Do You Have to Pay Summer Interns?

Posted by Admin on June 12, 2013

Guest Blogger: Mark Wilkinson

Summer has arrived and many employers have already supplemented their operations with student interns, but the question we see crop up repeatedly is, “do I have to pay interns?”  In the last few years, with a more competitive job market and corporate focus on reducing costs, we have seen an increase in the use of unpaid interns.  Unfortunately, not all internships can be unpaid.  

Several high-profile employers currently face wage and hour collective actions brought by former interns who now claim they should have been paid during their internship.  The entertainment industry is currently under attack for its longstanding use of unpaid interns.  For example, former interns are currently suing Fox Searchlight pictures for unpaid wages on the set of the movie, Black Swan. See, e.g., Glatt et al., v. Fox Searchlight Pictures Inc., No. 11-6784.pdf (S.D. N.Y. June 11, 2013) (where after analyzing the DOL’s six-factor test and considering the totality of the circumstances, the court determined that some of the plaintiffs were improperly classified as unpaid interns and were “employees” covered by the FLSA and a similar state statute).

While the courts continue to wrestle with how to treat unpaid interns, the United States Department of Labor has provided employers with some guidance.  Public employers and not-for-profit entities do not have to pay their interns.  On the other hand, private employers, must meet a six-factor test in order for an internship to qualify as unpaid under the Fair Labor Standards Act:

  • Is the internship similar to training given in an educational environment?
    • For instance, could the intern pay to receive this kind of training somewhere else?
    • The more an internship program is built around the classroom or academic experience, as opposed to the employer’s actual operations, the greater the chance the internship will be considered an extension of the student’s educational experience.
  • Is the internship experience for the benefit of the intern?
    • College credit is a strong indicator that the intern benefits from the experience, but will not be dispositive.
    • Does the intern receive a real benefit from the internship (like learning a skill transferrable to other employers)?
  • Does the intern work alongside regular employees (and not otherwise displace them) under close supervision of existing staff?
    • Interns cannot fill in for regular employees who want take time off or who are on leave and employers cannot use interns to add to the workforce during peak periods.
    • Job shadowing where the intern performs little or no work looks like a bona fide training and educational experience. 
  • Does the intern not provide the employer with any immediate advantages or services?
    • Technically, this means that interns cannot perform any menial tasks like deliver mail, sort files, fetch coffees, or run errands.
    • This requirement of the test is the most difficult and controversial and a couple courts have rejected it altogether.  See Solis v. Laurelbrook Sanitarium & School Inc., 642 F.3d 518 (6th Cir. 2011) (“the proper approach … is to ascertain which party derives the primary benefit from the relationship”); McLaughlin v. Ensley, 877 F.2d 1207 (4th Cir. 1989) (general test in the Fourth Circuit is whether the employee or the employer is the primary beneficiary of the intern’s labor). 
  • Does the intern understand that they are not entitled to a job at the conclusion of the internship?
    • Unpaid internships should have a fixed duration established prior to the start.
    • An internship should not be used as a trial or probationary period for job-seekers.
  • Do both the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship?
    • The label “intern” or “trainee” does not matter under the FLSA and job titles are largely irrelevant—only the duties that persons perform matter.
    • A person cannot “agree” to be an unpaid intern.

As a flowchart, the DOL’s test looks like this:

interns.jpg

Employer Insight

Given the activity in this area from the plaintiff’s bar, employers should take a hard look at their unpaid internship programs and evaluate them against the DOL’s six-factor test.  An internship agreement or acknowledgement form tailored to the factors in the test is a good start, but employers should remember that persons cannot waive the protections of the FLSA.  So, an agreement will not necessarily resolve the question.  Employers that have come to rely on the contributions of interns each summer or during school semesters will likely have a hard time justifying their internship program as unpaid, even if every other employer in the industry does the same thing. 

Can We Mandate Direct Deposit? [Wage & Hour FAQ]

Posted by Bill Pokorny on October 12, 2012

Direct Deposit Slip iStock_000017654852XSmall.jpgQ. We would like to require employees to accept pay via direct deposit. Is this permitted?

A. Direct deposit is an increasingly common method of paying employees, with numerous advantages for employees (fewer trips to the bank, no worry about losing a check) and employers (reduced cost and administrative hassle).

The Fair Labor Standards Act does not directly answer this question. However, in its interpretive regulations, the U.S. Department of Labor states that the FLSA requires payment "in cash or negotiable instrument payable at par," except under limited circumstances in which employers are permitted to record a credit for board, lodging, and other facilities. 29 CFR § 531.27. That of course begs the question of whether direct deposit into a bank account qualifies as a "cash equivalent." The regulations do not address that question, but in Section 30c00(b) of its Field Operations Handbook, the DOL says the following:

The payment of wages through direct deposit into an employee's bank account is an acceptable method of payment, provided employees have the option of receiving payment by cash or check directly from the employer. As an alternative, the employer may make arrangements for employees to cash a check drawn against the employer's payroll deposit account, if it is at a place convenient to their employment and without charge to them. [Emphasis added.]

So, at least according to the U.S. Department of Labor, employers can pay employees via direct deposit, but have to allow employees the option of receiving payment by cash or check. (Note - we strongly recommend against paying employees in cash.) 

Most states also have laws that govern when and how employers must pay employees. While a handful of states permit employers to mandate direct deposit (usually with some restrictions), most, like Illinois, allow direct deposit only with the agreement of the employee. The Society of Human Resources Management has a useful compilation of state laws on wage payments and direct deposit available here. 

 

Do Hours Worked On A Second Job Count Toward Overtime? [Wage & Hour FAQ]

Posted by Bill Pokorny on June 18, 2012

PunchClock9472033.jpgQ. An employee works for the company full-time, 7.5 hours per day, 5 days per week, at $20 per hour. To make ends meet, the employee also voluntarily works a different part-time job for the company on Saturdays, usually working an additional 7.5 hours at $15 per hour. The two jobs are completely separate and could just as easily be done by different people. Do we have to pay overtime for the additional hours, and if so how do we calculate the amount due?

A. Yes. Under the FLSA and parallel state laws, overtime is due whenever a non-exempt employee works more than 40 hours for an employer in a single 7-day workweek. It makes no difference that some portion of those hours are spent performing different duties than other hours.

That leaves the question of how to calculate overtime given that the employee is paid at two different pay rates for the different jobs. The employee is due time and a half, but at what rate? Here there are basically two options.

Continue Reading

Can Employees Agree to Be Exempt? [Wage & Hour FAQs]

Posted by Bill Pokorny on May 30, 2012

iStock_000004431244XSmall.jpgQ. Our employees consider themselves "professionals" and don't want to be treated as hourly workers. If our employees agree to it, can we still treat them as "exempt" even if they don't meet all of the requirements under the FLSA or state law? 

A. In a word, no. This question comes up more often than you might think. In some cases, particular industries have developed a practice of treating certain categories of employees as "salaried" and assuming that they are not exempt. In others, employees would simply rather be "salaried" or "exempt" because this suggests a higher status than an "hourly" position, or because they prefer not to have to track their time. 

Unfortunately for employers, an employee's choice generally had nothing to do with whether or not the employee can legitimately be classified as "exempt" from overtime requirements under state and federal law. With very few exceptions, the rights provided by the Fair Labor Standards Act and is state equivalents can't be waived or modified by an agreement with the employee. 

So how can employers manage employee expectations without running afoul of the law? 

Continue Reading

Do I Have To Pay An Exempt Employee Who Answers E-Mail Or Phone Calls While On FMLA Leave? [Wage & Hour FAQ]

Posted by Bill Pokorny on March 05, 2012

You've Got mailQ. A salaried, exempt employee who recently returned from a week of unpaid FMLA leave claims that he is entitled to be paid his full salary for entire week because he responded to a number of work-related e-mails and telephone calls while he was out. Do we have to pay?

A. Wage and hour law is confusing enough on its own, but it becomes even more so when it intersects with other complicated legal issues, like the Family and Medical Leave Act. On our FMLA Insights blog, my colleague Jeff Nowak explains how to deal with this situation from the perspective of counting the employee's time as FMLA leave. But that leaves open the question of whether and how much the employee is entitled to be paid. 

As we explained in a recent post regarding unpaid disciplinary suspensions, in most cases employees who are classified as exempt executives, administrators, and professionals under the Fair Labor Standards Act must be paid on a "salary basis," meaning that they must receive a fixed salary each workweek that does not vary regardless of the number of hours worked or the quality or quantity of work performed. 

However, the FLSA regulations provide certain exceptions from this general rule. Salary deductions are allowed when an exempt employee misses one or more full workdays for personal reasons other than sickness or disability. Deductions are also permitted for full-workday absences due to sickness or disability if the employer has a "bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by such sickness or disability," such as paid sick days or a short-term disability insurance plan. 

In the case of FMLA leave, however, the regulations go one step further. Here is the relevant text (29 CFR § 541.602(b)(7)):

An employer is not required to pay the full salary for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. Rather, when an exempt employee takes unpaid leave under the Family and Medical Leave Act, an employer may pay a proportionate part of the full salary for time actually worked. For example, if an employee who normally works 40 hours per week uses four hours of unpaid leave under the Family and Medical Leave Act, the employer could deduct 10 percent of the employee's normal salary that week.

So, turning to our hypothetical question above: 

Much depends upon exactly how much time the employee is spending on e-mail and telephone calls while he is away from work. If all the employee does is spend a couple of minutes over the course of the week responding "OK" to e-mails or taking a quick phone call or two, the time at issue may be de minimus and not an issue. If, on the other hand, the employee is spending significant time working while on FMLA leave, the employee might arguably be entitled under the FLSA to a percentage of his regular salary proportionate to the time actually worked, but not his full salary for the entire workweek. 

That takes care of federal law, but what about state law? As noted in our discussion of disciplinary suspensions, Illinois rejected the 2004 amendments to the FLSA regulations that added the language quoted above. However, as stated in the preamble to the 2004 FLSA regulations, the exception for FMLA leave incorporated into the 2004 FLSA rules merely codified existing federal law. Indeed, the exception is written into the FMLA itself at 29 U.S.C. § 2612(c):

Except as provided in subsection (d) of this section, leave granted under subsection (a) may consist of unpaid leave. Where an employee is otherwise exempt under regulations issued by the Secretary pursuant to section 213(a)(1) of this title, the compliance of an employer with this subchapter by providing unpaid leave shall not affect the exempt status of the employee under such section.

Insights for Employers:

  1. FMLA leave is the one situation in which an employer can take deductions from an exempt employee's salary in increments of less than one full work day. 
  2. However, if an exempt employee is actually performing work during FMLA leave and the time involved is more than de minimus, the employee might be entitled to a pro rata portion of his or her salary for the time spent on work activities. 

 

Can We Suspend An Exempt Employee Without Pay? [Wage & Hour FAQ]

Posted by Bill Pokorny on February 17, 2012

Man with dunce cap on stoolQ. One of our salaried exempt employees appears to have violated our sexual harassment policy. We would like to suspend him without pay for 3 days. Is this allowed under the FLSA?

A. Maybe, but check your state's laws as well. 

With a few specific exceptions, employees whose duties qualify them as executive, administrative and professional employees under the Fair Labor Standards Act can be considered exempt only if they are paid on a "salary basis." This means for each week in which the employee performs any work, he or she must receive a fixed weekly salary that does not vary regardless of the number of hours worked or the quality or quantity of work performed. Taking improper deductions from an exempt employee's salary can potentially result in loss of exempt status not only for the affected employee, but for all employees in the same job classification. 

There are, however, certain exceptions to the rule against salary deductions. For example, if an employee is absent for one or more full workdays for personal reasons other than sickness or disability, the employee's salary can be reduced proportionately. Likewise, an exempt employee's salary can be reduced for full-day absences due to sickness or disability if the employer provides paid sick leave or other disability compensation. 

With respect to this specific question, the regulations also allow for salary deductions for "unpaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules" "imposed pursuant to a written policy applicable to all employees." In the example cited above, the sexual harassment policy is (hopefully) in writing, and (hopefully) applies generally to all employees in the organization. Consequently, suspending the employee for three full days without pay under these circumstances likely would not violate the FLSA.

But that's not the end of the story. While most states follow the U.S. Department of Labor's rules regarding exempt status, this is not universally so.  In our great state of Illinois, for one, the General Assembly specifically rejected the 2004 updates to the FLSA regulations that allowed for disciplinary suspensions for violations of written workplace conduct rules. Thus, in Illinois, an exempt employee can be suspended without pay for disciplinary reasons  only for violating a "safety rule of major significance," such as rules "prohibiting smoking in explosives plants, oil refineries, and coal mines."

So what can an employer in Illinois do if it wants to impose discipline that will hit an exempt employee's pocketbook without terminating the individual's employment? There are a few options:

  • Suspend the employee for a full week. Provided that the employee does not perform any work during the week, no salary is due. However, no work means no work. Requiring the employee to participate in a conference call or respond to e-mails during the suspension could obligate the employer to pay the employee's full salary for the week, converting a disciplinary suspension into a paid vacation. 
  • Require the employee to use available paid vacation or PTO while on suspension. So long as the employee's take-home pay is not reduced, deducting from the employee's bank of paid leave time does not result in loss of the employee's exempt status. 
  • If the employee is eligible for any sort of discretionary bonus or other compensation in addition to their salary, consider reductions in those amounts if that is consistent with any applicable policies, plans or agreements. 
  • Factor the infraction in to future compensation adjustments. While after-the-fact salary deductions are not permitted, bona fide prospective salary adjustments are allowed. 

What Does The FLSA Say About Nursing Mothers? [Wage & Hour FAQ]

Posted by Bill Pokorny on January 31, 2012

Baby bottleRegular readers may have noticed a decline in the frequency of our updates around the end of the year. That's because, in addition to the usual holiday and year-end craziness, my wife and I welcomed a new baby on the day after Christmas. As I get back into the swing of work and blogging, I thought this might be a perfect time to review the federal requirements regarding break time for nursing mothers. 

Before you ask, yes, this really is a wage and hour law issue, as the new rules regarding nursing mothers included in the Patient Protection and Affordable Care Act of 2010 were added as amendments to the Fair Labor Standards Act. 

Here's what the law requires:

  • Employers with 50 or more employees must provide "a reasonable break time for an employee to express breast milk for nursing her child for 1 year after the child's birth each time such employee has need to express the milk."
  • The employer must provide "a place, other than a bathroom, that is shielded from view and free from intrusion of coworkers and the public, which may be used by an employee to express breast milk."
  • Employers with fewer than 50 employees are subject to the same requirements unless complying with the law "would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation tot he size, financial resources, nature, or structure of the employer's business." 
  • Employees do not have to be paid if they take a break during work time under the law.

There are a few important things that employers should keep in mind with respect to this law:

  1. While the additional leave provided by the law can be unpaid, employees who use what would otherwise be a paid break in order to express milk must be compensated in the same manner as other employees for the break time. Additionally, for break time under the law to be unpaid, the employee must be "completely relieved of duty," and should not perform any work.
  2. The law does not apply to employees who are exempt from Section 7 of the Fair Labor Standards Act, which is the section governing overtime. Accordingly, executive, administrative, and professional employees, as defined under the FLSA, are not entitled to breaks to express milk under federal law. 
  3. While there is an "undue hardship" exception for employers with fewer than 50 employees, there is no such exception for employers with 50 or more employees. In other words, larger employers are required to comply with the law even if doing so would be expensive or disruptive to their operations. 
  4. Many states and localities also have laws relating to nursing mothers. If your business has employees in a jurisdiction that provides more generous rights for nursing mothers than required by federal law, you must comply with those laws. The National Conference of State Legislatures offers a summary of state laws relating to breastfeeding and expressing milk on its website. 

Does An Exempt Employee Who Calls In Sick The Day Before Thanksgiving Get Holiday Pay? [Wage & Hour FAQ]

Posted by Bill Pokorny on November 22, 2011

Turkey iStock_000001827125XSmall.jpgQ. Our holiday pay policy says that employees must be at work the day before and the day after a holiday. Our office is closed Thursday and Friday for Thanksgiving. If an exempt employee works Monday and Tuesday but calls in "sick" on Wednesday, can we deny the employee holiday pay?

A. Many employers have policies like this one. The intent behind them is to discourage employees from extending their holiday weekends through strategic use of unscheduled sick time or personal days. With hourly employees, the issue is relatively simple from a wage & hour perspective: follow your policy (and any applicable union contract or employment agreement) and make sure the employee is paid for any time actually worked. 

For exempt employees, the problem is a bit more complicated. Remember that to qualify for the most commonly used exemptions - the "white collar" exemptions for executive, administrative, and professional employees - employees must (with some exceptions) be paid on a "salary basis." This means that an exempt employee must receive his or her full salary for any workweek in which he or she performs any work, regardless of the number of hours worked or the quality or quantity of work performed. Deductions are permitted for some disciplinary suspensions, purely personal absences and, if the employer has a policy providing for paid sick leave, for absences due to personal injury or illness. However, employers cannot take deductions for absences occasioned by the employer or resulting from the operating requirements of the employer's business. In other words, the fact that the employer is closed for business on a holiday does not permit the employer to deduct from an exempt employee's salary, even if the employee would not be eligible for "holiday pay" under the employer's policies. 

So if you cannot take a salary deduction, what can you do to curb abuse of sick or personal leave by exempt employees around the holidays? One solution would be to deduct an additional day or two, as applicable, from the employee's available paid vacation or personal leave time. This is permissible under the FLSA, as the exempt employee still receives his or her full salary for the week. However, if an employee has exhausted all available paid leave the full salary must still be paid.

Other alternatives for managing this situation include requiring the employee to make up the extra hours (or possibly even work on the holiday), or imposing discipline without any adjustment to pay. Of course, if those alternatives seem too punitive for the holiday season, you could also simply let the issue go, though if you do so you should be sure that all similarly-situated employees are treated in the same manner.  

Exempt Employees, Paid Leave, and Partial Day Absences [Webinar Q&A]

Posted by Bill Pokorny on October 18, 2011

Thumbnail image for Q&AChalkboardAnother in our series of answers to questions from our September 28 webinar on wage and hour law in higher education:

Q. If an exempt employee only works a half day, i.e. they go home sick at noon, and they have both sick and vacation leave available, can we require that they use four hours of leave time to "make up" the lost four hours? Or, since they are exempt and there can be no variance for hours, must they be paid their full regular pay and not use leave time? 

A. Yes, if an exempt employee has a bank of available paid leave time and misses a half day, you can deduct a half day of available paid leave time from the employee's "bank", so long as the end result is that the employee receives his or her full salary for the workweek. If you allow use of leave time in smaller increments, you could also deduct smaller increments of time from the employee's leave bank for shorter absences. What you cannot do is take a partial-day deduction from the employee's salary once the employee has exhausted all available paid leave, unless the absence counts as FMLA leave.

For greater detail, see the DOL's opinion letters on this issue here and here.

How to Calculate Overtime for Salaried Employees Who Also Receive Commissions [Wage & Hour FAQ]

Posted by Staci Ketay Rotman on September 15, 2011

Frustrated Manager.XSmall.jpgReading about a recent lawsuit filed against Groupon, I was reminded that even the most cutting edge businesses may not understand the nuances associated with calculating overtime and find themselves a target for running afoul of wage and hour laws.  My colleague and fellow blogger, Bill Pokorny, wrote a helpful blog entry last week on calculating overtime for salaried employees.  I thought it might be useful for our readers if a follow-up entry was posted discussing how to calculate overtime for salaried, non-exempt employees who also receive commissions.

The key in calculating overtime is to determine the regular rate of pay.  Generally speaking, adding commission payments to the mix does not alter this calculation; you still must divide the employee’s total non-overtime compensation for the week by the total number of hours worked.  As Bill points out in his post, things get trickier when a non-exempt employee is paid a salary.  Adding a weekly commission payment does not really affect that calculation too much – the commission is simply added to the salary received for the week.  Here is a sample calculation using Bill’s prior example (and also assuming my math is correct):

  1. Chuck is paid a salary of $1,000 per week.  The employee handbook states that the normal workweek consists of 40 hours, thus the base salary is intended to cover 40 hours of straight-time work.  In one week, Chuck works 50 hours – 40 hours of straight time, and 10 hours of overtime.  The Company is also able to determine that Chuck earned $250 in commissions that week.  Chuck’s pay would be calculated as follows:

    Regular rate = $1,000 + 250/40 hours = $31.25
    Total pay =  (Regular salary + commission) + 10 hrs at time and-a-half
    Total pay = $1,250 + (10 hrs x 31.25/hr x 1.5) = $1,718.75
  2. Now assume that Chuck and the Company have an understanding that the $1,000 is intended to cover up to 50 hours of work per week.  As a result, Chuck would be entitled to the additional overtime premium for 10 hours at one-half of the regular rate of pay:

    Regular rate = $1,000 +250/50 = $25/hr
    Total pay = (Regular salary + commission) + 10 hrs at half the regular rate
    Total pay = $1,250 + (10 hrs x $25/hr /2) = $1,375

But things get trickier when that employee is paid both a weekly salary and a monthly commission, and the employer is not able to determine exactly what workweek in the month the employee earned a commission.  Here, Chuck earns $1,200 this month in commissions but the Company cannot tie the commissions earned to a specific workweek.  In such a situation, the Company must allocate the commissions equally to each workweek in the period covered by the commission payment.  Therefore, to calculate Chuck’s regular rate of pay under these circumstances, divide the total commission amount ($1,200) by the number of weeks in the pay period (4) to determine the weekly commission earned ($300).  So, here is how you would then calculate Chuck’s overtime using the examples above:

  1. Regular rate = $1,000 + 300/40 hours = $32.50
    Total pay =  (Regular salary + commission) + 10 hrs at time and-a-half
    Total pay = $1,300 + (10 hrs x 32.50/hr x 1.5) = $1,787.50
  2. Regular rate = $1,000 +300/50 = $26/hr
    Total pay = (Regular salary + commission) + 10 hrs at half the regular rate
    Total pay = $1,300 + (10 hrs x $26/hr /2) = $1,430

Hopefully, these examples will help guide employers through the perils of calculating overtime owed.  As Bill points out, such overtime calculations may be different if the employer uses a fluctuating workweek method for paying employees.  This will be addressed in a future post.

Calculating Overtime for Salaried Employees [Wage & Hour FAQ]

Posted by Bill Pokorny on September 07, 2011

CalculatorQ. We have a number of non-exempt employees who are nevertheless paid a salary. How do we calculate overtime for these employees? 

A. The question above is a positive sign, because if you find yourself asking it you've passed the first hurdle of realizing that not all "salaried" employees are exempt from the overtime requirements of the Fair Labor Standards Act. 

Generally speaking, calculating overtime is a simple affair. Employees must be compensated for hours worked in excess of forty hours in a single workweek at a rate of one and one-half times the employee's regular hourly rate of pay. The "regular rate" is calculated by dividing an employee's total non-overtime compensation for the week by the total number of hours worked. For employees who are paid a simple hourly rate, this calculation is simple, as the regular rate is simply the employee's normally hourly rate of pay.

However, things get trickier when a non-exempt employee is paid a salary. Suppose Chuck is paid a salary of $1000 per week. He works 50 hours in a certain week - 40 hours of straight time, and 10 hours of overtime. To calculate Chuck's overtime pay, you need one more crucial piece of information: how many hours is the $1000 salary intended to cover? 

Continue Reading

Can An Employer Pay An Exempt Employee Extra Compensation? [Wage & Hour FAQ]

Posted by Staci Ketay Rotman on August 25, 2011

Dollr Sign13528403.jpgQ.        My Company anticipates embarking on a big project this fall that will have extreme importance to the Company’s future and require extra hours at the office.  The Company wants to give a little extra pay to employees who work on this important project.  A number of these employees are classified as exempt.  May the Company provide extra compensation to exempt employees for their work on this project?

 A.        Yes.  Exempt employees are not required to receive extra compensation for extra work, but the FLSA allows employers to provide extra pay and still maintain their employees' exempt status.  Specifically, the FLSA regulations provide that an employer may provide an exempt employee with additional compensation so long as the employment arrangement also includes a guarantee of at least the minimum weekly-required amount or $455 paid on a salary basis. 

Generally, in these types of situations, the risk facing employers is whether the format of the additional compensation will invalidate the salary basis requirement, resulting in a loss of the overtime exemption.  The regulations provide limited examples of acceptable additional compensation that will not affect the salary basis qualification.  If your Company chooses to pay exempt employees additional compensation for this extra work, one of the payment formats with the least risk of destroying the employees' exempt status would be that of a flat sum bonus.  An employee’s exempt status – already difficult to establish - might be even more difficult to prove if the employee is paid time-and-a-half for the extra hours, like a non-exempt employee. 

Do We Have to Pay Employees for Checking E-Mail Outside of Work? [Wage & Hour FAQ]

Posted by Bill Pokorny on August 05, 2011

Angry man with cellphoneQ. Our company provides remote access to e-mail for all employees, and some of our hourly employees carry iPhones and Blackberries with access to their work e-mail. Most non-exempt employees only work during regular business hours, but some will occasionally check and respond to e-mail after hours or on weekends. Do we need to pay employees for this time? If so, how do we track it?

A. Yes, employees need to be paid for time spent reading or responding to work-related e-mail. If this occurs only sporadically and the time involved is truly de minimus - for example, if the employee occasionally types out "Thanks" or "OK" in response to a short message - it may not be an issue. However, if you do not have any mechanism for employees to track and report this time, you may have no way to prove that the time spent was in fact minimal. When a disgruntled current or former employee files a complaint asserting that they worked an hour or two extra every week for three years, will you be able to prove otherwise?

 

Continue Reading

When does the FLSA require pay for meal periods? [Wage & Hour FAQ]

Posted by Bill Pokorny on June 30, 2011

Hungry office workersQ. A company provides employees with a 30-minute unpaid lunch break. An employee, who is a smoker, has asked if she can take two 5-minute unpaid smoking breaks - one in the morning and one in the afternoon - and reduce her unpaid lunch break to 20 minutes. Is this allowed?

A. No. Under the FLSA, "bona fide meal periods" are not regarded as work time and can be unpaid. For a break to qualify as a bona fide meal period, "[t]he employee must be completely relieved from duty for purposes of eating regular meals," and the break must generally be at least 30 minutes or longer. The rules do allow that a period shorter than 30 minutes "may be long enough under special circumstances." For example, in a 2004 opinion letter, the DOL found that an employer could permissibly reduce its 30-minute unpaid lunch break to 20 minutes and provide an extra 10 to 15-minute paid break, given that the employer and employees' union agreed to the arrangement and that it took employees only one to one and a half minutes to reach the break room once they were relieved from duty. 

The question above states that the two additional 5-minute smoking breaks would be unpaid. Under the FLSA rules, this is likely to be problematic, as breaks of short duration - running from 5 to 20 minutes - are regarded as working time and must be paid. Further, although the DOL has recognized situations in which a meal break of less than 30 minutes can be treated as unpaid time, there are no clear rules for determining when this is permissible. Thus, while an employer might be able to get away with treating a 20-minute break as unpaid, particularly if it makes this agreement in exchange for additional paid break time under a union contract, the safer course is to treat any break under 30 minutes as paid time. 

Do you have a wage and hour question that you would like us to answer on this blog? If so, contact us! Leave a comment, or e-mail us at wageandhourinsights@franczek.com.(Please, general and hypothetical questions only as inquiries may be posted publicly. If you are an employer and need legal counsel, please contact the authors or any of our attorneys directly to discuss your situation.)

What To Do When the DOL Makes an Unannounced Visit

Posted by Bill Pokorny on June 13, 2011

Hand knocking on doorTwo federal agents arrive at your workplace and ask to interview all of your employees and see all of your payroll records for the last two years. Their business cards say that they are investigators from the U.S. Department of Labor Wage & Hour Division. What do you do? 

The unannounced on-site visit is a common tactic employed by Wage & Hour Division investigators, particularly when dealing with small employers who may not fully understand their legal rights. Often, employers simply comply with the investigator's requests, calling their lawyers only after the fact. This is usually a mistake. As with other law enforcement officers, employers are generally not obligated to immediately turn over records or allow DOL investigators into non-public areas of their premises without a warrant.

So how should you respond?

Continue Reading