Courts Limit Exempt Employee Status

December 31st, 2010 Posted by Derrick

Employers should be more cautious about classifying workers as salaried employees, in light of several recent federal court cases.

 

One of the most common complaints received by the Wage and Hour Division of the U.S. Department of Labor is that an has been deprived of overtime wages, due to being misclassified as an exempt salaried worker.   

 

Increasingly, the courts are finding in the employees’ favor in these cases, according to attorney Howard Radzely with the firm of Morgan, Lewis & Bockius. While some employers believe that they can avoid overtime simply by proclaiming an employee “exempt,” this has not proven to be the case.

 

The federal FLSA or Fair Labor Standards Act acknowledges five categories of exempt employees:

  1. Executives
  2. Salespeople
  3. Professionals (including doctors, lawyers and creative artists)
  4. Administrators
  5. Certain Computer Professionals such as System Analysts and Programmers

 

However, the courts are increasingly interpreting those classifications very narrowly.

 

In one recent example, an appeals court ruled that sales reps for pharmaceutical giant Novartis were not exempt employees partly because, by law, they can distribute samples and make a sales pitch, but cannot sell drugs. Only a licensed pharmacist can sell drugs legally.

 

In another case, appeals courts have turned in different opinions on whether managers of stores are genuinely exempt employees. In Morgan v. Family Dollars Stores Inc., the Supreme Court ordered the retail chain to pay $35.6 million in overtime to 1,424 retail store managers. The court found that the “managers” were not exempt executives because they:  (more…)

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Train Supervisors to Avoid Discrimination

December 29th, 2010 Posted by Amelia

Two recent federal court rulings highlight the importance of supervisors to handle complaints, and of gathering accurate first-hand information about problems. An impartial internal investigation or a well-trained can make or break the company’s case in a discrimination suit.

 

In Thompson v. Memorial Hospital of Carbondale, the hospital oversaw emergency medical operations for the Southern Illinois region. Archie Thompson was the only black in the region. Paula Bierman, a female middle at the hospital repeatedly stated that “one black paramedic was one too many” and stated her belief that African American employees did not have the same abilities as Caucasian employees. 

 

After saving the life of a diabetic patient, paramedic Thompson was verbally reprimanded by his on-duty supervisor for not reporting a certain procedure. Following an investigation, the supervisor concluded that the paramedics had not been trained in the protocol and that none of them, including Thompson, had been following the proper procedure. The next day, after reviving another diabetic patient, Thompson did follow the correct call-in procedure.

 

When manager Paula Bierman learned of the initial lapse, she requested permission from the hospital to put paramedic Thompson on probation. Under questioning, Bierman lied, claiming that the other paramedics were following the procedure, and that Thompson had been trained in it.

 

Bierman also claimed that Thompson had received lower scores than other paramedics on an extremely difficult pop quiz that she gave.

 

If the hospital administrator had interviewed other paramedics or the on-duty supervisor, he would have learned that Bierman was creating a trumped-up case against Thompson due to his race. In fact, the paramedics routinely failed to follow the diabetic protocol because the policy had not been publicized. Bierman had not (more…)

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New York Payroll Deductions

December 24th, 2010 Posted by Derrick

York employers face stricter limits on deductions from paychecks, under new regulations issued by the New York Department of Labor. The new clarify severe restrictions under Labor Section 193 that limit deductions, even with the employee’s written permission.

 

Specifically, the new regulations prohibit deductions in four areas that have been common in the past.

 

  1. Employers are not allowed to make deductions for overpayments or advances. This also means that the employer cannot dock an employee’s final paycheck if the employee has a negative vacation balance.
  2. Employers in New York cannot make deductions for repayment of a loan, advance or debt. There is an exc (more…)
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2011 Minimum Wage Requirement Recap – Arizona, Colorado, Montana, Ohio, Oregon, Vermont, Washington

December 22nd, 2010 Posted by Cara

Effective January 1, 2011 seven states will the minimum wage: Arizona, , , , , and Colorado.

 

2011 minimum wages for the states are: 

  • Arizona $7.35
  • Colorado $7.36
  • Montana $7.35
  • Ohio $7.40
  • Oregon $8.50
  • Vermont $8.15
  • Washington $8.67 

Florida and Missouri, which usually update the annually, will not have any increases. The Florida remains at $7.25 per hour, with tipped employees entitled to $4.23 per hour. In Missouri, the is also $7.25 per hour, while a tipped can be paid just $3.64 per hour.

 

Every employer should prominently display updated minimum wage and employment law posters in the workplace, in a location where they can be seen by all employees.

 

Washington’s minimum wage is the highest in 2011, while Oregon is in second place. The minimum wages in Connecticut, Illinois and Nevada are tied for third place at $8.25 per hour. However, Nevada employers who offer affordable group health insurance can pay just $7.25 per hour, the same as the federal minimum wage.

 

The Vermont minimum wage will be sixth highest in 2011 at $8.15 per hour. Massachusetts and California are tied for seventh place at $8.00 per hour. The minimum wage in Alaska is $7.75 while Maine and New Mexico require that employees be paid at least $7.50 per hour. The Rhode Island minimum wage rounds out the top dozen at $7.40 per hour.

 

In total, 14 states have minimum wages higher than the federal rate of $7.25 per hour, while 26 states have minimum wages the same as the federal minimum wage. Five states have lower minimum wages, while another five have no state minimum wage at all.

 

The minimum wage for tipped employees in the same states will also change. The 2011 rates for tipped employees are:  (more…)

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Colorado Minimum Wage for 2011 is $7.36

December 17th, 2010 Posted by Madison

The Colorado minimum wage will 12 cents on January 1, 2011 from $7.24 to $7.36 per hour. The has increased 51 cents in the past four years, from $6.85 per hour in 2007.

 

On the same date, the Colorado minimum wage for tipped employees will also increase 12 cents, from $4.22 to $4.34 per hour. Under Colorado , employers can take a maximum tip credit against the minimum wage of $3.02 per hour. However, if the does not average at least $7.36 per hour in tips and wages combined, the employer must pay the difference as wages. 

 

Colorado employers must update their labor law posters, including minimum wage posters. Employers are required to prominently display the posters in an area accessible by all employees.

 

Colorado is one of a dozen states that provide for an adjustment in the minimum wage based upon the cost of living. On January 1, 2010 the minimum wage actually decreased 4 cents per hour from $7.28 to $7.24. However, most employees were still entitled to the federal minimum wage of $7.25 per hour. The annual adjustment is base don the Consumer Price Index for All Urban Consumers in the Denver-Boulder-Greeley combined metro area. Colorado is one of the few states that permit a reduction in the minimum wage.

 

The Colorado minimum wage generally applies to private sector (non-government) employees in certain industries including: , service, food, beverage, health, medical and commercial support service. It does not apply to government employees or those in manufacturing, construction or the wholesale industry.

 

The statues provide myriad (more…)

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