Tag Archives: Seyfarth Shaw

How To Pay When Your Facilities Close For Weather-Related Reasons?

stormPost by Alex Passantino, Seyfarth Shaw LLP on January 26th, 2015

As Juno prepares to pummel the Northeast with snow, employers should prepare for any weather-related closures of their offices, factories, or other facilities.  The effect of a weather-related closure on compensation requirements varies for different types of employees and also varies by state.

EXEMPT EMPLOYEES

Most employees who are exempt from federal overtime requirements and paid on a salary basis are not subject to reductions to their weekly salaries because of a closure.  Even if an exempt employee misses a full day of work, the employer may not reduce the employee’s weekly salary (unless the employee misses an entire work week).  An employer that improperly reduces an employee’s salary might lose or jeopardize the ability to treat the employee as exempt from overtime pay requirements — potentially a very costly mistake.

Even though employers will almost certainly have to pay exempt employees their full salaries regardless of storm-related closures, employers do have the right to charge exempt employees for vacation or PTO for any work that they miss.  Employees who do not have enough accrued vacation or PTO to cover the closure, however, must still be paid their full weekly salaries.

The legal rules for paying exempt employees apply in all states.  Of course, in deciding whether to charge employees with vacation or PTO, employers may also want to consider non-legal factors such as employee morale and the organization’s finances.

NON-EXEMPT EMPLOYEES

For non-exempt employees, federal law requires only that employers pay employees for the hours they actually work.

TELECOMMUTING

In assessing pay requirements for all employees, employers should keep in mind that, even if an office or other facility is closed, some employees might work remotely.  Work performed remotely generally must be paid to the same extent as work performed on an employer’s premises — even if the employer did not request that the work be performed.  Non-exempt employees working remotely must generally be paid at their usual hourly rate (and subject to the usual requirements for overtime pay).

REPORTING PAY

Certain Northeastern states have additional requirements that apply to hourly employees who report to work when a facility is closed or not operating at full capacity.  For example:

  • Connecticut has a reporting pay requirement that applies to employees in the “Mercantile trade.”  Employees in that industry must be paid four hours at their regular rate of pay, if they actually report for work.  The “Mercantile trade” is defined as the wholesale or retail selling of commodities and any operation supplemental or incidental thereto.  A two-hour guarantee is in place for the restaurant and hotel industries, if the employee was not “given adequate notice the day before” that she should not report for work.
  • Massachusetts mandates reporting pay for non-exempt employees of at least three hours at the statutory minimum wage ($9.00) if they are scheduled to work more than three hours on a given day and actually report for work.  Employees scheduled for less than three hours need only be paid for their scheduled hours.
  • New Hampshire requires reporting pay for non-exempt employees who actually report for work of at least two hours at their regular rate.
  • New Jersey requires reporting pay for non-exempt employees who actually report for work of at least one hour at their applicable wage rate (unless, prior to this report to work, the employer already made available to the employee the minimum number of hours of work agreed upon for the week).
  • New York requires “call-in pay” for non-exempt employees of at least four hours, or the number of hours in the regularly scheduled shift (whichever is less) at the basic minimum hourly wage ($8.75) for employees who actually report for work.  A 2009 New York Department of Labor opinion letter, however, interpreted the reporting-pay obligation as not applying if “the amount paid to an employee for the workweek exceeds the minimum and overtime rate for the number of hours worked and the minimum wage rate for any call-in pay owed.”  Employees working in the hospitality industry may be subject to different requirements.
  • Rhode Island requires an employer to pay an employee who reports for duty at the beginning of a work shift (where the employer offers no work for him to perform) not less than three (3) times the employee’s regular hourly rate of pay.
  • Washington, D.C., requires reporting pay of at least four hours at the statutory minimum wage ($9.50) for non-exempt employees who actually report for work if they are scheduled to work for at least four hours.  Employees scheduled for less than four hours need only be paid for their scheduled hours.

Some of the reporting pay requirements noted above may be waived if the employer makes a good faith effort to provide employees with reasonable advance notice that they should not to report to work.  Employers that foresee that their facilities will be closed should give employees who are scheduled to work as much notice as possible for both practical and wage/hour compliance reasons.

If you have questions, call Rick Dacri at rick@dacri.com or 207-229-5954.

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Internships: Labor Department’s 6 Criteria to Meet Before Not Paying

  (This blog was written by attorneys Richard Alfred and Jessica Schauer of Seyfarth Shaw)

 Many employers in today’s business environment have had to make do with fewer employees to meet the constraints of smaller budgets. As the economy shows signs of rebounding, many companies face pressure to grow their business in spite of a lack of resources to support increased hiring. At the same time, competition for entry-level professional jobs, especially among recent college graduates, has become fierce. Many unemployed professionals see working for free as a way to build their resumes, gain experience, get their feet in the door, and stay current in their field. Both groups – employers and those seeking work – have increasingly turned to unpaid internships to provide educated and eager help for employers and opportunities for those in the entry-level job market.

 Employers considering unpaid internship programs, and those that already have them, however, should beware – the Department of Labor and plaintiffs’ employment counsel are watching. Two new lawsuits in the Southern District of New York by interns against high-profile employers demonstrate this trend. In Wang v. The Hearst Corp., filed this week, a former intern for the fashion magazine Harper’s Bazaar claims that the publisher violated state and federal wage law by making her work as many as 55 hours per week without pay. The plaintiff claims that interns “are a crucial labor force” for the magazine and that she spent her time coordinating deliveries of samples, maintaining records of the contents of the magazine’s sample trunks, and processing reimbursement requests – activities for which she claims she should have been paid. Hearst has told the press that its internship program is educational in nature and conforms to legal requirements. A similar lawsuit filed last fall, Glatt v. Fox Searchlight Pictures, Inc., alleges that the defendant violated wage laws when it used unpaid interns during production of the 2010 film “Black Swan.” These are only two examples of what may be a growing litigation trend.

 The fact that an unpaid intern performs work voluntarily is not enough, by itself, to avoid violations of the Fair Labor Standards Act; for-profit employers are prohibited from using volunteers. However, for-profit employers can hire unpaid interns without running afoul of the FLSA, so long as they meet the stringent test for “trainees.” An individual who meets this test is not considered an employee and thus is not covered by the minimum wage or overtime provisions of the FLSA. Many states have analogue laws that may also apply and should be considered.

The Department of Labor has identified six criteria to determine whether an unpaid internship meets this test: (1) the internship is similar to training which would be given in an educational environment; (2) the experience is primarily for the benefit of the intern; (3) the intern does not displace regular employees, and works under close supervision of existing staff; (4) the employer that provides the training derives no immediate advantage from the activities of the intern; (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. The test is more likely to be satisfied where the internship has a classroom component and participants learn skills applicable to multiple employment settings.

Given growing attention to internship and volunteer programs, as demonstrated by the Hearst and Fox Searchlight lawsuits, employers should carefully evaluate programs of this kind that they have in place or are considering to ensure compliance with the FLSA and applicable state laws.

 

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Is Using a Smartphone Compensable?

(This blog was authored
by Alex Passantino of Seyfarth Shaw’s)

For years, questions have been swirling around the intersection of 21st Century technology and the Depression-era law that governs whether and how an employee should be paid for the time spent using that technology. Regular readers of Seyfarth Shaw’s blog may recall that this summer, the House Committee on Education and Workforce’s Subcommittee on Workforce Protections held a hearing on this very issue. The hearing was titled “The Fair Labor Standards Act: Is It Meeting the Needs of the Twenty-First Century Workplace?” and Seyfarth Shaw’s Richard Alfred testified about the explosion of wage and hour litigation.

In a possible foreshadowing of continued legislative activity, the Congressional Research Service (CRS)* recently issued a report entitled “The Fair Labor Standards Act, Overtime Compensation, and Personal Data
Assistants”.
   The report focuses on “[t]he increased use of personal data assistants (PDAs) and smartphones by employees outside of a traditional work schedule” and
“questions about whether such use may be compensable under the Fair Labor Standards Act (FLSA).” It goes on to identify the critical issue: “As PDAs and smartphones provide employees with mobile access to work email, clients, and co-workers, as well as the ability to create and edit documents outside of the workplace, it may be possible to argue that non-exempt employees who perform work-related activities with these devices should receive overtime if such activities occur beyond the 40-hour workweek.”

The report describes the difficulty in applying the FLSA’s definition of “employ” – “to suffer or permit to work” – in the absence of a definition of “work.” It discusses a number of Supreme Court decisions addressing the concepts of work, de minimis, and compensable time, but notes that no Supreme Court – indeed, few courts at all – have addressed these issues in the context of PDAs and smartphones. Ultimately, the report concludes that the determination of compensability for PDA or smartphone use by non-exempt employees will be based on the same factors courts consider in other “work” cases: “First, does use of a PDA or smartphone require physical or mental exertion? Second, is the use of a PDA or smartphone controlled or required by the employer? Finally, is the use of a PDA or smartphone necessarily and primarily for the benefit of the employer and his business?”

The politics of the FLSA – particularly as an election year approaches – make it difficult to know how (or even whether) Congress will address this issue. In the meantime, however, employers should exercise great
care when providing non-exempt employees with PDAs, smartphones, or other methods of remote e-mail access. In a wide variety of circumstances, an employee’s use
of this technology may be compensable work time under the FLSA. Although the long-anticipated landslide of “smartphone cases” has not yet materialized, an employer is merely a plaintiff away from learning about these issues on a first-hand basis. Review your policies, practices, and procedures related to the use of technology by non-exempt employees.

How is your company responding? Leave a comment below.

* The CRS works for the United States Congress, providing policy and legal analysis to committees and Members of both the House and Senate, regardless of party affiliation.

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New ADA Regulations Issued: EEOC Rules Mean Virtually Everyone Is Disabled

 (This posting was written by the law firm Seyfarth Shaw)

 The Equal Employment Opportunity Commission’s long-awaited regulations under the ADA Amendments Act (“ADAAA”) has been issued. The regulations will become effective on May 24, 2011. Much of the new regulations and accompanying guidance is unsurprising and comports with the language of the ADAAA. For example: the statute is to be construed broadly; employers should focus on accommodations, as opposed to questioning whether someone is disabled; and mitigating measures including medicine, other treatments, and prosthetic devices must be set aside in analyzing whether an individual is “disabled.”

 What is surprising, and doubtless game-changing, is the agency’s decision to list conditions that, according to the EEOC, will “virtually always” be covered impairments. The EEOC says those impairments are not per se disabilities, as it must if the new regulations are to resemble the original statute. Yet, by characterizing listed conditions as “virtually always” covered, the agency has in effect labeled tens of millions of Americans disabled.

 The EEOC did not stop there. Rejecting the views of business organizations and employment attorneys, the EEOC has made clear that any impairment – no matter how brief in duration – can be a covered disability. By those changes and others, the EEOC’s new regulations will further burden employers, not only with compliance challenges but also litigation that will inevitably follow the EEOC’s expansive approach.

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Massachusetts Superior Court Judge Reads Wage Act Expansively to Include Severance Pay

(Written by John Duke of Seyfarth Shaw’s Wage & Hour Litigation Practice Group)

A Massachusetts Superior Court recently held for the first time that severance payment are “wages” covered by the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148 et seq. In Juergens v. MicroGroup Inc., Albert Juergens alleged that his employer, MicroGroup, promised to pay him six months salary in severance if he was terminated without cause. A couple of years later, MicroGroup informed Juergens that his position was being eliminated and laid him off without paying the promised severance.

 Juergens sued MicroGroup alleging that MicroGroup violated the Wage Act by not paying him severance upon his termination. MicroGroup moved to dismiss the claim, relying on the Massachusetts Appeals Court’s decision in Prozinski v. Northeast Real Estate Services, LLC, which held that severance payments were not “wages” under the Wage Act. With little analysis other than pointing out that the Prozinski decision had issued before the Supreme Judicial Court had “authorized a more expansive interpretation of the Wage Act,” the court held that the definition of “wages” under the Wage Act should “not be limited to exclude severance pay” and denied the motion to dismiss.

 While Massachusetts courts have long held that employees may assert contract claims against their former employers based on severance agreements, this is the first time a Massachusetts court has held that severance agreements are subject to the Wage Act. Employers should be concerned about the Juergens decision because, if other courts were to follow it, it would open up the full panoply of Wage Act remedies for an employer’s failure to pay severance, including treble damages and attorneys’ fees.

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