Latest Trends in Labor and Employment Law

1. Latest Trends in Labor and Employment Law • Presented By • Shawn R. Lillie, Esq. • Allen, Summers, Simpson, Lillie & Gresham, PLLC • 80 Monroe Avenue, Suite 650 • Memphis, TN 38103 • (901) 763-4200

2. Latest Trends is Labor and Employment Law • Four Topics: • FLSA update • Social Media issues • EEOC Update • NLRB Update

3. Fair Labor Standards Act update • Beginning in 2009, there was an infusion of money into the DoL and the EEOC. • This money was used for various initiatives, hiring additional investigators, attorneys, and administrative staff to vigorously enforce the federal employment laws. • We continue to see DoL investigations and employer liability of unpaid wages. • Additionally, trial attorneys are filing more and more FLSA collective action cases against employers.

4. Be Careful… • “Our employees are all paid on a salary basis, so they are not entitled to overtime.” • “As long as our employees are given the job title of ‘manager’ or given at least some supervisory responsibility, we can classify them as exempt employees.” • “Our employees all signed an agreement stating that they waived their right to receive overtime pay.” • “Our employees may be at work for 45 hours a week, but we dock 1 hour a day to account for meal breaks.”

5. Be careful… • “We don’t have to pay for overtime unless it was approved in advance.” • “We pay overtime, but we average our employees’ hours over two weeks.” • “The training that our employees attended last Saturday was ‘off-the-clock’, so we don’t need to pay overtime.” • “We’ve never been audited or had a problem, so I’m sure we’re in compliance.” • “We just give comp time instead of overtime.”

6. Fair Labor Standards Act update • The biggest problems are unpaid overtime and “off the clock” cases. • Unpaid overtime – often results from misclassifying an employee as exempt, when they don’t meet the exemption. • Most employers think they are correct in their determinations. • In my experience, many employers are wrong. • The biggest myth in all of labor law is that if you pay someone a salary, that means they are exempt.

7. General Points to remember • The burden of proof is on the Employer to show an exemption is warranted. • The exemptions by law are “narrowly construed.” • Courts will defer to the Department of Labor’s interpretations and decisions.

8. FLSA – White Collar Exemptions • Main white collar exemptions: • Executive; • Administrative; and • Professional. • There are some other exemptions (Outside Sales, Computer Employee, etc.).

9. Three Tests for Exemption • Salary Level • Salary Basis • Job Duties

10. Minimum Salary Level - $455/week • For most employees, the minimum salary level required for exemption is $455 per week • The $455 per week may be paid in equivalent amounts for periods longer than one week: • Biweekly: $910 • Semimonthly: $985.83 • Monthly: $1,971.66

11. Salary Basis Test • Regularly receives a predetermined amount of compensation each pay period (on a weekly or less frequent basis) • The compensation cannot be reduced because of variations in the quality or quantity of the work performed • Must be paid the full salary for any week in which the employee performs any work • Need not be paid for any workweek when no work is performed

12. Salary Deductions – General Rule • An employee is not paid on a salary basis if deductions from the predetermined salary are made for absences occasioned by the employer or by the operating requirements of the businesses • If the employee is ready, willing and able to work, deductions may not be made for time when work in not available

13. Permitted Deductions • Seven exceptions from the “no pay-docking” rule: • Absence from work for one or more full days for personal reasons, other than sickness or disability • Absence from work for one or more full days due to sickness or disability if deductions made under a bona fide plan, policy or practice of providing wage replacement benefits for these types of absences • To offset any amounts received as payment for jury fees, witness fees, or military pay • Penalties imposed in good faith for violating safety rules of “major significance” • Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of workplace conduct rules • Proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment • Unpaid leave taken pursuant to the Family and Medical Leave Act

14. Improper deductions • Deduction for a partial-day absence to attend a parent-teacher conference • Deduction of a day of pay because the employer was closed due to inclement weather • Deduction of three days of pay because the employee was absent from work for jury duty, rather than merely offsetting any amount received as payment for the jury duty • Deduction for a two day absence due to a minor illness when the employer does not provide wage replacement benefits for such absences

15. Problem • Salaried exempt employee is missing a lot of work. • The employee is not generally required to work overtime. • Employer deducts for time missed. • No time records are kept. • What legal issues do you see? • How could the employer deal with this employee?

16. Executive Exemption • Primary dutyis management of the enterprise or of a customarily recognized department or subdivision; • Customarily and regularly directs the work of two or more other employees; and • Authority to hire or fire other employees or whose suggestions and recommendations as to hiring, firing, advancement, promotion or other change of status of other employees are given particular weight.

17. Administrative Employee Exemption • Whose primary dutyis 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 • Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

18. Learned Professional Exemption • The employee’s primary duty must be the performance of work requiring advanced knowledge • In a field of science or learning • Customarily acquired by a prolonged course of specialized intellectual instruction • Does the employee have an advanced • degree in their area of work?

19. “Off the Clock” Cases • Suffer or permit to work concept • Working through lunch • Working on off days • Being required to clock out and still work, etc. • http://www.dol.gov/whd/regs/compliance/whdfs22.pdf • See handout – Fact Sheet #22 • These cases often lead to collective action lawsuits…

20. FLSA Collective Action Cases • Plaintiffs’ lawyers are filing more and more collective action cases under the FLSA. • These cases can cost hundreds of thousands of dollars. • Most insurance policies do not cover these types of cases. • Some plaintiffs’ attorneys routinely screen for these cases, or look for ways to file them. • FLSA provides an attorneys’ fees provision. • Employers need to make sure they are complying with the law to avoid serious problems. • Be sure to conduct audits of your salaried positions (“good faith defense”).

21. Social Media Policies & Issues • Lots of attention given to social media policies • NLRB has found some to be overbroad and invalid • Be careful before firing someone for posting something work-related on Facebook, Twitter, etc. • Employees in non-union facilities still have NLRA Section 7 rights, including the right to make comments about terms and conditions of employment

22. Sample Social Media Policy • See Handout

23. EEOC Update • The EEOC is making headlines. • They won’t settle a case they have filed without a press release. • They won’t let parties settle a charge without knowing the settlement amount. • They are seeking headlines and numbers to report to Congress on what a great job they are doing enforcing federal civil rights laws. • If you get sued, you will likely get your name in the paper…and on the internet.

24. EEOC Update • Since 2000, the total number of EEOC charges has increased over 20%. • We are seeing a lot of the following cases: • Race, sex, age discrimination • Disability discrimination and reasonable accommodation • Retaliation The EEOC has also filed a good number of class action cases • Texas Roadhouse – class wide age discrimination • Bass Pro Outdoor World – class wide race discrimination • Equal Pay Act issues

25. EEOC Update • Major problem areas: • Inconsistent Policy Enforcement • Performance Evaluation problems • Stray remarks (age, sex, etc.) How to fight these problem areas: • Good policies/evaluations • Consistent Enforcement/accurate ratings • Supervisory Training

26. NLRB Update • D.C. Circuit Court delays implementation of NLRB posting rule. • Previously scheduled to go into effect on April 30, 2012. • Now, delayed indefinitely until Court of Appeals can rule on it.

27. NLRB Update • New union election rules went into effect April 30, 2012. • Quick elections – ambush elections • Instead of 35-45 days for a “campaign” period, employers will have perhaps 2 weeks, at most This is going to be dangerous for some unwary employers.

28. What you can do now - • 1. Focus on maintaining positive employee relations. • 2. Find ways to listen to your employees. • 3. Conduct a realistic assessment of your vulnerability to unionization. • 4. Train your supervisors. • 5. Communicate with your workforce about unions, as necessary.

29. What you can do now - cont’d. • 6.Be prepared to respond if a petition is filed. • 7. If there is a hint of union talk, don’t ignore it. You may need to take immediate steps. • 8. Control rogue managers/supervisors. • 9. Continue to explain “Economics” to your employees. • 10. Review policies and address any problem areas.

30. Questions?