do i have to pay for that? navigating the common pitfalls of wage and hour laws

Do I Have to Pay for

That?

NAVIGATING THE COMMON PITFALLS OF WAGE AND HOUR LAWS

August 24, 2017

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About the Speakers

Webinar Host

Michelle Lanter Smith

Chief Marketing Officer

EPAY Systems

Featured Speaker

Chelsea Mesa

Partner

Seyfarth Shaw, LLP

Featured Speaker

Cheryl Luce

Associate

Seyfarth Shaw LLP

Agenda

• Introduction

• Refresher on Time Worked Basics

• Meal and Rest Breaks

• Travel Time

• On-Call Pay/Reporting Time Pay

• How EPAY Can Help

• Questions

EPAY Systems Overview

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Legal Disclaimer

The contents of this presentation should not be construed as legal advice or a

legal opinion on any specific facts or circumstances.

These materials are intended for general information purposes only, and you are

urged to consult a lawyer concerning your own situation and any specific legal

questions you may have.


Refresher on Time

Worked Basics

Compensable Time

FEDERAL STANDARD

• Includes all time that employers “suffer or permit to work”

• If the employer is aware that employee is working, the time is compensable

• The reason is immaterial and includes voluntary work

• Most states mirror or incorporate this standard

CALIFORNIA

• “The time during which an employee is subject to the control of an employer, and includes all of the time the employee is suffered or permitted to work, whether or not required to do so”

• Stricter standard, as we’ll see when discuss standby and on-call reporting time pay

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• Pre-shift and post-shift work

o Federal standard: “principal work activity”

o California standard: control test

• Problem areas:

o Work during meal periods

o Taking work home

o After-hours calls

o Mobile devices

o Donning and doffing

o Bag checks

“Off the Clock”

Work

Payment of Overtime


All non-exempt employees earn overtime in accordance with applicable state and federal law

10

Payment of

Overtime:

When Is It

Owed?

• Federal / FLSA

o all hours worked over 40 in a work week

• States that require overtime after certain number of hours in a day

oAlaska

oCalifornia

oColorado

oNevada

oPuerto Rico

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Payment of Overtime:

What Is the Rate of Pay?

California

1.5 Times the Regular Rate for:• Over 8 hours in a workday (up to 12

hours) • Over 40 hours in a workweek• First 8 hours on the 7th consecutive

workday worked in a workweek

2 Times the Regular Rate for:• Over 12 hours in a workday• Any hours over 8 on the 7th

consecutive day worked in a workweek


California Make Up Time Exception

• Offering make-up time is not required by law.

• If not done by the book, this employee benefit falls into the category of “no good deed goes unpunished.”

• Rules

o Voluntary request in writing each time

o Employee’s personal obligation

o Make up time in same workweek

o Must not cause employee to work more than 11 hours/workday or more than 40 hours/workweek for “make up time”

o Employer must not encourage or solicit make up time


California Wage Theft Prevention Act Notice

• California employers must provide a written notice to new non-exempt employees, which states:

o Pay rate(s) and basis, whether by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime

o Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances

o The regular payday designated by the employer

o The name of the employer, including any formal or informal "doing business as" names used by the employer

o The physical address of the employer's main office or principal place of business, and a mailing address, if different

o Telephone number of the employer


o Name, address, and telephone number of the employer's workers' compensation insurance carrier

o As of January 1, 2015, that an employee may accrue and use paid sick leave; has a right to request and use accrued paid sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave; and has a right to file a complaint against an employer who retaliates

o Any other information the Labor Commissioner deems material and necessary

14

Wage Theft

Notice

(Continued)

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Other States with Written Wage Notice Laws


• Montana

• New Hampshire (upon demand)

• New York (form required)

• North Dakota (not required,

but required to establish

limited PTO forfeiture)

• South Carolina (recommended)

• West Virginia

Written wage notice requirements, where postingwill suffice:

•Alaska

•Colorado

•Iowa

•Pennsylvania

•Tennessee

•Utah

• Connecticut

• Delaware

• D.C. (form required)

• Hawaii

• Idaho (upon request)

• Illinois

• Kansas (upon request)

• Louisiana (upon request)

• Maryland (upon request)

No Federal Law

States with Paystub Requirements

Majority of states require them, but the following states do not address them:

o Alabama

o Arkansas

o Florida

o Georgia

o Louisiana

o Mississippi

o Ohio

o South Dakota

o Tennessee

o Virginia (unless requested)


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California

Itemized

Wage

Statements

─ Required

Information

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• Gross wages earned

• Total hours worked (not for salaried exempt employees)

• Number of piece-rate units earned and any applicable piece rate

• All deductions

• Net wages earned

• Dates of the pay period

• Employee name and last four digits of SSN or other employee ID.

• Name and address of the employer

• All applicable hourly rates for the pay period with number of hours worked at each rate

• sick time*

California Deductions

for Overpayments

• Signed Authorization

• Voluntary

• Amount of Deduction Must be Specified

• Not Less than Minimum Wage

• No “Balloon” Deductions


California Pay at Termination: The Rules

ResignationoMust pay on final day, unless employee did not

provide 72 hours’ notice

oWhere employee does not provide 72 hours’ notice, must be paid within 72 hours of notice

Location of payment

Employee request to deliver by mail: documentation is very important.

Involuntary Termination/LayoffoMust pay on final day (all pay) – have check ready

for termination meeting.

oReporting time pay needed for termination meeting?


California Pay at Termination: Waiting Time

Penalties

• Exiting employees not paid allwages owed at termination can get “waiting time penalties.”

• Requires “willful” failure to pay, but that is a broad concept under California law.

• Unless you have reasonabledefense to paying the wages, you generally owe the penalties.

• Ignorance of the law is no excuse.


• Alaska (termination only)

• Arizona (termination only)

• Arkansas (termination only)

• Colorado (termination only)

• Connecticut (termination only)

• D.C.

• Hawaii (termination and resignation with notice)

• Idaho

• Illinois (if possible)

• Iowa

• Louisiana

• Maine (2 weeks, if earlier)

• Massachusetts

• Michigan (if possible)

• Minnesota (termination)

• Missouri (termination)

• Montana (termination)

• Nebraska (2 weeks, if earlier)

• Nevada (7 days, if earlier)

• New Hampshire (termination and resignation with notice)

• New Mexico (termination)

• Oregon

• South Carolina (30 days if earlier)

• Texas (termination)

• Utah (termination)

• Vermont (termination)

• Wisconsin (31 days, if earlier)

Other States

Requiring Pay

Sooner than

Next Pay

Period

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Meal and Rest

Breaks

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Federal Meal and Rest Break Laws

• Federal law does not require

rest breaks for adults

• But if an employer offers

breaks for less than 20

minutes, employees must be

paid

• Federal law does not

require meal breaks for

adults

• But if an employer offers

meal breaks for less than 30

minutes, employees must be

paid

• Under some circumstances,

meal breaks can be less

than 30 minutes

Rest Breaks

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Meal Breaks Lactation Breaks

• Federal law does require that

employers provide non-exempt

mothers with the time and

space to express breast milk

for 1 year after birth of child

• Requires providing a

“reasonable amount of time”

as frequently as needed by the

nursing mother

• Space must be shielded from

view

• Lactation breaks are generally

not compensable, with certain

exceptions

States with

Meal Break

Laws For

Adults

• Colorado (5 hrs / 10 hrs)

• Connecticut (7.5 hrs)

• Delaware (7.5 hrs)

• Illinois (7.5 hrs)

• Kentucky (5 hrs)

• Maine (6 hrs)

• Massachusetts (6 hrs)

• Minnesota (8 hrs)

• Montana (“regular meals”)

• Nevada (8 hrs)

• New Hampshire (5 hrs if not feasible to eat while working)

• New York (6 hrs)

• North Dakota (5 hrs)

• Oregon (6 hrs)

• Rhode Island (6 hrs 20 mins / 8 hrs 30 mins)

• Tennessee (6hrs)

• Vermont (“reasonable time to protect hygiene”)

• Washington (5 hrs)

• West Virginia (6 hrs)

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States with

Rest Break

Laws For

Adults

• Colorado (4 hrs)

• Kentucky (4 hrs)

• Minnesota (4 hrs restroom break)

• Nevada (3.5 hrs)

• Oregon (4 hrs)

• Vermont (“reasonable time to protect hygiene”)

• Washington (4 hrs)

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California Meal Periods − Overview

• Employees who work more than five hours in a workday must be provided with a 30-minute off-duty, uninterrupted, unpaid meal period.

o Meal Period must begin no later than the end of the fifth hour of work.

o If the employee works more than five hours but not more than six hours, the employee and the Company may voluntarily agree to waive the meal period.

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California

Meal

Periods

(Continued)

Employees are relieved of all duties during their meal periods and are free to use the time for whatever purpose they desire, including leaving the premises.

• “Duty-free” means that employees cannot be required or encouraged to carry pagers, phones, or any other device during their meal periods. See Augustus v. ABM Security Services, 2 Cal. 5th 257 (2016).

Employees who work more than 10 hours in a workday must be provided with a second 30-minute off-duty, uninterrupted, unpaid meal period.

• Meal Period must begin no later than the end of the 10th hour of work.

• If the employee works more than 10 hours but not more than 12 hours, the employee and the Company may voluntarily agree to waive the second meal period.

• Second Meal Period Waiver Form

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California Rest Periods (Non-Exempt Employees) −

Overview

Employees are authorized and permitted to take one paid off-duty, uninterrupted rest period for every four hours worked or major portion thereof.

o “Major portion thereof” means more than two hours.

Rest periods should be taken as close to the middle of each four-hour work period as practicable.

Hours Worked Rest Breaks

0-3.5 0

3.5-6 1

6-10 2

10-14 3

14-18 4

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• Rest periods are paid and are counted as time worked.

• Employees are relieved of all duties during their rest periods and are free to use the time for whatever purpose they desire, including leaving the premises.

o “Duty-free” means that employees cannot be required or encouraged to carry pagers, phones, or any other device during their rest periods. See Augustus v. ABM Security Services, 2 Cal. 5th 257 (2016).

• Employees cannot combine rest periods and meal periods.

• Employees cannot use meal periods and rest periods to arrive late or leave early from their shift.

California

Rest

Periods

Non-

Exempt

Employees

(Continued)

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California Meal and Rest Periods − Penalties

• If, on any workday, the employer fails to provide a required meal period (or it’s late, short or interrupted), the employer must pay the employee one additional hour of pay as a penalty (plus pay for time actually worked).

• If, on any workday, the employer fails to authorize and permit one or more required rest periods, the employer must pay the employee one additional hour of pay as a penalty (plus pay for time actually worked).

• Limited to two additional hours of pay as penalties for meal/rest breaks per day:

o Up to one additional hour of pay for one or more meal period violations; and

o Up to one additional hour of pay for one or more rest period violations.

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California Meal and Rest Periods −

Practical Tips


• Robust Written Policy. Have a detailed California Meal and Rest Periods Policy

o Require employees to notify Human Resources if they are denied a meal or rest period; required to delay their meal period beyond the end of the fifth hour of work; or required to return to work before the end of their meal or rest period.

o Advise employees that the Company will assume that they have been provided with meal and rest periods as set forth in the policy unless they notify Human Resources of an issue.

• Training. Train managers and supervisors on California’s strict meal and rest period requirements

• Meal Period Recordkeeping. Keep required meal period records.

It’s unclear if the specific start and stop time of the meal period must be recorded, but the DLSEgenerally takes the position that this information must be recorded.

It’s also strongly recommended to record this information because it’s the employer’s burden to prove that it provided timely meal periods of at least 30 minutes.

• Attestation. Require non-exempt employees to sign off on their weekly time cards, certifying that the time cards reflect all of their time worked, and that they were provided with all of their meal and rest periods, except as they’ve noted below.

• Compliance Monitoring. Periodically monitor meal and rest period compliance.

California

Meal and

Rest Periods

− Practical

Tips

(continued)

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Travel Time

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Federal Travel Time

• Travel time from home to work generally not compensable

• When traveling away from home, only time that cuts across normal working hours is compensable

• This includes not only normal working hours on regular days, but also corresponding hours on non-working days

• If any work is performed during travel time, alwayscompensable

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California

Travel Time

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• Commute time to and from work generally is unpaid.

• Under California law, all other travel time by non-exempt employees generally is compensable, even if outside of work hours.

• Exception: duty-free meal breaks during travel.

On-Call and

Reporting Time Pay

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Federal On-Call/Reporting

Time

• No federal requirement that employees by paid for on-call time

• But on-call time could be considered hours worked that employees must be paid for depending on the constraints on the employee’s freedom

• Factors that could make on-call time compensable:

o Employee is required to remain on or close to premises

o Employee has short time limit to respond to calls to come to work

o Employee is frequently responding to calls during off-hours

o Employee has excessive geographical restrictions

o Employee and employer have agreed that there will be at least some compensation for being on-call

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California Reporting Time Pay

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• The Company must pay an employee for half of the employee’s usual scheduled day’s work (no less than 2 hours and no more than 4 hours) when the employee:

o is required to report to work, and reports to work, and

o is not put to work OR is furnished less than half of the usual scheduled day’s work.

Exceptions to California Reporting Time Pay

Reporting time pay is not required where:

• Operations cannot commence due to threats to employees or property

• There is a failure of public utilities

• The interruption of work is due to factors outside of employer control

• Employee is not fit to work

• For training/meetings that were scheduled in advance, even though the meetings were scheduled for less than half the amount of time an employee typically worked.o Reporting time pay only would apply if the employee is furnished work for less than half the

scheduled meeting time

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• Connecticut (only for certain industries)

• District of Columbia (4 hours)

• Kansas (depending on circumstances)

• Massachusetts (3 hours)

• New Hampshire (2 hours)

• New Jersey (1 hour)

• New York (lesser of 4 hours or the number of hours scheduled at minimum wage rate)

• Rhode Island (3 hours)

• Washington (2 hours)

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Other

States with

Reporting

Time Laws

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California Call Back Pay


The Company must pay an employee for two hours of work at the employee’s regular rate of pay if the employee:

o is required to report to work for a second time in a single workday, and

o is furnished less than two hours of work on the second reporting.

Questions?

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Integrated HCM to Help You Manage Meal and

Rest Breaks


44

EPAY Human Capital Management

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DELIVERED AS A SERVICE

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PAYROLL & TAX

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TIME & LABOR

MANAGEMENT

SELF SERVICEMOBILE ANALYTICSREPORTING

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PERFORMANCE

MANAGEMENT

•Private Cloud

•Dedicated Servers

EPAY HCM Highlights

Superior Tax

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Robust Time &

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Rules

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ONE UNIFIED, EASY-TO-USE SYSTEM


Mix & Match

Time

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Or for Just a Few

Employees (IVR)

BIOMETRIC TIME

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Integration

46

Meal Break Compliance Features

Keep Managers in the Loop with Automatic Alerts

Get alerted when employees miss a meal break, take too short of a meal break, or go on

break too late in the shift.

Ensure Employees Are Taking Long Enough Meal Breaks

Restrict employees from being able to punch back in until the full meal break is

completed.

Keep Meal Break Records with Clock Out Question

Ask employees a question at the end of the shift, and document their answer. When

the employee goes to clock out, they must answer, “Did you take a meal break today?”


How EPAY Can Help You Stay in Compliance with Meal Break Laws

48

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