wage and hour law: your company’s not exempt from litigation
DESCRIPTION
This webinar will demonstrate how the use of job analysis can help you limit your company’s risk of experiencing wage and hour issues and turn around those issues you may now face.TRANSCRIPT
Speaker: Toni Locklear, Ph.D. Industrial Psychologist and Managing Director APTMetrics, Inc.
Robert Lewis, Ph.D. Industrial Psychologist and Vice President APTMetrics, Inc
Moderator: Mike Prokopeak Vice President, Editorial DIrector Talent Management magazine
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Wage and Hour Law: Your Company’s Not Exempt From Litigation
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Mike Prokopeak Vice President, Editorial Director Talent Management magazine
Wage and Hour Law: Your Company’s Not Exempt From Litigation
#TMwebinar
Wage and Hour Law: Your Company’s Not Exempt From Litigation
Robert Lewis, Ph.D. Industrial Psychologist and Vice President APTMetrics, Inc. Toni Locklear, Ph.D. Industrial Psychologist and Managing Director APTMetrics, Inc.
2011 APTMetrics, Inc.
Wage and Hour Law:
Your Company’s Not Exempt from Litigation
Presented by Robert E. Lewis, Ph.D. and Toni S. Locklear, Ph.D.
September 13, 2011
8 Privileged and Confidential
Agenda
• Introduction to wage-‐hour law
• Why care about wage-‐hour laws?
• Difficulties implementing wage-‐hour laws
• How to limit risks associated with wage-‐hour laws
How to Reset Your Wage and Hour Practices to Avoid Litigation A Wage-‐Hour eBook from
© 20011 APTMetrics, Inc.
9 Privileged and Confidential
Introduction to Wage-‐Hour Law
• What is regulated by wage-‐hour law? • Federal law:
• overtime pay • minimum wage • child labor • record-‐keeping requirements
• State law: • meal and rest breaks • discharge notices • pay upon discharge
10 Privileged and Confidential
Introduction to Wage-‐Hour Law
• Key issue in wage-‐hour litigation: Exemption • Exempt—not subject to overtime pay regulations
• Non-‐exempt—subject to overtime pay regulations
11 Privileged and Confidential
Exemption Standards
• Based on the work as it is done • Individual determination • Exemption types:
• Executive • Administrative • Professional • Computer Professional • Outside Sales
12 Privileged and Confidential
Exemption Standards
• Key work tests: • Salary level test • Duties test
• Discretion • Independent judgment • Authority • Hire/fire authority • Prolonged course of specialized instruction
13 Privileged and Confidential
Polling Question
1. What percent of jobs in your company are classified as exempt from federal and state wage-‐hour laws? a. Less than 20% b. 20 – 40% c. 41 – 60% d. 61 – 80% e. 81 -‐ 100% f. I don’t know
14 Privileged and Confidential
Little Known Facts
• Classifying jobs as exempt is voluntary • No requirement to claim exemption for any job
• Employers bear the burden of proof when claiming exemption
• The Department of Labor estimates 70 percent of employers are not in compliance with the FLSA in some way
15 Privileged and Confidential
Wage-‐hour Issues are Important
• Lawsuits are on the rise • Wage hour suits outpace others (e.g., discrimination) • 77 percent rise in lawsuits filed between 2004
and 2009 • Multi-‐million dollar settlements—
• $1.77 billion in settlements in 2007-‐2010 • Average settlement of $12.8 million per case
• Damages • Back pay for lost wages, interest,
liquidated damages, and attorneys’ fees • Treble damages in some states
• Changing exemption status can create litigation risk
16 Privileged and Confidential
Difficulties Implementing Wage-‐hour Laws
• Wage-‐hour administration crosses organizational lines • The HR, finance, legal functions generally have some responsibility • Little coordination among them • Key players: legal and HR
• Work is changing • Leaner staffing levels require managers to do more
“non-‐managerial” work
• Laws require interpretation • What is “work time”? • When is doing non-‐management work “essential” to doing
management work?
17 Privileged and Confidential
Polling Question
2. Which jobs do you wrestle with most regarding wage-‐hour issues? a. Assistant managers/team leaders b. Computer technicians c. Accountants d. Project managers e. Other
18 Privileged and Confidential
Key Wage-‐hour Concerns
• Employees working off the clock
• Ensuring that employees take meal breaks
• Determining a job’s exemption status
19 Privileged and Confidential
Reactions to Wage-‐hour Challenges
• Delegate wage-‐hour compliance to field/district management
• Conduct compensation/market analyses • Empower Staffing to make exemption
decisions at hire • Create policy manual section on wage-‐
hour compliance • Regular audits of wage-‐hour policies/
implications • Train managers on managing meal
breaks and overtime • Conduct job analysis
Leve
l of E
ffect
iven
ess
20 Privileged and Confidential
Case study – Guinup v. Petr-‐All Petroleum
Are retail store managers entitled to overtime pay? • The Plaintiff’s Claim -‐-‐ the company misclassified all of its store
managers as exempt from both the FLSA and state wage-‐hour law • Plaintiff managed a convenience store/gas station in NY state
• Plaintiff spent: • 80% of her time on nonexempt duties such as counting
cigarettes and verifying gas readings • 20% of her time on exempt duties such as scheduling,
supervising, and evaluating employees
• Most of her day free from supervision; the regional manager was generally not in the store
•
21 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
• Knowing the work that is done is the number one way to limit wage-‐hour risk
• Job Analysis is the preferred method for documenting work requirements • Structured • Defensible • Drives coordination • Documents critical job components
• Frequency and importance of work activities • Entry requirements for knowledge, skills and abilities • Level of discretion and autonomy • Policy creation versus enforcement versus execution
22 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
• Job analysis process • Determine jobs that present risk • Collect structured, verifiable data
• Develop a comprehensive work activity and knowledge/skill/ability list with job experts
• With your employment attorney, decide which activities are exempt • Identify the ratings you need based on your state (importance, time
spent, level of autonomy, etc.) • Administer the survey to the entire population
• Analyze the data, including for exemption implications • Means and standard deviations • Illustrate the findings using visuals to facilitate comparing jobs
on relevant dimensions
23 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
Job Analysis Results
• How important are these job activities for the Manager job? • 3 – Critically important– this activity has significant impact on profit, performance, or safety • 2– Important-‐-‐ poor performance on this activity hinders performance • 1-‐-‐ Minor Importance– this activity must be done but has little impact on profit, performance or safety • 0– Not Applicable– this activity is not performed in this job
24 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
Job Analysis Results
• Including both exempt and non-‐exempt activities allows you to assess the degree to which job respondents meet exemption criteria
25 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
• Develop job descriptions based on the job analysis
• Key activities and responsibilities
• Key and required KSAs
• Minimum and preferred qualifications
26 Privileged and Confidential
Job Profiles
27 Privileged and Confidential
Job Profiles
28 Privileged and Confidential
Job Profiles
29 Privileged and Confidential
Limiting the Risk of Wage-‐hour Issues
• HR Audit • Policies—are wage-‐hour considerations reflected in policies?
• Use of pagers and smartphones for email access • On-‐call duty for computer operators/technicians • Use of company-‐owned vehicles
• Practices—are processes in effect for managing issues on an ongoing basis?
• Grievance process for work time complaints • Active training program for managers to understand their
responsibilities • Cross-‐functional committee responsible for wage-‐hour
issues that meets regularly • Regular employee survey to determine how employees
spend their time in important work activities
30 Privileged and Confidential
Summary
• Wage-‐hour issues require cross-‐functional management • Typically from Legal, HR and Finance
• Knowing the job is your best proactive and defensive measure • A job analysis is a court-‐tested method of determining status • Changing an employee’s exemption status without knowing and
changing activities/skills is a recipe for litigation
• Audit your policies and practices to ensure coordination and proactive measurement • Policies to ensure guidance • Practices to ensure execution
Questions and Answers
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Robert Lewis, Ph.D. Industrial Psychologist and Vice President APTMetrics, Inc. Toni Locklear, Ph.D. Industrial Psychologist and Managing Director APTMetrics, Inc.
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