© 2015 Snell & Wilmer © 2015 Snell & Wilmer WAGE AND HOUR AND TRADITIONAL LABOR UPDATE April 2, 2015 John F. Lomax, Jr Arizona Total Rewards Association

© 2015 Snell & Wilmer Wage and Hour Issues, Overtime Issues, and Litigation Exemption Misclassification Claims Off-the-Clock Claims Independent Contractors and Limited Liability Companies Claims

© 2015 Snell & Wilmer Exemptions: The Big Four Executive Administrative Professional Outside Sales But Don’t Stop There...

© 2015 Snell & Wilmer White Collar Exemptions Must Meet Salary and Duties Test Salary Test now equals $ per week or $23,660 per year. Department of Labor considering rule to raise annual salary test; e.g., increase to $50,000 annual salary.

© 2015 Snell & Wilmer Other Exemptions Highly Compensated Employee Motor Carrier Exemption Computer Services Exemption Host of Other Statutory Exemptions

© 2015 Snell & Wilmer Exemption Misclassification Claims No. 1 Misclassification Problem: Paying a Salary Does Not Make an Employee Exempt. No. 2 Misclassification Problem: People Like to Be Salaried Even if They Forfeit Overtime.

© 2015 Snell & Wilmer Off-the-Clock Claims The iPhone, Blackberry, Smart Phone Problem Managing Overtime Expense Problem Sloppy Timekeeping Problem

© 2015 Snell & Wilmer Independent Contractor Issues Converting Hourly Pay Employees to Independent Contractor Status Creates Significant Risks Audit Risks: Form 1099 and W-2 in same year Voluntary Compliance Programs State Unemployment Problems

© 2015 Snell & Wilmer NLRB UPDATE Employers’ systems New election rules

© 2015 Snell & Wilmer EMPLOYERS’ SYSTEM Old Rule: Register Guard, 351 NLRB 1110 (2007) – Employees have no right to use Employers’ systems for Section 7 purposes. New Rule: Purple Communications, Inc., 361 NLRB No. 126 (Dec. 11, 2014) – Overrules Register Guard and permits Employee use of on non-working time.

© 2015 Snell & Wilmer Purple Communications ISSUE: Do employees have a right under § 7 of the NLRA to communicate via with one another at work regarding self- organization and other conditions of employment? HOLDING: Employees may use on non-working time if employers have given access to employees.

© 2015 Snell & Wilmer Purple Communications Applies only to those already granted access to an employer’s system; does not require an employer to grant access to employees. Employer may ban non-work use of , including § 7 use of non-working time, by demonstrating that special circumstances make the ban necessary to maintain production or discipline. Does not address access by non-employees. Does not apply to other electronic communications systems.

© 2015 Snell & Wilmer Purple Communications Dispute over employer’s property rights versus employees’ core right to communicate in the workplace; is the new natural gathering place. systems differ from other equipment; not a bulletin board or phone, and harm to employer appears minimal. Did not treat as solicitation or distribution.

© 2015 Snell & Wilmer Purple Communications May be solicitation, distribution (literature or information) or neither of the two but still protected communications. Declined to define systems as work areas or non-work areas ― more of a mixed-use area. Can establish uniform and consistently enforced restrictions, prohibiting large attachments or A/V content, if interfere with efficient functioning.

© 2015 Snell & Wilmer PRACTICAL TIPS Review and revise solicitation and distribution policy. Review and revise electronic communications policy. Train Human Resources and Management Team on new case law. Can still monitor systems, but must do so fairly and uniformly; otherwise may face a charge of discrimination or unlawful surveillance.

© 2015 Snell & Wilmer NEW NLRB ELECTION RULES Published Dec. 15, 2014; becomes effective April 14, Permits petitions for elections to be filed electronically. Requires employer to provide personal addresses and phone numbers in Excelsior lists.

© 2015 Snell & Wilmer NEW NLRB ELECTION RULES Non-petitioning party will respond to petition and state positions the day before pre- election hearing opens. Petitioning party responds at opening of hearing. – Litigation of eligibility, inclusion, and scope of unit issues deferred to the end of election. – Written briefs at close of hearing only if RD determines they are necessary. – Only issue is whether election should be conducted.

© 2015 Snell & Wilmer NEW NLRB ELECTION RULES Elections are not stayed after RD’s Decision and Direction of Election unless NLRB orders. Pre-election hearing generally set to open 8 days after a hearing notice is served; post- election hearing opens 14 days after objection filed. Employer’s list of voters with job classifications, shifts, and work locations should be part of position statement.

© 2015 Snell & Wilmer NEW NLRB ELECTION RULES Employers do not have to file Request for Review to preserve appeal of RD’s Decision and Direction of Election (“D&DE”). Excelsior list due 2 days, not 7 days, after approval of election or D&DE. Objections and challenges must be filed within 5 days of election. On filing of petition, employer must post and distribute NLRB notice about petition and potential for an election.

© 2015 Snell & Wilmer PRACTICAL TIPS Anticipate Union organizing issues – What is scope of a voting unit? – Who should be included? – How would you communicate in a short period of time? Training for supervisors and managers – Avoiding unfair labor practices – Communicating company’s position on unions.