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Wage & Hour Attorneys’ Best Tips for Staying Out of Trouble
Featuring Seyfarth Shaw LLP
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Welcome
Michelle Lanter Smith
Vice President of MarketingEPAY Systems, [email protected]
Today’s Host
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EPAY Systems -- designed to meet the needs of your complex,
distributed workforce
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• Reduce your labor costs by 5% or more
• Keep you in control and in compliance
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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?
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Our Speakers
Noah A. FinkelPartner, Seyfarth Shaw LLPLabor & [email protected](312) 460 -5000
Rebecca P. BrometPartner, Seyfarth Shaw LLPLabor & [email protected](312) 460 - 5000
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Ask Your Questions
To ask a question, simply type your question in the
“Question” box on the right side of your screen.
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Overview: Trends for 2013
• Litigation trendso Continued aggressive plaintiffs’ bar
• Increased agency enforcement • FLSA exemptions
o Administrative exemptiono Executive exemption
• Regular Rate of Payo Calculating overtime properly
• Off-the-clock worko Donning & doffingo Travel timeo BlackBerries and PDAs
©2012 Seyfarth Shaw LLP
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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 litigationo 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 plaintiffso Outside companies sending email blasts to employees of target
companieso Ads on Facebook, Twitter
• 7064 lawsuits filed under the Fair Labor Standards Act (“FLSA”) in 2012 o Record high numbero State wage-and-hour actions raise this number significantlyo 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
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Top 10 Private W&HSettlements 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
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FLSA Cases in Federal Court1993-2012
©2012 Seyfarth Shaw LLP
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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
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Increased WHD Enforcement Capabilities
Number of Wage and Hour Division Investigators, 1987 to 2011
951 952
970
938
835
804 800809
942 942 938949 945
898
850
788773
751
732
865
781
731
893
950
1,006
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Applied Econom ic Strategies , us ing U.S. Departm ent of Labor, Wage and Hour Divis ion data.
©2012 Seyfarth Shaw LLP
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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
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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
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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
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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, commissionso Bonuses included unless, purely discretionary, or
percentage of total (including overtime) earningso Certain types of pay for time not worked can be
excluded if paid at a premium rate
©2012 Seyfarth Shaw LLP
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Mistake #5
• Failure to take a strong stand against off-the-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
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Mistake #6
• Not including all required time in the calculation of hours workedo Pay for pre- and post-shift activities (donning &
doffing; computer boot up, etc.)o Is the activity “integral and indispensable” to
employees’ principal work activities (and therefore compensable)?
o Do the employer’s rules or the nature of the work require it?
o Waiting to work- you don’t have to exert yourself to be working
o Is the time de minimis (and can you count on this)?o 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
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Mistake #7
• Not paying for time spent working outside of normal hours on phones & computers
• Key Issues:o Does the employer require the use of phones after
hours?o Are employees required to check and respond to
email?o Do employees record this time?o How are employees paid for this time?
©2012 Seyfarth Shaw LLP
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Mistake #8
• Not paying for travel time
• Key Issues:o Home to work, or vice versa, typically
is not compensableo Between job sites is compensableo Complex rules for out-of-town travelo State laws add a twist
©2012 Seyfarth Shaw LLP
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Mistake #9
• Not paying trainees or internso 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
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Mistake #10
• Not auditing pay practices & exempt status
• Key Issues: o Has the company reviewed its pay practices?o Has the company reviewed its exempt status
classificationso Compliance with state laws?o Conducted at the direction of counsel to establish
privilege?
©2012 Seyfarth Shaw LLP
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EPAY Systems
Michelle Lanter Smith
Vice President of MarketingEPAY Systems, Inc.
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EPAY -- In Time with You
Uniquely flexible
Mobile workforce,
union contracts,
multiple job assignments?
Complex pay rules?
No problem!
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Reduce your labor costs
Reduce payroll administration time
Eliminate erroneous pay calculations, time rounding, and management inconsistencies
Eliminate buddy punching
Biometric time clocks with camera and finger print reader
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• Audit Trails• Overtime• Meal Breaks• Pay Differentials• Privacy and Security• Reduce Workers
Comp Claims• Did you have an
accident free day?
Minimize Compliance Risk
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Over 40,000 customer sites
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Blueforce adapts to how YOU do business
Easy, Anywhere Time Tracking
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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
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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
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Thank You!
Noah A. FinkelPartner, Seyfarth Shaw LLPLabor & [email protected](312) 460-5913
Rebecca P. BrometPartner, Seyfarth Shaw LLPLabor & [email protected]
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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 LinkedIn – follow our company page at EPAY Systemso Twitter -- @EPAYsystemso Sign up for our e- newsletter at www.EPAYsystems.com
Connect with Seyfarth Shaw LLP:o Wage & Hour Litigation Blog http
://www.wagehourlitigation.com/o Twitter - @SeyfarthShawLLP
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Thank You!