Presented by: Thomas G. Collins, Esquire Buchanan Ingersoll & Rooney PC P: 717.237.4843 F: 717.233.0852 E: tho

1. A Potpourri of Wages, Hours, Benefits And Miscellaneous Considerations … Everything you wanted to know, but were afraid to ask in 90 minutes or less. Presented by: Thomas G. Collins, Esquire Buchanan Ingersoll & Rooney PC P: 717.237.4843 F: 717.233.0852 E: thomas.collins@bipc.com W: www.bipc.com

2. What are we going to accomplish today? • “Hours worked”: What time is Compensable? • “White Collar” exemptions (just the basics). • Conflicts between the Federal FLSA and Pennsylvania MWA • Registry v. Agency? • ERISA Plan Documents: Why should I care? • Unemployment Comp: Should I appeal? • Terminating the Difficult Employee: How do I protect my company from discrimination claims? • Non-compete agreements: Do they really work? (9) Social Media and miscellaneous NLRB Considerations.

3. (1) Hours Worked: What time is Compensable? Issues directly impacting home care: • Call time (schedulers, etc.); • Travel time; • In-service training; and • Sleep time (24/7 Care).

4. (1) Hours worked: What time is Compensable? General considerations: • All hours “permitted” or “suffered” to work. • Hours “permitted” is the time you want employees to work. • Hours “suffered” is the time you don’t necessarily want the employees to work, but they do so anyway (usually applies in the context of unauthorized overtime). • Key: unauthorized overtime is a disciplinary issue/not a payment issue: Employees must be paid for all time worked, even if unauthorized.

5. (1) Hours worked: What time is Compensable? General considerations cont’d … • The moment employee begins principal activities for the benefit of the employer. • Example. Before starting work for the day at a client location, employee records notes. In such circumstances, the work day begins and the commute may be work time. • Work time excludes de minimis activities of minimal duration (e.g. a few minutes to map driving routes before beginning work). • No de minimis threshold. Rule of reasonableness. Activities areaggregated.

6. (1) Hours worked: What time is Compensable? Examples of “on the clock”: • Breaks of less than 20 minutes; • Breaks of more than 20 minutes, where the employee is not free to leave or go about his or her own business; and • Company required in-services or other training.

7. (1) Hours worked: What time is Compensable? Examples of “off-the-clock”: • Commuting time to or from work: but only if it is before the commencement of, or after completing, responsibilities. • Time exceeding 30 minutes when the employee is free to engage in personal pursuits without restriction.

8. (1) Hours worked: What time is Compensable? Examples of off-the-clock, cont’d … • Meal periods, so long as the employee is free from all work duties and the break is long enough to be useful. (Be careful!) • Sleep time, so long as the “tour of duty” is 24 hours or longer and no work is required. (We will discuss in detail later.)

9. (1) Hours worked: What time is Compensable? Travel Time: • Travel directly to client site at the start of the work day is not compensable time under FLSA and PMWA (concept of “portal-to-portal”). • Travel from client site at the end of the work day is likewise not work time. • Employee travel time between clients during the work-day, however, is compensable work time.

10. (1) Hours worked: What time is Compensable? Travel Time cont’d … • Travel time is also “on-the-clock” if it occurs during an employee’s normal working hours. • Issue: What if consumer visits are more than 30 minutes apart even taking into account travel time?

11. (1) Hours worked: What time is Compensable? Travel Time cont’d … • Example: Consumer A is authorized for 2 hours of service between 9:00 – 11:00 a.m. Consumer B is authorized for 2 hours of service from 12:00 – 2:00 p.m. A and B live only 10 minutes apart. What portion of time is compensable between 11:00 – 12:00 if the same employee services A and B.

12. (1) Hours worked: What time is Compensable? On-Call Time: • Merely being “available” to work is not work time, e.g., carrying a pager on the weekend. • Employers who have employees “engaged to wait” may pay employees a different rate for the waiting time. • However, it is generally impermissible to pay employees two separate rates for the same work during a single workweek.

13. (1) Hours worked: What time is Compensable? On-Call Time cont’d … • On-call “bonus” must be included in the employee’s “regular rate” when calculating overtime. • Employees who do not have to be compensated for on-call time still must be compensated for time actually spent taking call. • Employer’s should be tracking time spent actually taking call and compensating for same on an hourly rate basis (or some multiple thereof, e.g., double time). • DOL audit risk. • No issue for exempt employees.

14. (1) Hours worked: What time is Compensable? On-Call Time Cont’d … • Example: Agency pays scheduler a flat fee of $125.00 to take call on Saturday . The scheduler worked 40 hours between Monday and Friday during the workweek at $12.00 per hour. On Saturday, the scheduler spends 2 hours addressing call. If the US DOL conducts an audit, they will add the $125.00 into the schedulers “regular rate” for overtime purposes and expect additional overtime compensation as follows: Regular rate = (40 hours x $12.00) + ($125.00) 42 hours Regular rate = $14.40 Overtime = $14.40 x .5 x 2 = $14.40

15. (1) Hours worked: What time is Compensable? On-Call Time Cont’d … In sum: • Track time actually spent taking call. • Pay some multiple of the employee’s standard rate for time spent taking call on weekends or evenings.

16. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Live-in Aides provide services around-the-clock. • Although they maintain separate residences, they often stay at the consumers’ premises for weeks and sometimes months on-end, working 24 hour/7-day schedules. • In the industry, these employees are often paid “day-rates.”

17. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Is a “day-rate” permissible underFLSA and PMWA? • Is “sleep time” compensable?

18. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Two separate laws are implicated: the FLSA and PMWA. • Under the FLSA, there is a “companionship service” exemption for employees that provide “companionship services” for individuals who because of age or infirmity are unable to care for themselves. See 29 U.S.C. § 213(a)(15). • The “companionship service” exemption has been confirmed by the U.S. DOL as applying to situations where the Aide is employed by a third-party/Agency. • In sum, acceptable under the FLSAfor now.

19. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • December, 2011: DOL Notice of Rule Making. • If the new rule proposed by the DOL goes into effect, the “companionship services” exemption will no longer apply to agency employers. • However, given the state of Pennsylvania law, this is likely not an issue for Pennsylvaniahome care providers.

20. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Under the PMWA, there is no counterpart to the FLSA “companionship service” exemption with respect to third-party employment. • Bayada Nurses, Inc. v. Pennsylvania Dept. of Labor & Industry, 8 3d. 866 (Pa. 2010). • In Bayada, the Pennsylvania Supreme Court expressly held that agency employers may not rely upon the “domestic services” exemption set forth in the PMWA. • Accordingly, home care aides employedby agency employers are entitled to boththe applicable PA minimum wage andovertime.

21. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • The definition of “hours worked” under the PMWA may (it is not certain) allow agency employers to exclude up to 8-hours designated for “sleep-time.” See 34 Pa.Code 231.1. • The regulation governing payment of the minimum wage states that: “in the case of a residential employe [which is an employe who resides and works on the premises of the employer], the Secretary will approve any reasonable agreement between the employer and employe for determining hours worked.” 34 Pa.Code § 231.21(b). • Issue: Is the consumer an “employer” for this purpose? Concept tacitly rejected by the Supreme Court in Bayada.

22. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • On March 6, 2006, the Pennsylvania Department of Labor & Industry issued a letter ruling expressly approving the exclusion of up to 8-hours for “sleep time” from a home care worker’s “hours worked.” • In such letter ruling, the Dept.further noted that it would deferto 29 C.F.R. § 785.22(b) (requiringthat at least 5-hours be uninterrupted)for enforcement purposes.

23. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Although there is little guidance on the payment of “sleep-time” under the PMWA regulations, a reasonable interpretation of the definitions referenced above would appear to allow employers to treat home care workers as “residential employees” and exclude up to 8 hours for sleep-time, provided that: • the employee gets at least 5 hours of uninterrupted sleep (see FLSA regulations); and • there is a “reasonable agreement” in place with the worker to exclude sleep-time from the “hours worked” calculus.

24. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Still risk involved even if above steps are taken. • Dept. of Labor & Industry letter rulings are not binding on Courts. (Current 8/80 issue, by way of specific example.) • PMWA Regs. Define “hours worked”to include “time during which anemployee is required to be on thepremises of the employer, to be onduty or to be at the prescribedworkplace.” 34 Pa. Code. § 231.1.

25. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • In any event, however, the home care worker will be entitled to at least the minimum wage for the first 40 hours, and time-and-a-half for hours worked in excess of 40 in the workweek. • Therefore, a “day-rate” isproblematic under the PMWA.

26. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • PMWA “regular rate” regulations provide that “[i]f the employe is paid a flat sum for a day’s work … his regular rate is determined by totaling all the sums received at the day rates or job rates in the workweek and dividing by the total hours actually worked. Heis then entitled to extra half-time pay at this rate for hours worked in excess of 40 in the workweek. 34 Pa. Code § 231.43(b).

27. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • Example: Home care worker receives a “day rate” of $120.00 per day. Works 16-hours per day (excluding sleep-time) for 7-days in the workweek. Day rate yields $840 for the week (7 x 120.00). Dept. of Labor & Industry calculation will yield additional compensation owed of $270.00. 16 hours x 7 days = 112 hours worked.Regular rate = $7.50 ($840.00 / 112).72 overtime hours (112 – 40) x ½ $7.50 = $270.00.

28. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • In light of the “regular rate” regulation under the PMWA, the payment of a “day rate” is highly questionable under the PMWA. • Better approach is to have an agreement premised on hourly compensation which expressly addresses the “sleep time” issue.

29. (1) Hours worked: What time is Compensable? 24/7 Care:How do I pay my workers? • “Day rate” solutions under the PMWA. • Establish a day rate equivalent of $145.00 [(8 x $7.25) + (8 x $10.88)] for the first 5-days of any workweek. • Must pay full 16-hours at time and a half minimum wage of $7.25 or $10.88 for days 6 and 7 in any workweek ($174.08). • Must have agreement in place with employee encompassing above and acknowledging that 8 hours will be excluded for sleep time.

30. (1) Hours worked: What time is Compensable? Overtime Calculation Issues: • Employees working for two or more clients with different rate ― What rate to use for overtime? • The “regular rate.”

31. (1) Hours worked: What time is Compensable? Overtime Calculation Issues: Amounts included in the “regular rate”: • All non-discretionary amounts paid to employees are presumed to be included in the “regular rate” when computing overtime. • Shift differentials. • On-call bonuses. • Attendance bonuses. • Retention bonuses. • Performance bonuses.

32. (1) Hours worked: What time is Compensable? Overtime Calculation Issues cont’d … Hourly Paid Employee: Shift Differentials – An Example. • Calculation: Shift differential must be added in the regular rate. (a) Hourly rate is $8.00. (b) Shift Differential for evening shift is $1.00/hour. (c) Employee works 48 hours in the week – 8 overtime hours, and 3 evening shifts. * 24@ $8.00 hour $ 192.00 * 24@ $9.00 hour 216.00 * T = $408.00 $ 408.00 (d) Overtime premium: 408 ÷ 48= $8.50 regular rate. (e) Regular rate x½ = overtime premium times overtime hours: * $4.25 x 8 = $34.00. (f) Total compensation for the week: $408.00 (straight time pay) 34.00 (overtime) $442.00 • Same analysis if employee working for two clients at different rates.

33. (1) Hours worked: What time is Compensable? Comp Time: • Essentially, comp. time does not exist for private employers. • For private employers, the employee must be given the time off within the same week in which the overtime is accrued.

34. (2) Are your “White Collar” employees really exempt? • Issue spotting … • Understanding salary basis compensation … • Exempt duties … Executive, Administrative, Professional …

35. (2) “White Collar” Exemptions … • Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees who are employed in a bona fide: • Executive; • Administrative; • Professional; or • Outside Sales capacity. • Certain computer employees may also be exempt professionals under Section 13(a)(1) or exempt under Section 13(a)(17) of the FLSA.

36. (2) “White Collar” Exemptions … Three Tests for Exemption: • Minimum Salary Level; • Salary Basis Compensation; and • Exempt Job Duties.

37. (2) “White Collar” Exemptions … Minimum Salary Level: • For most employees, the minimum salary level required for exemption under the FLSA is $455 per week. • Must be paid “free and clear.”

38. (2) “White Collar” Exemptions … 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 anywork. • Need not be paid for any workweek when no work is performed.

39. (2) “White Collar” Exemptions … Deductions from Salary: • 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 business. • If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.

40. (2) “White Collar” Exemptions … Permitted Salary Deductions: There are seven exceptions to the “no pay-docking” rule: 1. 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.

41. (2) “White Collar” Exemptions … Permitted Salary Deductions cont’d … 4. Penalties imposed in good faith for violating safety rules of “major significance.” 5. Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of workplace conduct rules. 6. Proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment. 7. Unpaid leave taken pursuant to the Family and Medical Leave Act.

42. (2) “White Collar” Exemptions … Additional Compensation: • An employer may provide compensation in addition to the $455 minimum guaranteed weekly salary, such as: • Commissions; • bonuses; and • additional pay based on hours worked beyond the normal workweek.

43. (2) “White Collar” Exemptions … Executive Duties: • Primary duty is 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.

44. (2) “White Collar” Exemptions … Primary Duty: • Employees who spent more than 50% of their time performing exempt work will generally satisfy the primary duty requirement under FLSA. • However, the regulations do not require that exempt employees spend more than 50% of time performing exempt work. • Lower threshold of 20% underPMWA.

45. (2) “White Collar” Exemptions … Administrative Duties: • 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 • Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

46. (2) “White Collar” Exemptions … Learned Professional: • 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.

47. (2) “White Collar” Exemptions … Nurses: • Registered nurses who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption. • Registered Nurses compensated on an hourly basis, however, would not be exempt. • Licensed Practical Nurses generally do not qualify as exempt learned professionals.

48. (3) Conflicts between the Federal FLSA and Pennsylvania MWA …

49. PMWA conflicts with the FLSA (domestic services exemption) (as discussed) • FLSA § 213(a)(15) “companionship services” exemption interpreted to apply to agency employers. Long Island Care at Home, Ltd. v. Coke, 127 S.Ct. 2339 (2007). • PMWA “domestic services” exemption interpreted not to apply to agency employers. Bayada Nurses, Inc. v. Commonwealth of Pennsylvania Dept. of Labor and Industry, 8 A.3d 866 (Pa. 2010).

50. PMWA conflicts with the FLSA (Example: 8/80 Rule) • Section 207(j) of the FLSA allows a hospital nursing or other establishment engaged in the care of the sick, aged or mentally ill to utilize a 14-day “workweek.” • Pursuant to this rule, employees receive overtime for hours in excess of 8 in any day or 80 in the 14-day workweek (the “8/80 Rule”). • There is no express counterpart to the 8/80 Rule under the PMWA. • Issue is currently being litigated across the state. • Key: 5 Pa. Dept. of Labor & Industry letter rulings authorizing the practice.