Webinar 1 - Allen Norton & Blue, PA

Report
Presented by
Robert E. Larkin III
[email protected]
Allen, Norton & Blue, P.A.
(850) 561-3503
July 18, 2013
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How FLSA claims arise.
How to guard against FLSA claims – proactive
steps to defend against these claims.
How to Respond to a Department of Labor
investigation.
How to defend against a private lawsuit.
Generally, FLSA Claims arise in two ways:
1. Department of Labor Investigation; or
2. Private Lawsuits
Florida District Courts account for 30% of
FLSA lawsuits filed nationwide.
2008
 2009
 2010
 2011





44.8%
34.5%
31.7%
32.0%*
* As of October 24, 2011
2011 Florida FLSA Lawsuits

Minimum Wage,

Overtime Pay,

Recordkeeping requirements, and

Youth employment standards
NOTE: FLSA applies to employees in the private
sector and in Federal, State, and Local
Governments.
SELF-AUDITS:


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Employers should conduct a Self Audit every 2-3 years
(coincides with the FLSA statute of limitations period);
A comprehensive analysis of all HR and payroll functions,
including the strengths and weaknesses that need to be
addressed.
A thorough review of position classifications, position
descriptions, policies (and your actual practices) on breaks,
meal periods, time records, on-call time, travel time,
employee training, records posting, etc.
An audit may serve to identify deficiencies in existing
practices, improving HR effectiveness and implementing new
changes in law.

Audits should be conducted by entities not affiliated with the
Public Entity or Company.
Why?
◦ Time – It often takes more time than can be devoted by an
internal individual.
◦ Objectivity – An independent analysis will provide a more
objective review.
◦ Experience – An experienced independent auditor can
compare the organization to others and provide a more
comprehensive frame of reference.
1. Create/Review the Organizational Chart.
2. Review Wage and Hour Policies and
Compliance with Laws.
3. Review General Practices.
4. Review Retention and Disclosure of Records
Policies.
1. Review application and hiring
process in order to determine
whether certain guidelines are being
followed
2. Review of Interview process,
including questions and guidelines
3. Review of position descriptions for
FLSA and ADA compliance
4. Review of pay scales for Equal Pay
Act
5. Review of pre-placement medical
testing
6. Review of job screening practices,
including background checks
7. Review of I-9 procedures and
submissions to assure IRCA
compliance
8.
Review EEO statistics to identify
hiring trends
9.
Review of past litigation/claims
made against the Employer and
assessment of remedial measures
taken during the postlitigation/claims stage in order to
identify problem areas
10. Review of Advertising methods and
method of dissemination of
information pertaining to the hire of
new employees
11. Review policy handbook (i.e.,
policies on leave, discrimination,
harassment, retaliation,
whistleblower and the complaint
procedures
12. Review record retention policies and
retained records

There are 2 primary ways employers violate
the FLSA:
1. Misclassifying an employee as exempt, when
they are not; and
2. Failing to pay non-exempt employees
overtime for all hours worked.
THE 3 MAIN FLSA WHITE COLLAR EXEMPTIONS ARE:
1. Executive exemption: Generally, those positions occupied by the senior
management and department directors - must supervise at least 2 employees and
have decision-making authority over them.
2. Professional exemption: Require, at minimum, a college degree in a specialized
area of study. These are highly educated (certified) individuals in 2 capacities:
1. Learned Professionals – Drs., Lawyers, Accountants, Engineers, RNs, etc.
2. Creative Professionals - Music, Writing, Acting, Graphic Arts.
3. Administrative exemption: The employee performs non-manual work related to
management or general operations of employer, customarily and regularly
exercises discretion and independent judgment for a majority of his/her work
time (51%) to effectuate binding policy or in matters of significance.

Salary Level: must earn more than $455/week;

Salary Basis: Regularly receives predetermined compensation.
◦ Compensation cannot be reduced due to variations in quality/quantity of
work.
◦ Must be paid full salary for any week in which employee performs any
work – unless leave accruals exist.
◦ Need not be paid for any workweek when no work is performed.

Job Duties:
◦ Job Title is not determinative
◦ Salary alone is not determinative
◦ Job Duties alone are not determinative



Outside Sales – primarily away from company
Computer Employees – Programmers and
Software engineers
Be careful here
Highly Compensated Employees - $100k and
non-manual work and do some exempt work.
NOTE: Police, firefighters, paramedics & other first
responders are generally not exempt from
the FLSA and must be paid overtime, unless
in senior management.

FLSA requires all employers subject to any
provision of the Act make, keep, and preserve
certain records – Private Companies should keep
records for at least

No particular payroll form that employer must
utilize;

All that’s required is that information is retained
in a “clear and identifiable” manner

Time clocks not required
1.
Full name
8.
Hours worked each workday and
total hours worked each
workweek
2.
Home Address
3.
Date of Birth
9.
Total daily or weekly straighttime earnings not including
overtime compensation
4.
Sex
5.
Occupation
10. Total overtime compensation not
including straight-time earnings
6.
Time of day and day of week
when employee’s workweek
begins (if entire workforce is the
same, only one notation
necessary)
11. Total additions to or deductions
from wages paid each pay period
(including dates, amounts, and
nature of items which make up
the total additions or deductions)
7.
Regular hourly rate of pay for any
workweek in which overtime
compensation is due, explanation
of the basis, and the amount and
nature of each payment excluded
from the regular rate
12. Total wages paid each pay period
13. Date of payment and the pay
period covered by the payment

Employer should define the “Workweek”;

Workweek = 7 consecutive 24-hour periods (168 hours);


May begin any day and at any hour, need not coincide with
calendar week;
Different workweeks may be established for different
employees;

Averaging hours over two or more weeks is not permitted;

Flex schedule does not relieve duty to pay overtime;

Overtime pay earned in a particular workweek must be paid on
regular pay day for that pay period (Workweek).
Work not requested, but “suffered or permitted”
to work;
 Working through lunch is most common!
 Be careful with “built in” meal and break periods!
Voluntary work before and after an employee’s
shift;
 Preliminary and Postliminary activities (i.e., loading and
unloading equipment before and after clocking in).
On-Call Time;
• Placing significant restrictions on an employee’s time off (i.e.,
geographical restrictions and response times);
Training Time:
 Requiring/mandating the employee to attend training
outside normal work time (4 factors must be met to
not be compensable):
(1) Voluntary attendance;
(2) Outside regular working hours;
(3) Training cannot benefit employer;
(4) No productive work performed during training time.
Travel Time: Must compensate employee for . . .
 “All in a Day’s Work” - travel between job sites as part of
principal activity during normal work day;
 Home to work travel for a one-day special assignment in
another city (may exclude time employee normally spends
commuting);
 Travel away from home that cuts across workday or
during working hours on non-workday
Triggered in one of three ways:
1. Employee Complaint (specific or multiple):
◦
Complaints are confidential. Be careful for Whistleblower complaint if
there is any retaliation against complaining employee.
2. Industry Targeting
o
Ex. DOL does sweep of all restaurants in central Florida and selects 25 for
investigation
3. Follow-up/re-visit
o
Done to determine continued compliance
NOTE: Based upon the records requested, you can often determine how
the DOL investigation is triggered. If the request if broad, several
employment positions generally means it is a targeted
investigation!
WHAT TO EXPECT:
1. The Wage and Hour Division of the U.S. Department of Labor is
tasked with enforcing the FLSA. It has more than 200 offices.
◦
Investigator may call to set up meeting or simply arrive unannounced.
◦
DOL Investigator will present credentials and act similar to a law
enforcement officer. Employer reaction should be friendly and cooperative.
◦
DOL Investigator has subpoena power to require employer compliance.
◦
DOL Investigator will conduct 2 types of investigations:

Specific Employee Investigation: Investigator is looking to remedy a single violation and
requests limited records and to interview only certain individuals. .

Wall-to-Wall Investigation: Investigator arrives with multiple employee complaints or
targeted industry and requests substantial records and witness interviews.
DOL Investigators will generally . . .
1.
Request employment and payroll records;
2.
Want to meet with Senior Executives and HR first and may want to tour the
facility
3.
Want to review records he/she has requested;
4.
Interview witnesses and may request employees or supervisors execute sworn
statements;
5.
Follow-up with HR for additional records and interviews;
6.
Provide an opportunity to conciliate/settle;
7.
If no conciliation/settlement then will forward to Office of Solicitor General for
enforcement proceedings. (if enforcement is sought, DOL will generally request
Liquidated Damages).
HOW TO HANDLE THE INVESTIGATION:
1.
Contact labor counsel immediately after learning of DOL
investigation.
2.
Remain composed and courteous and try to establish a cooperative
relationship with the investigator.
◦
During the investigation contact the investigator often to apprise about the
status of the records requested or identities of witnesses to be interviewed.
3.
After receiving the Investigator’s records request, the Employer
should immediately conduct a self-audit of the area(s) in question.
4.
Employer should tour the facility prior to DOL arriving to ensure that
all proper documents are posted and workplace is free from
harassment and discrimination.
HOW TO HANDLE THE INVESTIGATION cont’d:
5.
Employer/labor counsel should meet with Supervisors and senior
management to inform of investigation and potential to interviewed.
◦
Employer may have a representative present for interviews of senior
management.
6.
Employer/labor counsel should meet with Employees in the
classifications requested to inform them of potential for interviews.
(Employer may not accompany investigator to these interviews).
7.
Employer should take copious notes of any interview which they
attend.
8.
Employer should inform Employees/Supervisors of their right to
review any statement that they are asked to sign.
HOW TO HANDLE THE INVESTIGATION cont’d:
9.
Provide copies of records to DOL rather than allowing DOL to take
records;
10. Review all records requested prior to providing them to DOL.
11. Maintain copies of all records requested and keep a log of what has
been provided, including the date(s) and time(s).
12. Maintain a log of all discussions with DOL investigator.
DOL
FORM
WH-56:
DOL
FORM
WH-58:
Individual Lawsuit

Single Plaintiff alleges violation
of FLSA (typically involves a
classification error or an hours
worked error)
 Employer should immediately
determine if there is any
exposure, and if so, consider
making an offer of judgment or
settling claim immediately.
 If the plaintiff/employee is
successful in a FLSA claim,
his/her attorney will recover
attorney fees.
Collective Actions

Several Plaintiffs sue for FLSA
violation and attempt to certify
a class action.
 Court will order employer to
give Plaintiffs contact
information of all current and
former employees in the
effected position(s) for past two
(2) years;
 Plaintiffs’ attorney then sends a
letter asking them to “opt-in” if
they believe that they were not
paid correctly;
 If a large number of opt-ins
share “commonality” of claims,
a class action is certified.
 If a class is certified, attorneys’
fees will increase exponentially
(Ex. $27k in back pay and
Attorney/Firm requested $167k
in fees).

Injunctive Relief (rare except for retaliation cases)

Back Wages (not for more than 2 years, or for willful
violations 3 years)

Liquidated Damages (discretionary where employer cannot
show good faith)

Prejudgment Interest (not recoverable in 11th Circuit)

Attorney’s Fees (reasonable)

Fines and Imprisonment (if willful violation proven)
THANK YOU
Robert E. Larkin, III
[email protected]
Allen Norton & Blue, P.A.

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