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Avoiding Wage and Hour Litigation

The FLSA is the backbone of federal wage and hour law. The FLSA regulates minimum wage, overtime pay, equal pay, and child labor. Its overtime requirements are the most significant contributor to wage and hour violations and litigation.
Because the FLSA has attractive damage remedies and often involves large numbers of plaintiffs in a single action, it is the employment lawsuit du jour. Under the FLSA, plaintiffs can recover double the amount of actual damages and attorneys’ fees. In many instances, attorneys’ fees reach into the high six figures and sometimes seven figures. If a willful violation of the FLSA is found, a three-year statute of limitations applies to all plaintiff claims. Since FLSA litigation often involves large groups of employees, liability exposure is often in the millions of dollars. And, most insurance policies exclude coverage for FLSA claims.
Wage and hour violations that commonly result in litigation include:

• Misclassifying employees as “exempt” and failing to pay them overtime (the requirements for “exempt” status are set forth in the FLSA and often misapplied).
• Failing to pay non-exempt employees for overtime, including overtime not approved in advance.
• Allowing time worked “off the clock,” such as requiring employees to arrive early to perform necessary preparations for work or stay late to perform duties such as “closing up” after punching out, and not paying employees for donning and doffing (putting on or taking off specialized work clothes and equipment).
• Granting compensatory time off to non-exempt employees in lieu of overtime pay.
• Making automatic wage deductions, such as from exempt employees’ salaries for part-day absences, or from non-exempt employees’ pay for meal breaks when they do not clock in or out for those breaks.
• Failing to pay overtime to independent contractors when they qualify for “employee” status under the law.
• Overlooking and violating exemption requirements under state law (some state law requirements are more stringent than the FLSA).

An increasingly popular type of FLSA litigation is the collective action, which allows a class of employees to adjudicate their claims together using common evidence. If a collective action is certified by the court, court-approved notice is sent to all potential class members, who are then entitled to “opt-in” to the litigation. A FLSA collective-action lawsuit can include classes of hundreds, and sometimes thousands, of employees.
To minimize liability exposure under the FLSA and state wage and hour law, employers should:

• Perform an internal audit of the company’s wage and hour practices with the assistance of legal counsel. Review employee classifications, records, and policies, and document the conclusions. Having the audit performed by an attorney, resulting in a legal opinion, helps establish a “good faith” defense to “double damages” under the FLSA and can decrease the statute-of-limitations period to two years.
• Keep an accurate record of non-exempt employees’ work time. Have both employers and employees approve timesheets/hours records.
• Pay for all “hours worked.” Require non-exempt employees to “clock in” and “clock out” at the beginning and end of the workday and before and after unpaid lunch periods.
• Prevent employees from taking breaks in work areas.
• Pay fixed, predetermined salaries to exempt employees, without improper deductions.
• Train managers on the FLSA and state wage and hour laws.
• Create a plan of action and contact legal counsel in the event of a Department of Labor wage and hour investigation.
• Make documentation of job duties part of every employee’s job. Create accurate and effective job descriptions and update them frequently. For exempt positions, ensure the descriptions themselves satisfy the applicable-exemption test.

Taking these steps will help decrease your company’s exposure to wage and hour liability, deter administrative agency investigations, and, if litigation does occur, minimize exposure.
                                               
Source:  Employment Law Information Network

 

Seven Tips for Minimizing Workplace Negativity

The best way to combat workplace negativity is to keep it from occurring in the first place. These seven tips will help you minimize workplace negativity. 1.       Provide opportunities for people to make decisions about and control and/or influence their own job. The single most frequent cause of workplace negativity I encounter is traceable to a manager or the organization making a decision about a person's work without her input. Almost any decision that excludes the input of the person doing the work is perceived as negative. 2.       Make opportunities available for people to express their opinion about workplace policies and procedures. Recognize the impact of changes in such areas as work hours, pay, benefits, assignment of overtime hours, comp pay, dress codes, office location, job requirements, and working conditions. These factors are closest to the mind, heart and physical presence of each individual. Changes to these can cause serious negative responses. Provide timely, proactive responses to questions and concerns. 3.       Treat people as adults with fairness and consistency. Develop and publicize workplace policies and procedures that organize work effectively. Apply them consistently. As an example, each employee has the opportunity to apply for leave time. In granting his request, apply the same factors to his application as you would to any other individual's. Do not create "rules" for all employees, when just a few people are violating the norms. You want to minimize the number of rules directing the behavior of adult people at work. Treat people as adults; they will usually live up to your expectations and their own expectations. 4.       Help people feel like members of the in-crowd; each person wants to have the same information as quickly as everyone else. Provide the context for decisions, and communicate effectively and constantly. If several avenues or directions are under consideration, communicate all that you know, as soon as you know it. Reserve the right to change your mind later, without consequence, when additional factors affect the direction of ultimate decisions. 5.       Afford people the opportunity to grow and develop. Training, perceived opportunities for promotions, lateral moves for development, and cross-training are visible signs of an organization's commitment to staff. 6.       Provide appropriate leadership and a strategic framework, including mission, vision, values, and goals. People want to feel as if they are part of something bigger than themselves. If they understand the direction, and their part in making the desired outcomes happen, they can effectively contribute more. 7.       Provide appropriate rewards and recognition so people feel their contribution is valued. The power of appropriate rewards and recognition for a positive workplace is remarkable. Suffice to say, reward and recognition is one of the most powerful tools an organization can use to buoy staff morale. Take some time to analyze how well your organization is applying these seven recommendations. They form the foundation for positive staff morale and minimized negativity in your workplace. source:www.humanresources.about.com

 

Make ‘Walk-Arounds’ a Priority To Improve Communication
By Linda Dulye
Years of client experience consistently point to one key workplace factor: Employees prefer to receive information in person from their direct manager, rather than through e-mails, web sites, intranet sites or town hall meetings. And, the most effective way to do that? Walk around and then sit down for a chat at their desks.
Employees at a leading aerospace manufacturer cited “walk-arounds” as the single most important action to create mutual trust between managers and employees. While that fact demonstrates how important walk-arounds are to employees, few managers do them—and those who do aren’t always as effective as they could be. One reason is that walking around sounds easy, but unless you have a game plan, you won’t score with employees. In addition, many managers find “informal” communication difficult without the security blanket of PowerPoint charts or videos. So, to keep it simple—and effective—use this checklist of walk-around tips:

1. Be consistent. Dedicate some time each week to get out and talk with your employees.
2. Minimize distractions. By leaving your cell phone in your office so it doesn’t compete for your attention, you’ll demonstrate courtesy and respect during your time on the floor.
3. Start slow. Don’t feel the need to dive right into your agenda. Use an icebreaker, like the weather or sports, to ease into the conversation.
4. Ask questions. Actively seek information by asking open-ended questions that can’t be answered with a simple yes or no.
5. Ask employees what they want to know. This will provide you with topics for your next walk-around and give employees a sense of involvement. They’ll also sense that you care, which is a key element in establishing trust.
6. Focus on listening. To glean your team’s ideas and perspectives about your business, learn how they think about their roles, your products, your services and your work practices. To be an effective listener, clear your mind of mental distractions, focus on the person who is talking and seek to understand (rather than question) their perspective.
7. Make eye contact. This lets them know that you are listening—as does an occasional nod and facial expression.
8. Follow up. When you’re asked a question that you can’t answer, admit that you don’t have the answer but will get back to them—and do so in a timely manner to demonstrate your credibility. Nothing kills momentum more than when an employee feels that his or her concerns are being blown off by a manager or supervisor.
9. Be honest. If times are tough, don’t sugarcoat reality. For example, if the company lost a big contract, ask others for their opinions on the subject—or what they heard about it. This is a great way for you to informally validate the effectiveness or non-effectiveness of “official” company communication channels in conveying important information.
10. Take notes. Write down questions or comments that you’d like to remember or that require follow-up, but leave formal reports and clipboards on your desk. The goal is to keep this process informal.
11. Show appreciation. When concluding a conversation, thank the employee for his time and comments.

Walk-arounds are a self-replenishing process because they are a catalyst for better conversations and relationships. People may be uncomfortable during the early months of this process, but as they see you more frequently, tensions will ease. As employees realize your commitment to getting information from them, finding out what’s on their minds and answering their questions, your rapport will grow.

Upcoming Seminars

May 16, 2007 - Employment Trends for 2007
·          Understanding Consumer Drive Health Plans (HSAs, HRAs)
·          Hiring Right for Successful Retention  
For more information click here www.hrsolutionsource.com

June 8, 2007- Who to Hire and How to Fire
Sponsored by the Cecil County Chamber of Commerce.  www.cecilchamber.com 

August 21, 2007- Managing Workforce Growth
Women's Business Roundtable, sponsored by the Small Business Development Center  410-836-4237

 

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