What You Need to Know About the FLSA
Wage and hour lawsuits filed under the Fair Labor Standards Act have risen by 456 percent since 1995 and experts predict the trend to continue.
Based on a series of interviews with TSheets, a time tracking app, here's what employment law attorneys recommend you do to mitigate your risk of a lawsuit (you can read the full scoop in "7 Deadly Sins: FLSA Violations You Must Avoid.").
The FLSA is full of pitfalls. Make sure you're not committing one of these common wage and hour violations:
A mere 39 percent of interns were paid in 2015. However, employment expert Jonathan M. Young of Greenberg Traurig, LLP says that number should be a lot higher:
"If the employer would have hired additional employees or had their staff been expected to work additional hours had the employer not used interns, the interns should be paid under the FLSA."
In other words, if the internship isn't primarily structured around your intern's educational benefit, and you're using the internship as an opportunity to offload work that would otherwise be done by paid employees, the intern should be paid.
Chances are high that one or more of your employees is currently misclassified. Meaning, you're vulnerable to an FLSA wage and hour lawsuit. While most misclassifications happen innocently enough, that's not a defense in court, and millions of employers pay out thousands in back wages, fines, attorney's fees, and penalties each year.
Off-the-clock work is a problem that sneaks up on many employers. Why? Advances in technology have created a slippery new dynamic for employers and employers when it comes to the definition of "work." Is responding to a manager's text message at home while watching TV considered work? According to the law, in most cases it is — and failing to compensate non-exempt employees for this time can result in a major lawsuit.
What's the protocol when an employee violates company policy and logs overtime without permission? Many employers assume that they're not on the hook for payment. However, failing to pay employees for unauthorized overtime is one of the most common ways employers find themselves in hot water when it comes to the FLSA. You're allowed to discipline an employee for the unauthorized work — but not by docking pay.
Should your employees be clocking out for lunch? The answer may surprise you. If employees are interrupted to do work while they're on a break, or if lunches/breaks are automatically deducted from an employee's hours without the full break being taken, employers may very well find themselves facing a lawsuit for back payments and penalties.
If your records aren't organized and accessible, you may very well be at risk for a lawsuit. The DOL requires business owners to keep records for two years for all non-exempt employees. And for the 62 percent of business owners who still use paper — that's a tall order.
Failure to acknowledge and negotiate both federal and state regulations is another common way employers get into trouble. Attorney Maria O. Hart says, "The Federal law is one thing, but it's the minimum. Each state is well within their authority to create a more robust or stronger law. Business owners need to be aware and up-to-date on both."
Take These Steps RIGHT NOW
So, what can you do today — right now — to avoid a lawsuit? The experts recommend these steps:
Avoid a he-said/she said situation with easily accessible, organized recordkeeping when it comes to HR documentation and keeping track of employee hours.
Maria O. Hart advises, "To the degree that you don't have this in place, start creating a really good paper trail. That's an attorney's best friend — to have documents that show what you were doing, not doing, and so forth. Document, document, document."
With the help of your legal counsel (if you don't have legal counsel, now's the time!) and your HR team, do a self audit of your employee classifications, policies, and procedures. You might be surprised what you actually find when it comes to documentation and employee awareness.
If you do find problem areas or need to make some changes based on your audit, make changes as soon as possible with the guidance of legal counsel to help you decide how and when to make the changes.
Attorney Daniel Abrahams says, "When it comes to wage and hour complaints, a good offense is not necessarily an appropriate response to a wage and hour complaint. The first appropriate response is to figure out if the worker is legally correct and whether you ought to be taking some kind of corrective action."
In other words, it's time to take a good look at your system for addressing employee complaints. Do they get shoved to the back of an inbox somewhere? How are your managers trained to address complaints? Set a new resolve to deal with complaints seriously and promptly.
This isn't just good advice from a morale perspective — many states require you to give employees advanced written notice 30 days prior to making any changes in pay or employment. Handle these conversations individually if possible — everyone will react in their own way, and you'll get a better idea of potential problems that may arise for different employees.
Arm yourself with information, and start preparing today!