New Health Care Act Requires Breaks for Nursing Mothers (5/10)

If you are like most employers, you likely have not had time to consider the myriad of new obligations imposed in the 2,000 plus pages of the Patient Protection and Affordable Care Act.  Most of the provisions that substantially change how health care will be provided in this country do not take effect for several years, beginning in 2014.  But, there is one provision buried within the Act that affects almost every employer in the United States, and it took effect March 23, 2010, the date the Act was signed into law.        Specifically, employers with 50 or more employees are required to provide a nursing mother with “a reasonable break time” to express breast milk each time the employee needs to express milk for up to a year after her child’s birth.  In addition, the provision requires employers to provide a place other than a bathroom that is private where the employee may express milk.  The place must be “shielded from view” and “free from intrusion from coworkers and the public.”  Although the Act does not define what a “reasonable” break time period is, it does indicate that an employee does not have to be paid for the time.        Smaller employers with less than 50 employees are not entirely off the hook.  The Act states that these employers will not be covered by the requirements if they can show that the breaks would cause an “undue hardship by causing the employer significant difficulty or expense.”  An employer’s size, financial resources, nature, or structure will be considered to determine whether undue hardship exists.  Again, the Act does not define “undue hardship” beyond these descriptions, but the standard appears fairly difficult to meet.      Finally, the new provision also indicates that employers still must comply with any state law providing greater protections to nursing mothers.  Several states, including California, Colorado, Connecticut, Hawaii, Illinois, Indiana, Maine, Minnesota, New Mexico, New York, Oregon, Tennessee, Vermont, and the District of Columbia, require employers to allow nursing mothers unpaid breaks to express milk during the work day.  The new requirement has been added to the Fair Labor Standards Act as new section 29 U.S.C. §207(r).  (For additional information on breaks for nursing mothers, see Rest Breaks, Chapter 704, notes 3 and 9.)

Flsa Investigations: What to Expect When the dol Pays a Visit (5/10)

FLSA investigations and lawsuits continue to target employers in every industry.  Successful claims can mean big money for employees and their lawyers - and big trouble for you.  Here is what you need to know if a DOL investigator drops by, and four steps to stay out of trouble.

Do you know what to do if the Department of Labor (DOL) comes knocking on your door to investigate an employee’s wage and hour complaint?  According to the Fair Labor Standards Act (FLSA), the DOL can come to your workplace, inspect your records, and interview employees to check your compliance with the law’s numerous requirements.        If the thought of exposing your records and employees to the DOL makes you nervous, you’re right to be concerned.  For Fiscal Year (FY) 2008, the DOL received almost 24,000 complaints of wage and hour violations and collected over $140 million in wage and overtime back wages for 197 million aggrieved employees.  And these numbers don’t even include the accelerating trend by plaintiff’s attorneys to seek and file FLSA class action suits.  (For more information on this topic, please see the preceding article “Can Anything Be Done to Stop the Avalanche of Wage and Hour Litigation?”)        Of course, an ounce of prevention can go a long way to protect your organization from a serious FLSA problem.  Below, you will find out what can trigger an investigation, what the DOL does during the process, and how to minimize your liability for potential violations. The FLSA Requirements As a practical matter, most employers are covered by the FLSA’s requirements.  Coverage under the FLSA is determined in two ways.  First, the DOL looks at the activities of individual employees, and the FLSA’s requirements generally apply to employees engaged in commerce or in the production of goods for commerce.  Alternatively, the DOL looks at the activities of the employer and applies the “enterprise coverage test.”  An enterprise meets this test if:  (1) it does an annual business of $500,000 or more; and (2) two or more employees of the enterprise are engaged in interstate commerce, in the production of goods for interstate commerce, or in operations or processes related and essential to the production of those goods.      Specifically, the FLSA, codified at 29 U.S.C. §§201, et. seq., requires covered employers to pay “nonexempt employees” (those who are not exempt from the law’s coverage) at least the minimum wage (currently $7.25 an hour) for all hours worked.  It also requires premium pay at a rate not less than one and one-half times the normal hourly rate for overtime for all hours worked in excess of 40 in a single workweek.      Some categories of employees are exempt from the FLSA’s minimum wage and overtime requirements, including those who are employed in a bona fide executive, administrative, professional, outside sales, or computer systems analysis or programming capacity or who are considered highly compensated.  Other types of employees are exempt only from the overtime requirements, including certain live-in household employees, motor carrier employees, and certain commissioned retail sales staff.      The FLSA also limits the employment of children and requires the maintenance of records pertaining to employees and their pay, including hours worked, rate of pay, overtime earnings, and total wages paid in a pay period.  In addition, the FLSA specifically prohibits you from taking any action to retaliate against employees who exercise their rights under the Act. The Investigative Process FLSA investigations typically are triggered in three ways.  The most common trigger is an employee or union complaint.  For example, wage claims often arise after an employee is terminated and complains about the final pay amount.  Second, the DOL may target an industry that pays low wages and has a history of violations, such as the garment industry, agriculture, janitorial services, restaurants, and health care.  And third, although it rarely invokes this right, the DOL also can investigate your organization at any time simply to ensure compliance.      Note, too, that the investigations may cover any of the laws that the DOL enforces, not just the FLSA.  So, the investigator also could look into your compliance with the Family and Medical Leave Act, the Employee Polygraph Protection Act, certain employment standards and enforcement issues under the Immigration Reform and Control Act (such as Form I-9 and discrimination compliance), and garnishment provisions under the Consumer Credit Protection Act.        You may get notice of an impending investigation, but it is possible the investigator will just show up at your door without warning.  Once you are aware of the investigation, you should consider getting your attorneys involved.  The DOL allows you to be represented by your attorneys (or accountants) at any point during this process.  As a practical matter, an attorney can help you determine what records must be turned over and which employees should be involved in the investigation.       The DOL investigator will identify himself and present official credentials.  (If he does not, you can ask to see them.)  The investigator will then explain the investigation process and the types of records required for the review.  Section 11(a) of the FLSA specifically authorizes DOL representatives to investigate and gather information concerning wages, hours, and other employment practices; to enter and inspect your workplace and records; and to question employees to determine whether there have been any FLSA violations.      Interestingly, the FLSA does not specify how the investigations should take place, and the DOL has not issued any regulations to fill in the gaps.  Instead, the agency provides an informal fact sheet to explain the process.  According to the fact sheet (which is somewhat euphemistically titled “Visits to Employers,” Fact Sheet #44), an investigation generally consists of the following four steps: 1.     Examination of records to determine if the FLSA or exemptions apply.  The DOL may want records showing your annual dollar volume of business transactions, involvement in interstate commerce, and work on government contracts to determine if the FLSA applies.   2.     Examination of payroll and time records.  Even if only one employee is alleging a single violation, it is important to remember that the DOL can – and often will – investigate all of your relevant records to search for other possible violations.  As a result, you may have to produce payroll and time records from the previous two or three years.  This fact is the single most compelling reason for why you should consult your attorney as soon as you are aware of an investigation.  Your attorney can help you determine which records are necessary.  While you do not want to impede the investigation, you also do not want to raise any further red flags by providing records that are not relevant to the particular investigation.      Further, the investigator may request to see your Form I-9s/employment eligibility forms since the DOL has oversight authority under the Immigration Reform and Control Act.  The investigator also may take notes and make transcriptions or photocopies of relevant documents.   3.     Employee interviews.  The investigator likely will talk with employees to verify your payroll and time records, to identify worker duties and exempt status, and to confirm your compliance with child labor laws.  These interviews generally are conducted at your workplace, in private, but employees (both past and current) sometimes may be interviewed at their homes, by mail, or by phone. 4.     Discussion of violations.  After the investigation is complete, the investigator will meet with you (and, if applicable, your attorney representative) to discuss any violations and suggest corrective actions.  If back wages are owed because of minimum wage or overtime violations, the investigator will request payment and may ask you to compute the amounts due. Penalties and Lawsuits Still Possible If violations are found and you have not yet consulted legal counsel, you should do so at this point.  You will have an opportunity to challenge the investigator’s findings and to request a hearing before the DOL.        If you do not comply with the investigator’s orders to remedy violations, more serious action can be taken.  The Secretary of Labor may file suit on behalf of employees for back wages and an equal amount in damages.  In addition, the Secretary may obtain a court injunction to restrain your organization from violating the law, including any unlawful withholding of proper minimum wage and overtime pay.  Civil monetary penalties may be assessed for child labor violations and for repeat or willful violations of the FLSA’s minimum wage or overtime requirements.  Further, employers that willfully violate the law may face criminal penalties and personal liability for decision-makers, including fines and imprisonment for management employees found responsible for the violations.      Even without a DOL investigation, an employee may file suit to recover back wages, as well as an equal amount in damages plus attorney’s fees and court costs.  In fact, employees and their attorneys often bypass the DOL and go right to court to pursue wage and hour claims.  These claims can be particularly attractive to attorneys who bring together large numbers of similar complaints in class actions.  (See lead article, “Can Anything Be Done to Stop the Avalanche of Wage and Hour Litigation?”) Four Steps to Prevent Claims The DOL has fallen under great pressure over the last year to step up wage and hour investigations.  In March 2009, the agency was on the receiving end of a scathing report by the General Accountability Office (GAO), known as the “congressional watchdog” because it investigates how the federal government spends money.  The GAO found that the DOL responded inadequately to wage and hour complaints, “leaving low wage workers vulnerable to wage theft.”  The report specifically cited “sluggish response times,” a “poor complaint intake process,” and “failed conciliation attempts,” among other problems.  As a result, the Secretary of Labor added 250 more field investigators and reaffirmed her commitment to protecting “working families.”        So, what can you do to help prevent becoming a target of the DOL’s latest enforcement efforts?  Here are four steps you can take immediately to limit wage and hour violations: 1.      Pay on time and completely.  Employees whose paychecks are late, or who are not properly paid for breaks and overtime, may have legitimate complaints under the FLSA.  Be very careful before delaying a paycheck or making an unusual deduction.  Nonexempt employees must be paid for all time “actually” worked, so be sure you understand which hours count as paid working time.  Pay special attention to trouble areas such as time spent waiting to be called to duty, meal breaks where work is performed, activities that are preliminary and postliminary to work, and other “off-the-clock” work. 2.     Get your exemptions in order.  The FLSA exemption classifications are largely defined by what a worker does, not by salary or title alone.  So make sure your exempt employee’s job duties meet the FLSA definitions.  The amount of time spent on specific duties usually is a meaningful guide in determining employees’ primary duties.  In addition, make sure exempt employees are not subject to wage deductions that jeopardize their exempt status. 3.     Keep accurate, complete records.  Incomplete or incorrect records can spell disaster if you are confronted with a compliance audit.  The FLSA generally requires that you keep most records related to employee wages for either two or three years.  But, when in doubt, you are best advised to hang on to a document rather than tossing it out.  And, be accurate.  When employee records are inaccurate or incomplete, the DOL and courts will rely on employee testimony to establish the proper number of hours worked.   4.     Do not retaliate.  The FLSA specifically protects employees who make a complaint or provide information during an investigation.  So, implement and enforce a strict “no retaliation” policy and make sure managers do not appear to be targeting any employee who has filed a claim or who participates in an investigation. Know the Law, Prevent FLSA Claims Clearly, you have a big incentive to avoid FLSA violations.  You don’t have to look any further than the trend in class action suits and recent wage and hour settlements discussed in the lead article for evidence of the high stakes involved.  At a minimum, an investigation puts an unnecessary spotlight on your pay practices and taxes your resources, both in the form of staff hours spent responding to DOL inquiries and money spent defending any alleged violations.  Plus, when you add in the potential for personal liability for any violations, it is clear that an ounce of prevention pays dividends in terms of the headaches you can avoid.      Your best bet for preventing investigations and subsequent claims is to follow the four steps outlined above and make sure you are in FLSA compliance.  But, remember that disgruntled employees are your most likely triggers for a complaint.  So, go an extra step further and work to resolve wage and hour concerns internally before employees feel they must seek outside remedies.