WAGE & HOUR QUICKSAND: Overtime and Spaghetti-on-the-Wall Collective Actions Presented By: Jeff Weintraub F ISHER & P HILLIPS LLP 1715 Aaron Brenner Drive, Suite 312 Memphis, TN (901)

Wage and Hour Issues Who is Covered?

Wage and Hour Issues Recent Developments –Recordkeeping –“Right to Know” Rule

Wage and Hour Issues Recent Developments –Companion Services

Wage and Hour Issues Child Labor –Regulations establish protections for youth in nonagricultural occupations.

Wage and Hour Issues Employees can Track Hours Worked and Pay Due on their Smart Phones

Wage and Hour Issues State-Specific Wage and Hour Law –The Tennessee Wage Regulations Act protects wage earners from unfair practices regarding pay. It also protects employees from discrimination in relation to wages.

Wage and Hour Issues State-Specific Wage and Hour Law –Tennessee has not established a minimum wage rate. Also, TN does not have laws governing the payment of overtime.

Wages and Hour Issues All employers covered under the FLSA must make and keep records reflecting employees’ wages and hours.

Wage and Hour Issues Employers MUST post a notice explaining the FLSA.

Wage and Hour Issues The FLSA establishes minimum wage and overtime provisions that affect nearly every employee.

Wage and Hour Issues Calculating Overtime: Regular Rate of Pay –For all non-exempt employees, the employer must pay overtime wages for all hours in excess of 40 hours in a workweek. –For non-exempt salaried employees, the employer must convert the employee’s weekly or monthly salary into an hourly wage.

Wage and Hour Issues Calculating Overtime: Hours Worked Hours worked can include: –Time spent donning protective gear

Wage and Hour Issues Calculating Overtime: Hours Worked Hours worked can include: –Travel Time

Wage and Hour Issues Calculating Overtime: Hours Worked Hours worked can include: –On-Call Time

Wage and Hour Issues Calculating Overtime: Hours Worked Hours worked can include: –Training Time

Wage and Hour Issues Calculating Overtime: Hours Worked Hours worked can include: –Time Spent for Medical Examinations

Wage and Hour Issues The FLSA exempts some employees from its overtime pay and minimum wage provisions and it also exempts certain employees only from the overtime pay provisions.

Wage and Hour Issues Certain Executive and Administrative employees are exempt from overtime pay under the FLSA.

Wage and Hour Issues For the administrative exemption to apply, the employee must meet certain criteria: –The employee must make more than $455 per week –The employee’s primary duty must be the 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 –The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance

Wage and Hour Issues Certain Professional Positions are also exempt: Learned Professionals Artistic or Creative Professionals Teachers Computer Professionals

Wage and Hour Issues Learned Professional –Primary duty must involve work requiring “advanced knowledge,” defined as work that is predominantly intellectual in character, and that includes work requiring the consistent exercise of discretion and judgment –Advanced knowledge must be “in field of service and learning” –Advanced knowledge must be “customarily acquired by a prolonged course of specialized intellectual instruction” –Receives a salary or guarantee of at least $ per week.

Wage and Hour Issues Artistic or Creative Professional –Primary duty is the performance of work requiring invention, imagination, or talent in a recognized field of artistic or creative endeavor –Recognized fields include music, writing, acting, and the graphic arts –Receives a salary or guarantee of at least $ per week

Wage and Hour Issues Teachers –Primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge –Employed and engaged in this activity as a teacher in an educational establishment –Educational establishment may include correctional facilities, day-care centers, and church-operated schools –Receives a salary or guarantee of at least $ per week

Wage and Hour Issues Computer Professional –Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field, and –Primary duty is application of systems analysis techniques and procedures, or design, development, documentation, analysis, creation, testing, or modification of computer or designs computer programs, and –Receives a salary or guarantee of at least $ per week or an hourly rate of at least $27.63 per hour.

Wage and Hour Issues Amusement and recreational establishments are exempt under the FLSA. Elaine L. Chao, Secretary of Labor v. Double JJ Resort Ranch 375 F. 3d 393 (6th Cir. 2004)

Wage and Hour Issues More Recent Developments –Changes in Classifications of Exemptions

Wage and Hour Issues Employers usually make a few common errors regarding employee overtime exemptions.

Wage and Hour Issues Timekeeping & Hours Worked: The basic obligation: to keep accurate records of all time a nonexempt employee works each workday and each workweek

Wage and Hour Issues FLSA Does Not Require Vacations and holidays Lunch breaks Rest periods Premium pay - Over 8, Saturday, and Sunday Maximum hours Sick days Discharge notice

Wage and Hour Issues Options for Employees Reporting Time Worked –Tennessee statutes regulate when an employee must be paid. –Tennessee requires certain lunch breaks.

Wage and Hour Issues Handling Deductions from Wages –There are seven permissible deductions from an exempt employee’s salary

Wage and Hour Issues Partial Day Deductions –Partial day deductions are inconsistent with the salary-basis requirement and should occur only for infractions of safety rules of major significance, for leave under the FMLA, or in the first and last weeks of employment.

Wage and Hour Issues Inadvertent Deductions –Inadvertent deductions typically will not destroy exempt status. However, employers can lose exempt status if they fail to reimburse employees for inadvertent deductions.

Wage and Hour Issues Piece Rate –The regular rate of pay for an employee paid on a piecework basis is obtained by dividing the total weekly earnings by the total number of hours worked in that week

Wage and Hour Issues Piece Rate –Even employees paid on a piecework basis are entitled to an overtime premium if they work over 40 hours in a week.

Collective Actions The FLSA collective action procedure permits the initial aggregation of hundreds or thousands of claims requiring only that the employees be "similarly situated."

Collective Actions The guts of an FLSA collective action: how it works…

Collective Actions Why FLSA collective actions can be so effective…

Collective Actions Collective actions can be potentially very costly for employers.

Collective Actions FIRST POINT: FLSA COLLECTIVE ACTIONS ARE PREVENTABLE! SECOND POINT: FLSA COLLECTIVE ACTIONS ARE PREVENTABLE! Here’s how…

Wage and Hour Issues QUESTIONS?

Wage and Hour Issues THANK YOU!