9 Tips to Help Employers Avoid Violations of the Fair Labor Standards Act
Wage and hour law is complex. Compliance is challenging, and although a company may have both processes and policies in place, a manager or supervisor can put the company at risk for unpaid wages if they are not familiar with all of the requirements of the Fair Labor Standards Act ("FLSA"). There can be ambiguity as to what time is compensable. For example, when does a work day begin and end? Does an employee need to be paid for traveling to work? Determining when an employee is "off the clock" is not as straight forward as many employers may think. Applying common sense and doing what "seems right" often leads to wage and hour violations.
Risks of the Digitally Connected Workplace
Many workers are digitally connected to their workplace 24/7, which has created enormous potential for wage and hour violations. If an employer requires or allows employees to work, the employee must be paid for all of that time. This means that even if the employer did not ask the employee to work, the employer may still be required to compensate the employee, so long as (1) the employer knows or has reason to believe that the employee is continuing to work, and (2) the employer is benefiting from the work being done. This is true regardless of where the work is performed at.
Company management must exercise control over employees to ensure that work is not performed off the clock. An employer cannot sit back and accept the benefits of an employee's work and then avoid payment because management did not specifically direct the employee to perform the work. Issuing a policy that employees will not be paid unless they are specifically authorized to perform a particular task is probably insufficient to avoid liability. Management must instead exercise control over the employee's work to ensure that the employee is not working if the employer does not want to compensate the employee for that work. For example, a supervisor can now text or email an employee 24/7. If the employee is expected to answer, they must be paid for their time in reviewing and responding to the message.
Suggestions To Reduce Risk
So, what steps can an employer take to protect itself? Here are a few:
- Do not allow non-exempt employees to remotely access their work email account.
- If an employee is given access to their work email at home, ensure that the employee is paid for their time in reviewing and responding to emails.
- Educate managers about text messaging or emailing non-exempt employees when they are off the clock. Speak with non-exempt employees to ensure that they are not receiving text messages or emails when they are off the clock.
- Do not allow employees to take lunch at their assigned work area. If an employee feels obligated to answer the phone or an email during their lunch break (even if they don't actually do so), the employee may be entitled to payment for that time.
- If employees routinely arrive before their scheduled start time, it does not necessarily mean they must be paid for that time. If, however, they are performing setup or prep work, that time may be compensable.
- If an employee is asked to stay after their scheduled end time to finish up a project, they need to remain "on the clock" and paid for that time.
- If a supervisor knows that an employee is staying late to finish a project, that time is compensable, even if the supervisor never asked the employee to stay late.
- Educate managers. If they are aware that a non-exempt employee is working, the employee must be paid for that time.
- A written policy against unauthorized work or unauthorized overtime will likely not protect an employer and they should still have such a policy.
The consequences employers face for violating FLSA can be significant. An employee may recover twice the amount of their unpaid wages, plus a mandatory award of attorney fees. In a lawsuit, the amount of attorney fees often far exceeds the amount of unpaid wages. Thus, a claim under the FLSA for failure to pay only $1,000 in wages can quickly turn into a very costly lawsuit. To avoid this, you should have an experienced attorney review your practices and policies to ensure there are no actual or potential FLSA violations. We help employers comply with the FLSA and other statutes and regulations.
About the author: Gary J. Jaburg is the managing partner of the Phoenix law firm of Jaburg Wilk. He assists clients with business matters, employment issues, workouts of financial issues and business divorce.