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Category: Employment Law – FLSA

Breach of Contract and Morale Issues Threaten Businesses After Injunction

Employees looking sad in a crisis

Changing the overtime threshold was never going to be easy but pausing the rule complicates things in a big way. Do employers undo what was already done – take back their promises of a salary increase or eligibility for overtime? How will employees deal with the news? What does the law allow?

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Judge Issues Injunction Against the New Overtime Rule

The new overtime rule employers have begrudgingly prepared for and employees have eagerly awaited over the last several months received a nationwide injunction by a Texas judge, Tuesday.

This news comes only 10 days before the DOL’s new rule was scheduled to go into effect and after many businesses had already started preparing for it.

The rule was challenged by 21 states and over 50 business groups and, while a federal judge in Texas reviews the potential impact of president Obama’s overtime rule, the deadline is on hold. With the Trump administration taking over the DOL in January and a republican held congress, it’s conceivable that rule will undergo some changes, but what those might be is anyone’s guess.

For now, businesses are advised to continue to make plans, assuming some kind of change to the overtime threshold will take place.

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New Hourly Employees Should Start Tracking Time Now

businessman running on clockThousands of businesses will potentially be switching millions of employees from salary to hourly status in response to the new overtime rule. While companies must be compliant by December, getting started now is a good idea because the process is not as simple as flipping a switch. New hourly rates need to be figured out, companies need to decide on an approach to time tracking for these new workers, and employees need to be trained.

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Wage & Hour Best Practices to Keep Small Business Owners Out of Court

hand open book of best practice

Owners of very small businesses often do everything themselves. They don’t have an HR person to tell them what’s legal and what’s not. They just have to try to keep up with the changing federal and state laws on their own. The problem with that is many of them don’t and, as a result, employers frequently have to deal with employment lawsuits. Employers can keep themselves out of trouble by following some time and attendance best practices:

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How to Switch Employees from Salary to Hourly

Switching fish bowlsIn light of the new overtime rule, employers will be switching many of their salaried employees over to hourly. A common misconception regarding an employee’s exemption status, i.e. whether the employee is hourly or salaried, is that if they perform certain job duties, they must be considered exempt. This is not true. The FLSA states that in order to be considered exempt an employee has to meet all of the following tests:

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Economic Dependence Test for Independent Contractors

The Department of Labor reports that most workers are employees and that classifying employees incorrectly as independent contractors robs employees of their benefits. It also robs the government of taxes, so you can be sure they are pretty serious about enforcing the FLSA and catching the employers who misclassify their employees. If you have any doubt about the status of your workers, become familiar with the rules before you classify them as independent contractors.
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Exceptions to the California Daily Overtime Laws

California labor laws are a little different than federal labor laws. In California, employees get overtime after 8 hours of work in one day. This law protects employees from being overworked, which is important, but the law could get in the way of other conveniences. For example, what do employees do when they prefer working four 10 hour shifts instead of five 8 hour shifts?

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Affordable Care Act and the Misclassification of Employees

Employers have always faced penalties for misclassifying employees as independent contractors but now, with the Affordable Care Act (ACA), some employers are finding yet another reason to try to skirt around the law.

Under the ACA, employers with 50 or more employees are required to offer health benefits to their workforce. If they don’t make health benefits available by the deadline, the company pays a penalty. You can see, then, how some companies might want to report having fewer than 50 employees so that they don’t have to offer health benefits.

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Common Wage and Hour Mistakes That Could Cost You

Making a mistake on your employee’s payroll obviously costs the employee their due wages but it can also cost you, the employer, in lawsuit damages. This is the last place you want to end up. Wage and hour lawsuits are expensive. And with the Department of Labor planning to hire 300 more investigators, small businesses will be even more at risk for getting caught.

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Common Overtime Violators by Industry

Overtime violations fit into a category called wage theft. And the thieves are, in this case, not the poor or needy, but the more fortunate business owners. While they would hardly call themselves thieves, they essentially steal wages from the poor and the needy: their low-wage employees. Sometimes business owners and managers do this by accident but most of the time they are trying to cut corners and save money by either:

  • Withholding overtime
  • Making employees work off the clock
  • Tip withholding
  • Paying employees under the minimum wage

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