The long-awaited decision in Brinker Restaurant v. Superior Court (Honhbaum) makes clear that employers do not need to force employees to take their meal breaks. Instead, an employer satisfies its duty under California’s meal period and rest break laws by relieving its employees of all duties, relinquishing control over their activities and permitting them a reasonable opportunity to take an uninterrupted 30-minute break, and not impeding or discouraging them from doing so. The Court made clear that “the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations.”Continue reading this entry
Category Archives: Wage and Hour
Is It Time to Audit and Update Your Payroll Practices?
Posted in Wage and HourDoes your company use a time clock or other work-time recording system for nonexempt, hourly employees that “rounds” employee work time to conform to employee work schedules? For example, if a nonexempt, hourly employee arrives for work and clocks in before the employee’s scheduled shift start time, does the system automatically round the employee’s recorded work time to reflect the scheduled shift start time? Similarly, if a nonexempt, hourly employee clocks out after the employee’s scheduled shift end time, does the system automatically round the employee’s recorded work time to reflect the employee’s scheduled shift end time? Does your company mandate that nonexempt, hourly employees don and doff work uniforms, other work-related attire, and safety and other equipment onsite but “off the clock”? Does your company require that nonexempt, hourly shift employees who relieve employees coming off shift report to work early so that they can meet with the employee being relieved to discuss what occurred during that employee’s earlier shift (commonly called “shift turnover”) off the clock?
New Regulations Could Put an End to Bonus Payments for Fixed-Salary, Fluctuating Workweek Employees
Posted in Wage and HourThe fixed-salary, fluctuating workweek method of payment has become an attractive option to many employers. The model permits employers to pay non-exempt employees at one-half of their regular rate of pay for any hours worked over 40 in a week, instead of at time and one-half that they would otherwise would have to pay. The “regular rate” is determined by dividing the employee’s weekly salary by the total number of hours worked in the week. Because an employee’s hours vary from week to week, so does the “regular rate.” Although an employee’s overtime rate decreases with each hour worked, the fluctuating workweek provides predictability for both the employer and employee.
California Employers Should Heed Seating Suits
Posted in Wage and HourA wave of wage and hour class actions have been filed in California against retail employers over lack of “suitable seating” for their employees. These cases are based on California Industrial Welfare Commission Wage Order 7-2001, section 14, which requires that:
(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of such seats. (B) When employers are not engaged in the active duties of their employment and the nature of their work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.
Employees Tracking Their Own Wages? The DOL Has an App for That!
Posted in Wage and HourLast week, the U.S. Department of Labor announced the launch of its first application for smartphones, an iPhone® timesheet to help employees independently track the hours they work and determine the wages they are owed. Available in English and Spanish, employees can conveniently track regular work hours, break time, and any overtime hours for one or more employers. Additionally, employees will be able to add comments on any information related to their work hours; view a summary of work hours in a daily, weekly, and monthly format; and email the summary of work hours and gross pay as an attachment.
Operating in New York? What You Need to Know About the NEW Wage Theft Prevention Act!
Posted in Wage and HourWith all the wage and hour class action litigation going on around the country, most employers with operations in a variety of states cannot help but be aware that careful compliance in this area is very important — and mistakes ever more costly. In addition to the recent enforcement initiatives announced by the U.S. Department of Labor and the many private lawsuits spreading like wildfire, an increasing number of states are now getting in on the act — in many cases adopting legislation that provides additional ammunition for private litigants. New York’s recent Wage Theft Prevention Act (WTPA), effective this month, is one such law. If you have not already, prudent employers with operations in New York should take notice.
Traditional Notion of Business Days Gives Way to New Economic Realities
Posted in Wage and HourAs the service sector of our economy continues to grow, so too does the competition to cater to consumer demands for business hours on weekends and holidays. Increasingly, employers are expanding the number of business days and hours they remain open for business. In doing so, they are eroding the traditional notion that business days merely comprise Monday through Friday, excluding weekends and holidays. Catching up to this consumer-driven phenomenon has not come easy for the U.S. Department of Labor (DOL), but a recent decision from the Board of Alien Labor Certification Appeals (BALCA) has compelled the DOL to take note.
The BALCA decision, In the Matter of IL Cortille Restaurant, concerned a labor certification recruitment campaign conducted by a restaurant to the benefit of its chef. A labor certification is a DOL-regulated process in which an employer demonstrates a shortage of available U.S. workers to fill an employment position currently occupied by a temporary foreign national worker. If the recruitment campaign demonstrates the shortage, the temporary foreign national employee can apply for U.S. residence. One of the DOL regulations that employers must fulfill to demonstrate the shortage of U.S. workers mandates that employers post a workplace notice of the available employment position “for at least 10 consecutive business days.” The regulation does not define “business days.” Because the restaurant is open seven days a week, the restaurant counted Saturday and Sunday as business days in fulfillment of the regulation.
The DOL denied the restaurant’s application because it concluded that Saturdays, Sundays, and legal holidays are not traditionally interpreted as business days. By excluding Saturdays and Sundays from the tabulation, the DOL concluded the restaurant failed to post the job availability notice for sufficient days. The court vacated the DOL’s decision, concluding that as long as an employer has employees working on weekends or holidays, those days are business days within the meaning of the regulation.
In reaching its decision, the court rejected the DOL’s assertion that its adjudication of labor certification applications would become unduly burdensome if it had to consider an employer’s particular days of business rather than a blanket rule that business days are limited to Monday through Friday. The court concluded such a blanket rule is not only inconsistent with the reality of today’s economy but would undermine the notice purpose of the posting requirement. After all, the court concluded, many service and retail businesses conduct more business on weekends than weekdays.
OSHA May Begin Regulating Medical Resident Work Hours
Posted in Wage and HourHeeding the request of Public Citizen, an advocacy group representing more than 13,000 resident physicians, OSHA has agreed to review the possibility of limiting work hours for resident physicians. In its recent “Petition to Reduce Medical Resident Work Hours,” Public Citizen contends that regulations are necessary to protect the safety of resident physicians and to create a better standard of care for patients.
Public Citizen requests imposing the following limits on resident physicians:
- A limit of 80 hours of work per week (no averaging)
- A limit of 16 consecutive hours in one shift
- A minimum 24-hour period of time off per week, and a 48-hour time off period per month
- In-hospital and on-call frequency of no more than once every three nights (no averaging)
- A minimum of at least 10 hours off after a day shift, and 12 hours off after a night shift
- A maximum of four consecutive night shifts
In its response to the petition, OSHA stated that it was “very concerned about medical residents working extremely long hours, and we know of evidence linking sleep deprivation with an increased risk of needle sticks, puncture wounds, lacerations, medical errors and motor vehicle accidents”.
Please stay tuned, we will update you further if OSHA decides to move forward on this proposal.
Court Decides Flat Rate Payment System Qualifies for Overtime Exemption
Posted in Wage and HourEmployees who worked for a NutriSystem call center sued the company, alleging they were entitled to overtime. The call center used two different methods of payment — one based on an hourly rate and the other based on a flat rate system. Employees who were paid based on the flat rate system did not receive overtime.
One exception to the overtime requirement under the Fair Labor Standards Act (FLSA), is the retail commission exception.
In order to qualify for the retail commission exception:
- Employees must be employed at a retail or service establishment
- The regular rate of pay must be at least one and a half times the minimum wage, or more than $10.88 an hour (this must be based on a representative period of not less than one month)
- Employees must receive more than half of their pay from commissions
In this case, there was not any dispute about whether the NutriSystem call center qualified as a retail establishment. Instead, the sole issue was whether the flat rate system qualified as a commission. NutriSystem had five meal types, each with two different prices, which varied depending on whether the customer signed up for automatic future shipments. The flat rate did not depend on the price of the sale, but instead varied based on whether it was the result of an inbound or outbound call, and whether the sale was during daytime hours or during evening/weekend hours. The court noted the flat rate system created an incentive for employees to make outbound calls and to work the less desirable evenings and weekends, since those sales received a higher flat rate.
As the court pointed out, the FLSA does not define the term “commission.” The employees argued that the flat rate paid was not a commission because it did not vary based on the cost to the consumer — in other words, it was not a percentage of the fee or sales price. The DOL filed a brief in support of the employees and relied on its prior opinion letters that concluded a flat rate payment did not qualify as a commission. The court decided that although a commission is most typically a percentage of the price to the customer, being paid a percentage was not a strict requirement for a commission payment plan. In part, the court was persuaded because the payment to the employee was proportionally related to the sales made by employee, even though it was not a percentage of price.
Dealing With the Downturn — Wage and Benefit Freezes and Takeaways
Posted in Wage and HourAs the U.S. economy continues to struggle, employers are exploring ways to control expenses. Labor costs, which often represent a significant portion of an employer’s operating expenses, continue to receive much attention from business owners and operators.
While employee layoffs have dominated the news for much of the current downturn, employers have been forced to implement other measures in order to remain viable, including wage and benefit freezes and/or takeaways. It goes without saying that wage and benefit freezes or takeaways pose significant employee relations problems. As such, they need to be carefully planned, communicated, and implemented. Employers should consider the following if they choose to undertake freezes or takeaways, or if they have already done so:
- Every effort should be made to be as transparent as possible concerning the organizational financial pressures leading to a decision to implement freezes or takeaways. It is vitally important that employees understand why these actions have become necessary. All relevant financial information that can be shared should be shared in a direct, easy-to-understand format.
- Employees may question whether other measures are being implemented to save costs in addition to freezes or takeaways that directly affect them. Employers should proactively describe other efforts being made so that employees can see how the actions negatively affecting them are part of a bigger picture of financial restraint.
- Employees may be concerned if organizational projects — such as building construction and equipment purchases — continue while they are forced to submit to freezes or takeaways. Care should be taken to anticipate such questions and to have answers ready.
- Employees should be advised of the freeze or takeaway “end game.” Employers should consider when and under what conditions freezes or takeaways can be lifted or modified, and should share that information as soon as possible with affected employees.
- Employees should be invited to participate in company cost-saving measures. A “suggestion box” should be implemented for company employees to provide ideas and input into cost-saving measures. Such an approach gives employees a sense of participation in the overall cost-saving process and may well lead to effective ideas otherwise not considered.
Implementing a wage and benefit freeze or takeaway can be much more complicated when some or all of the employer’s workforce is unionized. In most cases, these issues would need to be bargained with the union(s) involved; in other cases, contractual commitments would prevent an employer from implementing such measures for its unionized workers without union approval. Before taking any action, employers should anticipate what they can expect to accomplish with the union(s) involved, and decide how best to deal with these issues with both their union and non-union employees. It can be a complicated analysis, but one that employers are well advised to thoroughly examine before embarking on a course of action that may impact non-union employees more negatively than their union co-workers.