Top 5 Handbook Updates for 2010
By Jill Weinberg, Board Certified in Labor and Employment Law

Now is a great time for companies to update their employment handbooks. In 2010 there have been several changes to existing employment laws. Additionally, new challenges such as texting and social networking among employees may need to be addressed in company handbooks.

1. Family Medical Leave Act: The FMLA was amended in 2009, and new regulations were also issued late in 2009. For this reason, FMLA policies and FMLA posters should be updated to address the expanded availability of qualifying exigency leave and expanded definitions of “covered service member” and “serious illness or injury.”

2. Text messaging, social networking, blogging: Text messaging or internet social networking between employees may create claims of discrimination, harassment and retaliation. Employers should include a provision on text messaging in their anti-discrimination, anti-harassment/retaliation policies, or create a separate policy to deal with these issues. Additionally, Employers should alert employees that “misuse” of texting or social networking relating to offensive/discriminatory remarks or photos may violate company policies.

3. Conflict resolution to defuse workplace violence: In 2009, incidents of workplace violence increased by 18%. Workplace violence may trigger claims for negligent hiring or workers’ compensation, or create an OSHA violation for an unsafe workplace. Handbook policies on conflict resolution may help deter violence at work if they provide employees with reporting and counseling options, or general guidelines of how to react when violence is threatened or suspected.

4. Genetic Information Nondiscrimination Act: GINA prohibits discrimination based on genetic information.  It went into effect in November 2009. Accordingly, employers should add Genetic Information to the list of protected classes in non-discrimination and anti-harassment policies, as well as updating all Wellness Programs to avoid collecting any genetic information from employees.

5. Overtime pay to non-exempt employees: Some employers are improperly classifying employees as exempt from receiving overtime based on improper policies. For example, just because an employee is paid a weekly salary does not automatically exempt the employee from receiving overtime pay. The duties of each employee must also be examined to determine the employee’s status as exempt or not exempt from receiving overtime pay.  A yearly internal audit should also be performed to determine compliance with wage and hour laws.

The above list is not exhaustive and is not intended as legal advice for a specific situation. It is essential that employers seek legal counsel before making changes to their handbooks. Further, when adopting new policies, employers should alert employees of such changes, by circulating and obtaining signed or electronic acknowledgement forms from employees.

www.wlfirm.com Copyright 2010

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COSTLY MISTAKES UNDER OVERTIME LAWS

Now is a good time for companies to assess their compliance with the new overtime regulations under the federal Fair Labor and Standards Act (FLSA). Failing to catch overtime violations can expose the company to double actual damages (liquidated damages) for unpaid overtime for up to three years. It adds up fast!

For example, if 20 nonexempt employees are each owed 10 hours a week of overtime for three years, and their overtime rate is $20.00 an hour, then each employee is owed $200 a week OT or $200 x 20 = $4000. $4000 multiplied by 150 weeks (excluding 2 weeks paid vacation for each of the 3 years ) equals $600,000 actual unpaid overtime. Liquidated damages would double that amount to $ 1.2 million.

Additionally, the FLSA provides for mandatory payment of attorneys’ fees for plaintiffs who sue and prevail. In certain situations, criminal violations may also apply.

Top 10 most common mistakes involving non-exempt employees:

1. SET SALARY FOR ALL: Paying a set salary to an employee who performs non-exempt duties and not keeping track of hours worked (including overtime).
Such employees are entitled to be paid for overtime if they work
more than 40 hours in a workweek.

2. UNPAID BREAKS: Not paying for breaks or meal time that are 20 minutes or less.
Such breaks must be paid.

3. INSIDE SALES: Treating inside sales people as exempt employees.
Only outside sales has a specific exemption from overtime.

4. COMP TIME: Allowing private sector employees to take “comp time” (in a different workweek) in lieu of receiving overtime pay.
Generally, only federal, state or local government employees may receive comp time.

5. TEMP AGENCIES: Using temporary agencies who fail to pay non-exempt employees over- time.
Contracting out such labor may still expose companies to overtime violations.

6. UNAPPROVED OVERTIME: Failing to pay overtime when an employee does not obtain prior approval to work the overtime.
Although an employee may be disciplined for failing to receive approval, the employee must still be paid.

7. EXCLUDING BONUSES/COMMISSIONS FROM REGULAR RATE: Failing to calculate commissions and bonuses into a regular rate of pay before calculating the overtime rates.
Some exceptions apply for holiday/special occasion bonuses.

8. AVERAGING OVERTIME: Averaging hours worked over two or more weeks to avoid paying overtime.
Some exceptions exist e.g., nurses, fire fighters and law enforcement.

9. UNPAID TIME RELATED TO PROTECTIVE GEAR: Not paying for time related to “donning and doffing” protective gear or clothing while at a worksite.
A recent U.S. Supreme Court case has held that the time spent walking to work stations from the place where employees put on protective items must be paid and the day ends only after they take off the clothing.

10. UNPAID TRAINING MEETINGS: Not paying for required training programs, lectures and meetings.
The meetings must be included in hours worked. The additional meeting time may also trigger overtime. Buying lunch for non-exempt employees during a lunch meeting does not eliminate the requirement of paying them for the lunch meeting.

Keep in mind that the above top 10 violations are only the tip of the iceberg. If you have any concerns or questions about whether overtime is being properly calculated and paid, you should seek legal counsel who is familiar with the complex FLSA laws.