labor lawAdivision of labor law center

Despite a recent ruling in the 9^th U.S. Circuit Court of Appeals, the U.S. Department of Labor is targeting employers who violate wage and hour laws.

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 (more…)

Reversing a recent trend to extend broader coverage to employees under FMLA, the 8^th Circuit Court of Appeals recently ruled that while treatment for alcoholism is covered by FMLA, a five-day drinking binge is not.

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 (more…)

The IRS  and U.S. Department of Labor are cracking down on employers who try to avoid employment taxes by misclassifying employees as independent contractors.

Under IRS regulations, an independent contractor is a self-employed small business person. The employer does not have to pay FICA or unemployment taxes on independent contractors, under federal law. State laws requiring workers’ comp insurance do not apply to independent contractors. Employers are also not required to withhold federal income taxes for independent contractors.

The minimum wage and overtime provisions of the FLSA, the federal Fair Labor Standards Act, do not apply to independent contractors.

All of these factors make hiring independent contractors very attractive to employers. However, both the IRS and the U.S. Department of Labor have stepped up enforcement actions against employers who misrepresent workers as independent contractors, when in fact they are employees.

To further complicate the issue, there is no one standard or group of standards to determine if a worker is an independent contractor, rather than an employee. The IRS has traditionally used the 20-factor test, particularly to determine if workers’ compensation coverage is required.

The IRS 20-factor test basically determines how much control the employer exercises over the worker. In general, a high level of control results in employee status, rather than independent contractor status. When an employer controls when, where or how the work is performed, that usually constitutes employee status.

Other agencies use (more…)

Effective May 21, 2009 companies entering into new federal contracts will have to use E-Verify to double-check the immigration and legal work status of new employees. This deadline has been delayed from January 15, 2009. 

The Office of Management and Budget or OMB recently extended the deadline after a request by the SHRM, or Society of Human Resource Management.

President Obama’s Chief of Staff Rahm Emanuel sent a memo to all federal agencies, suggesting that they delay effective dates of any regulations introduced during the last few months of the Bush Administration. SHRM had partnered with other business organizations to fight the new regulation in court.

The Department of Justice concurred with the SHRM request to delay the deadline. Although a federal district court judge in Maryland must review the delay, it seems certain to be approved.

This action gives federal contractors (more…)

In an effort to reduce costs, many employers are considering furloughs – unpaid leave – for exempt employees. However, furloughs can be a legal minefield, if not handled properly, according to the SHRM, the Society of Human Resource Management.

According to the U.S. Department of Labor regulations issued in 2007, an exempt salaried employee is entitled to his or her full salary in any week in which the employee does any work at all – regardless of the number of hours that the employee works.

Under the federal FairPay regulations , an exempt employee who works for 10 minutes during the week is entitled to the same salary as if he or she worked 100 hours during the week.

Also under the FairPay regulations, if an exempt employee is ready, willing and able to work on a particular day, but no work is available, the employer must pay the worker for that day. For example, if the business in Kentucky is closed by a massive power outage, exempt employees must still be paid for that day. Hourly or non-exempt salaried employees need not be paid, under the FLSA or Fair Labor Standards Act.

This means that an employer cannot furlough an exempt employee (more…)