presents

Healthcare Employee Wage and Hour Collective Claims: Growing Litigation Threat

presents

Collective Claims: Growing Litigation ThreatAvoiding, Defending and Settling FLSA Actions

Against Hospitals and ProvidersA Li 90 Mi t T l f /W bi ith I t ti Q&A

Today's panel features:

Alison B. Marshall, Partner, Jones Day, Washington, D.C.Lee Schreter, Shareholder, Littler Mendelson, Atlanta

A Live 90-Minute Teleconference/Webinar with Interactive Q&A

Lee Schreter, Shareholder, Littler Mendelson, AtlantaShanti Atkins, President & CEO, ELT, San Francisco

Wednesday, May 5, 2010

The conference begins at:The conference begins at:1 pm Eastern12 pm Central

11 am Mountain10 am Pacific10 am Pacific

You can access the audio portion of the conference on the telephone or by using your computer's speakers.Please refer to the dial in/ log in instructions emailed to registrants.

HEALTHCARE EMPLOYEE WAGE AND HOUR COLLECTIVE CLAIMS: A GROWING THREAT

Alison B MarshallAlison B. MarshallJones Day

Why Compliance Matters

• Obama Administration has promised increased enforcement activityenforcement activity.

• Plaintiffs’ bar has launched an aggressive nationwide campaign.p g

• Potential high dollar exposure and disruptive litigation.

3

Increased DOL Activity

• March 2009 -- announced addition of 250 new investigators• June 2009 -- Secretary Solis – “Make no mistake the DOL is back y

in the enforcement business.” • November 2009 – Secretary Solis announced new worker

awareness campaign; same month, DOL announced initiative targeting healthcare in Connecticut and Rhode Islandtargeting healthcare in Connecticut and Rhode Island

• February 22, 2010 – DOL initiative targeting healthcare industry in NY announced

• March 24, 2010 – DOL announced that it will no longer provide f t ifi id t l th h i i l ttfact-specific guidance to employers through opinion letters.

• April 1, 2010 – DOL announced focus on assisted living employers in southeast for investigation of FLSA violations

4

Increased Private Bar Activity

• Plaintiffs’ bar using websites like http://hospitalovertime.com• Aggressively encouraging hourly employees at hospitals and• Aggressively encouraging hourly employees at hospitals and

healthcare facilities to join wage and hour lawsuits• Using publicly available data sources to identify

employees/potential class membersemployees/potential class members• Cases started in Northeast

– Multiple suits filed in a city on same day (e.g. NYC in March 2010)2010)

• Copycat litigation proliferating across country

5

Potential Exposure

• December 2009, SSM Healthcare in St. Louis paid $1.7 million to nurses to resolve unpaid meal break claims.p

• August 2009, Kaiser Permanente paid $1.4 million to settle class action for misclassifying project managers as exempt.

• July 2009, Partners Healthcare paid $2.7 million to 700 employees who worked in more than one company-owned facility but were not having their hours properly aggregated.

• March 2009, Tenet Healthcare paid $81 million to settle claims under California law for unpaid overtimeunder California law for unpaid overtime.

• November 2007, Total Health Home Care Corporation paid $2 million to settle compensable travel time claims.

6

Collective or Class Claims or Both

• FLSA -- § 216(b) collective action – opt-in classSt t R l 23 l ti t t l• State – Rule 23 class action – opt-out class

• Often see combination of two• 3 year statute of limitations for willful claims under• 3 year statute of limitations for willful claims under

FLSA• Liquidated damages• Focus here will be primarily on the FLSA – state laws

vary and need to be checked

7

Top Targeted Area: What Hours CountCount

• Meal and rest breaks and automatic deductionsP d t hift h• Pre- and post-shift hours

• On-Call Time• Aggregation of Hours• Aggregation of Hours

8

What Hours Count?

• Employees must be paid for work “suffered or permitted” by the employer even if thepermitted by the employer even if the employer does not specifically authorize the work. 29 C.F.R. § 785.11.

• So long as the employer “knows or has reason to believe” that such work is occurring, the

l t b id f th h ifemployee must be paid for the hours, even if off-site or off-shift. 29 C.F.R. § 785.12.

9

Meal and Rest Periods

• Meal and rest periods not required under FLSA.• Short breaks (generally 5 to 20 minutes) are hours worked and• Short breaks (generally 5 to 20 minutes), are hours worked and

compensable. • “Bona fide” meal or break periods (typically 30 or more minutes)

do not count towards hours worked provided employees actuallydo not count towards hours worked, provided employees actually take the break and are “completely relieved from duty” during that time. 29 C.F.R. § 785.18.

• California requires employers to provide a 30-minute meal break• California requires employers to provide a 30-minute meal break for any person who works a period of more than five hours.

10

Meal and Rest Periods cont’d

• Ex.: LPNs in the pediatric intensive care unit are given 30-minute meal breaks. Routinely, they are interrupted by requests tomeal breaks. Routinely, they are interrupted by requests to assist patients or to answer phones for the unit. Given their workloads, they also frequently eat lunch at a desk while completing charts. Does the 30 minutes count? p g

– Yes. According to a 2008 DOL opinion letter, such breaks would have to be counted since the meal periods are spent working on tasks predominantly for the benefit of the g p yemployer.

11

Automatic Deductions

• Subject of numerous collective actions currently pending (e.g. Fengler v. Crouse Health; Camesi v. University of Pittsburgh g y gMed. Ctr.; Gordon v. Kaleida Health)

• Issue is whether employers should or should not take automatic deductions for meal breaks.

• Ex.: A skilled nursing facility automatically deducts one half-hour for meal breaks each shift. Upon hiring, the employer notifies the employees of the policy and of their responsibility to take the break Is this lawful?break. Is this lawful?

– Yes, but the employer must monitor to ensure that the breaks are actually taken without interruption.

12

Pre- and Post-Shift Hours

• Hours worked prior to or after an employee’s principal activity are not compensable time unless they are anactivity are not compensable time unless they are an “integral and indispensable” part of those activities. 29 U.S.C. § 254.

• But, if the hours worked are integral and indispensable, they will count as hours worked even if not authorized by the employer if the employer “knowsnot authorized by the employer if the employer knows or has reason to believe” that such work is occurring.

13

Pre- and Post-Shift Examples

• Ex. 1: LPNs assigned to a busy critical care unit routinely stay post-shift to complete their time sheets and notate patient charts.post shift to complete their time sheets and notate patient charts. Compensable?

– Yes. This work is integral to performance of their job duties.• Ex 2: A medical tech chooses to change into and out of his• Ex. 2: A medical tech chooses to change into and out of his

scrubs and hairnet in the locker room at the hospital. Is this time compensable?

No As employees have the option and ability to change into– No. As employees have the option and ability to change into these items at home, changing gear is not a considered a principal activity and is not likely to be compensable.

14

On-Call Time

• Periods of inactivity while on duty are hours worked and compensable 29 C F R § 785 15and compensable. 29 C.F.R. § 785.15.

• Periods during which an employee is “completely relieved from duty“ and which are long enough to enable him to use the time effectively for his ownenable him to use the time effectively for his own purposes are not hours worked.”

– The relevant distinction is whether the employee is “engaged to wait” or “wait[ing] to be engaged” --the former is compensable, while the latter is not.

15

On-Call Time cont’d.

• Ex. 1: Hospital requires its hourly nurses to carry a pager during 1-hour lunch breaks, but they are allowed to leave the hospital with no other

t i ti C bl ti ?restrictions. Compensable time?– No, because they are allowed to leave the premises and have few

restrictions on their time. Employees required to remain on-call on or close to the employer’s premises such that they cannot use the p y p ytime effectively for their own purposes, however, are considered to be working and the hours compensable.

• Ex. 2: Hospital requires its hourly on-call equipment repair technician to carry a pager remain sober be available on twenty minutes notice andcarry a pager, remain sober, be available on twenty minutes notice, and answer calls usually 3 or 4 times per shift. Compensable time?

– Probably yes. Frequency of the calls will be a factor.

16

Aggregation of Hours When an Employee Works at More than One Facilityy

• FLSA requires employers to include all hours worked for the same “enterprise ”for the same enterprise.

• “Enterprise” is defined as “the related activities performed (either through unified operations or common control) by any person or persons for acommon control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments by one or more corporate orestablishments by one or more corporate or organization units.” 29 U.S.C. § 203 r(1).

17

Factors Used in Determining Whether Joint Employer or Single Enterprisep y g p

• DOL regulations provide: “if employment by one employer is not completely disassociated from employment with the othercompletely disassociated from employment with the other employer(s), all of the employee’s work for all of the joint employers during the workweek is considered one employment for purposes of the act.” 29 C.F.R. § 791.2(a).p p § ( )

• 2005 DOL Opinion Letter: Concluded that the facilities of system with two acute-care hospitals, a nursing home and one combined long-term hospital and nursing home were under common control g p gof the parent company and all hours worked had to be aggregated.

18

Factors Cited By DOL in 2005 OpinionOpinion• System was owned by a single, not-for-profit parent holding

company that had no employees.p y p y• Facilities shared a president and board of directors.• The Hospital’s HR department provided support to the nursing

home.• The system’s VP of HR and several senior executives had

responsibility for more than one entity.• Some of the facilities’ personnel policies were the same.• Job vacancies were posted within the system before being

advertised publicly.

19

Joint Employer cont’d.

• Will be a fact intensive assessment based on totality of the circumstancesof the circumstances.

• Using separate tax identification numbers, filing separate tax returns, and maintaining separate p , g plicenses, while relevant, may not be determinative.

• Focus will be on the economic realities of the relationshiprelationship.

• Core issue is extent to which there is common control.

20

Current Trends

Healthcare is a Major Target!Healthcare is a Major Target!

In 2008 and 2009, more than 530 wage and hour lawsuits were filed against healthcare organizations

Wage and hour class/collective actions Wage and hour class/collective actions against healthcare organizations increased 35% from 2008 to 2009increased 35% from 2008 to 2009

22

Heightened Government Enforcementg

“Make no mistakeh b k

Hilda Solis – Secretary of Labor

the DOL is back inthe enforcement fbusiness.”Prepared remarks by Secretary Solis Prepared remarks by Secretary Solis for the American Society of Safety Engineers conference, June 2009

23

Heightened Government Enforcementg

Hilda Solis Secretary of Labor"In early 2010, the department will launch a national public awareness campaign

Hilda Solis – Secretary of Labor

p p gtitled "We Can Help" to inform workers about their rights. The department will work closely with advocacy groups and other stakeholders to ensure that the materials developed for the campaign reach the workers who need them. We

ill t t til th l i f ll d bwill not rest until the law is followed by every employer, and each worker is treated and compensated fairly."

F 11 19 2009 DOL N R l– From 11-19-2009, DOL News Release24

Heightened Government Enforcementg

F b 22 2010 DOL P R l t ti th t l February 22, 2010, DOL Press Release stating that less than 36% of healthcare employers investigated during the last five years by Albany office were in compliance y y y pwith the FLSA.– Found more than $2 million in back wages owed– Announced major compliance initiative targeted

at New York healthcare industry In December of 2009 SSM Healthcare pays $1.7 million

in back wages to nurses for work done during unpaid meal breaks to settle DOL lawsuit.meal breaks to settle DOL lawsuit.

25

DOL’s Enforcement – 2008DOL s Enforcement 2008

C ll t d $185 illi i b k Collected $185 million in back wages for 228,000 employees.

Concluded 28,242 compliance actions. Assessed $9.9 million in civil money penalties. Complaints declined for 4th year to lowest

number in 8 years.y Violations found in 80% of DOL investigations.

26

2010 Policy and Enforcement I i i iInitiatives

ti h lth l f i d Targeting healthcare employers for missed and interrupted meal periods and failure to aggregate hours workedaggregate hours worked

Directed recidivism audits for past violators A i f i il lti f Aggressive use of civil money penalties for

repeat and willful violations More coordination between the DOL OSHA More coordination between the DOL, OSHA,

and OFCCP 3 year back wage period for repeat and 3-year back wage period for repeat and

willful violations 27

2010 Policy and Enforcement I i i iInitiatives

i id t d d f t illf l i l ti Liquidated damages for repeat or willful violations Limited use of DOL Release (Form WH-58) to

“f ll i ti ti ”“full investigations” Targeting “misdesignated” independent

t tcontractors Tolling Agreements now toll limitations period

for claims by employeesfor claims by employees Voluntary Compliance Arrangements are

in questionin question28

Plaintiffs’ Lawyers areT ti H lth E lTargeting Healthcare Employers

Th & S l LLP Pl i tiff ’ l Thomas & Solomon LLP: Plaintiffs’ law firm based in Rochester, New York, that i t ti ll t ti th 100 is systematically targeting more than 100 healthcare employers in all 50 states.

“Me too” lawyers targeting other healthcare employers.p y

29

Modus OperandiModus Operandi

Obt i l ’ d dd Obtain employees’ names and addresses from publicly available directories of healthcare licenseslicenses.

Send “investigatory” letters to employees’ homes to offer assistance in protecting homes to offer assistance in protecting employees’ rights.

Obtain “consents” through word of mouth, home g ,mailings, and website: hospitalovertime.com.

Target largest healthcare employers in specific g g p y pcities. 30

Modus Operandi (cont’d)Modus Operandi (cont d)

Si lt l fil ti i t l t Simultaneously file actions against largest healthcare employers in target cities.

Boilerplate complaints with virtually identical Boilerplate complaints with virtually identical claims asserted against all targeted employers.

Issue press releases to garner media attention Issue press releases to garner media attention. Generally file motion for conditional certification

with complaint or very soon after filing of with complaint or very soon after filing of complaint.

Force employees to fight on two fronts by filing Force employees to fight on two fronts by filing claims in state and federal court. 31

Who is Next?Who is Next? New healthcare employers added to website frequently New healthcare employers added to website frequently. Website lists healthcare employers in 48 states, the District of Columbia,

Guam, Philippine Islands, Puerto Rico, and Virgin Islands. Started in Rochester and then moved to Buffalo and Syracuse New York Started in Rochester and then moved to Buffalo and Syracuse, New York. Spring 2009 moved from New York to Pittsburgh, Pennsylvania. September 2009 filed actions against 5 of the largest healthcare systems

i B t M h ttin Boston, Massachusetts. Currently sending “investigatory” letters to employees’ homes to

additional areas, including Philadelphia, Washington, D.C., Providence, and Californiaand California.

November 2009 filed actions against 7 Philadelphia-based healthcare systems.

March 2010 filed actions against New York City-based healthcare systems.32

Targeted Areas

33

The ClaimsThe Claims

Off-the-clock work under FLSA Off-the-clock work under state law

CO l i iff ll i RICO – Plaintiffs allege senior management conspiracy designed to underpay employees.

ERISA ERISA Estoppel Breach of Contract Breach of Contract Breach of Implied Contract Assumpsit Assumpsit

34

The Claims (cont’d)The Claims (cont d)

Quantum Meruit Unjust Enrichment Fraud Conversion Conversion Negligent Misrepresentation Equitable Estoppel Equitable Estoppel Promissory Estoppel Failure to Maintain Accurate Records

35

What to Expect:E l i T iEvolving Tactics

Other major plaintiffs’ firm players, as well as “copycat” players, have not adopted the Thomas & Solomon model hook, line and sinker –tactics are evolving

36

What to Expect:S li i i

Plaintiffs’ firms are hiring outside companies to send email blasts to

Solicitation

-----Original Message-----

Plaintiffs firms are hiring outside companies to send email blasts to employees of target companies. Below is actual text from one such email:-----Original Message-----

From: Hours Worked [mailto:medrecallnewscl@gmail.com]Sent: Monday, January 04, 2010 3:50 PMTo: [INSERT NAME]Subject: You May Not Have Been Paid For All The Time You Were Permitted To Work

IF YOU WORKED AS AN HOURLY EMPLOYEE FOR A HEALTH CARE FACILITY OR HOSPITAL OUR INVESTIGATION SUGGESTS THAT...

YOU MAY NOT HAVE BEEN PAID FOR ALL THE TIME YOU WERE PERMITTED TO WORK!YOU MAY NOT HAVE BEEN PAID FOR ALL THE TIME YOU WERE PERMITTED TO WORK!

PROTECT ANY AMOUNT YOU MAY BE OWED BY CALLING NOW.

(this is not a sales program)BECAUSE OF SEVERAL EMPLOYMENT LAWS EVERY DAY YOU DELAY MAY ELIMINATE YOUR ABILITYBECAUSE OF SEVERAL EMPLOYMENT LAWS, EVERY DAY YOU DELAY MAY ELIMINATE YOUR ABILITY

TO RECOVER MONEY.

CALL TOLL-FREE FOR NO OBLIGATION INFORMATION (888) 668-381737

What to Expect:S li i iSolicitation

Lawyers are using vendors such as “services to lawyers” (http://servicestolawyers.com/home/), traditionally used for medical malpractice, workers traditionally used for medical malpractice, workers compensation claims and car accident cases, to spam employees of hospitals and healthcare providers with this type of informationproviders with this type of information.

Email addresses can be identified either by:identifying a domain name ( @littlerhospital org) – identifying a domain name (____@littlerhospital.org) and obtaining an employee roster

– obtaining a list of employees (such as nurses) from a f i l li i b dprofessional licensing board

38

Healthcare Employers area Major Part of the Focusa ajor art of the ocus

In 2008 and 2009, 33% of wage and hour actions targeted at healthcare organizations were filed in the southeast

39

Time, Task and Payroll SSystems

Automated and integrated time, attendance and payroll systems can reduce wage-hour compliance issues.– More accurate time records.– More likely that employees will record

hours.hours.– More difficult for managers to shave hours.

40

But... Top Ten Problemswith Timekeeping/Automated with Timekeeping/Automated

Systems1. Auto Deductions for Meal Periods.2 Deductions for Short Meal/Rest Breaks2. Deductions for Short Meal/Rest Breaks.3. Exception Time Reporting.4. Rounding.5 Early Arrivers and Long Punching5. Early Arrivers and Long Punching.

41

But... Top Ten Problemswith Timekeeping/Automated Systems p g y

(cont’d)6 Pre and Post shift Computer Logging 6. Pre- and Post-shift Computer Logging

and Other Activities.i i i7. Discrepancies Between Time Records

and Other Electronic Records.8. Remote Work.9 Garbage In Garbage Out9. Garbage In, Garbage Out.10. Failure to Include Bonuses, Incentives,

and Commissions in Overtime Calculationand Commissions in Overtime Calculation.42

F d Thi ki S i dForward Thinking Strategies andRemedial Measures to Attack New Challenges

and Eliminate Old Problemsand Eliminate Old Problems

43

The Good NewsThe Good News

D it i i b f l i th Despite rising number of claims, there are measures employers can take now to strengthen defenses and make themselves strengthen defenses and make themselves a less attractive litigation target.

Many “remedial steps” can be quickly Many remedial steps can be quickly implemented with little or no cost.

Most healthcare emplo ers alread ha e the Most healthcare employers already have the basic compliance structure in place on which a more elaborate wage and hour compliance a more elaborate wage and hour compliance model can be built. 44

A Word About the Attorney-Client Privilege and Discoverability of Internal g y f

Communications Gi l th t f liti ti l h ld k Given real threat of litigation, employers should work

with counsel (inside or outside counsel) to evaluate existing compliance.

Internal communications that are not privileged or discoverable.

Employers should exercise caution in how they communicate about potential compliance issues.

Plaintiffs’ counsel often take discovery of an employer’s knowledge of compliance issues and what, if any, steps employer has taken to address , y, p p ypotential problems. 45

Building a Good Faith Defenset Off th Cl k Cl ito Off-the-Clock Claims

K bl f h lth l Key problem for healthcare employers is lack of sufficient evidence to establish

ti k i d “ d f ith” proper timekeeping and “good faith” defense to off-the-clock claims.

Compliance model should be targeted toward building evidence of employer’s g p ygood faith efforts to ensure employees accurately report and are paid for all y p pworking time. 46

Obstacles to Effective Compliance M d lModel

E l d h Employees and managers have misconception about respective legal obligations and what is compensable obligations and what is compensable working time.

Employees are often careless timekeepers Employees are often careless timekeepers. Some managers may instruct employees

to ork off the clock d e to b dgetar to work off-the-clock due to budgetary restrictions.

S l l f l l Some unscrupulous employees may falsely claim off-the-clock work. 47

What is aF h /Ell th D f ?Faragher/Ellerth Defense?

I t i f th l t h i d In certain areas of the law, courts have recognized something called the “doctrine of avoidable consequences,” which prevents a party from recovering damages where the injured party could have avoided harm through reasonable efforts.

U d f 10 i Titl VII tt f ll i Used for 10+ years in Title VII matters, following US Supreme Court decisions in Faragher and Kolstad.

Courts have now started to recognize the validity Courts have now started to recognize the validity of this defense in wage and hour actions.

48

Elements of theF h /Ell th D fFaragher/Ellerth Defense

1 Ad t d bli i l ti k i li i d d 1. Adopt and publicize clear timekeeping policies and procedures. 2. Require employees to review, and, if correct, certify the accuracy

of time records. 3. Implement a robust complaint mechanism specifically targeted

to wage and hour complaints. 4 Audit time records to ensure employees and managers are 4. Audit time records to ensure employees and managers are

complying with policies and procedures. 5. Discipline managers and employees for violations of timekeeping

policies and procedures policies and procedures. 6. Reinforce timekeeping policies through periodic reminders.7. Train managers and employees on key FLSA concepts, 7. Train managers and employees on key FLSA concepts,

timekeeping policies, and complaint mechanism. 49

Element 1:Adopt and Publicize Clear Timekeeping

Ti k i li i h ld i h db k

Adopt and Publicize Clear Timekeeping Policies and Procedures

Timekeeping policies should appear in handbooks, ethics policies, and collective bargaining agreements.

Require signed receipt to demonstrate knowledge Require signed receipt to demonstrate knowledge of policies and procedures.

Recommend policies should:p– Define working time with examples that target most common

misconceptions.dd l i d d i t t l h t t – Address meal periods, and instruct employees on what to

do if a meal period is interrupted or missed.– Prohibit off-the-clock work but advise that in the event

work is performed, employees will be paid.50

Element 1: (cont’d)Adopt and Publicize Clear Timekeeping

Recommend policies should:

Adopt and Publicize Clear Timekeeping Policies and Procedures

Recommend policies should:– Require immediate reporting of off-the-clock work within 72

hours of occurrence.– Provide a mechanism for employees to report off-the-clock

work.– Require advance authorization for overtime except in the q p

event of an emergency.– Advise employees that no one is authorized to require off-the-

clock workclock work.– Require employees to report violations of timekeeping policies

within 72 hours of occurrence and require employees to pursue alternative complaint mechanism by calling 1 800 number if no alternative complaint mechanism by calling 1-800 number if no response received from initial complaint within 5 business days. 51

Element 2:ifi i f Ti dCertification of Time Records

Require non-exempt employees to review time records. Daily review is ideal but something less frequent can be used

provided employees have the opportunity to review actual p p y pp yrecords.

Provided records are correct, require employee certification as to accuracy. as to accuracy.

If records are not correct, require employee to identify any inaccuracies to permit immediate correction.

Require employees to review accuracy of paycheck and, if systems permit, certify secondary review. On-line tools make this level of review more available.

Certification should cover off-the-clock work and meal periods. 52

Element 3:Ad b C l i Adopt a Robust Complaint

Mechanism Most employers already have some type of

complaint mechanism in place. Existing complaint mechanisms often do not Existing complaint mechanisms often do not

specifically reference wage and hour issues. Revise existing complaint mechanism to ensure Revise existing complaint mechanism to ensure

it specifically addresses wage and hour issues. Publicize complaint mechanism in handbooks, p

open door policies, collective bargaining agreements, ethics handbooks, and other employee communication channels employee communication channels.

53

Element 3: (cont’d)Ad b C l i Adopt a Robust Complaint

Mechanism Train managers and payroll personnel to be alert

to payroll concerns and treat any complaints with same level of attention as other employee relations same level of attention as other employee relations complaints (i.e., sexual harassment).

Promptly investigate payroll concerns using same techniques and controls as other types of internal complaints.

If d t i d t b i t t k t If determined to be appropriate, take prompt and effective remedial steps.

Effective remediation may require payment of Effective remediation may require payment of back wages. 54

Element 4:A di Ti d f C liAudit Time Records for Compliance

Adopt an audit protocol to ensure employees and managers are following policies and procedures.

A dit protocol sho ld be designed to be disco erable Audit protocol should be designed to be discoverable in the event of future litigation as part of Company's good faith defense.

Promptly investigate and remediate any discovered violations.

Implement appropriate discipline for managers and employees in the event of violations.

55

Element 5:Impose Appropriate Discipline for Policy

I t d l h

pose pp op ate sc p e o o cy Violations by Employees and Managers

In some reported cases, employers have been criticized for quickly disciplining employees for timekeeping violations but employees for timekeeping violations but not doing so for manager violations.

Manager misconduct is increasingly being Manager misconduct is increasingly being characterized as wage theft.

Manager miscond ct sho ld be promptl Manager misconduct should be promptly addressed and, where confirmed, considered serious violation of the Company's serious violation of the Company s most important policies. 56

Element 6:P i di R i d

Ti k i li i d d

Periodic Reminders Timekeeping policies and procedures

should be reinforced through available i ti communication means.

Annual letter to all employees. p y Newsletters. Postings. Refresher training Refresher training.

57

Element 7:T i iTraining

R t ELT S f 2 000 L l & HR Recent ELT Survey of 2,000+ Legal & HR Professionals:– 60% said their employees were not

accurately recording hours worked, or weren’t sure if they were or not;

– 40% said their employees would not know how to complain internally, about wage concerns.

58

Why Train?A id P bl t B i WithAvoid Problems to Begin With

‐ Teach your employees about your organization’s key wage and hour rules (e.g., prohibition against off‐the clock work; mealprohibition against off the clock work; meal and rest breaks; etc.), AND where to turn to internally if they have wage problems;

‐ Teach your managers about your organization’s policies and their special role in ensuring the policies are followed andin ensuring the policies are followed and 

enforced, and all issues are addressed.

59

How Training Helps Defeat Off th Cl k W k Cl iOff-the-Clock Work Claims

Increasingly the avoidable consequences doctrine Increasingly, the avoidable consequences doctrineis being recognized in FLSA and related state wage and hour cases, as a critical defense for employers.

Cornerstone of the defense is employee and supervisory training on wage and hour topics.p y g g p

60

Training Reduces D EDamages Exposure

2 yrs. vs. 3 yrs. back pay

Reduces liquidated (double) damages risk

Reduced attorneys’ fees

Reduced interest

Reduced civil money penalties 61

When To TrainWhen To Train

Should be integrated into Should be integrated into employment relationship.

Should be done regularly to Should be done regularly to reinforce policies and understanding:– Employee orientation.p oyee o e a o .– New manager training.– When there are new legal

developments or policy p p ychanges.

– Every 2 years.– More often for highly g y

specialized compensation jobs.

62

Who Should Be TrainedWho Should Be Trained

Manager training should focus on employee topics, plus:– Compliance responsibilities.Compliance responsibilities.– Handling employee

complaints.Manager misconduct– Manager misconduct.

– Prohibition against retaliation.G d d k i – Good record keeping practices.

63

Who Should Be TrainedWho Should Be Trained

Employee training should focus on the basics, such as:

Review of key policies– Review of key policies.– Define hours worked.– No off-the-clock work.o o e c oc o .– Meals and rest periods.– Rules relating to OT.– Reporting errors and

misconduct.

64

Training SolutionsTraining Solutions

Li t i i Live training:– Instructor led and tailored to audience

(i.e., senior leaders).– When highly customized materials req’d.

E learning: 40%+ (and growing) of E-learning: 40%+ (and growing) of employers today choose e-learning solutions.

Interactive and engaging hands on – Interactive and engaging – hands on experience.

– Significant cost savings.– Creates electronic records and – Creates electronic records and

employee acknowledgments.View a demo: www.elt-inc.com. 65

The Power of eLearningThe Power of eLearning

Abilit to a tomate an Ability to automate an enterprise-wide mandatory training effort.

Irrefutable tracking of all learners.

Complete record of consistent Complete record of consistent training content.

Learner certification regarding g gpolicy compliance.

Learner certification of training completioncompletion.

66

Critical Training Components Critical Training Components

Educate your workforce about the basics of the law – both state and federal. (Content needs to configure federal. (Content needs to configure by state.)

Educate your workforce about yourpolicies policies.

Translate critical messages into real-life stories that your employees will understand and rememberunderstand and remember.

Specifically designed to help establish powerful affirmative d fdefenses.

67

ELT’s Wage & Hour CourseELT s Wage & Hour Course

Employees must certify that they:

Completed the Completed the course.

Reviewed your & h d wage & hour and

payroll policies and will abide by them.

Know who to call with any questions or concerns.

68

Wage & Hour Training: A Case St dStudy

69

Training: A Case StudyTraining: A Case Study

“S t ” “Symptoms”: Large New England-based healthcare system, with 6,000+ employees, operating in several states, was fearing the p g , gimminent filing of a wage & hour class action.

Major concerns with off-the-clock work and meal and rest break management.

This “patient” presented itself to ELT in July 2009.

70

Training: A Case StudyTraining: A Case Study

“T t t” i i “Treatment”: In October 2009, client partners with ELT to provide online wage and hour training to client’s 6,000+ employees, system-wide, in various , p y , y ,states.

Client requests customizations including imbedding its wage and hour policies within the training course. ELT hosts the course on its LMS.

Course ready to launch Course ready to launch December 1, 2009.

71

Training ROITraining ROI Prevent inadvertent federal and Prevent inadvertent federal and

state law violations. Prevent claims:

• Policies are clear and irrefutable.

• Plaintiff credibility?Plaintiff credibility?• More difficult to certify a class.

Reduce damage awards and potentially build a good faith defense.

Build a culture of compliance.p

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