Connecticut and Federal Wage

1
Connecticut and Federal Wage Hour Laws Are You
Prepared?HRACCJames Sconzo, Neal Murphy,
Ronald Marquis, Nancy DiPietro
2
US DOL New Sheriff In Town

• Make no mistake about it, the Department of
  Labor is back in the enforcement business
• Secretary of Labor Solis

3
DOL Enforcement Initiatives

• Wage Hour Division
• Shift in focus from assisting employers to
  assisting employees
• Increased enforcement efforts
• Addition of 250 investigators (33 increase)

4
DOL Shift in Policies

• DOL no more opinion letters for employers
• Focus on Administrator Interpretations
• intended to be general interpretations of the
  law and regulations
• First Administrator Interpretation
• Mortgage Loan Officers
• DOL reversed position no longer exempt

5
DOL Stepped-Up Enforcement

• I have a message for those employers who break
  this nations labor laws and prey on vulnerable
  workers It ends today.
• Sec. of Labor Solis
• New marching orders for investigators
• Aggressive stance on legal interpretations
• Increase random audits

6
DOL We Can Help

• We Can Help Initiative
• educate workers about their rights under various
  wage and hour laws
• encourage employees to report violations
• Work with unions, community organizations
• If someone is stealing your wages, you can and
  should call the Department of Labor.We can
  help.
• Sec. Solis

7
DOL Misclassification Initiative

• Joint venture with Treasury
• Designed to target misclassification of
  independent contractors.
• 2011 budget includes an additional 25 million
• 100 new investigators

8
DOL On the Horizon

• Recordkeeping Requirements
• Proposed update to recordkeeping regulations
• Designed to create more transparency
• Proposals includes
• notify workers of their rights under the FLSA
• require employers who exclude workers from FLSAs
  coverage to perform a written classification
  analysis and disclosures

9
DOL Timesheet App

• Time sheet for phone to record hours worked
• Includes overtime pay calculations
• Instead of relying on ... their employers
  records, workers now can keep their own records.
• This information could prove invaluable during a
  Wage and Hour Division investigation....

10
Basic FLSA Concepts

• You must accurately record all time worked by
  employees
• You must pay employees at least minimum wage for
  all time worked
• You must pay overtime at the appropriate rate for
  all hours worked over 40 in a 7-day workweek

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Overtime Avoidance Strategy Hire Contractors

• FLSA applies to employees not independent
  contractors
• But how do you know which is which?
• DOL is cracking down on independent contractor
  misclassification

12
Independent Contractor Myths

• Individual preference determines contractor
  status
• A written independent contractor agreement
  ensures contractor status
• Payment via the 1099 process ensures contractor
  status
• Prior clean audits ensure future classification
  status
• Temporary arrangements ensure contractor status

13
The Worker Is Probably Not a True Independent
Contractor If

• You control how the job gets done
• Dictate start time, stop time, location of work,
  method by which work is performed
• Require frequent reports, attendance at meetings
• Closely supervise and evaluate job performance
• Pay by the hour
• Dont permit him to hire others to perform the
  job
• Remember True contractors are hired to achieve a
  result

14
The Worker Is Probably Not A True Independent
Contractor If

• He is economically dependent on your business
• Does not bear his own expenses
• Cannot suffer a loss
• You furnish equipment
• You provide training
• Exclusivity requirement
• A totality of the circumstances analysis will be
  applied

15
Overtime Avoidance Strategy Use Temps

• A contracting business may be deemed to jointly
  employee leased/temporary workers
• Economic realities test will apply
• Exercise caution with respect to your contingent
  workforce
• Review agreements with staffing agencies

16
Overtime Avoidance Strategy No-Overtime
Policies

• Such policies are lawful
• But make sure off-the-clock work is not
  occurringdo a reality check
• All overtime worked must be paid even if not
  approved
• Supervisory training is key
• Review all of your overtime policies to make sure
  they are in balance

17
Overtime Avoidance Strategy Comp Time

• Private employers are never allowed to provide
  comp time in lieu of overtime
• Public employers may implement comp time programs
  in strict compliance with the FLSA

18
Overtime Avoidance Strategy Make em all Exempt

• No timekeeping requirements for exempt employees
• No overtime liability
• No math, not hassles.
• So why not?

19
Common Misconceptions Regarding FLSA Exemptions

• If I put an employee on salary, he becomes
  exempt.
• If an employee has a manager, supervisor, or
  administrator title, he is exempt.
• If an employee is highly compensated, he is
  exempt.

20
Common Misconceptions Regarding FLSA Exemptions

• If an employee is college-educated and performs
  white-collar office work, he is exempt.
• If an employee has an advanced degree, he is
  exempt.

21
Best Risk Avoidance Strategy Accurate Records
and Sound Policies

• Records must accurately record time worked
• Timekeeping for exempt employees?
• Have employees authorize all changes
• Keep all records for at least three years

22
Best Risk Avoidance Strategy Accurate Records
and Sound Policies

• Upgrade your policies
• Exempt vs. nonexempt classifications
• Timekeeping
• No off-the-clock work
• No work performed during unpaid breaks
• Deductions
• Reporting pay errors
• Conduct internal audits

23
Basic O.T. Rule

• The FLSA does not define the term work.
• For covered, nonexempt employees, the FLSA
  requires overtime pay to be at least one and
  one-half times an employee's regular rate of pay
  after 40 hours of work in a workweek.

24
Basic O.T. Rule

• An employer must compensate its employees for
  unauthorized work that, even though prohibited,
  is performed with the knowledge and acquiescence
  of management. All unrequested work that an
  employer suffers or permits is considered
  compensable time --even if an employer has a
  rule or formal policy forbidding unauthorized
  work.

25
Basic O.T. Rule

• Where an employee is subject to both the state
  and federal overtime laws, the employee is
  entitled to overtime under the higher standard.

26
Training Time

• Attendance at lectures, meetings, training
  programs and similar activities need not be
  counted as working time -- if four criteria are
  met
• it is outside normal hours
• it is voluntary
• it is not directly job related
• and, no other work is concurrently performed.

27
Breaks And Meals

• Federal law does not require lunch or coffee
  breaks. However, when employers do offer short
  breaks (usually lasting about 5 to 20 minutes),
  federal law considers the breaks as compensable
  work hours that would be included in the sum of
  hours worked during the work week and considered
  in determining if overtime was worked.
  Unauthorized extensions of authorized work breaks
  need not be counted as hours worked when the
  employer has expressly and unambiguously
  communicated to the employee that the authorized
  break may only last for a specific length of
  time, that any extension of the break is contrary
  to the employer's rules, and any extension of the
  break will be punished.

28
Breaks And Meals

• Bona fide meal periods (typically lasting at
  least 30 minutes), serve a different purpose than
  coffee or snack breaks and, thus, are not work
  time and are not compensable.
• Electronic/automated timekeeping Issues

29
Donning/Doffing

• Under the FLSA, employees may be entitled to
  compensation for time spent donning and doffing
  uniforms if they are required to do so at work.
• Under the FLSA, you do not have to pay employees
  for activities that are preliminary or
  post-liminary to the principal activities of the
  job. However, if activities performed before or
  after the regular work shift are an integral and
  indispensable part of the principal activities,
  they are compensable.

30
Donning/Doffing

• There is a three-stage inquiry used in
  determining whether donning and doffing is
  compensable whether the activity (1)
  constitutes work, (2) is integral and
  indispensable to the employees principal
  activities, and (3) is minimal.

31
On Call

• An employee who is required to remain on call on
  the employer's premises is working while "on
  call.
• An employee who is required to remain on call at
  home, or who is allowed to leave a message where
  he/she can be reached, is not working (in most
  cases) while on call. Additional constraints on
  the employee's freedom could require this time to
  be compensated.
• 24 hour rule

32
Travel Time

• Time spent traveling during normal work hours is
  considered compensable work time.
• Time spent in home-to-work travel by an employee
  in an employer-provided vehicle, or in activities
  performed by an employee that are incidental to
  the use of the vehicle for commuting, generally
  is not "hours worked" and, therefore, does not
  have to be paid. This provision applies only if
  the travel is within the normal commuting area
  for the employer's business and the use of the
  vehicle is subject to an agreement between the
  employer and the employee or the employee's
  representative.

33
Keeping Track of Hours Worked

• Although employers must maintain accurate records
  of time worked, they are not required to use any
  particular type of time-recording system. If an
  employer does use time clocks, it can disregard
  early or late punching by employees who
  voluntarily arrive early or remain after hours,
  so long as the employees do not perform any work
  during these periods. When employees work more
  hours than their time cards show, the employer
  must pay for the extra hours it permits them to
  work.
• Whatever type of time-recording system an
  employer uses, problems can arise over the proper
  treatment of small amounts of scheduled or
  unscheduled time missed or worked by employees.
  Employees generally must be paid for all time
  worked an employer cannot use rough estimates or
  arbitrary formulas to compute hours worked.
  However, regulations establish the following two
  rules

34
Keeping Track of Hours Worked

• Rounding off practicesEmployers may record
  employees' starting or stopping times to the
  nearest five minutes or to the nearest one-tenth
  or quarter of an hour , provided that the
  amounts rounded off average out over time and the
  practice does not result in the failure to
  properly compensate employees for all time
  actually worked.
• De minimis rule An employer may disregard
  insubstantial or insignificant amounts of time
  beyond a worker's scheduled hours if it cannot
  as a practical administrative matter precisely
  record the small portion of time involved. The
  rule applies only where there are uncertain and
  indefinite periods of time involved of a few
  seconds or minutes duration, and where the
  failure to count such time is due to
  considerations justified by industrial
  realities. However, an employer may not
  arbitrarily fail to count as hours worked any
  part of fixed or regular working time or
  practically ascertainable periods of time that
  workers are required to spend on assigned duties.

35
White Collar Exemptions

• Executive, administrative, professional, outside
  sales, computer employees
• Must
• Be paid on a non-fluctuating salaried basis of at
  least 455 per week AND
• Perform exempt duties

36
Executive Exemption

• Paid on salaried basis of at least 455 per week
• Has a primary duty of management of the
  enterprise in which he is employed, or a
  customarily recognized subdivision
• Customarily and regularly directs the work of two
  or more employees
• Has the authority to hire or fire/suggestions as
  to personnel decisions given particular weight

37
Area of Responsibility

• Could be geographic
• Could be operational
• Must have some authority to make decisions
  impacting his area of responsibility
• Must have some accountability for success of his
  area
• Look at level of involvement of his boss
• Exercise care particularly with assistant
  managers

38
Management

• Federal regulations state that management
  includes activities such as
• interviewing, selecting, and training employees
• setting and adjusting employees rates of pay and
  hours of work
• directing the work of other employees
• maintaining production or sales records for use
  in supervision or control of employees

39
Management

• appraising employees productivity and efficiency
  for purposes of recommending promotions,
  demotions, terminations, or other changes in
  employment status
• handling employee complaints and grievances
• disciplining employees
• planning the work.

40
Primary Duty

• Primary duty is defined for all exemptions (not
  just the executive exemption) as the principal,
  main, major or most important duty that the
  employee performs. Factors that will be
  considered are
• the relative importance of the exempt duties
  compared to other duties
• the amount of time spent performing exempt work
• 50 percent rule of thumb
• the employees relative freedom from direct
  supervision and
• the relationship between the employees salary
  and the wages paid to non-exempt employees who
  may be performing similar duties.

41
Direction of Two or More Employees

• Or equivalent (80 hours)
• Each executive must have at least 80 hours
  attributable solely to him
• When supervisory authority overlaps, make sure
  each exempt executive has at least 80 hours.

42
Authority to Make Personnel Decisions

• Does not have to be unilateral
• But must be significant involvement
• This is a new addition under Fairpay
• Enforcement examples recent cases
• Pay close attention to this factor with respect
  to front-line supervisors

43
Administrative Exemption

• Compensated on salaried basis of not less than
  455 per week
• Has a primary duty of performing office or
  non-manual work directly related to the
  management or general business operations of the
  employer or the employers customers
• Has a primary duty which includes the exercise of
  discretion and independent judgment

44
Administrative Work

• Must be linked with running or servicing the
  employers business (behind the scenes)
• Tax
• Finance
• Auditing
• Budgeting
• Quality Control

45
Administrative Work

• Purchasing/procurement
• Public Relations
• Compliance
• Human Resources
• Computer network, internet and database
  administration
• Or providing similar services to the employers
  customers

46
Administrative Work

• Must not be
• Routine or clerical in nature
• Merely applying set policies and procedures to
  tasks, even if advanced skills are required
• Production work
• Current emphasis by DOL (mortage loan originator
  opinion)
• Inside sales work

47
Discretion Independent Judgment Factors

• Whether the employee has authority to formulate,
  affect, interpret, or implement management
  policies or operating practices
• Whether the employee carries out major
  assignments in conducting the operations of the
  business
• Whether the employee performs work that affects
  business operations to a substantial degree, even
  if the employee's assignments are related to
  operation of a particular segment of the
  business
• Whether the employee has authority to commit the
  employer in matters that have significant
  financial impact

48
Discretion Independent Judgment Factors

• Whether the employee has authority to waive or
  deviate from established policies and procedures
  without prior approval
• Whether the employee has authority to negotiate
  and bind the company on significant matters
• Whether the employee provides consultation or
  expert advice to management
• Whether the employee is involved in planning
  long- or short-term business objectives
• Whether the employee investigates and resolves
  matters of significance on behalf of management
  and
• Whether the employee represents the company in
  handling complaints, arbitrating disputes or
  resolving grievances.

49
Professional Exemption

• Is compensated on a salaried basis of not less
  than 455 per week
• Has a primary duty of work
• Requiring knowledge of an advanced type in a
  field of science or learning customarily acquired
  by a prolonged course of specialized educational
  instruction OR
• Requiring invention, imagination, originality or
  talent in a recognized field of artistic or
  creative endeavor.

50
Learned Professionals Covered Areas

• Medicine
• Law
• Theology
• Accounting
• Actuarial computation
• Engineering
• Architecture
• Teaching
• Physical, chemical, and biological sciences
• Pharmacy
• Similar occupations

51
Advanced Knowledge

• Varies depending on profession
• For doctors, lawyers, engineers, an advanced
  degree is required
• For accountants, a CPA
• For others, a 4-year degree or certification MAY
  be sufficient
• Look at state licensure or certification
  requirements
• RNs are exemptLPNs are not

52
Creative Professionals

• Actors
• Musicians, composers
• Artists who are given only general guidelines as
  to the subject matter
• Includes artists working in electronic mediums
  (website design, etc).
• Cartoonists who are given only the title or
  underlying concept for a cartoon
• Essayists, novelists, short-story writers and
  screenplay writers
• Writers in advertising agencies
• Journalists who contribute a unique
  interpretation or analysis to a their work
  product, or who appear as on-air personalities,
  conduct interviews, or serve as narrators or
  commentators

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Other Exemptions

• Highly compensated employees
• Computer professionals
• Outside sales
• Retail sales
• Motor carrier