There's More Than One Way to Sink a Ship

Following an investigation by the Department of Labor’s Wage and Hour Division , Norwegian Cruise Line is being asked to pay $526,602.00 in back wages.

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Every employee has a core job comprised of the main duties the employee is hired to perform.  And just about every job has non-core elements that take up time and (often) seem unproductive—organizing or maintaining tools, putting on protective clothing, cleaning or picking up after work, or attending meetings. Do employees need to be compensated when they are not really working?

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Hospital Overtime Case Settled for $8.5 Million

If non-exempt employees work, they are supposed to be paid for their time, as a Boston hospital learned that just settled a class-action overtime lawsuit for $8.5 million. As we discussed last year (Perils of Having Employees Work Through Lunch)

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Springtime Brings Summer Hiring - Keep in Mind the Rules for Interns

Summer time is approaching and so is the time for hiring summer interns. As discussed recently in the NY Times, employers should be aware of the need to comply with employment and overtime laws in hiring and paying unpaid interns.

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You Can't Avoid Paying Overtime Wages By Splitting Up An Employee's Tasks

Unless an employee fits into an exemption under the FLSA, employees who are entitled to overtime need to be paid overtime pay for all hours over 40 worked in a single work week. One Maryland school bus company thought otherwise.

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Waiting Time is Often Work Time . . . and Must be Paid

A Tennessee car wash found out the hard way that “waiting time”—time employees spend between tasks—is paid working time. Employees of the Shur-Brite car wash in Nashville sued claiming that the car wash would clock the workers in and out multiple times a day—clocking them in when a car pulled in to be washed, clocking them out when there were no cars around.

An advocate for low-wage earners went undercover at Shur-Brite and was clocked out more than 10 times during a single eight-hour shift. The result—he was paid for only four of the eight hours. The case settled for $130,000.00.

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Don't Round Time Worked and Deny Employees Overtime Pay

Non-exempt workers need to be paid for ALL time worked. Failing to do so can lead to substantial liability, especially for unpaid overtime pay. may be in the process of learning that lesson painfully.

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Do Not Judge Employees by Their Titles: Make Sure Employees Actually Are Managers Before Paying Them Like Managers

Most employers know that executives do not get overtime.  Some people are unaware, however, that it takes more than a title to make a manager.  AT&T and its subsidiaries are in the process of finding that out the hard way, as they confront a $1 billion lawsuit brought by “managers” who were not paid overtime.  The suit is being brought by seven named plaintiffs, and also seeks class-action status to bring in another 5,000 employees.

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Paying Exempt Employees Who Serve Jury Duty

Employers are often unaware of the requirements under Federal law regarding paying exempt employees who serve jury duty. Failing to comply with these requirements can expose employees to significant risks. The main principle is simple enough: 

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The Pitfalls of Utilizing Volunteers

In this economy we are seeing employers looking for ways to cut costs (including payrolls) and job seekers looking for ways to get noticed, such as offering to work for free to “show what they’ve got.” While these might seem like good ideas—offering an opportunity to learn in exchange for the person’s labor; offering labor in exchange for a potential job—these situations could run afoul of the Fair Labor Standards Act (“FLSA”), the federal law that governs wage and hour regulations, as well as parallel state laws.

Under the FLSA, employment is defined broadly as “to suffer or permit to work.” If you “employ” someone (i.e., you let them work for you), you need to pay that person according to the often complex and confusing rubric of state and federal wage and hour laws.

Can anyone volunteer? Yes. . . but only in the public or not-for-profit sectors, for example for a religious or charitable organization.  People can volunteer for the local library, the homeless shelter, “meals-on-wheels,” or the local hospital. People can volunteer to help with disabled children or can volunteer for their local ambulance corps or fire house. The only caveat is that public and not-for-profit sector employees can only volunteer for their own organization or agency if there is no undue pressure to volunteer and the volunteered services are not the same type of services which the individual is employed to perform for such public agency.'' A paid firefighter cannot volunteer for his or her own fire company, but can volunteer as a firefighter in another county. An office worker for a hospital may volunteer to sit with a sick patient as an act of charity, but cannot volunteer to perform additional administrative duties. (DOL Field Operations Handbook § 10b03(d), p.5.)  Private companies, however, as a matter of law, simply cannot have “volunteers,” no matter how enticing it is.

Is that really an Intern?

Many industries make unpaid internships the gateway to an entry-level position. Unfortunately, as with many things in the employment law arena, what seems like a good idea may just be something that gets your company in trouble with the local Department of Labor. Internships are one of these problematic arrangements under the Fair Labor Standards Act (“FLSA”).

In order for people participating in an internship or trainee program to qualify as something other than the company’s employees who need to be paid, the program must satisfy ALL of the following criteria:

  1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the trainees or students, not the company;
  3. The trainees or students do not displace regular employees, but work under close supervision;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his or her operations may even be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

A relatively safe way to set up an internship program is to partner with a local college or high school. If the student is getting school credit for the program, if the employer has to submit progress reports to the educational institution, and if there are sufficient educational components in the program (e.g., seminars and field trips, mentoring sessions with people in different departments, etc.), it is more likely that the program will pass muster . . . as long as all the above components are satisfied. 

Remember that an employer only needs to pay employees at minimum wage (currently $7.25/hour under the FLSA, which comes out to about $13,000.00/year), and to pay overtime wages if the employee works over 40 hours in one workweek (which the company can control). At that rate, it might be worth the investment to have paid “interns” and the associated ability to give them real work assignments that assist the company and its productivity, while providing peace of mind should the DOL come to call. Companies can still hire a paid intern for the summer, or a semester, and do not need to guarantee a job at the end of the internship period.  Doing this may well be preferable to putting the company at risk of incurring DOL penalties and fines—plus, the employer gets to see how the intern functions under real working conditions.