Wage and Hour Mistakes Supervisors and Managers Can’t Afford to Make

Approximately 90% of employment law class actions are wage and hour claims.

The average settlement in 2010 of the top 10 reported wage and hour class claims was $34 million.

Recording Hours Worked  The FLSA requires employers to keep records on wages and hours  Time clocks are not required under the FLSA  May disregard “de minimis” periods of time under some circumstances

Rounding of Hours The Department of Labor accepts rounding if the employer’s time-keeping method averages out so employees are fully compensated for all the time they have actually worked.

Rounding of Hours The problem with rounding is that the effect may be that the employee’s time is always rounded down.

Rounding of Hours Regardless of whether the employer or the employee is the more frequent beneficiary of the rounding policy, even a few employees who are negatively impacted by the policy can pursue a costly collective action.

Remote Work E.g., Logging onto a company computer from home or driving for work-related purposes. Failure to take reasonable steps to ensure employees are paid for such work can create significant liability.

Off-The-Clock Work Off-the-clock work occurs whenever an employee performs work while on work premises, but not clocked in, whether before or after shifts or during meal periods.

Off-The-Clock Work Off-the-clock work can be largely avoided through implementation and strict enforcement of a clear, written, time and attendance policy that requires employees to record all work time accurately and submit completed, signed time records in a timely manner.

Break and Meal Periods Kentucky DOL Questions and Answers  “Am I entitled to a rest period, and do I get paid for this time?” “You are entitled to a rest period of at least (10) minutes during each four hours you work. The rest period is a paid break.”

Break and Meal Periods  “Am I entitled to a meal period, and do I get paid for this time?” “You are entitled to a reasonable period for a meal no sooner than the third nor later than the fifth hour of your work shift unless you and your employer have mutually agreed to some other arrangement. A duty free meal period does not have to be paid.”

“Waiting Time” and “On-Call Time” Employees are eligible to be paid wages for certain time spent waiting to perform work.

“Waiting Time” and “On-Call Time” Whether waiting time is time worked under the FLSA depends upon the circumstances. The determination involves an assessment of all of the circumstances, including “scrutiny and construction of the [relevant] agreements, appraisal of [the] practical construction of the working agreement by conduct, consideration of the nature of the service, and its relation to the waiting time. Facts may show the employee was engaged to wait or they may show that s/he waited to be engaged.

“Waiting Time” and “On-Call Time” The obligation to pay wages for waiting time may also exist for employees who work away from the work site.

“Waiting Time and “On-Call Time” The DOL Wage and Hour Division has stated that if an employee “is required to remain on call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes,” the waiting time is considered hours worked under the FLSA and is compensable. On the other hand, an employee who is “merely required to leave word at his home or with company officials where he can be reached” after his regular working hours is not entitled to compensation for his on-call time.

“Waiting Time and “On-Call Time” Factors to be considered in making a determination as to whether the employer is exercising control over the employee when the employee is on call include:  Is the employee required to remain on premises?  If allowed off premises, are there excessive geographic restrictions on the employee’s movements?  Is more than merely leaving contact information with the employer required?  How often is the employee actually contacted while on call?  Is there a fixed time for an employee to respond while on call, and is the response time unduly restrictive?  Can the on-call employee easily trade on-call responsibilities with another employee?  To what extent is the employee allowed to freely use time while on call?

Travel Work Time Nonexempt employees must be paid for all hours worked, including time spent working outside the office for business trips and meetings. This includes assigned work as well as work not directly requested by the employer. Thus, if a nonexempt employee voluntarily works extra hours in a hotel without the employer’s knowledge or consent, the employee still must be paid for that time.

Travel Breaks Nonexempt employees must be paid for rest or meal periods lasting 20 minutes or less. Break periods that exceed 20 minutes need not be compensated. While on a business trip, unless the employee is completely relieved from duty to eat regular meals, s/he must be paid.

Travel Employers must include time worked on a business trip when calculating overtime. During workweeks when a nonexempt employee has taken paid time off, overtime pay is based on actual hours worked. For example, if the employee used eight hours of paid time off and worked 40 hours on the business trip, s/he would be compensated for 48 hours at straight-time pay. Overtime and paid time off

Travel Waiting Time When a nonexempt employee spends time waiting while on a trip, s/he may be eligible for pay. If the employee is “on- call” but free to handle personal tasks, it is usually not compensable time. However, if the employer requires the worker to remain in a meeting room, this will likely be compensable time.

Travel Travel pay For a one-day assignment, if the nonexempt employee travels to a location in another city, all travel time is considered compensable. However, the employer can deduct the employee’s normal commuting time to a regular worksite. For overnight trips, travel time is counted when it occurs during the employee’s normal workday hours, regardless of the day of the week.