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WAGE AND HOUR ANDTRADITIONAL LABOR UPDATE

April 2, 2015

John F. Lomax, Jr.jlomax@swlaw.com

602.382.6305

Arizona Total Rewards Association

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Wage and Hour Issues, Overtime Issues, and Litigation

• Exemption Misclassification Claims• Off-the-Clock Claims• Independent Contractors and Limited Liability

Companies Claims

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Exemptions: The Big Four• Executive• Administrative• Professional• Outside Sales

But Don’t Stop There . . .

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White Collar Exemptions Must Meet Salary and Duties Test• Salary Test now equals $455.00 per week or

$23,660 per year.• Department of Labor considering rule to raise

annual salary test; e.g., increase to $50,000 annual salary.

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Other Exemptions• Highly Compensated Employee• Motor Carrier Exemption• Computer Services Exemption• Host of Other Statutory Exemptions

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Exemption Misclassification Claims• No. 1 Misclassification Problem: Paying a

Salary Does Not Make an Employee Exempt.• No. 2 Misclassification Problem: People Like to

Be Salaried Even if They Forfeit Overtime.

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Off-the-Clock Claims• The iPhone, Blackberry, Smart Phone Problem• Managing Overtime Expense Problem• Sloppy Timekeeping Problem

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Independent Contractor Issues

• Converting Hourly Pay Employees to Independent Contractor Status Creates Significant Risks

• Audit Risks: Form 1099 and W-2 in same year• Voluntary Compliance Programs• State Unemployment Problems

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NLRB UPDATE

• Employers’ email systems• New election rules

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EMPLOYERS’ EMAIL SYSTEM

• Old Rule: Register Guard, 351 NLRB 1110 (2007)– Employees have no right to use Employers’ email

systems for Section 7 purposes.• New Rule: Purple Communications, Inc., 361

NLRB No. 126 (Dec. 11, 2014)– Overrules Register Guard and permits Employee

use of email on non-working time.

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Purple Communications

ISSUE: Do employees have a right under § 7 of the NLRA to communicate via email with one another at work regarding self-organization and other conditions of employment?

HOLDING: Employees may use email on non-working time if employers have given email access to employees.

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Purple Communications

• Applies only to those already granted access to an employer’s email system; does not require an employer to grant access to employees.

• Employer may ban non-work use of email, including § 7 use of non-working time, by demonstrating that special circumstances make the ban necessary to maintain production or discipline.

• Does not address email access by non-employees.• Does not apply to other electronic communications

systems.

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Purple Communications

• Dispute over employer’s property rights versus employees’ core right to communicate in the workplace; email is the new natural gathering place.

• Email systems differ from other equipment; not a bulletin board or phone, and harm to employer appears minimal.

• Did not treat email as solicitation or distribution.

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Purple Communications

• May be solicitation, distribution (literature or information) or neither of the two but still protected communications.

• Declined to define email systems as work areas or non-work areas ― more of a mixed-use area.

• Can establish uniform and consistently enforced restrictions, prohibiting large attachments or A/V content, if interfere with efficient functioning.

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PRACTICAL TIPS

• Review and revise solicitation and distribution policy.

• Review and revise electronic communications policy.

• Train Human Resources and Management Team on new case law.

• Can still monitor email systems, but must do so fairly and uniformly; otherwise may face a charge of discrimination or unlawful surveillance.

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NEW NLRB ELECTION RULES

• Published Dec. 15, 2014; becomes effective April 14, 2015.

• Permits petitions for elections to be filed electronically.

• Requires employer to provide personal email addresses and phone numbers in Excelsior lists.

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NEW NLRB ELECTION RULES

• Non-petitioning party will respond to petition and state positions the day before pre-election hearing opens. Petitioning party responds at opening of hearing.– Litigation of eligibility, inclusion, and scope of unit

issues deferred to the end of election.– Written briefs at close of hearing only if RD

determines they are necessary.– Only issue is whether election should be conducted.

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NEW NLRB ELECTION RULES

• Elections are not stayed after RD’s Decision and Direction of Election unless NLRB orders.

• Pre-election hearing generally set to open 8 days after a hearing notice is served; post-election hearing opens 14 days after objection filed.

• Employer’s list of voters with job classifications, shifts, and work locations should be part of position statement.

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NEW NLRB ELECTION RULES

• Employers do not have to file Request for Review to preserve appeal of RD’s Decision and Direction of Election (“D&DE”).

• Excelsior list due 2 days, not 7 days, after approval of election or D&DE.

• Objections and challenges must be filed within 5 days of election.

• On filing of petition, employer must post and distribute NLRB notice about petition and potential for an election.

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PRACTICAL TIPS

• Anticipate Union organizing issues– What is scope of a voting unit?– Who should be included?– How would you communicate in a short period of

time?• Training for supervisors and managers

– Avoiding unfair labor practices– Communicating company’s position on unions.