You’re
not imagining things if it
seems like
you read
about more
pay-related
employee lawsuits and court
awards
than ever
before.
When the
feds changed FLSA’s overtime rules, some
experts said fears of a lawsuit explosion were unfounded. But there’s been
a 77% rise in FLSA lawsuits tied to wage-and-hour disputes since 2004,
according to the National Employment Lawyers’ Association.
Also, over the same period, there’s been an 11% increase in wage-
and-hour enforcement actions by the DOL. Here
are the biggest problem areas
to watch for:
- Unpaid
or
underpaid
overtime
due
to
alleged
job
misclassification
- Requiring
employees
to
use
their
own
money
for
company
purposes
(e.g., employees must buy their own uniform
or equipment), and
- Supervisors
who fudge
time reports.
Another
factor:
High-profile
lawsuits
against
big companies – including
Wal-Mart, Pep Boys
and Dollar
General – have
brought
attention
to FLSA
regs and
have spurred
copycat
suits
against
smaller
employers
who’ve
employed similar
practices.
To date, retail
giant Wal-Mart Stores
has paid an
estimated $640
million to settle
dozens of wage-and-hour
lawsuits across the
nation that accused
the world’s
largest retailer
of forcing
hourly-wage employees
to work through breaks
and off the clock.
Regardless of the
business you’re
in or your personal
opinion of Wal-Mart’s
pay and benefits
policies, the company’s
legal problems offer
you an opportunity
to grab the attention
of supervisors and
senior management
to get serious about
FLSA compliance.
Here are two key take-aways to
hammer home in management training:
1. FLSA Compliance Starts
Upstairs
Unless
your organization
realize
that
no firm
is
immune
from OT
lawsuits,
there’s
little you can do
to safeguard
the company
from
costly
errors.
That’s because
many OT payment errors
stem from firms using
outdated record-keeping
systems that’ll
take time and money to
correct. It’s
unfair for
anyone to expect you – or
Payroll – to
singlehandedly
find
and fix every possible
calculation glitch.
In the end, taking the
time to review and upgrade
your record-keeping system
more than pays for itself
compared to the risk
of FLSA violations.
Roughly 85% of the
U.S. workforce is
OT-eligible. And
since 2004, employers
have had to pay out
$1.5 billion in OT
lawsuits. It hasn’t just
been the Wal-Marts and
Smith-Barneys that’ve
been
targeted, either.
Small firms also
get nabbed.
2.
Start
With
Record-keeping
Systems
By far, the biggest mistake
employers of all sizes
make is to over-rely
on time cards or time
sheets to record the
hours worked by their
non-exempt employees.
FLSA also requires
employers to
record (and
pay any related
OT for) certain
off-the-clock
work activities.
These errors
can occur either
on the front
or back end
of your firm’s
compensation
system.
The biggest front-end
danger area: FLSA requires
employers to track and
pay for time non-exempt
employees spend logging
onto computers or donning
safety equipment. Another
common slip-up: lack
of a tracking system
for work-related travel
time by non-exempts.
On the back end of record
keeping, FLSA requires
your company to track
total compensation (not
just base pay) when calculating
overtime rates. This
includes bonuses, money
from PTO buy-backs, wellness
incentives with monetary
value and other forms
of compensation.
August
5, 2009 by Bill Meltzer
Posted in Employment
Las: FLSA , Pay and Benefits
Records documentation,
Special Report-Benefits
