Minnesota Labor & Employment Law Blog : Minnesota Employment Lawyers & Attorneys : Abrams & Schmidt Law Firm : Unfair Labor Practices, Workplace Investigations : Minneapolis, St. Paul, Twin Cities

Every day more and more applications become available for smartphone users some are for fun and some are useful. I personally have a barcode scanner app, The Weather Channel app and a stopwatch app on my smartphone. The federal government has gotten into the app business and created an application which will help employees track the hours they work and determine the wages they are owed. At this time, the Department of Labor app is available in either English or Spanish, but only for the iPhone and iPod Touch. The Department of Labor timesheet app does not handle tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.

Secretary of Labor Hilda Solis remarked, "I am pleased that my department is able to leverage increasingly popular and available technology to ensure that workers receive the wages to which they are entitled. This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay."

I’ve blogged several times about employers who have been fined for not properly paying their employees under the Fair Labor Standards Act, including Levi Strauss & Company and Walt Disney Parks & Resorts in Orlando, Florida. Now, employees have technology in their favor. In the past, if the Department of Labor received a complaint and the Wage and Hour Division conducted an investigation, the only party with any evidence was the Employer. Through this new app the employee can now provide verification of their tracked work hours to the Wage and Hour Division. The Department of Labor states, such information could prove invaluable during an investigation when an employer has failed to maintain accurate employment records.

Employers make sure you are correctly tracking your employees’ hours of work, and make sure employees are properly compensated under the FLSA. You don’t want your business subjected to an investigation by the Wage and Hour Division and then have to rely on the evidence provided by an employee through a smartphone app, because you don’t accurately track an employee’s work hours.
 

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 I’ve blogged in the past about other businesses found to have violated the Federal Fair Labor Standards Act (FLSA), including Walt Disney Parks & Resorts in Orlando, Florida and Umatilla Chemical Depot plant in Oregon. Now, Levi Stauss & Company, the first business to manufacture blue jeans, joins this notable list. The San Francisco District Office of the U.S. Department of Labor’s Wage and Hour Division conducted an investigation and determined Levi Strauss had misclassified several groups of workers, including assistant store managers of newly acquired stores, as exempt from overtime. Additionally, the company failed to record all hours employees worked in its payroll system. Levi Strauss has agreed to pay $1,011,413.00 in overtime back wages to 596 employees nationwide, and upgrade its time and attendance system. 

Very few businesses are immune from following the Federal Fair Labor Standards Act (FLSA). It applies to all employees of certain “enterprises" regardless of the work they perform. Even if your business does not meet one of the definitions of a "covered enterprise", your employees may still be covered if their work duties meet certain interstate commerce requirements, such as the production of goods for interstate or foreign commerce, including any closely related process of occupation directly essential to such production. For example, an office worker who uses the telephone, fax, U.S. mail or e-mail to communicate with persons in another state is engaged in interstate commerce.

It is important to make sure your employees are properly classified under the FLSA, because the likelihood your business is required to comply with the FLSA is almost 100%. Don’t let your business be penalized like Walt Disney & Levi Strauss.

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 Earlier this week the United States Supreme Court issued a decision in Kasten v. Saint-Gobain Performance Plastics Corp. holding, '[t]he scope of the statutory term “filed any complaint” includes oral, as well as written complaints.'

This case arose when Mr. Kasten was fired, he alleges, for complaining to his supervisors and human resources about the unlawful location of the time clocks at the Saint-Gobain facility. After his termination, he filed an anti-retaliation lawsuit claiming violations of the Fair Labor Standards Act of 1938. The Supreme Court did an extensive analysis of the phrase, “filed any complaint”, before holding in favor of Mr. Kasten and remanding the case for further proceedings.

Saint-Gobain argued, if oral complaints would suffice, then employers will be left in a state of uncertainty about whether an employee is making an actual complaint or perhaps just blowing off steam. The Court agreed with Saint-Gobain and stated, “the phrase “filed any complaint” contemplates some degree of formality, certainly to the point where the recipient has been given fair notice that a grievance has been lodged and does, or should, reasonably understand the matter as part of its business concerns.” But, the Court proceeded to side with Mr. Kasten.

Given how long the Fair Labor Standards Act has been in effect, it is surprising this type of case hasn’t come before the Court earlier. Now, Employers need to be pay attention to any verbal complaints raised by employees, and address them in the same manner as a more formal written complaint.

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I’ve blogged before about the importance of making sure your employees are being paid properly under the Fair Labor Standards Act (FLSA).

Last week, the U.S. Department of Labor issued two new press releases announcing investigations resulting in more than $500,000 in back wages being paid to employees. The first, involved the Walt Disney Parks and Resorts in Orlando, Florida where 69 employees will receive $433,819 in back wages due to violations of the FLSA. During its investigation the Wage & Hour Division found employees were not being paid correctly for work activities occurring before and after their normal shifts, when they worked through their meal breaks or when they worked from home. The investigation revealed, “while Walt Disney has specific rules regarding off-clock work, . . .managers within the company were not adhering to those important policies.”

The second press release, involved a Minnesota home health care company, Prairie River Home Care Inc. which was found to have violated the FLSA by failing to pay 144 current and former employees time and one-half their regular rates of pay, for all hours worked in excess of a 40 hour week. Under the Minnesota Fair Labor Standards Act (Minn. Stat. 177.25), employers are required to pay overtime for all hours worked over 48 hours in a week. Prairie River Home Care Inc. was following Minnesota law for overtime compensation. The problem arose because wages and hours of work are covered by both state and federal law. When that is the case, the law with the higher standards must be observed. So, although Prairie River Home Care Inc. was not running afoul of state law, it did run afoul of federal law, resulting in the investigation and penalties.

I’ve said it before and it is worth repeating; it isn’t just important to have a policy addressing overtime issues, it is also important to train employees on the policy, and make sure supervisors are following it. It cost Walt Disney a lot of money, just because supervisors were not following the policies which were in place. Lastly, when both state and federal law are applicable to your business, make sure you are following whichever law, has the standard which is more advantageous to the employee, so you don’t get penalized like Prairie River Home Care.

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My law partner, Marylee Abrams has blogged in the past about the importance of properly classifying your employees. Not only is it important to properly classify your employees it is also important to pay them appropriately for the actual hours they work.

An investigation by the U.S. Department of Labor Wage and Hour division at the Umatilla Chemical Depot plant determined 603 employees involved in departments including maintenance, munitions, and warehouse work, were underpaid for their time in the workplace. “In some instances, workers were not relieved for their lunch time, resulting in inappropriate pay deductions for lunch breaks that could not be taken.” These pay deficiencies are violations of federal laws including the Fair Labor Standards Act (FLSA). This investigation has resulted in a payment of more than $4.2 million dollars in back wages and additional civil monetary penalties.

The Fair Labor Standards Act provides an employee must be paid for all of the time considered to be hours worked and all time that is hours worked must be counted when determining overtime hours worked. The FLSA defines the term "employ" to include the words "suffer or permit to work". If an employer knows or has reason to believe that the employees are continuing to work when they are supposed to be on break and the employer is benefiting from the work being done, it should be compensated time.

This was a very costly error in employee compensation. I’m sure the employer is not likely to make this kind of mistake again. The U.S. Dept. of Labor will not hesitate to take action against employers who violate the law. In addition to making sure employees are properly being compensated for all hours worked, the U.S. Dept. of Labor is also investigating if employees are appropriately classified.

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It is being reported there has been a 77% increase in Fair Labor Standard Act (FLSA) claims against employers alleging wage and hour violations since 2004. A large number of the claims and probably the most expensive have been about disputes over underpaying or failing to pay overtime to employees due to job misclassification.

Most recently AT & T was sued for $1 billion dollars in two class action suits, alleging a new company-wide policy exempting first line managers from overtime, violated federal law. The first line managers claimed they fill low level supervisory positions, and they do not meet the standards established to qualify as “exempt” employees.

To avoid this type of costly FLSA claim:

• 1. Conduct a comprehensive job analysis to determine if someone is an “exempt or a non-exempt employee.” Jobs are classified as non-exempt or exempt based on:
•  
• Nature of the work performed,
• The extent of the discretion exercised in the job,
• Level of compensation, and the education, training, and
• Credentials of the person filing the position.

2. Once employees are properly classified as exempt or non-exempt, do a check to insure employees’ wages and benefits match their federal FLSA exempt or non-exempt status. If their wages and benefits do not match their FLSA status, correct the problem immediately.

Astronomical claims by employees against their employers, and the wide-spread press coverage they receive are sure to lead to copycat cases against smaller and mid-size employers. Costly FLSA claims over job misclassifications can be easily avoided with a moderate amount of effort by employers.

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