Posts Tagged ‘FLSA’

Winter Months Bring Seasonal HR Challenges

Thursday, November 10th, 2016

Winter months are just around the corner and with them comes colder weather.  We don’t get as much “white stuff” as our Northern Brethren but when we do things get messy.  Be reminded that employee injuries on employer owned and maintained parking lots may be covered by workers’ compensation and may be OSHA recordable depending upon circumstances relating to the injury.  If injuries occur at a reasonable time (just prior to or just after work) and injuries result in medical treatment, days away from work or restricted activity, both workers’ comp and OSHA record keeping come into play. winterweather

Winter weather poses a particular problem regarding parking lot and sidewalk injuries.  Both should be maintained free of snow and ice to prevent employee injuries.  Potential costly injures to customers, vendors and to the general public would not be covered by workers’ compensation but by an employer’s liability insurance.

Employers also need to be aware of the dangers of overexertion in winter months.  Liberty Mutual Insurance Company conducted a study a few years ago revealing that more than 25% of disabling workplace injuries resulted from overexertion.  Overexertion also poses a major threat to ones’ health and life outside of work, especially in geographical areas that experience extreme snow and ice accumulation like the Northeast this past winter.  Around 100 people die in the US every winter as a result of shoveling snow. For more tips dealing with colder weather go to https://www.ready.gov/winter-weather.

Perhaps a more vexing issue we deal with each year surrounds pay practices during inclement weather.  Exempt employees are paid on a salaried basis. If the company is closed, the exempt employee must be paid for the day(s) to maintain the exemption status. It is the company’s decision as to whether or not exempts are required to take a vacation day.  Keep in mind that if the exempt does not have vacation or PTO to cover the absence, the exempt must be paid.

If the office is open and the exempt decides not to report to work, the day can be charged to vacation or PTO. If in this situation the exempt does not have vacation or PTO, the company is allowed to dock for the day due to personal reasons. This is one of the allowed deductions under the FLSA without destroying the exemption status. Be reminded, however, that if the exempt works any part of the day, the exempt must be paid for the entire day. This often comes in to play when the exempt does not come into work but works a partial day from a laptop or other electronic device.

If you have more questions regarding your Inclement Weather Policy, contact CAI’s Advice & Resolution team today.

Are you Prepared for the New Overtime Rule?

Thursday, September 29th, 2016

On December 1, 2016, the new US DOL Overtime Rule will officially go in effect. This new rule determines which employees are exempt from overtime. Employers will not have to pay overtime to exempt employees. If an employee is non-exempt, employers need to pay overtime for actual hours worked in excess of 40 hours in a single work week. The FLSA (Fair Labor Standards Act) defines which jobs may be exempt from the overtime penalty depending on minimum salary and duties performed. Exemption categories include both a minimum salary threshold, and a duties test. Jobs will have to meet both standards to qualify for exemption.

Feeling overwhelmed? We don’t blame you. Where do you begin? How do you prepare?

Organization and communication are a major factor in businesses making the shift to compliance as painless as possible.

Below are 3 key steps in preparing for the upcoming deadline.

  1. Conduct an internal audit to identify positions and employees potentially affected.
    In recent research conducted by Paychex found that one out of five employers were not aware of the final rule, and 55% did not think the new rule applied to them.
  2. Educate your employees on time keeping and tracking overtime.
    Some employees might still receive a salary but are now required to log their worked hours. Set up training on proper time recording practices.
  3. Develop a communication plan.
    Talk to your employees, explain the new law and guidelines. Make them aware of benefit changes, if any, due to the necessary change in FLSA status from exempt to non-exempt. Misclassifications can cause challenges and serious financial consequences.

2016_telu_header_2In our upcoming 2016 Triad Employment Law Update Conference in Greensboro, North Carolina, lead attorneys from Constangy, Brooks, Smith & Prophete, LLP and CAI’s HR experts will provide registrants with key information about current and proposed changes in state and federal employment law. Building the proper infrastructure to protect your business and effectively navigate the Department of Labor’s new overtime rules and related regulations is critical to every company’s success. One of the concurrent breakout sessions at the 2016 Triad Employment Law Update Conference will focus on protecting your business and cover the shrinking white collar exemptions, interns, joint employers, postliminary duties and the DOL’s approach to enforcing these new standards.

Want to learn more about the conference and who should attend visit https://www.capital.org/triadlaw.

Every workplace has questions that need to be answered, and the sooner the better. Contact CAI’s Advice & Resolution team today!

When Are You Required to Pay Interns?

Tuesday, April 19th, 2016

With summer months fast approaching, many employers are considering employing interns.  CAI’s Advice & Resolution Team often receives questions regarding pay requirements for interns.  There seems to be one school of thought out there that says the employer can decide whether or not they pay interns.  Well in fact, the USDOL (United States Department of Labor) has issued guidance on this issue (Fact Sheet #71.)  This fact sheet Internspecifies tests that must be met to exclude interns from minimum wage and overtime requirements under the FLSA (Fair Labor Standards Act).

The following criteria must be applied when making this determination:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment
  • The internship experience is for the benefit of the intern
  • The intern does not displace regular employees, but works under close supervision of existing staff
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded
  • The intern is not necessarily entitled to a job at the conclusion of the internship
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

If ALL of the above factors are met, an employment relationship does not exist under the FLSA, and the minimum wage and overtime requirements do not apply.

Of course, the decision to pay an intern goes beyond the legalities of such.  There are many differing opinions as to whether or not employers should pay interns.  Local columnist, Alice Wilder at the Daily Tarheel, has written an interesting article on the virtues of paying an intern, that may be useful in making your decision.

How the Department of Labor’s Overtime Changes Will Affect Your Company

Tuesday, August 18th, 2015

In today’s video blog, CAI’s Senior Executive and HR Advisor, George Ports, discusses the US Department of Labor’s (USDOL) recent proposed changes to overtime regulations and what employers must do in order to remain compliant. George begins by noting that under the new revisions to the Fair Labor Standard Act (FLSA), the USDOL will increase the minimum salary threshold for exemptions, opening up eligibility for overtime protections to nearly 5 million workers nationwide.

George believes it is important for employers to know how these changes will affect their company, and goes on to list the specific revisions to the FLSA. Some of these proposed changes include:

  • A vast increase in the minimum salary level exemption for the executive, administrative, and professional exemptions from $455 per week to no less than $921 per week
  • An increase in the minimum salary exemption for highly compensated employees from $100,000 to $122,148
  • A metrics system to automatically increase the minimum salary threshold test on an annual basis

In order to examine the impact these changes could have, George advises employers to make the necessary alterations to salary levels or re-classify positions. For those employers interested in making comments on these proposed changes, head to www.regulations.gov to make your voices heard. Just make sure to do so before the 60 day comment period ends on September 4, 2015.

Please call our Advice and Resolution team at 919-878-9222 or 336-668-7746 with any related questions.

When Can I Be Held Personally Liable for Employment Actions?

Thursday, April 2nd, 2015

CAI’s Advice and Resolution team member Pat Rountree shares valuable information regarding liability for employment actions in today’s post.

Pat Rountree, HR Advisor

Pat Rountree, HR Advisor

Employment laws outline employer responsibilities for compliance under the various regulations. From time to time, the Advice and Resolution team is asked, “Can I be held personally responsible?” The answer is, it depends. It depends on the definition of employer under the regulation and/or the interpretation of that definition by the court if it is ambiguous.

The Fair Labor Standards Act (FLSA) defines employer to include any person acting directly or indirectly in the interest of the employer in relation to an employee. That definition could include HR Managers and other managers or supervisors who have the authority by the employer to exercise control over the employee’s job. HR Managers and managers who review job classification could be held liable for misclassification of a job as exempt when it should have been non-exempt, resulting in failure to pay overtime.

Individuals who qualify as employers as explained above may also be liable under the Equal Pay Act if they are responsible for paying a male more than a female for the same job unless there are factors to support the differential (more experienced, merit based on documented performance, etc.).

The Family and Medical Leave Act follows the same definition as the FLSA. Supervisors and managers who have authority over an eligible employee can be held responsible for denying FMLA or failing to fulfill other requirements of FMLA. Examples of individual responsibility include failure to designate absences that qualify as FMLA resulting in disciplinary action for absences (train your supervisors), and failure to provide FMLA notices (HR take note).

Other employment laws that can hold individuals personally responsible for violations include:

  • USERRA – failure to hire or taking negative action against a person because of their military service or other actions in violation of the Act
  • Section 1981 Civil Rights Act – discrimination based on race/color (Title VII does not consider individuals as employers; Section 1981 permits individual actions)
  • HIPAA – revealing personally identifying health information
  • ERISA – fiduciary breach of responsibilities under health care plan, retirement or 401(k) plan, or other covered plans
  • Immigration and Reform Act – knowingly hiring an illegal immigrant

Employees can also sue personally responsible individuals under state tort laws for wrongful discharge, or other conduct that violates a duty of care that a supervisor, or manager may have in their role.

While employees may not know that they could sue individuals, plaintiffs’ lawyers do. Where there is individual liability, the opportunity for monetary gain increases as individuals can have the same penalties as employers.

Please contact a member of CAI’s Advice and Resolution team with questions at 919‑878‑9222 or 336‑668‑7746.

5 Important Topics You Might Have Missed from the 2014 Triad Employment Law Update

Tuesday, November 25th, 2014

2014 TELU Flash ImageMore than 170 people attended CAI’s annual Triad Employment Law Update on Friday, November 14. Held at the beautiful Grandover Resort in Greensboro, the conference informed participants on the most recent updates in state and federal employment law. Knowledgeable attorneys from Constangy, Brooks and Smith, LLP, as well as compliance experts from CAI, shared information on several employment law topics, such as DOMA, health care reform, I-9 and E-verify compliance and FLSA.

Below are five important topics that speakers highlighted at this year’s conference:

I-9s Made Easy

  • I-9s must be completed by employees no later than the first day of work and completed by the employer no later than the third day of the new hire’s employment.
  • Retain I-9s for the longer of three years or one year after an employee’s termination.
  • Office of Special Counsel of the US Justice Department investigates I-9 complaints of over-documenting an I-9, asking for a particular document, not accepting a valid document and requiring a document when one is not needed.

Practical Tips for Complying with Health Care Reform

  • Determination of “full-time” – employees must be treated as full-time in the following “stability period” if the employee averages 30 hours during the measurement period.
    • Stability period must last for at least six months and be the same for new employees and on-going employees.
  • Carefully consider the best measurement and stability periods to minimize costs.
  • Track hours to confirm that individuals are properly classified.

Correcting FLSA Mistakes

  • Meal breaks must be continuous and uninterrupted. If not, you must pay employees for that time.
    • Tips – Don’t let employees take lunch at their work stations, train supervisors to respect lunch, and if you use automatic meal break deductions, have a procedure in place for exceptions.
  • You must pay employees for preliminary and postliminary work that is indispensible to their principal work activities. For example, time spent logging into the computer system and shutting it down at the end of the day is likely compensable.
    • Tips – allow employees to clock in when they arrive at their work stations. If your clock in system is run through a computer system, either leave the computer on or add a set number of minutes to the time each day, and have a procedure for exceptions.

Avoid Discrimination with Unique Employees

  • Public image policies should not be based upon discriminatory preferences of clients. Be sure to avoid improper stereotypes, and if you have a questionable policy, ask yourself if you’re willing to defend it in court.

Defense of Marriage Act (DOMA) and Same-Sex Marriage

  • In 2012 North Carolina passed a constitutional amendment saying marriage is between one man and one woman. In 2013 the Supreme Court of the United States declared that amendment unconstitutional under Section 2 of DOMA.
  • Same-sex spouses will be entitled to all spousal benefits if they married in NC after October 10, 2014.
  • Same-sex spouses will be entitled to all spousal benefits if they were validly married in another state before moving to NC.
  • Same-sex spouses will not be entitled to spousal benefits if they were “married” in a state that doesn’t recognize it, but they can always remarry in NC.

For further assistance on staying compliant with state and federal employment laws, please call a member of CAI’s Advice and Resolution Team at 919-878-9222 or 336-668-7746.

Travel Time and the FLSA

Thursday, September 18th, 2014

In today’s video blog, George Ports, CAI’s Senior Executive of government relations and member of the Advice and Resolution team, shares helpful information for understanding the tricky subject of calculating compensable travel time.

George starts by saying some of the most confusing wage and hour regulations are those dealing with travel time for non-exempt employees. The question usually asked is, “is it or isn’t it compensable?” This confusion is due in part to the number of different situations involving travel.

George lists several scenarios that demonstrate a compensable travel time situation. For example, he says travel time to or from work is not compensable, but time that cuts across an employee’s regular work day is. He gives more examples in the video.

The video also includes information relevant with today’s technology-driven workplace. George shares the following information in the video: If an employee gets in his vehicle and receives special instructions on his cell phone or laptop before leaving home that time is compensable.

If you have questions about travel time or any other wage and hour regulation, please call CAI’s Advice and Resolution Team at 919-878-9222 or 336-668-7746.

Cash Shortage Deductions from Commission Payments

Thursday, April 3rd, 2014

CAI’s Advice and Resolution Team answers several questions from members daily. Many questions the Team receives deal with Wage & Hour issues and what is right under the Fair Labor Standards Act (FLSA) Here’s a recent question the team received:

George Ports, Senior Executive and HR Advisor

George Ports, Senior Executive and HR Advisor

Are Employers Allowed to Deduct Cash Shortages from a Salaried Exempt’s Commissions?

In today’s post, Advice and Resolution Team Member George Ports offers guidance for this employer question:

According to the US Department of Labor’s Wage & Hour Division, cash shortage deductions from commission payments made to salaried exempt employees would not affect their exempt status under section 13(a)(1) of the Fair Labor Standards Act (FLSA) as long as the affected employee meets both the duty and the guaranteed salary level tests required.

An employee will be considered to satisfy the salary level test if the employee is paid on a salary basis at a rate of not less than $455.00 per week. The salary basis test is met if the employee regularly receives each pay period “a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” An exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. [Note: There are limited exceptions regarding deductions from exempt pay. For more information, go to http://j.mp/ex-su.]

An employer may provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis. Thus, for example, an exempt employee guaranteed at least $455 each week paid on a salary basis may also receive additional compensation of a one percent commission on sales.

An exempt employee may receive a percentage of the sales or profits of the employer if the employment arrangement includes a guarantee of at least $455 each week paid on a salary basis. Similarly, the exemption is not lost if an exempt employee who is guaranteed at least $455 each week paid on a salary basis also receives additional compensation based on hours worked for work beyond the normal workweek. Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include paid time off. In other words, additional compensation paid on any basis besides the guaranteed salary is not inconsistent with the salary basis of payment.

Wage and hour regulations require only that exempt employees be paid a guaranteed salary of at least $455 per week, and any additional compensation above this salary amount is generally something that may be agreed upon between the employer and the employee. The prohibition against improper deductions from the guaranteed salary does not extend to any such additional compensation provided to exempt employees.

Cash shortage deductions, therefore may be made from a salaried exempt employee’s commission payments without affecting the employee’s exempt status as long as the commission payments are bona fide and are not paid to facilitate otherwise prohibited deductions from the guaranteed salary.

If you have wage and hour regulation questions, please contact a member of CAI’s Advice and Resolution Team at 919‑878‑9222 or 336‑668‑7746.

Executive Exemption and its Supervision Requirements

Thursday, February 6th, 2014
Pat Rountree, HR Advisor

Pat Rountree, HR Advisor

CAI’s Advice and Resolution Team answers several questions from members daily. The team often receives questions concerning the different exemptions under FLSA and how to ensure correct compliance, such as this one below:

If a supervisor supervises one employee and two independent contractors, would he or she be eligible for the executive exemption under FLSA?

In today’s post, Advice and Resolution Team Member Pat Rountree offers guidance for this employer issue:

The executive exemption has several tests that must be met:

  • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
  • The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

The requirement that the supervisor regularly direct the work of at least two full-time employees or their equivalent refers to employees of the employer under the FLSA. The US Department of Labor Wage and Hour handbook states that “only other employees of the employer may be considered when determining if the two full-time employee equivalency is met; supervision of volunteers, employees of independent contractors, or any other ‘non-employees’ (trainees, interns) in relation to the employer are not considered for purposes of this test.”

Also, to clarify, full time is generally considered to be 40 hours per week.

If the supervisor does not qualify for the executive exemption, you may want to consider whether he or she would meet the administrative exemption.

For more information on the executive, administrative, and other white-collar exemptions, see http://www.dol.gov/ elaws/ esa/ flsa/ overtime/ menu.htm.

Tracking Telecommuting Time

Tuesday, May 14th, 2013

This is a guest post from Diane Aull. Diane is the Website Manager for Acroprint Time Recorder Company and editor of its Time for Business blog. Acroprint offers a full range of workforce management products including AcroTime, its flexible and powerful cloud-based solution.

record telecommutingWith the news coming out of companies such as Yahoo and Best Buy recently, telecommuting has been back in the news. While these companies have chosen to scale back their telecommuting programs, working from home remains popular with employees and is offered as an option at many organizations.

Much of the debate about telecommuting has centered around productivity, collaboration and employee engagement. However, there’s an important aspect of any telecommuting program that seldom gets discussed — how to track employee time.

Performance versus Time Spent

I came across an article not too long ago in which the author stated work-from-home programs would mean “the death of the time clock,” because employers only needed to evaluate how well workers met their goals, not how much time they spent working on them.

The problem, of course, is that the author was confusing performance evaluations with payroll. Effective performance evaluations have always been about meeting or surpassing goals and not about simply showing up. On the other hand, payroll — especially for overtime-eligible employees — requires some form of time tracking.

No matter when or where the work is done… if an employee is eligible for overtime, the company must track the time the employee spends on the job. Otherwise, how are they to calculate properly whether (and how much) overtime is due?

In fact, the Fair Labor Standards Act (FLSA) requires employers to maintain accurate, complete payroll records, including records of time worked, for all overtime-eligible employees.

Alternatives and Options

Many companies already have a telecommuting policy or are considering implementing this popular employee perk. How can you offer a telecommuting program and still maintain compliance with the FLSA?

Well, the law does not require you to track time for workers who are exempt from overtime. So you might choose to allow only exempt employees to work remotely, while your overtime-eligible workers must come in to the office where their time can be more easily monitored and recorded.

Problem solved, right? While this might seem like an easy solution, there are several issues to keep in mind:

  1. Employee morale: If some non-exempt or hourly jobs are otherwise suitable for a flexible work arrangement, employees in those jobs may become resentful when denied the opportunity you extend to exempt workers.
  2. Workforce quality: Higher-caliber workers may be inclined to migrate to companies that do allow them to telecommute.
  3. Other labor laws: The Americans with Disabilities Act (ADA) requires employers to offer “reasonable accommodations” to disabled employees. If an employee becomes disabled, and working from home would allow him to remain productive in his job, you may be required to offer him the option of telecommuting, regardless of his overtime eligibility status.
  4. Misclassification issues: If it turns out you have misclassified any employees as exempt when they should have been non-exempt — and those employees have been working from home, where you were not tracking their time — you could find yourself on the hook for thousands of dollars in back pay and penalties. Without any employer time records, the courts will rely on the employees’ own recollections or personal records, which might or might not accurately reflect the time they really spent on the job.

Modern Time Recording to the Rescue

The best option, of course, is to implement a time tracking solution that allows you to accurately record all employee work hours (exempt and non-exempt), no matter where the work is performed. As a bonus, automated time and attendance systems typically offer many cost-saving and productivity-enhancing benefits beyond the ability to record time for remote workers.

Consider, for instance, a cloud-based time recording system. Typically these systems can be accessed using an Internet connection and a web browser or via a smartphone app, enabling employees to easily clock in and out no matter where they are. Some also offer a telephony module that let employees clock in and out using any telephone, whether mobile or landline, or other options.

Like their employees, the supervisors and managers can access the system using a web browser, so they can review and approve employee time sheets no matter where or when they are working. The approved time is automatically totaled and can easily be exported to the company’s payroll system for processing. All high-quality service providers also process and store your information in highly secure data centers and keep regular backups, reducing your risk of data loss.

With a modern web-based time clock system, employers can offer their employees flexible work arrangements while still meeting their legal obligations to maintain accurate time records. It’s a win-win situation!

If you need an accurate  solution to track work hours for your employees, regardless of their location, contact Acroprint at 1-800-334-7190 or visit www.AcroTime.com to learn more.

Photo Source: polapix