Sometime soon, your e-mail inboxes are going to be bombarded from attorneys telling you that you need to pay attention NOW to new overtime rules by the U.S. Department of Labor.  ROFL.  

At least based on what we know now, it’s best taking a lesson from my teenagers and ignoring the messages and hype (and all the text abbreviations too.)  SMH. 

Late last week, Bloomberg news reported that the DOL is considering changing the rules regarding who is eligible to receive overtime by increasing the salary threshold from about $24,000/year to $35,000. IKR?

In plain English, employees who make less than $35,000 would have to be paid overtime on any hours worked over 40 — no matter what their duties are.   MEGO. 

If all this sounds vaguely familiar, you may recall that the Obama-era proposed rules were enjoined by a court before implementation and then we had an election.  Those proposed rules would have set the bar even higher to approximately $47,000.  RIP.

But here’s the thing – we don’t have anything yet. And when released, the proposed rules will be just that — proposed.  They are still very much subject to change.  And even then, there will likely be a significant period of time before implementation.  My guess — and it’s just that — would be late 2019 or early 2020 at the earliest.  SWAG.

For now, here’s the one thing to think about: If you have any exempt employees that are paid about $35,000 or less, keep in mind that you may need to start paying them overtime…at some point.  MEH.

But remember: Just because you are paying employees a salary does not mean you’re following the law. Employees must also have “duties” that are exempt — typically, professional, executive or administrative.  


USDOL Headquarters in DC
USDOL Headquarters in DC

Over the last few weeks, there’s been a lot of bluster about lawsuits filed that are challenging the new overtime rules that are set to take place in just a few weeks. And there was also news that Congress was considering a law restricting the law as well.

Both seem unlikely to come to pass and employers that have been postponing action in the hopes of a “white knight” on the issue should think twice.

I covered the new rules in several prior posts (here and here, for example). But as a reminder, the rule becomes effective December 1, 2016. Note that December 1 is a Thursday, so employers will have to make sure that the entire pay period is compliant with the new rule.

So, that leaves you with precious few weeks to get into compliance.  There are a number of different approaches to take and its definitely not a one-size-fits-all type of law.

One suggestion though is to have your trusted attorney or HR consultant take a look at any questions you have.  We have done this for several and there are some challenges that may seem unique to your business that other companies have struggled with as well.

If the court suspends implementation of the new rules, you can still decide then, but it may be a game-time decision given how late we are in the process.

bbolSo, you remember February 2009, right?

We were all aflutter over Liam Neeson in Taken (ok, I still haven’t seen it).  And we were listening to “My Life Would Suck Without You” by Kelly Clarkson (still a good song.)

And I had a Blackberry Bold and loved it. (I know; even lawyers can plead temporary insanity).

How do I remember this? Because I wrote about my mobile device back then.  (We called these devices “PDA”s.) 

Now you might be asking the next question: Why? Because I suggested that employers needed to get on top of the issue of employees using these devices outside the office.

At that time I said: “questions have been raised about the use of these devices by non-exempt employees — in other words, those employees who are eligible to receive overtime. If these employees are reviewing their messages outside of work, do they need to be compensated for that time?”

But enough people still hadn’t gotten the message, so I repeated that cautionary tale in 2012.  I even talked about best practices.

Now, over six years later, Blackberrys have almost disappeared (and the new iPhones are getting announced next month, right Siri?) but the issue of mobile device usage by non-exempt employees has not.

In fact, earlier this month, the U.S. Department of Labor indicated that it will seek public comment as to the after-hours usage of mobile devices by employees and its impact on wage & hour enforcement laws.

The Pennsylvania Labor & Employment Law Blog has a good recap here, but the essence of what the post says is similar to what I also said six years ago:

Determine whether and to what extent the operational benefits offered by giving off-hours access to work e-mail and telephone systems by non-exempt employees exceed the potential costs of class-based claims for unpaid overtime….[And h]ave in place a policy for non-exempt employees that addresses working remotely and outside of normal work hours.

I expect you will continue to hear a lot more about this as this becomes a priority for the USDOL.

Just don’t say I didn’t warn you.  It’s been an issue many years in the making.

Well, it’s official.  Connecticut is under a Blizzard Warning as of Sunday afternoon.

This is, of course, nothing new for employers in the state. We’ve had more than our fair share of big “monster” storms. If you’ve been following this blog for some time, you’ll have read more than your share of blog posts about what to do with your employees when a storm hits.

But here are three issues you may not have thought of recently.

Reporting Time or Minimum Daily Earnings Guaranteed: Connecticut has a “reporting time” obligation (as do several of our neighboring states). It is contained in various regulations and applies to certain industries like the “mercantile trade”. You should already be aware of this law, but it has particular application in storm situations where people may not work full shifts.

For example, in Conn. Regs. 31-62-D2(d) for stores, an employer who requests an employee to report to duty shall compensate that employee for a minimum of 4 hours regardless of whether any actual work ends up getting assigned. So if you bring your employees in on Tuesday only to send them home 30 minutes later, you may be on the hook. For restaurant workers, it is typically a minimum of two hours (Conn. Regs. 31-62-E1)

Takeaway? For certain industries, be sure to know whether you will need to pay employees for a minimum amount of time if you send them home early from their shift.

Wage Agreements: Also be aware of any wage agreements (collective bargaining agreements mainly) that require you to provide employees with a guaranteed minimum number of work hours. Typically, these will need to be followed.

Hours Worked: Be aware of Connecticut’s “hours worked” regulation found in Conn. Regs. 31-60-11. That regulation says that “all time during which an employee is required to be on call for emergency service at a location designated by the employer shall be considered to be working time” regardless of whether the employee is called to work.

When an employee is on call, but is simply required to keep employer informed of whereabouts or until contacted by the employer, working time starts when the employee is notified of his assignment and ends when that employee is finished.

As you contemplate whether to close the office this week, make sure you’ve thought about these issues:

  • What are the situations when an office will close?
  • How will employee receive notice that an office is closed? Is there a central number that they can call for information? Will an e-mail be sent out? What about text message?
  • Will employees be paid for the time when the business is closed?
  • Will employees be paid if they don’t report to work due to inclement weather when the business is open?
  • Will the employer discipline or discharge and employee for failing to report to work due to weather conditions when the business is open?

As I said before, none of these issues should really be new for an employer in Connecticut. But with this being the first big storm of the season, it’s time to shovel out those policies.

Stay warm and safe the next few days!

Updated: August 28, 2011 – As of mid-morning, more than 40 percent of the state is without power, making this storm the highest power outage in state history.  Widespread office closures are expected for Monday and early this week.

It’s the (relatively) calm before the storm on Saturday night.  Hurricane Irene is definitely coming.

But one question that I’ve seen raised on Twitter today is the following: As an employer, do I need to pay employees if we’re closed on Monday?

It’s a question that is looking more and more likely in need of answer.  Widespread power outages and major flooding are forecast.

There are some exceptions (and, as I’ve highlighted before, you ought to consult with your legal counsel about the particulars of your business) but in general, the answer to the question depends on whether the employee is exempt or non-exempt.

As a general rule, exempt employees get paid on a salary basis the same amount each week — regardless of the amount of work that they do. Thus, for these employees, they are going to get “paid” for the day, in the form of their typical weekly salary.

For non-exempt employees, the general rule is that they only get paid for time that they work.  If they don’t work Monday — even if the office is closed — then they don’t get paid for the work.

Of course, as a morale issue, some employers will pay non-exempt employees for the time or may ask employees to merely take the day as “paid time off”  — figuring that these things happen. But there may be some employers who don’t.

For additional information, there are several posts out there discussing this in the context of a snow day.  Ah, snow. Seems very far off now.

Given the fluid power outage situation, I’m not quite sure when the next blog post from me will be.  Hopefully, on Monday.

In the meantime, stay safe until we can safely say, Goodnight Irene.

Two weeks ago, my colleague Michael Lavelle did a post about dealing with employees who may be on call.  Today, he’s back, following up on another weather-related issue — paying employees for just reporting to work (even if they are sent home), sometimes known as the "Minimum Daily Earnings Guaranteed". It was the subject of a recent SHRM article and Michael explains what is — and is not — required under Connecticut law.   

Mark Twain is usually credited with the wonderful observation that everybody talks about the weather, but nobody ever does anything about it.

We can’t do anything about the weather either, but as the snows continue to fall, we can continue to alert businesses as to some practical considerations for employee pay in the event of weather hazards.

One category of employee that we did not mention in our last weather-related article (approximately three snow storms ago) is the employee who struggles into the workplace, only to find that the business is shut down and must return home.

Generally speaking, the employee does not need to be paid since he or she did not work. But under statutory authority to set wage policies for certain industries, the Connecticut Commissioner of Labor has made a different rule for these types of businesses:

  • beauty shops
  • laundry, cleaning and dyeing operations
  • mercantile trades (meaning wholesale and retail selling of commodities)
  • hotel and restaurant occupations

Employees in these industries must be paid minimum earnings of 4 hours (2 hours for hotel and restaurant employees) if they report for duty, except that waivers are available if the regularly scheduled shift is less than 4 hours.

But the regulations specifically apply to employees who report in "at the request or by permission of the employer," which suggests a good practice for all employers, not just in the regulated industries.

There are many ways to communicate a business closing to employees: by phone, e-mail, texting, requiring a call-in to hear a recorded announcement, required viewing of a TV station that announces closings, a calling tree, and so on.

Employers who announce a closing are not requesting employees to report in, and are in fact denying them permission to report in.

Under the labor regulations, this policy should exclude payment for reporting in.  In doing so, it can also be seen as being courteous to employees and contributing to their safety.

When new laws get passed, the complications that arise from the passage aren’t immediately clear.  But a look at Connecticut’s new family violence leave provisions (effective October 1, 2010) demonstrates how some of those complications are now making themselves apparent. 

As you may recall, the new Family Violence Victim leave law permits employees to take up to 12 unpaid days leave for medical care or counseling arising from a domestic violence situation or to attend court proceedings related to the same (or a variety of other listed reasons.)  If an employee has compensatory time or vacation time or the like, the leave can be paid. 

The law specifies that employers do not need to provide paid leave if (1) the employee is not entitled to paid leave pursuant to the terms and conditions of the employee’s employment or (2) the paid leave exceeds the maximum amount of leave due the employee during any calendar year. However, the bill requires the employer to provide unpaid leave if paid leave is exhausted or not provided.

Easy enough, right?

But when the statute is put in the context of other wage & hour issues, there’s bound to be some confusion.  And indeed, its interaction with exempt employees should have employers scratching their heads a bit.  Let me explain. 

To simplify, for exempt employees in Connecticut (using the standard white-collar exemptions), employers can deduct from an employee’s pay for one or more full days "if the employee is absent for personal reasons other than sickness or accident" or for "sickness or disability" if pursuant to a policy where deductions are made when sick days are exhausted.  Deductions can also be made for FMLA-covered leave in less than a full day increment.

So, suppose an exempt employee is injured during a domestic violence assault and sees a physician. Can the employer not pay the exempt employee for the days not worked without losing the exemption? Part of the answer depends on whether you consider the absence for a "personal reason" or whether its a "accident".    

Now, suppose that an employee is taking only a half day off, can the employer dock the employee for a half-day without losing the exemption? One could argue "no" because less than a day increments are only allowed for FMLA-related leave, not other types of leave.  Which then raises the question, can the employer requires that the family violence leave be taken in increments of not less than a full day?

Now, suppose the employee needs to attend a court proceeding relating to a family violence issue, is that absence also to be considered a "personal reason"? 

Still more questions to ponder: Does the Department of Labor have any jurisdiction to issue regulations or guidance on the impact of this new law? If not, who does and how can we get more guidance on these types of issues as they arise?

Obviously, these types of situations are not going to be the everyday-type of issues that employers have, but I highlight them because even well-intended laws like the new family violence leave bill, can have unintended consequences and raise unexpected issues.   Unfortunately, as history has shown, it is often only through litigation through the courts that we may ultimately get some answers to the interpretation of this law.

While I’m out on vacation for a bit, I thought I’d have one of my colleagues share a post on a recent case he’s focused on.

Mick Lavelle is no stranger to employment law issues, having successfully litigated the case of Bridgeport Hospital v. CHRO — an important Connecticut Supreme Court case which curtailed the damages that could be imposed by the agency on employers. 

Today, he discusses classification of workers and how a seemingly little issue can turn into big bucks:

A "store manager" certainly sounds like an exempt position, but what if the employee actually spends 80 to 90% of his time on non-exempt work, such as stocking shelves, unloading trucks, running cash registers and cleaning the store?

The U.S. Supreme Court has recently denied review in the case of Morgan v. Family Dollar Stores, originally decided by a jury in Alabama in 2006.

Although the appellate issue was a fairly technical one of when the Fair Labor Standards Act allows one trial to be a "collective action" for similarly situated employees (in this case, over 1400 store managers), the case is also yet another illustration that the rules as to exemption from overtime requirements focus on actual work activities.

Family Dollar Store managers worked up to 60 hours per week, but followed a detailed managers’ manual, spent up to 90% of their time on non-exempt work, and could not hire or fire or select outside vendors without the permission of the district managers. In fact, the store managers were closely supervised by the district managers, who were probably the real exempt employees.

Proper classification of employees as exempt or non-exempt should be a continuing exercise for all employers, especially when employees are incurring lots of overtime. Sometimes a bland title like administrative assistant can qualify as exempt if the proper tests are met, especially for independent judgment.

And unfortunately, sometimes positions that employers have always assumed were exempt turn out not to be.

For Family Dollar Stores, it was a $ 35.6 million error.

One of the latest fads in employment law has become a peculiar side effect of this recession — the increase in the usEmpty officee of mandatory furloughs.

What are they? Well, in simple terms, they are orders from an employer to an employee that they take a day (or multiple days) off without pay. In doing so, the employee is to refrain from working.

An excellent post up this morning on the HR Daily Advisory site, runs through the risks of using furloughs, particularly for exempt employees.  Indeed, the title is particularly apt – "Attractive, but Legally Tricky".

There are plenty of traps for employers to fall into. An employer, for example, may decide to reduce salaries by 20% and then reduce workweeks by one day a week.  The post suggests that in general, this approach may not work because of the Department of Labor’s pronouncement that "reducing exempt employees’ work schedules with a corresponding reduction in salary because of lack of work violates the salary basis test."

The post does suggest a ray of hope, though:

The DOL further clarified that an employer may make a "fixed" and "permanent" decision to reduce the hours and corresponding pay for exempt employees. For instance, an employer could reduce the work schedule for the year from 52 five-day workweeks to 47 five-day workweeks and 5 four-day workweeks, and also reduce the pay of exempt employees as a result of the shortened workweeks.

The linchpin of the distinction between this permitted approach and the impermissible hours reduction is the permanence of the schedule reduction as contrasted to a temporary reduction in the normal scheduled workweek to address a short-term work slowdown or temporary economic conditions.

So, for employers considering using mandatory furloughs as a way to keep their workforce intact through this recession, be careful and cautious.

I love my Blackberry Bold. And I know many others that praise the virtues of an iPhone or other PDA device.

But recently, questions have been raised about the use of these devices by non-exempt employees — in other words, those employees who are eligible to receive overtime.  If these employees are reviewing their messages outside of work, do they need to be compensated for that time?

Recently, my colleagues, Joshua A. Hawks-Ladds and Megan M. Youngling prepared an article for the Connecticut Law Tribune supplement on this subject that you can download here. It is worth reading because it discusses an answer to this question.

While the law is still developing here, they conclude that:

[A]fter-hours PDA use increases an employer’s exposure for overtime and record-keeping liabilities, as well as the possibility that nonexempt employees will not be properly compensated for all time actually worked in violation of the FLSA and state wage laws. The practices and policies that many employers currently have in place for after hours work may no longer “fit” today’s PDA environment.

Employers must reexamine their current policies and procedures and revise them to reflect PDA usage. They must also reexamine their employees’ exempt versus nonexempt status. Once appropriate policies governing PDA usage are in place, they must be adequately communicated to employees and then enforced. Policy violators should be subjected to appropriate discipline. Following these steps should limit the risks PDAs pose to employers under the sate and federal wage laws.

As I’ve said before, there are a lot of issues right now for a human resources department. But ensuring compliance with wage and hour laws should continue to remain a top priority for employers.