The federal Department of Labor has filed several class action suits in recent months against employers who require – or permit – employees to work “off the clock.” Violations include permitting employees to work while on unpaid meal breaks, or permitting employees to “volunteer” after hours and on weekends.

The FLSA or Fair Labor Standards Act permits the government to file collective actions on behalf of a group of employees in a similar situation. Employers are generally liable for 2 years of back pay, and 3 years in the case of willful violations.

In a recent ruling limiting membership in such class action suits, the 9^th Circuit Court of appeals ruled that an employee can join a collective action only if he or she files written consent with the court at the time the action is brought.

In Smith v. T-Mobile USA, two employees in California voluntarily settled their claims for working during unpaid breaks. Later, the two filed motions to be included in the collective action suit against T-Mobile USA, Inc. The 9^th Circuit denied the employees’ motions, ruling that because they had opted out of the suit at the beginning, they could not join it at a later time.

Colleen F. O’Keefe, an employment lawyer with the firm of Franczek Radelet PC, opines that employers can use this principle in their favor. “A strategically timed offer of judgment is an important litigation tool” in a collective action suit, O’Keefe says.

Despite that ruling, many employers are at risk of lawsuits for back wages, penalties, interest, fines and fees.

Under the FLSA and various state minimum wage laws, a non-exempt employee must be paid for all the  time he or she works. This includes time that the employee “voluntarily” works, in excess of his or her scheduled shifts.

A call-center employee who volunteers to come in on a day off for additional training, must be paid for that time. This principle applies to any other industry, as well.

The FLSA also requires that employees be paid overtime – usually after working 40 hours in the payroll week. (Some state laws set stricter requirements for overtime.) If the employee volunteers to work overtime, he or she must be compensated at a rate equal to 1.5 times the employee’s average wage.

Even in cases where the employer has expressly forbidden an employee from working overtime, if the employee works, he or she must be paid for it. The employer may discipline or terminate the employee for working unauthorized overtime, but the employee must be paid for it.

In Scobey v. Nucor Steel-Arkansas, a steel mill employee was no-call, no-show on April 10. The following day the employee, Talmadge Scobey, spoke briefly to his supervisor on the phone. Scobey sounded intoxicated, and told the supervisor he was not coming to work because he had suffered a nervous breakdown. However, when the supervisor tried to get more information, Scobey hung up.

The employee was also absent on April 12, 13 and 14. On April 14, the employee again phoned the supervisor, saying that he wanted to get help. The employee was referred to the HR manager, but did not contact her until April 19. At that point, the employee was referred to Nucor Steel’s employee assistance program, and entered an inpatient alcohol treatment program.

The employee argued that the employer should have known that his absence was for an FMLA-related reason due to his statements on April 11 that he had “a nervous breakdown” and the very colorful expression he used to mean that he was intoxicated at the time.

While employers should still err on the side of caution when providing FMLA notification to employees, this ruling shows that employers are not in the business of diagnosing whether an employee has a serious health condition or not if the employee merely calls in sick.

This suit reinforces the policy that many employers have, allowing alcoholics to use FMLA for treatment, but not for drinking binges.

In the ruling, the court noted that an employee must provide sufficient information to support a determination that he or she has a serious health condition and qualifies for FMLA leave. In addition, while FMLA can be used for treatment of alcoholism, it cannot be used for a drinking binge.

The Family and Medical Leave Act permits employees to take up to 12 weeks of unpaid, job-protected leave for a serious health condition. Alcoholism and drug addiction have long been recognized as serious health conditions under the law. However, the FMLA covers time off for treatment, rather than time off for drug or alcohol use. Often, employees take FMLA for weeks to enter a rehab program, or use it intermittently to attend outpatient treatment.

Alcoholism and drug addiction are also disabilities under ADA, the Americans with Disabilities Act. Often employees are entitled to additional unpaid time off as a reasonable accommodation under ADA.

This change in the law will require every employer to update the Military Caregiver poster, even if they do not have any employees who qualify.

The  National Defense Authorization Act for 2010 provides for two  major changes to current FMLA regulations: 

• Families of Armed Forces members on active duty are covered, not just family members of the National Guard and Reserve
•  Military caregiver leave is expanded to cover the families of some veterans 

It appears that these changes are retroactive, according to Matthew Effland, an Indianapolis attorney specializing in FMLA issues.

Active Duty Included

Under the new law, when a member of the Armed Forces is deployed to a foreign country, his or her spouse, son, daughter, parent, step-child, or step-parent can take up to 12 weeks of unpaid, job-protected FMLA leave for any “qualifying exigency.”

Many employers have already been granting this leave to military families, and not just the families of Reserve or National Guard members who are called to active duty. In fact, it is unclear why the U.S. Department of Labor interpreted the original law so narrowly in the final days of the second Bush administration.

Under the current regulations, qualifying exigencies include attending military-sponsored functions, making appropriate financial and legal arrangements, handling details of a short-notice deployment, attending counseling, and making alternate childcare arrangements. In addition, an employee can take up to 5 days of FMLA for rest and recreation or R&R under the law. The employee can also use FMLA up to 90 days following deployment for arrival ceremonies, post-deployment ceremonies and other military events.

Military Caregiver Leave Expanded to Veterans

The NDAA also permits an employee who is the son, daughter, spouse, or parent to take up to 26 weeks of unpaid, job-protected FMLA during a 12-month period to provide care for a service member who has been injured or contracted a disease in the line of duty.

This extended FMLA leave also applies to the injured soldier’s next-of-kin, regardless of the relationship. This means in some cases that an in-law, grandparent, sibling, aunt, uncle or cousin could qualify for military caregiver leave.

The new law permits the family member to take this leave for up to 5 years after the soldier leaves active duty, if the soldier develops an illness or injury that is service-related. The law’s authors note that often soldiers develop traumatic brain injury or post-traumatic stress disorder, PTSD, years after military service.

This new federal posting requirement applies to virtually every employer, even if they never engage in genetic testing.

GINA, of course, is the Genetic Information Nondisclosure Act of 2008. Under GINA, employers are prohibited from gathering information on an employee’s genetic makeup. Employers are also prohibited from considering an employee’s genetic information in making employment decisions.

Health insurance providers cannot discriminate against consumers, based on genetic information under GINA. For example, a health insurance company could not refuse to cover an individual, simply because her mother, grandmother and aunt all had breast cancer. Even if genetic testing showed that the consumer had a gene for breast cancer, that alone would not be sufficient cause for the health insurance company to deny her coverage.

The GINA prohibition on gathering genetic information also includes taking information on an employee’s family medical history – especially hereditary illnesses like heart disease, breast cancer, diabetes, arthritis, Alzheimer’s, and other inherited conditions.

GINA covers a wide variety of mental health conditions including depression, schizophrenia, and bipolar disorder. One of the concerns is that employees will forgo genetic testing because they fear discrimination in the workplace, or from health insurance companies.

Employers are also prohibited from gathering an employee’s family medical history in more traditional ways under the Gina law. Employers are forbidden from inquiring whether members of the employee’s family have heritable diseases like cancer, heart disease and Alzheimer’s. In addition, if the employee volunteers such information in casual conversation, the employer is prohibited from considering it when making employment decisions. These employment decisions include hiring, promotions, training, layoffs, salary and duties.

Opponents argue that GINA solves a problem that doesn’t exist. No one has yet identified a single employer that is engaged in genetic testing of workers, and basing employment decisions on that information. However, as genetic tests for dozens of conditions were developed, members of Congress became concerned that such information would be used against employees.

Every employer covered by Title VII of the Civil Rights Act of 1964 must display a GINA poster. In general, that is every employer with 15 or more workers, including businesses and non-profits. State and local governments, unions, labor organizations, employment agencies and the federal government are also required to display a GINA poster.

When GINA goes into effect in late November 2009, it will be enforced by the EEOC.

Many states are imposing stricter penalties for employers who illegally avoid paying unemployment insurance and workers’ comp by misclassifying workers as independent contractors.

In Somers v. Converged Access, the Massachusetts Supreme Judicial Court ruled that the independent contractor law is a strict liability  statute. This means that the employer’s intent in misclassifying a worker is irrelevant. Therefore, the worker was entitled to compensation for wages, overtime and benefits that he would have received, if he had been correctly classified as an employee. In addition, the employee was permitted to keep the $65 per hour that the company paid him as an independent contractor – an amount far in excess of an employee’s wage in the same job.

The Massachusetts company was required to pay the employee for benefits including vacation and holiday pay. In addition, the company was ordered to pay the employee overtime at a rate of $97.50 per hour – 1.5 times the worker’s $65-per-hour wage.  

The Massachusetts definition of independent contractor is even more strict than federal independent contractor regulations. A worker is an employee unless he or she is:

Free of any control and direction in connection with work performance, both in fact and under the contract

Performs a service outside the usual course of business of the employer

Is customarily engaged in an independently established trade, occupation, profession or business (the same as the services performed.)

In addition, the burden of proof to show that these conditions have been met, falls on the employer. If  the worker does not meet all these conditions, he or she is an employee, not an independent contractor.

This means that in Massachusetts, any independent contractor hired must be outside of the employer’s usual business. A plumbing company could hire an accountant as an independent contractor – but not a plumber. An accounting firm could hire a plumber as an independent contractor – but not an accountant. California has a similar rule, but there is no such limitation on independent contractors under federal law.