aptmetrics wage and hour law: your company’s not exempt from litigation presented by robert e....
TRANSCRIPT
APTMetrics
Wage and Hour Law: Your Company’s Not Exempt
from Litigation
Presented by Robert E. Lewis, Ph.D. and Toni S. Locklear, Ph.D.
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About APTMetrics
Global Talent Management Solutions Provider Comprised of:
• Ph.D. industrial/organizational psychologists• Human resource consultants • Information technology specialists
What Sets APTMetrics Apart:• Professional integrity• Evidence-based approach• Technical expertise• Customer service
Diversity Supplier • Certified as a women-owned business
by WBENC• Certified as a women-owned small
business by the US SBA
Global Strategies for Talent Management.
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Our Areas of Expertise
• Leader Assessment• Employee Selection• Litigation Support• Diversity Strategy &
Measurement• Job Analysis• Competency Modeling• Performance Management• Staffing for Mergers &
Acquisitions• Organizational Surveys
Global Strategies for Talent Management.
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Our Web-Based Solutions Platform
APTMetrics®
SelectionMetrics®
Employee Selection SystemLeadINsm
Leadership Assessment Suite
JobMetrics®
Job Analysis System
360Metrics®
360-Degree Feedback System
SurveyMetrics®
Organizational Survey System
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APTMetrics’ U.S. Offices
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• Introduction to wage-hour law
• Why care about wage-hour laws?
• Difficulties implementing wage-hour laws
• How to limit risksassociated with wage-hour laws
Agenda
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• What is regulated by wage-hour law?• Federal law:
• overtime pay • minimum wage • child labor • record-keeping requirements
• State law: • meal and rest breaks • discharge notices • pay upon discharge
Introduction to Wage-Hour Law
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• Key issue in wage-hour litigation: Exemption• Exempt—not subject to overtime pay
regulations
• Non-exempt—subject to overtime pay regulations
Introduction to Wage-Hour Law
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• Based on the work as it is done• Individual determination• Exemption types:
• Executive• Administrative• Professional• Computer Professional• Outside Sales
Exemption Standards
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• Key work tests:• Salary level test• Duties test
• Discretion• Independent judgment• Authority• Hire/fire authority• Prolonged course of specialized instruction
Exemption Standards
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1. What percent of jobs in your company are classified as exempt from federal and state wage-hour laws?a. Less than 20%b. 20 – 40%c. 41 – 60%d. 61 – 80%e. 81 - 100%f. I don’t know
Polling Question
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• Classifying jobs as exempt is voluntary• No requirement to claim exemption for any job
• Employers bear the burden of proof when claiming exemption
• The Department of Labor estimates 70 percent of employers are not in compliance with the FLSA in some way
Little Known Facts
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• Lawsuits are on the rise• Wage hour suits outpace others (e.g., discrimination)• 77 percent rise in lawsuits filed between 2004
and 2009• Multi-million dollar settlements—
• $1.77 billion in settlements in 2007-2010• Average settlement of $12.8 million per case
• Damages• Back pay for lost wages, interest,
liquidated damages, and attorneys’ fees• Treble damages in some states
• Changing exemption status can create litigation risk
Wage-Hour Issues are Important
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• Wage-hour administration crosses organizational lines• The HR, finance, legal functions generally have some
responsibility• Little coordination among them• Key players: legal and HR
• Work is changing• Leaner staffing levels require managers to do more
“non-managerial” work
• Laws require interpretation• What is “work time”?• When is doing non-management work “essential” to
doing management work?
Difficulties Implementing Wage-Hour Laws
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2. Which jobs do you wrestle with most regarding wage-hour issues?a. Assistant managers/team leadersb. Computer techniciansc. Accountantsd. Project managerse. Other
Polling Question
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• Employees working off the clock
• Ensuring that employees take meal breaks
• Determining a job’s exemption status
Key Wage-Hour Concerns
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Reactions to Wage-Hour Challenges
Leve
l of
Effe
ctiv
enes
s
• Delegate wage-hour compliance to field/district management
• Conduct compensation/market analyses
• Empower Staffing to make exemption decisions at hire
• Create policy manual section on wage-hour compliance
• Regular audits of wage-hour policies/implications
• Train managers on managing meal breaks and overtime
• Conduct job analysis
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Are retail store managers entitled to overtime pay?• The Plaintiff’s Claim -- the company misclassified all of
its store managers as exempt from both the FLSA and state wage-hour law
• Plaintiff managed a convenience store/gas station in NY state
• Plaintiff spent: • 80% of her time on nonexempt duties such as
counting cigarettes and verifying gas readings• 20% of her time on exempt duties such as
scheduling, supervising, and evaluating employees
• Most of her day free from supervision; the regional manager was generally not in the store
Case Study – Guinup v. Petr-All Petroleum
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• Knowing the work that is done is the number one way to limit wage-hour risk
• Job Analysis is the preferred method for documenting work requirements • Structured• Defensible• Drives coordination• Documents critical job components
• Frequency and importance of work activities• Entry requirements for knowledge, skills and abilities• Level of discretion and autonomy• Policy creation versus enforcement versus execution
Limiting the Risk of Wage-Hour Issues
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• Job analysis process• Determine jobs that present risk• Collect structured, verifiable data
• Develop a comprehensive work activity and knowledge/skill/ability list with job experts
• With your employment attorney, decide which activities are exempt
• Identify the ratings you need based on your state (importance, time spent, level of autonomy, etc.)
• Administer the survey to the entire population
• Analyze the data, including for exemption implications
• Means and standard deviations• Illustrate the findings using visuals to facilitate comparing
jobs on relevant dimensions
Limiting the Risk of Wage-Hour Issues
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Job Analysis Results
• How important are these job activities for the Manager job?• 3 – Critically important– this activity has significant impact on profit, performance, or safety• 2– Important-- poor performance on this activity hinders performance• 1-- Minor Importance– this activity must be done but has little impact on profit, performance or
safety• 0– Not Applicable– this activity is not performed in this job
Limiting the Risk of Wage-Hour Issues
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Job Analysis Results
• Including both exempt and non-exempt activities allows you to assess the degree to which job respondents meet exemption criteria
Limiting the Risk of Wage-Hour Issues
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• Develop job descriptions based on the job analysis
• Key activities and responsibilities
• Key and required KSAs
• Minimum and preferred qualifications
Limiting the Risk of Wage-Hour Issues
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Job Profiles
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Job Profiles
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Job Profiles
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• HR Audit• Policies—are wage-hour considerations reflected in
policies?• Use of pagers and smartphones for email access• On-call duty for computer operators/technicians• Use of company-owned vehicles
• Practices—are processes in effect for managing issues on an ongoing basis?
• Grievance process for work time complaints• Active training program for managers to understand their
responsibilities• Cross-functional committee responsible for wage-hour
issues that meets regularly• Regular employee survey to determine how employees
spend their time in important work activities
Limiting the Risk of Wage-Hour Issues
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• Wage-hour issues require cross-functional management• Typically from Legal, HR and Finance
• Knowing the job is your best proactive and defensive measure• A job analysis is a court-tested method of determining
status• Changing an employee’s exemption status without
knowing and changing activities/skills is a recipe for litigation
• Audit your policies and practices to ensure coordination and proactive measurement• Policies to ensure guidance• Practices to ensure execution
Summary
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203.655.7779 [email protected]
Contact Information
Global Strategies for Talent Management.