Wage & Hour Attorneys’ Best Tips for Staying Out of Trouble

Featuring Seyfarth Shaw LLP

2

Welcome

Michelle Lanter Smith

Vice President of MarketingEPAY Systems, Inc.mlsmith@EPAYsystems.com773-499-7512

Today’s Host

EPAY Systems -- designed to meet the needs of your complex,

distributed workforce

3

• Reduce your labor costs by 5% or more

• Keep you in control and in compliance

4

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?

5

Our Speakers

Noah A. FinkelPartner, Seyfarth Shaw LLPLabor & Employmentnfinkel@seyfarth.com(312) 460 -5000

Rebecca P. BrometPartner, Seyfarth Shaw LLPLabor & Employmentrbromet@seyfarth.com(312) 460 - 5000

6

Ask Your Questions

To ask a question, simply type your question in the

“Question” box on the right side of your screen.

7

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

8

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

9

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

10

FLSA Cases in Federal Court1993-2012

©2012 Seyfarth Shaw LLP

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

EPAY Systems

Michelle Lanter Smith

Vice President of MarketingEPAY Systems, Inc.

24

EPAY -- In Time with You

Uniquely flexible

Mobile workforce,

union contracts,

multiple job assignments?

Complex pay rules?

No problem!

25

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

26

• Audit Trails• Overtime• Meal Breaks• Pay Differentials• Privacy and Security• Reduce Workers

Comp Claims• Did you have an

accident free day?

Minimize Compliance Risk

27

Over 40,000 customer sites

28

Blueforce adapts to how YOU do business

Easy, Anywhere Time Tracking

29

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

30

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

31

Thank You!

Noah A. FinkelPartner, Seyfarth Shaw LLPLabor & Employmentnfinkel@seyfarth.com(312) 460-5913

Rebecca P. BrometPartner, Seyfarth Shaw LLPLabor & Employmentrbromet@seyfarth.com

32

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

33

Thank You!