If your organization hasn't yet been hit with a pay-related lawsuit, consider yourself lucky. A recent report shows the onslaught of wage-and-hour lawsuits continues to rise at a record pace.
In fiscal year 2015, U.S. employees filed more than 8,700 lawsuits in federal court related to wage-and-hour issues, according to a study by the Seyfarth Shaw law firm. Since 2000, wage-and-hour federal court filings have skyrocketed 450%.
Why the higher risk? An intense new focus on independent contractor classification, unpaid internships, joint employer status and the fight for minimum wage hikes has created a perfect storm for Fair Labor Standards Act (FLSA) lawsuits.
The good news: There are ways for employers to reduce the risk of wage-and-hour suits, and strengthen their defenses if one is filed.
- Can you eliminate paper paychecks and force employees into direct deposit?
- When is it illegal to set a use-it-or-lose-it policy on vacation time?
- What's the rule for delivering final paychecks for employees who quit, are fired or even those who die?
Get answers to these questions and more with the Employee Pay Workshop: Compliance Advice for 2016 & 2017.
Here are six do's and don'ts:
√ 1. DO audit nonemployee workers. Some employers use workers who are classified as independent contractors, interns or volunteers. Regularly review the classification of such workers to ensure your compliance.
√ 2. DO audit exempt employees. Employers often wrongly classify managers as exempt from overtime. Regularly review their duties to ensure they truly satisfy the requirements for such exemptions.
√ 3. DON'T permit "off the clock" work. If employees work beyond their scheduled hours, pay them. Then counsel them not to do it again and discipline if they do (but don't dock their pay). Consider requiring employees to certify the accuracy of their time records at the end of the day or week.
Important: This session is especially timely because state and federal regulators are taking a MUCH closer look these days at how you pay employees. Last year alone, the U.S. Department of Labor secured more than $250 million for employees in back pay. State regulators are racking up equally impressive hauls. Discover what you must do (and not do) to stay in compliance with federal and state pay laws from payroll expert Alice Gilman, Esq., the editor of Payroll Legal Alert, with Employee Pay Workshop: Compliance Advice for 2016 & 2017.
√ 4. DO consider arbitration agreements. Instead of slugging it out in court with employees, have them sign agreements that send disputes to arbitration. It will make you a much less attractive wage-and-hour target for plaintiffs' attorneys.
√ 5. DO ensure proper calculation of overtime rates. Overtime rates for nonexempt employees must be calculated based on one and one-half times the employee's "regular rate." The regular rate might not be the employee's base hourly rate. Instead, it often must take into account commissions, bonuses and other incentives.
√ 6. DO comply with federal and state laws that require posting wage-and-hour notices and maintaining payroll-related records. Also, adopt a payroll/overtime policy that confirms your commitment to comply with wage-and-hour obligations. Train managers about it.
Use this recording as a checklist to make sure your pay policies are in total compliance with state and federal law. You will learn answers to questions like:
Can you make direct deposit mandatory? Discover what the federal Consumer Financial Protection Bureau and state payday laws say about mandatory direct deposit policies. Learn five simple ways to encourage employees to voluntarily sign up for direct deposit, plus the three key traps that will sabotage your goal of 100% electronic pay.
When can you deduct pay for breakage, cash shortages and discipline? Discover the eight indispensable policy pointers to keep your company toeing the legal line when making loss-related deductions from employees' pay.
How can you legally pay employees using paycards? Don't make the mistake of other employers and become lawsuit bait when paying workers via payroll debit cards. Learn the specifics of the Federal Reserve's Regulation E, and the six steps to keep you and your paycard program out of court.
How (and how quickly) must you pay departing workers? Learn the ins and outs of termination pay, including step-by-step instructions on creating a voluntary termination pay workflow, and the nine do's and don'ts for involuntary terminations.
When must you pay for sick days? Find out what the new state and municipal mandatory paid sick day laws require. Hint: Even the smallest employers aren't off the hook for mandatory sick days. Government contractors and subcontractors beware: The Obama administration is proposing you give employees at least seven days of sick leave a year.
What's a "wage theft" law—and why should you care? Such laws place substantial burdens on employers and are the latest twist in state payday laws. Get the Employee Pay Workshop: Compliance Advice for 2016 & 2017 CD.
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