Posts Tagged ‘U.S. Department of Labor’

The Six Criteria for Unpaid Interns

Thursday, April 28th, 2011

With the U.S. Department of Labor’s (USDOL) Wage and Hour Division focusing so closely on uncovering and investigating violations of the Fair Labor Standards Act (FLSA), employers need to be sure that they are complying with every part of the wage and hour law.  One area where the actual regulations often fail to match what employers believe them to be concerns the paying of interns.

Thankfully, USDOL released Fact Sheet #71: Internship Programs under the Fair Labor Standards Act last year, which provides general information to employers to help determine whether interns must be paid under the FLSA for the service they provide.  For an internship to be unpaid, it must meet the following six criteria:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an education environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. 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;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Along with the six criteria, USDOL also provides some examples and interpretations of workplace situations in the Fact Sheet.

We encourage employers who have an internship program in place, or who are considering one, to review this important Fact Sheet.  A review of the six criteria and the interpretations in this Fact Sheet should help clarify any confusion.  Interns who do not meet the criteria should be paid at least minimum wage, plus any earned overtime.

If you have any questions about intern compensation, please contact a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photos Source: Inspiring Interns

Eight Things N.C. Employers Need to Know About the U.S. Department of Labor

Thursday, March 31st, 2011

Albert Bell, Jr., Attorney at Law with Ward and Smith, P.A., advised participants in CAI’s recent members-only Ask the Experts session on the U.S. Department of Labor’s (USDOL) stepped-up enforcement and pro-labor approach, and highlighted areas that can present problems for employers.

Some of the key points in the presentation included:

  1. Increased collections for wage and hour violations – In 2009, the government collected more than $172 million in back wages for 219,560 employees.
  2. Increase in wage and hour investigators – There was an increase of 250 investigators in 2010, and USDOL is projecting that they will have 1,000 investigators by the end of 2011.
  3. Focus on employees – Protecting the rights of employees is the priority for USDOL.  In December 2010, it established a partnership with the American Bar Association to provide a toll-free number to employees to refer them to a private attorney in their area whom they may contact to discuss a complaint.  For more information, see http://bit.ly/dol-aba.
  4. USDOL is less helpful to employers – Employers used to be able to write letters to the USDOL explaining a situation and asking for guidance. The USDOL would then respond with an Opinion Letter to the employer but would post the Opinion Letter anonymously on the Web.  These Opinion Letters were helpful to employers in understanding USDOL interpretations of laws.  In 2010, the USDOL started issuing Administrator Interpretations and eliminated the Opinion Letter process.  The Administrator Interpretations address general interpretation of the law rather than specific situations.  The USDOL also withdrew some prior Opinion Letters.
  5. Hot Fair Labor Standards Act (FLSA) issues – Rounding of time, and donning and doffing are areas that plantiffs’ attorneys are focusing on because of the number of employees affected and the resulting potential gold mine.
  6. Strategy for 2011-2016 – The emphasis is on Plan/Prevent/Protect.  USDOL plans to propose regulations requiring employers to put systems in place to address risks, hazards and inequities in their workplaces and correct deficiencies to be compliant with the FLSA.  It is expected that once the USDOL outlines the regulations for this process, they will conduct audits to see that employers have the systems in place, rather than auditing just for specific violations of the FLSA.
  7. Proposed recordkeeping rule in 2011 – USDOL intends to publish a rule in 2011 requiring employers to notify employees of their rights under FLSA and how their hours and pay are determined.
  8. Employees you don’t know you have – Employers should revisit independent contractor classifications to make sure they truly are independent contractors and not employees.  To determine whether someone is an independent contractor or employee the USDOL considers who has control, the opportunity for profit and loss, investment, skill and permanency of the relationship.

For additional information on the current initiatives of the USDOL, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: 4nitsirk

Transitioning Returning Military Service Members to the Civilian Workplace

Tuesday, December 7th, 2010

Men and women represent our country every day as they serve in the military on our behalf. They are praised for their courage, loyalty and leadership but often return home to face a new set of hurdles for which they may be ill-prepared. One hurdle involves jobs.

Finding stable, secure civilian employment has been a challenge encountered by returning veterans, military spouses and wounded warriors.

Why is it that serving our country can act as a risk for future employment? The training and discipline military service provides should make any veteran an asset to future organizations. Veterans exude responsibility and professionalism, knowing their role is vital and that they represent something much larger than themselves. The leadership and work ethic they develop through their service are essential skills not easily taught in the workplace.

According to the U.S. Department of Labor, numerous companies recognize the benefit of employing veterans, but though there is an expressed interest, the process has been complex. Organizations have found difficultly both internally and externally. They are unsure where to begin their search, or how to prepare their staff to better accommodate and assimilate veterans into their ranks.

The Department of Labor has taken a proactive role in responding to this growing crisis by establishing an outlet to connect veterans with potential employers. The following six-step process acts as a reference guide for companies seeking veterans to employ and absorb into the company culture.

The Veterans Hiring Toolkit

Design a Strategy for Your Veterans Hiring Initiative – Become familiar with veteran employment by identifying the benefits procedure, the tax incentives and the recruitment and retention process.

Create a Welcoming and Educated Workplace for Veterans – Current employees can better relate to their veteran coworkers if they have a grasp of military culture, experiences and trauma through the proper training and education.

Actively Recruit Veterans, Wounded Warriors and Military Spouses – As with any employee, recognize the specific target audience you are pursuing and how best to reach them.

Hire Qualified Veterans and Learn How to Accommodate Wounded Warriors – With the appropriate orientation plan in place, plan to hire not just any veteran, but the right veteran for the position and for the company.

Promote an Inclusive Workplace to Retain Your Veteran Employees – The needs for recognition and challenge, and the desire to be successful in an organization don’t change for those returning from military service.  Therefore, it’s best to apply the company’s current retention plan across the board.

Keep Helpful Tools and Resources at Your FingertipsEffective and accessible resources can act as one of the strongest assets when hiring and retaining veterans. 

Thousands of military personnel walk away from active duty each year. After all that veterans have sacrificed for us, as a society it is our duty to incorporate them into the civilian workforce and lifestyle to the best of our ability.

For more information on veterans in the workplace, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo source: U.S. Air Force

Compliance Update: Vacation Pay Regulated by N.C Wage and Hour Law

Tuesday, November 9th, 2010

With the holiday season upon us, employers and HR leaders need to recognize the following when it comes to recovering vacation that has been advanced to an employee: The U.S. Department of Labor Wage and Hour Division’s position is that advanced vacation pay may not be deducted from the guaranteed salary of exempt employees.

The department regards advance vacation pay as inconsistent with deductions allowed under the definition of “salary basis” for exempt employees. A fuller explanation appears in the DOL Fact Sheet on Salary Basis.

While the N.C. Department of Labor makes no such claim, the fact is that whenever state laws differ from the federal Fair Labor Standards Act or FLSA, an employer must comply with the standard most protective to employees. Thus, the “no deduction for advanced vacation pay” rules apply here.

With that in mind, it is recommended that you do not allow advanced vacation to exempt employees if you want to recover the costs associated with this practice. Remember, ambiguous policies and practices regarding vacation pay have been construed against employers and in favor of employees.

For information on how to create an effective vacation pay policy or to discuss related issues to this item, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: The Tahoe Guy

Five Things Employers Need to Know about Immigration Law and I-9’s

Thursday, October 14th, 2010

Bernhard Mueller, immigration attorney with the Ogletree Deakins Law Firm, presented his “Immigration Law and I-9 Update” to CAI Members at our free, August, members-only Ask the Expert programs.

Here are some of the key points Mueller made during these sessions:

1. Employers who have constructive knowledge that an employee is not authorized to work, but nonetheless continue to allow the employee to work, are subject to fines. Examples of constructive knowledge are:

a. failure to complete an I-9 form for an employee

b. failure of the employer to ensure that Section 1 is properly completed and signed

c. failure of the employer to sign the I-9

d. failure to re-verify employment authorization after it expires

e. inconsistencies, such as an employee who checked the Permanent Resident box in Section 1 but subsequently asks the employer to sponsor him/her

2. Although employers are not required to do I-9’s for contractors, they have a duty to ensure to the best of their ability that contractors are legally authorized to work. The recommended practice is to include the following in the contracting agreement:

a. a statement that your company is committed to compliance with all federal and state employment laws, including hiring only employees authorized to work in the United States, and that you expect the contractor to comply as well

b. that you reserve the right to inspect the I-9’s of contracted workers that are supplied to you at any time

c. an indemnification clause

3. Employers who hire out-of-state employees (sales employees, construction, etc.) where there is no company representative to handle the I-9 process may contract with someone to complete I-9’s on their behalf, such as a notary public. (Note: Texas does not allow notaries to perform this service.) The employer should ensure that the contractor is knowledgeable of the legal requirements and appropriate procedures for I-9 completion since the employer is ultimately responsible.

4. The I-9 form cannot be completed until a job offer is made and accepted. Because the I-9 requires date of birth and identifies whether the person is a U.S. citizen or alien, it could be a source of potential discrimination charges if an applicant were required to complete it pre-offer and then not hired.

5. It is fraud if someone other than the employee fills in Section 1 but does not provide the required information and a signature in the Preparer and/or Translator Certification box, or if HR or a company representative fills in missing information in Section 1 for the employee.

If you have questions about immigration law and I-9s, please call a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: O. Cosma

“ALL OF YOUR BASE ARE BELONG TO US. RESISTANCE IS FUTILE.”

Thursday, September 30th, 2010

By Robin E. Shea, Attorney, Constangy, Brooks & Smith, LLP

The U.S. Department of Labor is planning to impose new “affirmative action” requirements on employers, requiring them to develop “plans” to address workplace safety, equal employment opportunity, and wage and hour/employee classification issues.

For the most part, these requirements – called “Plan/Prevent/Protect” – will not be limited to federal contractors but will apply to all employers covered by the relevant laws.

The proposed changes are dramatic, and shift from what the DOL calls “catch me if you can” (in other words, employer is presumed compliant unless the government is given reason to believe otherwise) to “Plan/Prevent/Protect” (in other words, employer is presumed guilty unless it can prove otherwise). “[E]mployers and other regulated entities will be asked to assemble plans, create processes, and designate people charged with achieving compliance,” says the DOL, and “compliance will be non-negotiable . . . .” (Emphasis added.)

Here are the basic guidelines of “Plan/Prevent/Protect”:

The “Plan” component will require employers to enlist employees in “identifying and remediating risks of legal violations and other risks to workers.” The plans must be made available to the workers “so they can fully understand them and help to monitor their implementation.”

The “Prevent” component will require employers to “thoroughly and completely implement the plan in a manner that prevents legal violations. . . . The employer . . . cannot draft a plan and then put it on a shelf. The plan must be fully implemented . . . .”

The “Protect” component will require employers to ensure “that the plan’s objectives are met on a regular basis. Just any plan will not do. The plan must actually protect workers from violations of their workplace rights.”

In the context of compliance with the Fair Labor Standards Act, Plan/Prevent/Protect will require that employers provide information to employees about how their pay is calculated, and prepare a “classification analysis” with respect to any job that it treats as FLSA-exempt. Of course, the analysis will have to be made available to the employees and the government.

The DOL will issue proposed regulations on Plan/Prevent/Protect at some point in the future.

Robin Shea will be a presenter at CAI’s Triad Employment Law Update on Wednesday, Nov. 3, 2010 at the Koury Center in Greensboro, N.C. For additional information on the conference, visit www.capital.org/triadlaw.

Photo Source: my.aegean.gr

Six Key Steps to Properly Classifying Independent Contractors

Thursday, September 16th, 2010

It has been well documented that the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) are cracking down on employers who misclassify employees as independent contractors.

Federal and state governments are seeking to contest these misclassifications due to the current economic strain on their finances.  Independent contractors, who can be reclassified as employees, represent increased revenue in the form of federal and state payroll income taxes, Social Security taxes, Medicare taxes, and unemployment insurance taxes.  President Obama has allocated $25 million to the DOL to hire additional federal investigators to lead this effort, and predicts the outcome will bring in another $7 billion in tax revenues over the next 10 years.

What Steps Should Employers Take to Properly Classify Their Workers?

1. Written, signed contracts.  Independent contractors should have specific contracts with the employer, including all terms and conditions citing when and where the work will be performed and that the contractor is not entitled to the same benefits as an employee.

2. Performance of duties. Provide an independent contractor with a general overview of his or her responsibilities within the contract itself.

3. Form 1099 vs. W-2. Independent contractors should receive a Form 1099 at the end of a calendar year, not a W-2.  A Form 1099 demonstrates the contractor was treated as any other accounts payable, and not as an employee requiring taxation.

4. Be consistent.  Treat your employees like employees and your contractors like contractors.  Independent contractors should not be supplied with the same perks (for example, equipment, cars, expenses, etc.) as your employees.

5. Recordkeeping. Retain any information that demonstrates the independent contractor is in business for themselves and is not an “employee” of your organization.  These items could include business cards, letterhead, signed contracts, federal taxpayer ID number, copies of business insurance and workers’ compensation insurance policies.

6. Conduct your own audit.  You can have your attorney, auditor, or an HR professional conduct an audit on your behalf to ensure these steps and others are being followed to properly classify your workers.

The IRS uses Form SS-8 as a guideline for determining worker classification.  Familiarizing yourself with the contents of this form and the questions asked will help you when classifying your workers.

For more details on the proper classification of employees and independent contractors, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: Wikimedia Commons

Revisions to the Family and Medical Leave Act: Everything You Need to Know

Tuesday, August 17th, 2010

As the definition of family in America has changed over the years, so have the U.S. Department of Labor’s terms about who qualifies for the Family and Medical Leave Act (FMLA). The department’s revision on June 22, 2010 to its definition of sons and daughters has extended coverage for certain employees with up to 12 weeks of unpaid, job-protected leave per year to include caretakers of a newborn, newly adopted or ill or injured child.

By caretakers, the revision means more than just parents with biological or legal connections to a child are eligible under the FMLA. Now aunts, uncles, step parents, lesbian-gay-bisexual-transgender (LBGT) parents and any others entrusted with care of a child are covered. In essence, any employee who assumes the responsibility of caring for a child receives parental rights to family leave.

While this may appear to be a huge change to employers, your company may not be affected by it. Remember the following fact about the FMLA: Employees are eligible for leave only if they have worked at least 1,250 hours over the past 12 months for their employer, and they work at a location where the company employs 50 or more employees within 75 miles of the workplace.

If your company meets these qualifications, it would be a wise step to update all employees about this expanded benefit, so that your staff realizes what is happening and why more workers may now be eligible to take time off. A quick review about the FMLA can prevent confusion for you and your employees on this issue and its impact on your office. Some businesses may not have to go to such measures if they already have extended unpaid leave to non-married and/or nontraditional parents.

Keep in mind as well that this benefit most likely will not result in major upheavals or workload problems for a majority of companies. In today’s economy, most employees are reluctant to take up to three months unpaid leave unless absolutely necessary for their child’s welfare.

There have been other updates to FMLA since it took effect in 1993. CAI will keep you informed of future ones as they occur.

For more details on the FMLA, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photos Source: storyvillegirl

Communicating Policies for Drug Tests in the Workplace

Thursday, June 24th, 2010

Even though drug tests for employees have been around nearly 100 years (the Ford Motor Company performed them as early as 1914), the policy remains controversial. If you are making random drug testing a part of your workplace program, the U.S. Department of Labor recommends that you take the following actions to lessen the negative reactions it may receive:

  • Treat your employees with dignity and respect, and honor their privacy.
  • Create a drug testing policy that specifies the type of drug testing used, the testing’s frequency, and the names of the substances for which the employee will be tested.
  • Provide fair and consistent methods for employee selection for drug testing.

Make sure your employees understand the reason(s) why you are implementing drug testing. It could be in order to follow mandates that already exist within the industry, or to bring yourself in line with what your competitors are doing, for example. Let them know drug testing is not meant as punishment for them either. The goal of a drug free workplace program is to provide the opportunity for employees to obtain treatment, overcome their substance abuse issues and return to work. It is meant to help them, not hurt them.

If your employees question the use of drug testing even after taking these measures, let them know that North Carolina law allows employers to conduct controlled substance examinations within certain guidelines. An employer can require that an applicant or employee submit to a drug test as a condition of hiring or of continued employment, and refusal to take it can result in termination or dismissal from consideration of employment.

To ease their minds further, you can have your employees review the state’s administrative rules about the procedural standards to be followed when drug testing. The 22-page document is available at http://www.nclabor.com/wh/Controlled_Substance_Examination_Regulation_Act_Packet.pdf.

As with all HR policies, drug testing programs that have clearly communicated procedures and conditions that are discussed, reviewed and uniformly applied to all employees will be much more effective than those that do not follow these steps.

For more details, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: micahb37

Five Important Points from CAI’s 2010 Employment and Labor Law Update

Wednesday, May 19th, 2010

More than 350 company executives and HR professionals gathered at the McKimmon Center in Raleigh on May 12 and 13 for CAI’s 2010 Employment and Labor Law Update.  The record-setting crowd heard about the latest changes in federal and state employment laws and what North Carolina employers need to be doing now to address these changes.

The two days were packed full with illuminating information, and there were many participants’ questions answered.  To write about everything that was covered would take two weeks’ worth of daily blog entries.  In lieu of that huge undertaking, here are five important points that were made:

1. A study released in September 2009 regarding wage-and-hour violations is driving the U.S. Department of Labor’s efforts to greatly increase its investigations into such non-compliance.  The study is based on interviews with more than 4,000 “workers in low-wage industries” in New York City, Los Angeles and Chicago.  The results were:

  • 76% of those surveyed worked overtime the previous week but were not paid time-and-a-half
  • 26% were being paid less than minimum wage
  • 69% of workers entitled to a break did not receive the required break time

2. The U.S. Department of Labor is also making a large investment in pursuing the misclassification by employers of independent contractors.  Three steps employers need to take to address this issue in their organization are: conduct a thorough, companywide risk analysis of your independent contractor population; design and implement a comprehensive compliance program; and establish an internal team to implement and monitor the compliance program.

3. Every organization needs to have a social media policy.  The first question to ask is whether to create a positive/empowering policy or a negative/deterring policy?  In other words, do you empower your employees to become ambassadors for your organization, or do you prohibit them from referring to it?

4. One of the most important things an employer can do to avoid violations under the new ADA Amendments Act is to train their supervisors how to respond to an employee’s request for accommodation.

5. Three key tips for avoiding I-9 liability: implement a comprehensive written policy; conduct I-9 audits at least annually; and implement a policy for resolving no-match notices.

Did you attend the 2010 Employment and Labor Law Update?  What important takeaways did you bring back to the office?

Photo Source: srqpix