime after
certain number of hours in a day
o Alaska
o California
o Colorado
o Nevada
o Puerto Rico
WWW.EPAYSYSTEMS.COM

11. Payment of Overtime:
What Is the Rate of Pay?
California
1.5 Times the Regular Rate for:
• Over 8 hours in a workday (up to 12
hours)
• Over 40 hours in a workweek
• First 8 hours on the 7th consecutive
workday worked in a workweek
2 Times the Regular Rate for:
• Over 12 hours in a workday
• Any hours over 8 on the 7th
consecutive day worked in a
workweek
11WWW.EPAYSYSTEMS.COM

12. California Make Up Time Exception
• Offering make-up time is not required by law.
• If not done by the book, this employee benefit
falls into the category of “no good deed goes
unpunished.”
• Rules
o Voluntary request in writing each time
o Employee’s personal obligation
o Make up time in same workweek
o Must not cause employee to work more than 11
hours/workday or more than
40 hours/workweek for “make up time”
o Employer must not encourage or solicit make up time
12WWW.EPAYSYSTEMS.COM

13. California Wage Theft Prevention Act Notice
• California employers must provide a written notice to
new non-exempt employees, which states:
o Pay rate(s) and basis, whether by the hour, shift,
day, week, salary, piece, commission, or
otherwise, including any rates for overtime
o Allowances, if any, claimed as part of the minimum
wage, including meal or lodging allowances
o The regular payday designated by the employer
o The name of the employer, including any formal or
informal "doing business as" names used by the
employer
o The physical address of the employer's main office
or principal place of business, and a mailing
address, if different
o Telephone number of the employer
13WWW.EPAYSYSTEMS.COM

14. o Name, address, and telephone number of the
employer's workers' compensation insurance
carrier
o As of January 1, 2015, that an employee may
accrue and use paid sick leave; has a right to
request and use accrued paid sick leave; may not
be terminated or retaliated against for using or
requesting the use of accrued paid sick leave; and
has a right to file a complaint against an employer
who retaliates
o Any other information the Labor Commissioner
deems material and necessary
14
Wage Theft
Notice
(Continued)
WWW.EPAYSYSTEMS.COM

15. Other States with Written Wage Notice Laws
WWW.EPAYSYSTEMS.COM 15
• Montana
• New Hampshire (upon
demand)
• New York (form required)
• North Dakota (not required,
but required to establish
limited PTO forfeiture)
• South Carolina
(recommended)
• West Virginia
Written wage notice
requirements, where posting
will suffice:
•Alaska
•Colorado
•Iowa
•Pennsylvania
•Tennessee
•Utah
• Connecticut
• Delaware
• D.C. (form required)
• Hawaii
• Idaho (upon request)
• Illinois
• Kansas (upon request)
• Louisiana (upon request)
• Maryland (upon request)
No Federal Law

16. States with Paystub Requirements
Majority of states require them, but the following states do not address them:
o Alabama
o Arkansas
o Florida
o Georgia
o Louisiana
o Mississippi
o Ohio
o South Dakota
o Tennessee
o Virginia (unless requested)
WWW.EPAYSYSTEMS.COM 16

17. 17
California
Itemized
Wage
Statements
─ Required
Information
WWW.EPAYSYSTEMS.COM
• Gross wages earned
• Total hours worked (not for salaried exempt
employees)
• Number of piece-rate units earned and any
applicable piece rate
• All deductions
• Net wages earned
• Dates of the pay period
• Employee name and last four digits of SSN or
other employee ID.
• Name and address of the employer
• All applicable hourly rates for the pay period with
number of hours worked at each rate
• sick time*

18. California Deductions
for Overpayments
• Signed Authorization
• Voluntary
• Amount of Deduction
Must be Specified
• Not Less than Minimum
Wage
• No “Balloon” Deductions
18WWW.EPAYSYSTEMS.COM

19. California Pay at Termination: The Rules
Resignation
o Must pay on final day, unless employee did not
provide 72 hours’ notice
o Where employee does not provide 72 hours’
notice, must be paid within 72 hours of notice
 Location of payment
 Employee request to deliver by mail: documentation is
very important.
Involuntary Termination/Layoff
o Must pay on final day (all pay) – have check ready
for termination meeting.
o Reporting time pay needed for termination
meeting?
19WWW.EPAYSYSTEMS.COM

20. California Pay at Termination: Waiting Time
Penalties
• Exiting employees not paid all
wages owed at termination can get
“waiting time penalties.”
• Requires “willful” failure to pay, but
that is a broad concept under
California law.
• Unless you have reasonable
defense to paying the wages, you
generally owe the penalties.
• Ignorance of the law is no excuse.
20WWW.EPAYSYSTEMS.COM

21. • Alaska (termination only)
• Arizona (termination only)
• Arkansas (termination only)
• Colorado (termination only)
• Connecticut (termination
only)
• D.C.
• Hawaii (termination and
resignation with notice)
• Idaho
• Illinois (if possible)
• Iowa
• Louisiana
• Maine (2 weeks, if earlier)
• Massachusetts
• Michigan (if possible)
• Minnesota (termination)
• Missouri (termination)
• Montana (termination)
• Nebraska (2 weeks, if
earlier)
• Nevada (7 days, if earlier)
• New Hampshire
(termination and resignation
with notice)
• New Mexico (termination)
• Oregon
• South Carolina (30 days if
earlier)
• Texas (termination)
• Utah (termination)
• Vermont (termination)
• Wisconsin (31 days, if
earlier)
Other States
Requiring Pay
Sooner than
Next Pay
Period
WWW.EPAYSYSTEMS.COM

22. Meal and Rest
Breaks

23. 23
Federal Meal and Rest Break Laws
• Federal law does not require
rest breaks for adults
• But if an employer offers
breaks for less than 20
minutes, employees must be
paid
• Federal law does not
require meal breaks for
adults
• But if an employer offers
meal breaks for less than 30
minutes, employees must be
paid
• Under some circumstances,
meal breaks can be less
than 30 minutes
Rest Breaks
WWW.EPAYSYSTEMS.COM
Meal Breaks Lactation Breaks
• Federal law does require that
employers provide non-exempt
mothers with the time and
space to express breast milk
for 1 year after birth of child
• Requires providing a
“reasonable amount of time”
as frequently as needed by the
nursing mother
• Space must be shielded from
view
• Lactation breaks are generally
not compensable, with certain
exceptions

24. States with
Meal Break
Laws For
Adults
• Colorado (5 hrs / 10 hrs)
• Connecticut (7.5 hrs)
• Delaware (7.5 hrs)
• Illinois (7.5 hrs)
• Kentucky (5 hrs)
• Maine (6 hrs)
• Massachusetts (6 hrs)
• Minnesota (8 hrs)
• Montana (“regular meals”)
• Nevada (8 hrs)
• New Hampshire (5 hrs if not
feasible to eat while working)
• New York (6 hrs)
• North Dakota (5 hrs)
• Oregon (6 hrs)
• Rhode Island (6 hrs  20
mins / 8 hrs  30 mins)
• Tennessee (6hrs)
• Vermont (“reasonable time to
protect hygiene”)
• Washington (5 hrs)
• West Virginia (6 hrs)
WWW.EPAYSYSTEMS.COM

25. States with
Rest Break
Laws For
Adults
• Colorado (4 hrs)
• Kentucky (4 hrs)
• Minnesota (4 hrs  restroom
break)
• Nevada (3.5 hrs)
• Oregon (4 hrs)
• Vermont (“reasonable time to
protect hygiene”)
• Washington (4 hrs)
WWW.EPAYSYSTEMS.COM

26. California Meal Periods − Overview
• Employees who work more
than five hours in a workday
must be provided with a 30-
minute off-duty, uninterrupted,
unpaid meal period.
o Meal Period must begin no later
than the end of the fifth hour of
work.
o If the employee works more than
five hours but not more than six
hours, the employee and the
Company may voluntarily agree to
waive the meal period.
WWW.EPAYSYSTEMS.COM

27. California
Meal
Periods
(Continued)
Employees are relieved of all duties during their meal periods and are
free to use the time for whatever purpose they desire, including leaving
the premises.
• “Duty-free” means that employees cannot be required or
encouraged to carry pagers, phones, or any other device during
their meal periods. See Augustus v. ABM Security Services, 2
Cal. 5th 257 (2016).
Employees who work more than 10 hours in a workday must be provided
with a second 30-minute off-duty, uninterrupted, unpaid meal period.
• Meal Period must begin no later than the end of the 10th hour of
work.
• If the employee works more than 10 hours but not more than 12
hours, the employee and the Company may voluntarily agree to
waive the second meal period.
• Second Meal Period Waiver Form
WWW.EPAYSYSTEMS.COM

28. California Rest Periods (Non-Exempt Employees) −
Overview
Employees are authorized and permitted to
take one paid off-duty, uninterrupted rest
period for every four hours worked or
major portion thereof.
o “Major portion thereof” means more
than two hours.
 Rest periods should be taken as close to
the middle of each four-hour work period
as practicable.
Hours Worked Rest Breaks
0-3.5 0
3.5-6 1
6-10 2
10-14 3
14-18 4
WWW.EPAYSYSTEMS.COM

29. • Rest periods are paid and are counted as time worked.
• Employees are relieved of all duties during their rest
periods and are free to use the time for whatever
purpose they desire, including leaving the premises.
o “Duty-free” means that employees cannot be
required or encouraged to carry pagers, phones, or
any other device during their rest periods. See
Augustus v. ABM Security Services, 2 Cal. 5th 257
(2016).
• Employees cannot combine rest periods and meal
periods.
• Employees cannot use meal periods and rest periods to
arrive late or leave early from their shift.
California
Rest
Periods
Non-
Exempt
Employees
(Continued)
WWW.EPAYSYSTEMS.COM

30. California Meal and Rest Periods − Penalties
• If, on any workday, the employer fails to provide a required
meal period (or it’s late, short or interrupted), the employer
must pay the employee one additional hour of pay as a
penalty (plus pay for time actually worked).
• If, on any workday, the employer fails to authorize and
permit one or more required rest periods, the employer must
pay the employee one additional hour of pay as a penalty
(plus pay for time actually worked).
• Limited to two additional hours of pay as penalties for
meal/rest breaks per day:
o Up to one additional hour of pay for one or more meal period violations;
and
o Up to one additional hour of pay for one or more rest period violations.
WWW.EPAYSYSTEMS.COM
30

31. California Meal and Rest Periods −
Practical Tips
WWW.EPAYSYSTEMS.COM 31
• Robust Written Policy. Have a detailed
California Meal and Rest Periods Policy
o Require employees to notify Human Resources if they
are denied a meal or rest period; required to delay their
meal period beyond the end of the fifth hour of work; or
required to return to work before the end of their meal
or rest period.
o Advise employees that the Company will assume that
they have been provided with meal and rest periods as
set forth in the policy unless they notify Human
Resources of an issue.
• Training. Train managers and supervisors on
California’s strict meal and rest period
requirements

32. • Meal Period Recordkeeping. Keep required meal
period records.
 It’s unclear if the specific start and stop time of the
meal period must be recorded, but the DLSE
generally takes the position that this information
must be recorded.
 It’s also strongly recommended to record this
information because it’s the employer’s burden to
prove that it provided timely meal periods of at
least 30 minutes.
• Attestation. Require non-exempt employees to sign off
on their weekly time cards, certifying that the time cards
reflect all of their time worked, and that they were
provided with all of their meal and rest periods, except
as they’ve noted below.
• Compliance Monitoring. Periodically monitor meal
and rest period compliance.
California
Meal and
Rest Periods
− Practical
Tips
(continued)
WWW.EPAYSYSWWW.EPAYSYSTEMS.C
OMWWW.EPAYSYSTEMS.COM
TEMS.COM
34

33. Travel Time
COMWWW.EPAYSYSTEMS.COM

34. Federal Travel Time
• Travel time from home to work generally not
compensable
• When traveling away from home, only time that cuts
across normal working hours is compensable
• This includes not only normal working hours on regular days, but
also corresponding hours on non-working days
• If any work is performed during travel time, always
compensable
COMWWW.EPAYSYSTEMS.COM

35. 35
California
Travel Time
WWW.EPAYSYSTEMS.COM
• Commute time to and from work
generally is unpaid.
• Under California law, all other travel
time by non-exempt employees
generally is compensable, even if
outside of work hours.
• Exception: duty-free meal breaks
during travel.

36. On-Call and
Reporting Time Pay
COMWWW.EPAYSYSTEMS.COM 36

37. Federal On-Call/Reporting
Time
• No federal requirement that employees by paid for on-call
time
• But on-call time could be considered hours worked that
employees must be paid for depending on the constraints on
the employee’s freedom
• Factors that could make on-call time compensable:
o Employee is required to remain on or close to premises
o Employee has short time limit to respond to calls to come to work
o Employee is frequently responding to calls during off-hours
o Employee has excessive geographical restrictions
o Employee and employer have agreed that there will be at least some
compensation for being on-call
COMWWW.EPAYSYSTEMS.COM 37

38. California Reporting Time Pay
38COMWWW.EPAYSYSTEMS.COM
• The Company must pay an employee for
half of the employee’s usual scheduled
day’s work (no less than 2 hours and no
more than 4 hours) when the employee:
o is required to report to work, and
reports to work, and
o is not put to work OR is
furnished less than half of
the usual scheduled day’s work.

39. Exceptions to California Reporting Time Pay
Reporting time pay is not required where:
• Operations cannot commence due to threats to employees or property
• There is a failure of public utilities
• The interruption of work is due to factors outside of employer control
• Employee is not fit to work
• For training/meetings that were scheduled in advance, even though the
meetings were scheduled for less than half the amount of time an
employee typically worked.
o Reporting time pay only would apply if the employee is furnished work for less than half the
scheduled meeting time
39COMWWW.EPAYSYSTEMS.COM

40. • Connecticut (only for certain industries)
• District of Columbia (4 hours)
• Kansas (depending on circumstances)
• Massachusetts (3 hours)
• New Hampshire (2 hours)
• New Jersey (1 hour)
• New York (lesser of 4 hours or the number of hours
scheduled at minimum wage rate)
• Rhode Island (3 hours)
• Washington (2 hours)
40
Other
States with
Reporting
Time Laws
WWW.EPAYSYSTEMS.COM

41. California Call Back Pay
WWW.EPAYSYSTEMS.COM 41
The Company must pay an
employee for two hours of work at
the employee’s regular rate of pay if
the employee:
o is required to report to work for a
second time in a single workday,
and
o is furnished less than two hours of
work on the second reporting.

42. Questions?
WWW.EPAYSYSTEMS.COM

43. Integrated HCM to Help You Manage Meal and
Rest Breaks
43WWW.EPAYSYSTEMS.COM

44. 44
EPAY Human Capital Management
ACATAX MANAGEMENT ANCILLARY SERVICESPAYROLL OUTSOURCING
DELIVERED AS A SERVICE
CLOUD-BASED SOFTWARE
APPLICANT
TRACKING
BENEFITS
ADMINISTRATION
HUMAN RESOURCES
MANAGEMENT
PAYROLL & TAX
MANAGEMENT
TIME & LABOR
MANAGEMENT
SELF SERVICEMOBILE ANALYTICSREPORTING
WWW.EPAYSYSTEMS.COM
PERFORMANCE
MANAGEMENT

45. •Private Cloud
•Dedicated
Servers
EPAY HCM Highlights
Superior Tax
Management &
Garnishment
Compliance
Premium
Customer Care
Program with
24/7 Support
Included
Robust Time &
Attendance with
Flexible Pay
Rules
Single Sign-On
System
Seamless
Onboarding
Gets New Hires
Up and Running
Quickly
ONE UNIFIED, EASY-TO-USE SYSTEM
45WWW.EPAYSYSTEMS.COM

46. Mix & Match
Time
Collection
Options
Or for Just a Few
Employees (IVR)
BIOMETRIC TIME
CLOCKS
MOBILE TIME TRACKING
APP WITH GPS
TELEPHONE (INTEGRATED
VOICE RESPONSE)
ONLINE TIME
TRACKING
Time & Labor Payroll
EPAY HCM
3rd Party
ERP,
Financial,
Accounting
Systems
Integration
46

47. Meal Break Compliance Features
Keep Managers in the Loop with Automatic Alerts
Get alerted when employees miss a meal break, take too short of a meal break, or go on
break too late in the shift.
Ensure Employees Are Taking Long Enough Meal Breaks
Restrict employees from being able to punch back in until the full meal break is
completed.
Keep Meal Break Records with Clock Out Question
Ask employees a question at the end of the shift, and document their answer. When
the employee goes to clock out, they must answer, “Did you take a meal break today?”
WWW.EPAYSYSTEMS.COM 47
How EPAY Can Help You Stay in Compliance with Meal Break Laws

48. 48
Connect with
Us on Social
Media
You’ll receive a copy of today’s slides
Take the survey
Upcoming Webinar: Put an End to
Workforce Time Theft
offers.epaysystems.com/tlm-webinar
Visit Our
Website
www.EPAYsystems.com
WWW.EPAYSYSTEMS.COM

49. Thank you!
WWW.EPAYSYSTEMS.COM