Monday, July 27, 2009

Federal Minimum Wage Increased

The Federal minimum wage increased on July 23rd from $6.55 per hour to $7.25 per hour. This wage increase is proscribed by 2007 amendments to the Fair Labor Standards Act. While the increase brings good news to workers making minimum wage, it also creates an added burden on business owners who must now pay higher wages in a struggling economy. Some small business asked Congress to defer the wage increase to some time after the U.S. recovers from the recession.

As a reminder, employers must update their labor law posters to reflect the new wage increase.

Interestingly, even with the increase to $7.25 per hour, a full-time employee making minimum wage only earns about $15,080 per year, hardly enough to live on.

Thirty states, including Georgia, have had to raise their minimum wage as well (states can have a higher minimum wage than the Federal, but not less). Nineteen states already have minimum wages laws that mandate a higher minimum wage than the Federal.

Some economists are predicting that the increase in minimum wage will have a negative effect on the consumer, as many businesses are expected to raise prices to offset increased labor costs.

Friday, July 24, 2009

Respect Employees in the Military

We have grown to better appreciate our military and the men and women who serve in the armed forces. It is not uncommon to witness uniformed servicemen getting applause in an airport or being honored and recognized at a sporting event. However, the same level of respect is not always given in the workplace. Employers need to understand that the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) protects employees who are called to service. USERRA is intended to provide military service members the ability to return to their jobs with credited seniority following absence due to service. The rights provided under USERRA include:

  • non-discrimination based on military status;
  • reinstatement rights to the position and pay that the employee would have held had the employee remained continuously employed;
  • continuation of medical benefits for service under 30 days;
  • optional continuation of medical benefits;
  • all seniority, rights and benefits upon return to work as if the employee had remained continuously employed; and
  • protection from discharge upon return to work, except for cause, for a period of time.
The US Department labor has jurisdiction over USERRA claims and can investigate any violations of that law. If the DOL cannot resolve a complaint directly with the employer, the matter is referred to the Department of Justice (DOJ). The DOJ has the ability to file a lawsuit in the appropriate federal district court on behalf of the aggrieved employee.

All employers should review their policies and procedures to make sure that they are in compliance with USERRA, including having the required posted notice apprising employees of their rights under USERRA. An employee returning from military service should be reinstated as dictated under law and must not be discharged subsequent to his/her return per USERRA.

In addition, recent changes to the Family and Medical Leave Act (FMLA) set forth military leave rights under that law.

Friday, July 17, 2009

Pregnancy Discrimination Claims Increase

It is not a surprise that the EEOC is receiving a greater volume of discrimination charges given that the U.S. unemployment rate is now over 10%. Naturally, many people who have lost their jobs have claimed a discriminatory basis for their separation. But, it is surprising that a large number of pregnancy discrimination claims have come into the EEOC. Pregnancy discrimination is covered under Title VII via the Pregnancy Discrimination Act (PDA). The EEOC reported that it received 6,285 claims in FY 2008, up from 5,587 in FY 2007.

The 7th Circuit Court of Appeals recently held that the PDA covers a "potential pregnancy" after an employee claimed she lost her job because she had taken time off for fertility treatment. This ruling certainly expanded the scope of covered claims (at least in that Circuit).

In addition, on January 1, 2009, the Americans with Disabilities Act (ADA) Amendments Act of 2008 went into effect. The ADA was amended because "the holdings of the Supreme Court in Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999) and its companion cases have narrowed the broad scope of protection intended to be afforded by the ADA, thus eliminating protection for many individuals whom Congress intended to protect." Pregnancy can be covered under the ADA if it effects a major life activity (such a major complications requiring bed rest).

Further, the Family and Medical Leave Act (FMLA) allows employees with serious health conditions, including conditions related to pregnancy, to take leave on a reduced work schedule if it is “medically necessary.” A reduced work schedule is “medically necessary” if an employee has a serious health condition that requires a treatment regimen which is best accommodated by this type of leave. Thus, if a health care provider certifies a pregnant employee’s need for part-time work, an employer may have to modify the employee's work schedule.

As always, employers should make sure that they are in compliance with all laws and should consult with counsel if any questions arise.

Tuesday, July 7, 2009

Right Staffing and Preserving Exemption

Yesterday I discussed supervisors and need to meet certain criteria in order to maintain an exemption from overtime. One reader aptly pointed out that paying on a "salary basis" means that an employee regularly receives each pay period a fixed, predetermined amount of money (of at least $455 per week) for every workweek in which the person performs any work. The U.S. Labor Department rules provide that, with some exceptions, the salary amount cannot be reduced based on the number of hours or days the employee works. And, the employee's salary may not be docked for absences during a workweek caused by the employer or by the organization's operating needs.

More and more, companies are looking to save money on labor costs while at the same time retaining valuable employees. Some companies have elected to reduce employee hours, work days or workweeks. Other companies have resorted to furloughs.

An employer can reduce an exempt employee's salary (temporarily or otherwise) on a going-forward basis, which can be made a part of a shortened work schedule. To meet the exemption rules, the employee's salary must be at least $455 per week and must still be paid per the "salary basis" rules, meaning that the lower salary could only be docked per those rules, which would not include days off in a workweek due to shutdowns.

Also, a salary does not need be paid for any workweek in which the exempt employee performs no work. If the employee is furloughed for one or more entire workweeks, then the "salary basis" rules do not require that she be paid any of the salary.

Be mindful that in order to preserve the exemption under these scenarios, the company should not allow an employee to take work home, handle matters remotely, by telephone, to perform duties from outside the office, etc. The relevant time period is the seven-day workweek the employer has established and documented for the employees as is required under the FLSA; this does not necessarily have to be a standard calendar week.

Monday, July 6, 2009

Wage & Hour and Multiple Locations

If your company maintains more than one location, such as multiple retail store locations, chances are you maintain a manager or store supervisor that oversees each location's operations. In tough times like now, many retailers staff very conservatively. A supervisor may be one of two employees staffing a retail store. While the supervisor may direct and control 1 or 2 other employees, she may also perform the same/similar duties as her subordinates, such as ringing up customers at a cash register.

The federal Fair Labor Standards Act (FLSA) determines whether a supervisor is exempt from overtime and is not based on what title the company uses or if the person is salaried. Whether or not an employee is exempt from overtime depends on that individual's job duties and the proper application of FLSA regulations.

A store manager at one location may be exempt from overtime, while a manager at another may not. The difference is sometimes subtle and difficult to understand under the FLSA. The question arises when when managers perform many non-managerial tasks: can they be exempt from overtime?

Store managers generally are not exempt from overtime where they do not customarily and regularly direct the work of two or more other full-time employees or the equivalent. Whether a manager's primary duty is "management" under the FLSA is based on all the particular facts and circumstances. Recent cases under the latest FLSA regulations, define "primary duty" as the principal, main, major or most important duty that the employee performs. The determination must be made with a view toward the character of the employee's job as a whole. So, an employee performing some nonexempt work can still be exempt if her primary duty is managerial in nature.

With the increase in wage and hour class-action suits, you should be very careful when making a determination on the exempt status of management personnel. Your policies and procedures will help define the scope of duties and managerial responsibilities, but remember, the FLSA governs.

Friday, July 3, 2009

Obama Administration Committed to I-9 Compliance

The Obama administration just announced that it was launching an investigation of hundreds of businesses as part of its strategy to focus immigration enforcement on the employers who hire illegal workers. The administration will be auditing I-9s and compliance with same.

An I-9 is a federally-mandated document that all employers are supposed complete with the cooperation of employees within 3 days of hire. It is intended verify that a person is authorized to work in the U.S.

Employers who do not properly retain, complete and verify I-9 information are subject to fines by the Immigration and Customs Enforcement (ICE). Reportedly, ICE served "Notices of Inspection" to 652 businesses, which is an increase from last year.

The biggest challenge facing employers subject to an audit may be their inability to confirm whether documents presented to them by workers were authentic (such as a Social Security Card) or that the worker's identity is genuine.

Now is the time to consult with counsel and to conduct a self-audit!

Wednesday, July 1, 2009

Federal Min. Wage to Increase Soon

The federal minimum wage is currently $6.55 per hour. It will increase to $7.25 per hour effective July 24, 2009. Many states have also raised their minimum wage rates.

Employers in these 17 states will see their minimum wage increase the same as above:

Nebraska (State law is not tied to federal law, so employers covered by state but not federal law will not be required to pay federal minimum wage.)
North Dakota
South Carolina
South Dakota
Utah (The state's minimum wage does not apply to anyone entitled to the federal minimum wage.)
Wyoming (Like Nebraska, Wyoming’s law is not tied to federal law, so employers covered by state but not federal law will not be required to pay federal minimum wage.)