On April 22, 2010 Sen. Sherrod Brown, (D-OH) and Rep. Lynn Woolsey, (D-CA) introduced the Employee Misclassification Prevention Act (EMPA) in the Senate and House, respectively. The primary aim of EMPA is to stop employers from improperly designating employees as independent contractors. Misclassification of employees as independent contractors is a major tactic employers use to avoid paying employees minimum and overtime wages, along with denying these employees other rights provided under various employment laws.
You can read the full text of the bill here.
If passed as written, EMPA would, among other things:
1) require every company covered by the FLSA to provide a written notice to all workers informing them that they have been classified as either an employee or “non-employee,” directing them to a Department of Labor Web site for further information about the rights of employees under the law, and informing them to contact the Department of Labor if they have any questions about whether they have been misclassified;
2) require companies to keep accurate records of the hours of work and wages of employees and keep comparable records for “non-employees” providing labor or services to the business;
3) add a new provision making it a “prohibited act” under FLSA §15 (29 USC §215) to fail to properly classify a worker as an employee; and
4) double the amount of liquidated damages (resulting in triple damages) for willful violations of the minimum wage or overtime laws where the employer has also misclassified the affected employee.
The bill as currently written would also direct the Secretary of Labor to establish a webpage on the Department of Labor website to inform individuals of their rights.
This law would be a great step in the fight to prevent wage theft as employees will have greater protections than ever against the unscrupulous employers who improperly classifies their workers.
Wednesday, April 28, 2010
Monday, April 26, 2010
DOL to review Recordkeeping Regulations
The Department of Labor announced today that they will be reviewing numerous regulations - making the agenda are the record keeping regulations. The DOL is contemplating what would be an enormous tool for employees to fight wage theft. The current regulations require an employer keep certain records. However, they do not require the employer to make those records available to employees. Where employees are barred from obtaining information, they cannot tell whether their rights are being violated. As the DOL accurately puts it, this "is an issue of transparency and is critical to workers’ understanding of their legal rights and responsibilities."
Additionally, the DOL is contemplating requiring "[a]ny employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it."
You can read more here.
Additionally, the DOL is contemplating requiring "[a]ny employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it."
You can read more here.
Friday, April 23, 2010
Improper deductions from paychecks
A common way that employers steal wages from their employees is through a practice of making improper deductions from the employees’ paycheck.
In Wisconsin, “No employer may make any deduction from the wages due or earned by any employee…for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction.” Wis. Stat. § 103.455. A common example of an employer violating this policy would be the cashier who, without authorization, has a shortage from her drawer deducted from her pay. If an employer makes such an improper deduction in violation of this statute, the employer shall be liable for double damages in a civil action brought by the employee. See id.
It is crucial to note that not all deductions will be deemed improper. The language of the statute clearly provides that an employee can authorize a deduction; however, if the authorization is not in writing it is not valid. It is also clearly established by case law that authorization by the employee for the deduction is only valid if it is given after the loss and before the deduction. See Donovan v. Schlesner, 72 Wis. 2d 74, 240 N.W.2d 135 (1976).
Although Wis. Admin. Code § DWD 272.10 requires an employer list all deductions on the employees pay stub, along with the number of hours worked and the employees rate of pay, an employer does not have to list miscellaneous deductions.
In Wisconsin, “No employer may make any deduction from the wages due or earned by any employee…for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction.” Wis. Stat. § 103.455. A common example of an employer violating this policy would be the cashier who, without authorization, has a shortage from her drawer deducted from her pay. If an employer makes such an improper deduction in violation of this statute, the employer shall be liable for double damages in a civil action brought by the employee. See id.
It is crucial to note that not all deductions will be deemed improper. The language of the statute clearly provides that an employee can authorize a deduction; however, if the authorization is not in writing it is not valid. It is also clearly established by case law that authorization by the employee for the deduction is only valid if it is given after the loss and before the deduction. See Donovan v. Schlesner, 72 Wis. 2d 74, 240 N.W.2d 135 (1976).
Although Wis. Admin. Code § DWD 272.10 requires an employer list all deductions on the employees pay stub, along with the number of hours worked and the employees rate of pay, an employer does not have to list miscellaneous deductions.
Friday, April 2, 2010
FLSA retaliation before the Supreme Court
On March 22, 2010 the Supreme Court of the US granted cert. to hear the matter of Kasten v. Saint-Gobain Performance Plastics Corp. The issue in front of the Court is as follows: “Is an oral complaint of a violation of the Fair Labor Standards Act (“FLSA”) protected conduct under the anti-retaliation provision, 29 U.S.C. § 215(a)(3)?” Section 15(a)(3) of the Fair Labor Standard Act (“FLSA”) makes it unlawful for an employer “to discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding, under or related to this chapter…”29 U.S.C. § 215(a)(3) (emphasis added). The Court’s ruling in this case will have a significant impact on the rights of individuals who are attempting to stop employers from stealing their wages as it will possibly open another avenue for the aggrieved worker to gain protections.
In this case, Kasten alleges that he was retaliated against in violation of the FLSA when he was terminated after voicing complaints that the location of the employer’s time clocks was illegal under the FLSA. On appeal from the Western District of Wisconsin, the 7th Circuit affirmed the grant of summary judgment to the employer on the grounds that Kasten had not “filed a complaint” within the meaning of Section 15 of the FLSA when he made oral complaints to his employer. The 7th circuit held that while an internal complaint is protected, the complaint must be in written form. Kasten v. Saint-Gobain Performance Plastics Corp. 570 F.3d 834 (7th Cir. 2009).
If the Supreme Court holds that an oral complaint of a violation of the FLSA is enough to trigger protections of the anti-retaliation section of the FLSA, it will certainly open the door for more employees to have their rights protected. It is important to remember; however, that even if the Court holds in favor of expanding the protection to oral complaints, the best practice to prevent retaliation is to express your concerns to your employer in writing.
In this case, Kasten alleges that he was retaliated against in violation of the FLSA when he was terminated after voicing complaints that the location of the employer’s time clocks was illegal under the FLSA. On appeal from the Western District of Wisconsin, the 7th Circuit affirmed the grant of summary judgment to the employer on the grounds that Kasten had not “filed a complaint” within the meaning of Section 15 of the FLSA when he made oral complaints to his employer. The 7th circuit held that while an internal complaint is protected, the complaint must be in written form. Kasten v. Saint-Gobain Performance Plastics Corp. 570 F.3d 834 (7th Cir. 2009).
If the Supreme Court holds that an oral complaint of a violation of the FLSA is enough to trigger protections of the anti-retaliation section of the FLSA, it will certainly open the door for more employees to have their rights protected. It is important to remember; however, that even if the Court holds in favor of expanding the protection to oral complaints, the best practice to prevent retaliation is to express your concerns to your employer in writing.
Salary pay does not mean exempt from overtime pay
Just because you are paid salary it does not necessarily mean that you are not entitled to overtime payment for hours that you work in excess of forty (40) in a workweek. Many people have the impression that if they are paid a salary they are not entitled to overtime; this is not always the case. In determining if an employee falls under one of the “white collar exemptions” (Administrative, Executive, Professional) of the Fair Labor Standards Act (“FLSA”) three tests must be put into play, the salary test, the salary basis test and the duties test. Only if each test is met, the employee will be considered exempt and will not be entitled to overtime payments.
The salary and salary basis tests are defined in the regulations issued by the Department of Labor at 29 CFR §541.600. Under the first test – the salary test - an employee must be compensated on a salary basis at a rate of not less than $455 per week. The $455 a week may be translated into equivalent amounts for periods longer than one week.
The second test – the salary basis test - the employee must be paid a guaranteed minimum of $455 per week which is not subject to reduction because of variations in the quality or quantity of the work performed. With few exceptions, if the employee works any time in a workweek, he or she is entitled to the predetermined salary.
The third test – the duties test – looks to the actual duties performed by the employee, not what their job description or title says.
The Executive Exemption applies to an employee: (1) whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (2) who customarily and regularly directs the work of two or more other employees; and (3) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. See 29 C.F.R. §§541.100-106
The Administrative Exemption applies to an employee: (1) whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (2) whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. See 29 C.F.R §§541.200-204
The Professional Exemption applies to an employee who meets the salary basis test and is either a learned professional or a creative professional. To qualify for the learned professional exemption, the position held by the employee must require knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. To qualify for the creative professional exemption, the position held by the employee must require invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. See 29 CFR §§541.300-304
It is important to remember that the determination of whether an employee meets one of the three “white collar exemptions” is very fact specific. If you have any question about whether you (or your employees) are properly classified, you should contact an attorney as soon as possible.
The salary and salary basis tests are defined in the regulations issued by the Department of Labor at 29 CFR §541.600. Under the first test – the salary test - an employee must be compensated on a salary basis at a rate of not less than $455 per week. The $455 a week may be translated into equivalent amounts for periods longer than one week.
The second test – the salary basis test - the employee must be paid a guaranteed minimum of $455 per week which is not subject to reduction because of variations in the quality or quantity of the work performed. With few exceptions, if the employee works any time in a workweek, he or she is entitled to the predetermined salary.
The third test – the duties test – looks to the actual duties performed by the employee, not what their job description or title says.
The Executive Exemption applies to an employee: (1) whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (2) who customarily and regularly directs the work of two or more other employees; and (3) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. See 29 C.F.R. §§541.100-106
The Administrative Exemption applies to an employee: (1) whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (2) whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. See 29 C.F.R §§541.200-204
The Professional Exemption applies to an employee who meets the salary basis test and is either a learned professional or a creative professional. To qualify for the learned professional exemption, the position held by the employee must require knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. To qualify for the creative professional exemption, the position held by the employee must require invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. See 29 CFR §§541.300-304
It is important to remember that the determination of whether an employee meets one of the three “white collar exemptions” is very fact specific. If you have any question about whether you (or your employees) are properly classified, you should contact an attorney as soon as possible.
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