Nine Steps To Reducing Your Wage & Hour Liability

Yesterday, we wrote about the incredible proliferation of wage & hour claims and lawsuits spreading over the country.

Today, some tips to reduce your chances of being at the wrong end of a filing:

  1. Audit all positions classified as exempt from overtime;
  2. Re-write your job descriptions, even if they were last done within the last few years;
  3. Review your policies to determine whether steps can be taken to eliminate or substantially reduce the possibility that an employee can claim to have been working, including reviewing such things as “automatic deductions for lunch,” rounding, and similar practices.
  4. Analyze policies and procedures to review deductions from wages and salaries to ensure that they comply with the minimum wage and overtime requirements of state and federal law. These are the first steps toward minimizing liability.
  5. Train Managers. Making sure managers understand the rules is paramount. Managers can avoid costly mistakes and spot problems before they become too costly.
  6. Think Exempt – Non-Exempt, Not Just Salary – Hourly. Too many employers pay employees a salary and then believe that relieves them from any obligation to pay overtime. Employees need to make sure those employees are properly classified as exempt (someone who is typically not paid overtime) or non-exempt (someone that is generally entitled to overtime).
  7. Take Complaints on Wage Issues Seriously. You want to treat wage and hour complaints just as seriously as employment issues including harassment or discrimination. In fact, these wage and hour lawsuits could be more costly to your business.
  8. Do Not Retaliate. Never, never, never retaliate against someone that makes a complaint for wage and hour issues.
  9. Develop strong policies on pay practices and employee hours. Make sure employees work those hours assigned and do not work off-the-clock. Above all, properly document the number of hours worked because just like in baseball where a tie goes to the runner – if the employer has not documented the hours worked by the employee – the benefit of the doubt will go to the employee.

Courtesy Rush on Business (we wish he was in California!), Elarbee Thompson, Monster.com

Wage & Hour Issues: The Trial Lawyers Dream Come True

More wage claims were filed in federal court in 2006 than in 2003/04 combined. Through April 2008, those claims are on pace to outdo 2007. Entire law firms are being formed to litigate wage and hour claims.

That’s because about 70% of all businesses are out of compliance with wage & hour laws.

One Rochester, NY attorney switched from defense to plaintiffs work, saying, “I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will.”

It’s estimated that corporate America pays out more than $1 Billion a year to settle and resolve wage and hour claims.

We’re mostly talking about exempt or non-exempt employees, from not taking meal breaks to tip credits, and overtime. From Starbucks to Oprah Winfrey, no employer is immune.

Tomorrow, we’ll talk about ways to prevent these lawsuits and claims from occurring.

Courtesy Rush on Business; Ethics & Legal Compliance Training; Business Week; New York Times (registration required)

Workplace Wellness Programs


Even in this down economy, workplace wellness programs are on the increase. The advantages are numerous – lower health care costs; increased attendance and improved morale.

Employee Assistance Programs (EAPs) are also an inexpensive way to obtain these advantages – and in some cases, spouses and dependents can participate as well.

Wellness programs also increase the attractiveness of an employer. Companies with wellness programs that touch on the physical and emotional needs of staff and their families show the employer’s interest in keeping everyone healthy, and keeping them happy.

Courtesy East Indiana Star Press.

When You’re Ready For Management

“It’s good to be the King,” said Mel Brooks in History of the World Part I.

Lots of employees envy the boss; the boss is the one who sets the agenda, enforces the rules, and gets to make the decisions the rest of us must implement.

From the outside looking up, management seems like a great job. Telling others what to do, instead of being told what to do, is really the essence of what many people aspire to.

Yet from the perspective of managers, there’s no job more humbling. Making decisions – no matter how benign – that affect people’s lives is difficult. The balance between managing and doing is a fine one.

For example, the best salesperson does not necessarily make the best manager. The attributes needed to succeed in sales – supreme self-confidence, self-motivation and determination along with a strong measure of independence – are not those which are desired in a great manager.

Management requires a huge team concept, the ability to admit you’ve made incorrect decisions and immediately change course.

A very good checklist on “Are You Ready For Management” is available here – written by Jackie Harder in the Miami Herald.

Keep Politics Out of the Workplace

We’ve written before about the need to keep political discussions out of the workplace. The best practice is to discourage it – emotions can simply get to volatile, and there’s no real need to have that discussion in the workplace, anyway.

And don’t let anyone throw the first amendment at you, either: political speech at work is generally not protected by the First Amendment.

Where the political issues get troubling is when employees bring political buttons, signs, bumper stickers, etc. into the workplace.

Make sure to review and/or update your employee handbook to make sure these activities are prohibited (usually through a non-solicitation policy).

And, make sure to read this excellent article on the topic from our friends at Jackson Lewis.

Insult Your Boss Day

Happy “Insult Your Boss Day”. No, I’m not kidding. It must be official – it even has a website: http://www.insultyourbossday.com/.

It better be tongue-in-cheek. I find very few bosses who appreciate being insulted.

There’s a difference, though, between insulting your bosses and legitimate criticism.

Think about a major difference you have with your employer. The best managers invite a contrary opinion; just be careful about how and where you express that opinion.

I never object to an employee who has a difference of opinion. But I would strongly prefer to be criticized in my own office than in front of a number of employees; my initial reaction to the latter situation would be hostile.

Don’t insult; do express your opinion – but know where and when to do it the right way.

Courtesy Winston-Salem Journal.

Employers Do Not Need To Ensure Meal Periods

In a decision that California employers have been waiting for, a California Court of Appeals today ruled “…while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken.”

In Brinker v. Superior Court, the Court analyzed what California Labor Code § 512 means when it requires an employer to “provide” meal periods to its non-exempt employees. (California Labor Code § 512 requires that an employer “provide” an employee with a meal period if the employee works five (5) hours or more.)

For years, the California DLSE and courts have interpreted the term “provide” to mean employers must require employees to take their mandatory meal periods or be liable to the employee for one extra hour of pay.

It would be a mistake to immediately change any policies you have in place regarding meal breaks; the decision will almost certainly be appealed to higher courts.