Contenu connexe Similaire à Show Them the Money: Wage & Hour Compliance (Series: HR, Talent Management & Employment Law Boot Camp) (20) Plus de Financial Poise (20) Show Them the Money: Wage & Hour Compliance (Series: HR, Talent Management & Employment Law Boot Camp)1. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™
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Practical and entertaining education for
attorneys, accountants, business owners
and executives, and investors.
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DISCLAIMER
The material in this webinar is for informational purposes only. It should not be
considered legal, financial or other professional advice. You should consult with an
attorney or other appropriate professional to determine what may be best for your
individual needs. While Financial Poise™ takes reasonable steps to ensure the information
it publishes is accurate, Financial Poise™ makes no guaranty in this regard.
About this PowerPoint: if you are looking at this PowerPoint without the benefit of
listening to the conversation that surrounded it then you are doing yourself a disservice.
This PowerPoint was prepared in contemplation of being viewed in conjunction with
listening to a one hour webinar on the topic
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MEET THE FACULTY
Moderator:
Charles Krugel – Law Offices of Charles Krugel
Panelists:
Neil Lappley – Lappley & Associates, Ltd.
Jason Klimpl – Tannenbaum Helpern Syracuse & Hirschtritt LLP
Gary Savine – Savine Employment Law, Ltd.
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ABOUT THIS WEBINAR: Show Them the
Money: Wage & Hour Compliance
Compliance with federal (as well as state) wage and hour laws returned to the forefront towards the
end of the Obama administration when it appeared that the salary threshold that applied to exempt
employees would be increased significantly. While the proposed change will not happen, the Trump
administration has signaled that the threshold will nonetheless likely increase. Regardless of where
the new threshold lands, employers must nonetheless be mindful of the risks posed by
misclassifying individuals as exempt as well as by a host of practices that can imperil otherwise
proper classification decisions. And while the federal government is no longer scrutinizing the use of
independent contractors as closely today, employers must still be careful when relying on
contractors. This webinar delves into the mistakes commonly made by employers and endeavors to
provide attendees with the tools needed to help find and fix potential wage and hour pitfalls.
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ABOUT THIS SERIES: HR, Talent
Management & Employment Law Boot Camp
If you have employees or advise companies with employees, this webinar series is for you! No
employer—whether large, medium or small—is immune from the reach of federal, state and/or local
employment laws and regulations. Now, more than ever, employers should consider taking a
proactive approach to auditing their employment practices and policies so that they can better
respond when issues arise. This webinar series approaches the employer-employee relationship
from beginning to end, with programs covering the most important steps along the way, including
hiring and onboarding, policy and procedure development and training, wage and hour compliance,
accommodating disabled employees, conducting investigations and considerations associated with
ending the relationship.
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EPISODES IN THIS SERIES
4/3/19 Episode #1: Welcome to the Team! Recruiting and Hiring, Including
Restrictive Covenants
5/8/19 Episode #2: An Ounce of Prevention: Policies, Procedures and Proactivity
6/5/19 Episode #3: Show Them the Money: Wage & Hour Compliance
7/10/19 Episode #4: Time for a Break: Managing Leaves of Absence and
Accommodating Disabilities
8/7/19 Episode #5: Know What You Did Last Summer: Workplace Investigations
9/4/19 Episode #6: It’s So Hard To Say Goodbye: Minimizing Risk When
Terminating Employees
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Dates shown are premiere dates.
All webinars will be available
On Demand approximately 4 weeks
after they premiere.
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Episode #3:
Show Them the Money: Wage &
Hour Compliance
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WAGE AND HOUR ISSUES ARE ON
THE RISE
• WHY?
• The “perfect storm” of events:
✓ Increased activity by plaintiff’s bar
✓ Greater focus on wage and hour violations by regulatory agencies
✓ Some employers do not understand the law
✓ Some employers lax in auditing wage and hour compliance
✓ Almost every employee is a potential plaintiff
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WHAT ARE THE MOST COMMON TYPES
OF CLAIMS?1. Unpaid work
✓ Auto-deduction for meal periods
✓ Rounding
✓ Remote work
✓ Requiring/permitting off the clock work
✓ Miscalculating regular rate for overtime purposes
2. Misclassification of exempt/non-exempt employees
3. Improper salary deductions
4. Failure to comply with more stringent state or local regulations
5. Poorly drafted pay plans
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FAIR LABOR STANDARDS ACT (FLSA)
• The FLSA, 29 U.S.C. § 203, is the primary federal law regulating minimum wage
and overtime payments.
✓ Must be an employment relationship between the employee/employer
✓ Applies to all employees of an enterprise engaged in interstate commerce or
production of goods
✓ Enacted in 1938
✓ Now being applied to jobs that didn’t exist in the 20th century
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FAIR LABOR STANDARDS ACT (FLSA)
(cont’d)
• Two types of coverage:
✓ Enterprise coverage: If an enterprise is covered, all employees of the
enterprise are entitled to FLSA protections; and
✓ Individual coverage: Even if the enterprise is not covered, individual
employees may be covered and entitled to FLSA protections
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STATE AND LOCAL WAGE LAWS
• Federal law does not preempt state employment laws
• Employees are entitled to the provision most favorable to them
• State wage law concerns:
✓ Higher minimum wages
✓ Different or non-existent exemptions
✓ Wage payment laws
✓ Wage deduction laws
✓ “Living wage” laws
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IMPACT OF STATE WAGE AND HOUR LAWS
• State or local law claims may be brought as class actions as opposed to FLSA
collective actions
• Class vs. collective actions:
✓ A class member must affirmatively “opt in” to an FLSA collective action in
order to participate and be bound by the judgment
✓ Under traditional class actions, each class member is bound by the
judgment and notified of award or settlement unless he or she
affirmatively “opts out”
✓ Thus, class actions under state or local law may have very large classes
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AUTO DEDUCTIONS FOR MEAL PERIODS
• What is a “bona fide” meal period?
✓ At least 20 - 30 minutes (depending on jurisdiction)
✓ Employees must be completely relieved from duty during that
time
✓ Any duties performed, whether active or inactive, disqualifies the
whole time period from being unpaid
✓ Issues carrying pagers or radios
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TIME ROUNDING
• Like automatic deductions, the practice is lawful
• DOL accepts rounding if employees are “fully compensated”
• Ripe for class-certification because of a uniform policy
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REMOTE WORK
• Employee able to perform work outside of visual observation from a
supervisor
✓ E.g., logging onto computer system, checking devices, taking
phone calls at home
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OFF THE CLOCK WORK
• Occurs when employee performs work on premises, but not clocked in, whether
before or after shifts or during meal periods
• Employees must be compensated for closely related duties and tasks that are
indispensable to the performance of the employee’s activities
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POLICIES REGARDING OFF THE CLOCK
WORK
• Accurately record all work time
• Prohibit off-the-clock work
• Mandatory process for reviewing exceptions to time entries
• Mandatory reporting of all suspected off-the-clock work
• Internal mechanism for hourly employees to complain about uncompensated work
• Prohibiting arriving at work station before set start time
• Automatic discipline of employees who violate the timekeeping policy
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CALCULATING OVERTIME
• Covered, non-exempt employees must receive one and one-half times the
regular rate of pay for all hours worked over forty in a workweek
• Cannot be less than the minimum wage
• Each workweek stands alone
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PROPERLY CALCULATING “REGULAR
RATE”
• Is determined by dividing total earnings in the workweek by the
total number of hours worked in the workweek
• May not be less than the applicable minimum wage
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REGULAR RATE INCLUDES
✓ Non-discretionary bonuses
✓ Incentive pay
✓ Commissions
✓ Shift differentials
✓ Retroactive pay increases
✓ Board or Lodging (if customarily furnished by employer to employee)
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REGULAR RATE DOES NOT INCLUDE
• Gifts
• Paid Time Off (e.g., vacation pay, holiday pay, sick leave)
• Expense Reimbursements
• Discretionary Bonuses
• Retirement Plan Contributions or Insurance Payments
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DIFFICULTIES CALCULATING
“REGULAR RATE”
• Non-discretionary bonuses and commissions can be problematic
because they generally must be apportioned back over the period in
which they were earned
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EXEMPT VS. NON-EXEMPT IN A NUTSHELL
• Employees are generally presumed “non- exempt,” and entitled to at least 1½
times their regular rate of pay for all time worked in excess of 40 hours per week
• Non‐Exempt
✓ Must be paid at least minimum wage
✓ Must be paid at least time‐and‐one‐half for all hours worked over 40 in a
work week
• Exempt
✓ Generally, if an employee is exempt, he/she is exempt from overtime
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EXEMPT VS. NON-EXEMPT IN A
NUTSHELL (cont’d)
• Exempt:
✓ only means that these employees generally meet all the criteria and are
generally exempt from overtime
• Not exempt:
✓ only means that these employees generally do not meet the criteria for this
exemption and generally are not exempt
• Take note: job titles are not controlling; reality of the circumstances controls
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EXEMPT…OR NOT? THAT IS THE QUESTION
• To be exempt, must meet two tests:
• Duties Test:
✓ different for each exemption
• Salary Basis Test:
✓ currently $455/week or $23,660/year; proposed increase to $679/week or
$35,308/year
✓ salary basis does not apply to lawyers, doctors, teachers or outside sales
✓ computer employees can be paid hourly, at least $27.63
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EXEMPTIONS
• White collar exemptions:
✓ Executive
✓ Administrative
✓ Professional
• Other typical exemptions:
✓ Outside sales
✓ Computer Analyst, Computer Programmer, Software Engineer
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“WHITE COLLAR EXEMPTIONS”
• Section 13(a)(1) of the FLSA provides an exemption from both minimum wage
and overtime pay for employees who are employed in a bona fide:
• Executive;
• Administrative;
• Professional; or
• Outside sales capacity.
• Certain computer employees may be exempt professionals under Section 13(a)(1)
or exempt under Section 13(a)(17) of the FLSA.
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WHAT DOES “PRIMARY DUTY”
MEAN?
• Primary duty means the position’s “principal, main, major or most important
duty that the employee performs”
• Employees who spend approximately 50% of their time performing exempt
work will generally satisfy the primary duty requirement under federal law
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PRIMARY DUTY: FACTORS TO CONSIDER
• The following factors should be considered:
✓ The relative importance of the exempt duties as compared with other
types of duties;
✓ The amount of time spent performing exempt work;
✓ The employee’s relative freedom from direct supervision; &
✓ The relationship between the employee’s salary and the wages paid to
other employees for the kind of non- exempt work performed by the
employee.
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EXECUTIVE EXEMPTION
• Primary duties must include:
✓ Management of the enterprise or of a recognized department or
subdivision
✓ Direct the work of two or more other employees or their full-time
equivalents
✓ Authority to hire or fire or offer valued suggestions as to hiring, firing,
advancement, promotion or any other change of status
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ADMINISTRATIVE EXEMPTION
• Primary duties must include:
✓ Performance of office or non-manual work directly related to the
management or general business operations of the employer or the
employer’s customers; and
✓ Exercise of discretion and independent judgment with respect to
matters of significance.
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COMPUTER EMPLOYEE EXEMPTION
• Includes persons employed as:
✓ Computer systems analysts
✓ Computer programmers
✓ Software engineers and other similarly skilled workers in the computer field
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COMPUTER EMPLOYEES ARE NOT
• Employees engaged in the manufacture or repair of computer hardware and
related equipment;
• Employees whose work is highly dependent upon, or facilitated by, the use of
computers and computer software programs;
• Individuals who work in a “help desk” capacity who perform installation or
troubleshoot computer or network issues.
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OUTSIDE SALES EXEMPTION
• Makes sales and takes orders away from the employer’s place of business, and
• Spends less than 20% of work hours at the employer’s place of business doing
work unrelated to sales duties
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CREATIVE PROFESSIONAL
EXEMPTION
• Primary duties must consist of:
✓ Performance of work requiring invention, imagination, originality or talent in
a recognized field of artistic or creative endeavor.
o Examples of recognized field of artistic or creative endeavor includes
music, writing, acting and the graphic arts.
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OVERTIME
• If an employee is not exempt from overtime, the employer must pay overtime
premium on all compensation the employee receives.
• “Compensation” includes:
✓ Hourly wages
✓ Salary
✓ Commissions
✓ Bonuses
✓ Spiffs
✓ Payments from the manufacturer
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PENALTIES FOR OVERTIME
VIOLATIONS
• Plaintiff may recover unpaid wages/overtime (i.e., backpay).
• In addition to backpay, a successful plaintiff is entitled to an equal amount (i.e.,
doubling) as liquidated damages for claims under the FLSA.
• Successful plaintiff is entitled to reasonable attorneys’ fees.
• Individual officers/managers/supervisors can be held personally liable.
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ALTERNATIVES TO OVERTIME
• Employers may chose other methods to compensate for additional time worked:
• For example:
✓ Comp Days: working less time another day in the same week
✓ Time-Off Plan: Take comparable # of hours off the next work week
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MINIMIZING UNPAID WORK RISKS
• Training
• Clear timekeeping policies
• Accurate timekeeping software
• Reporting and audit protocol to monitor hours worked reports
• Internal reporting system
• Employees to certify time records and paychecks accurately reflect time worked
and pay due
DOL Guide to Minimum Wage and Overtime Pay can be found:
http://webapps.dol.gov/elaws/elg/minwage.htm
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WHO IS AN INDEPENDENT CONTRACTOR?
• Depends on the forum you are in:
✓ The definition may vary between the IRS and other agencies (Department of Labor,
EEOC) and courts tasked with making this determination
• No clear line; no general test
• Important considerations:
✓ Extent to which services rendered by an individual are an integral part of the
principal’s business
✓ Permanency of the relationship between the individual and the principal
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WHO IS AN INDEPENDENT
CONTRACTOR? (cont’d)
✓ The amount of investment in facilities and equipment by the individual
✓ The opportunities for profit or loss by the individual, and the method of
compensation
✓ The degree of independent business organization and operation by the
individual
✓ The degree and nature of control of the individual by the principal
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WHO IS AN INDEPENDENT CONTRACTOR?
(cont’d)
✓ The degree of independent judgment exercised by the individual who performs the
services
✓ Performance of the same or similar services by the individual for third parties in
addition to the principal
✓ Employment of the individual by the principal in any other capacity
✓ A comparison of the relationship to other independent contractor operations of a
similar nature in the industry
✓ The right of either party to terminate the relationship on short notice without penalty
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RECORDKEEPING TIPS
• “Basic records” that a covered employer must keep certain for each non-exempt worker,
For example –
• Full Name, sex, social security number, age (if younger than 19)
• Regular rate of pay, total hours worked, total daily or weekly straight-time earnings
• Deductions and date of payment and pay period for payment, etc.
Reference: Fact Sheet 21: Recordkeeping Requirements Under The Fair Labor Standards
Act (FLSA)
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CONCLUSION
• Wage and hour compliance program
✓ (1) employee complaint;
✓ (2) manager report; or
✓ (3) audit result.
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ABOUT THE FACULTY
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Charles Krugel – cak1@charlesakrugel.com
As a management side labor & employment attorney & human resources (HR) counselor,
Charles Krugel, www.charlesakrugel.com, has 24 years of experience in the field & has been
running his own practice for 18 years. His clients are small to medium sized companies in a
variety of industries. Charles has been lead negotiator for hundreds of labor & employment
agreements & contracts. Additionally, he’s litigated dozens of court cases, administrative
proceedings & arbitrations. In addition to providing traditional labor & employment law
services, he represents companies desiring to institute preventive & proactive HR
functions. These functions include policies & procedures, which help to efficiently &
discreetly resolve issues in-house & prevent lawsuits & complaints; they also help to reduce
costs & act as catalysts for increasing productivity & profits. Moreover, he’s frequently the
subject labor & employment law related TV, radio & print interviews.
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Neil Lappley – nlappley@lappley.com
Neil specializes in design of employee compensation delivery systems.
Neil has over 25 years of experience in compensation and human resources. He has worked
with a wide variety of companies in the manufacturing, consumer product, service,
chemical and pharmaceutical industries. Prior to starting his own consulting business in
1996, Neil was a VP with Hay Management Consultants. Neil has a BS in mechanical
engineering and an MS in industrial engineering from the University of Wisconsin-
Madison.
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Jason Klimpl – klimpl@thsh.com
Jason B. Klimpl is a partner in the Employment Law Group of Tannenbaum Helpern Syracuse & Hirschtritt
LLP. In this capacity, he advises clients on a broad range of employment law matters, such as wage and hour
compliance; healthcare; equal opportunity actions and policies; employment agreements and restrictive
covenants; independent contractor and consulting issues, reductions in force; technology and privacy
concerns; and other human resources counseling. Jason is also the Associate General Counsel of the New York
Staffing Association, and is heavily involved in legal and legislative efforts to support the staffing industry.
Jason has written numerous employment law articles and is a contributing faculty member of both Lawline
and the National Academy of Continuing Legal Education. Jason is also a member of the Manhattan Chamber
of Commerce’s Speakers Bureau and Help Desk.
-Awarded Martindale‐Hubbell “Preeminent” peer review rating.
-Named 2013 ‐2017 New York Super Lawyer (Rising Star).
-Finally, the New York Enterprise Report named Jason the winner of the 2012 Best Attorneys and Accountants
“Rising Star Attorney” category.
Follow Jason on Twitter: @HR_Attorney
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Gary Savine – gnoah@savinelaw.com
Gary Noah Savine is an employment lawyer and the founder of Chicago-based law firm Savine
Employment Law, Ltd. Gary brings to the table over twenty years of legal expertise and hands-
on experience, working around the globe, shoulder-to-shoulder with senior executives and
human resource professionals solving the thorniest of workplace disputes. Before starting his
firm, Gary practiced employment law exclusively at two of Chicago’s largest law firms and
served as chief employment counsel at Navistar (NYSE: NAV) and Hill-Rom Holdings (NYSE:
HRC). Gary frequently speaks and writes about employment law issues. He has written and
presented before the American Bar Association, the National Employment Lawyers
Association, the Northern Illinois Society for Human Resources Management, the Northern
Illinois Franchise Association and the American Conference Institute. Gary received his law
degree cum laude from the University of Michigan Law School in 1996. More information
about Gary’s firm can be found at www.savinelaw.com.
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QUESTIONS OR COMMENTS?
If you have any questions about this webinar that you did not get to ask during
the live premiere, or if you are watching this webinar On Demand, please do
not hesitate to email us at info@financialpoise.com with any questions or
comments you may have. Please include the name of the webinar in your email
and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes only. It has been prepared primarily
for attorneys and accountants for use in the pursuit of their continuing legal education and continuing professional education.
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