Employers should be more cautious about classifying workers as exempt 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 employee 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 law 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:
Professionals (including doctors, lawyers and creative artists)
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 retail 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…)
Two recent federal court rulings highlight the importance of training supervisors to handle discrimination complaints, and of gathering accurate first-hand information about employee problems. An impartial internal investigation or a well-trained supervisor 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 paramedic in the region. Paula Bierman, a female middle manager 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 administrator 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…)
New York employers face stricter limits on deductions from employee paychecks, under new regulations issued by the New York Department of Labor. The new regulations clarify severe restrictions under Labor Law 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.
New 2011 minimum wages for the states are:
Florida and Missouri, which usually update the minimum wage annually, will not have any increases. The Florida minimum wage remains at $7.25 per hour, with tipped employees entitled to $4.23 per hour. In Missouri, the minimum wage is also $7.25 per hour, while a tipped employee 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.
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 law, employers can take a maximum tip credit against the minimum wage of $3.02 per hour. However, if the employee 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 annual adjustment in the state minimum wage based upon the cost of living. On January 1, 2010 the state 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: retail, 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…)