Most Wage & Hour Investigations Find Violations
Posted on December 01, 2011
Adapted from hr.blr.com
According to attorney Kara Shea, the DOL statistics show that 73% of recent Wage and Hour investigations have resulted in findings of violations. Employers can push the odds in their favor, however, by double checking their practices of three primary areas that regulators seem to be zeroing in --- before being audited. Those areas include: Independent Contractors, Off-the-Clock Time, and Exempt Classifications.
Independent Contractors. Slap a label on a person as “Independent Contractor” and that does it, right? Wrong. Some employers have been hiring back former employees and classifying them as “consultants.” Typically these “consultants” are either ignorant to the significance of their classification or simply aren’t bothered by it because they receive benefits through their working spouse. However, the work they’re doing is exactly what they did as employees --- meaning that if things turn sour, they could sue for owed back pay and overtime because they should have been classified as an employee. And with the increased enforcement of misclassifying workers, the DOL now shares information with the IRS, who is always anxious to receive uncollected back taxes.
Off-the-Clock Time. If you offer non-paid meal breaks, pay special attention to whether employees are truly getting their uninterrupted 30 minutes while “off-the clock.” A classic example is a nurse who is often interrupted during meals by patient needs and emergencies. If you have employees on a time keeping system that auto-deducts for meals, you may want to verify that their meal breaks are uninterrupted from work; otherwise, some of that time should be paid as compensable time worked. If you insist on having non-paid breaks, you may want to encourage the employees to leave their typical work space (such as going to a break room) to avoid compensable interruptions.
Exemption Status. According to Shea, regulators are looking closely at exempt employees and whether they truly qualify for exempt status. Again, simply labeling somebody as exempt doesn’t mean much. Each case should have the salary and duties tests run to verify qualifying status. If this is over your head, you may want to consider getting expert help, as penalties can add up quickly. Some states have common law that allows the courts to look back for up to 6 years to calculate back wage payments.
Take our advice and double check your wage and hour practices to ensure compliance and to avoid costly penalties. If you need help, please contact one of our ESG Human Resources Consultants at 888-810-8187.