Is Your Company Wage & Hour Compliant?

In case you thought that wages and hour cases were rare, think again. Through April 2008, almost 1,900 wage and hour cases had been filed in federal district courts. If this trend continues, the number of wage and hour cases will exceed 2007 levels. Plus, these figures do not include state court filings.

• How do you avoid wage and hour claims? Best practices to avoid such claims include:
• Auditing all positions classified as exempt from overtime.
• If you have not conducted an audit in the past few years, it's time for a follow-up review of lower level managers and supervisors should to ensure there have been no changes in duties.
• Making sure your company has adopted and published a "safe harbor" policy on deductions from salaried employees.
• Reviewing timekeeping policies to avoid or reduce the possibility of an employee claiming to have been working, eliminating such things as "standard" or "automatic" deductions for lunch, rounding hours, and similar practices.
• Reviewing policies and procedures to review deductions from wages and salaries to ensure that they comply with the minimum wage and overtime requirements of state and federal law.

FMLA Joint Employer Ruling

Many of the Federal employment laws do not take into consideration co-employment, joint employment or other employment relationships that involve more than one employer.

Under the Family and Medical Leave Act (FMLA), the U.S. DOL promulgated regulations explaining circumstances where a joint-employment relationship may exist: (a) Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers and facilities. Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as: (1) Where there is an arrangement between employers to share an employee's services or to interchange employees; (2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or, (3) Where the employers are not completely disassociated with respect to the employee's employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer. 29 C.F.R. § 825.106(a).

A case just decided a few week ago held that for a joint-employer relationship to exist, each alleged employer must exercise control over the working conditions of the employee, although the ultimate determination will vary depending on the specific facts of each case. That case, Moldenhauer v. Tazewell- Pekin Consol. Communications Center, 2008 WL 2927018 (C.A.7 (Ill.)), is a Seventh Circuit case (which covers Illinois, Indiana and Wisconsin).

Cases like Moldenhauer arise where one of the two employers has less than the requisite "50 employees within a 75-mile radius" to come under the purview of the FMLA, but when aggregated to the second company, falls within the applicable number of employees.

You Can't Read Employee Emails?

On June 18, 2008, the 9th Circuit U.S. Court of Appeals decided that employers have no right to read their employees' text messages without their consent. Even if employers pay for the service, providers are prohibited by the federal Stored Communications Act from releasing the text message contents to them.

The Court ruled that reasonable expectations of privacy vary depending on the specific facts and circumstances, and that the availability of other, less intrusive, ways to monitor the amount of text-messaging services played a role in the decision.

This opinion emphasizes the importance of having good policies and procedures, including reference to when and how the employer may search, review or monitor phone calls, emails, etc. This case is only binding in AK, AZ, CA, GU, HI, ID, MT, NV, OR, WA.

E-Verify Required In Georgia

Effective July 1st, under the Georgia Security and Immigration Compliance Act, public employers, contractors and subcontractors with 100 or more employees (but less than 500) were required to use the e-verify system, an online system operated jointly by the Department of Homeland Security and the Social Security Administration (SSA). Participating employers can check the work status of new hires online by comparing information from an employee's I-9 form against SSA and Department of Homeland Security databases. More than 69,000 employers are enrolled in the program, with over 4 million queries run so far in fiscal year 2008.

In addition, public employers in Arkansas, Colorado, Mississippi, and Oklahoma are required to use E-Verify. Rhode Island mandates its use for public employers and state agencies. Two states-Missouri and Tennessee-encourage its use. In Indiana, Minnesota, North Carolina, Pennsylvania, and Utah, state agencies must use the system, and in California, Colorado, Florida, Illinois, Iowa, Kansas, Missouri, New Jersey, Pennsylvania, South Carolina, Tennessee, and West Virginia E-Verify legislation is pending.

To register for E-Verify, go here.

Supreme Court ERISA Case

On June 19th, the US Supreme Court ruled that the dual role of ERISA plan administrators that both determine whether an employee is eligible for benefits, and pay benefits out of their own pockets, creates a conflict of interest. Thus, a reviewing court should consider such conflict as a factor in determining whether a plan administrator has abused its discretion in denying benefits, and the significance of the factor will depend upon the circumstances of the particular case.

The case is Metro. Life Ins. Co. v. Glenn, No. 06-923.

Jobless Claims Continue To Rise

Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy's fragile state. The unemployment rate held steady at 5.5 percent - the same as May. Previously, the last time the unemployment rate hit as high 5.5 percent was in October 2004.

Heavy job losses in construction, manufacturing, business services and retailing eclipsed job gains in education and health services, leisure and hospitality, and government.

Responding to Debt Collection

With the economy in a downturn, cash flow is tight for many businesses. In turn, a company may be slow in paying its bills. Before you get involved in litigation for failing to meet a payment deadline, consider the following tips to avoid a creditor's escalating collection efforts:

• Respond in a timely manner to any demand letters you receive;
• Dispute in writing any debt that you believe is erroneous;
• If you can't pay a bill in full, pay as much as you can;
• Contact the creditor and try to arrange a payment plan that you can afford; and
• Contact counsel as soon as possible if you receive any "final demands", threats of litigation or are sued.