November 2014 -

Wage and Hour Issues Pose a Significant Risk for Employers

One of the most prevalent issues currently facing employers is wage and hour issues. This is due to several reasons:

First, there are many common misperceptions about the wage and hour laws, which cause employers to inadvertently stumble into trouble.
Second, a changing or growing workforce can quickly turn what was lawful into an unlawful situation and/or can cause employers to overlook potential pitfalls.
Third, the exposure in these cases can be significant and oftentimes is not covered by insurance. The exposure can be significant for a few reasons. Back wages add up quickly. Oftentimes a mistake in the handling of a personnel matter can affect more than just one employee. Wage and hour issues can also easily lead to class action lawsuits.

In light of these risks, we offer a few tips:

Confirm that any people classified as an independent contractor meet the definition of an independent contractor as set forth in the FLSA.
Confirm that any employees labelled as exempt fit within one of the narrow exemptions set forth within the FLSA
Make sure that all job descriptions are accurate based on the present workforce and company.
Ensure that non-exempt employees are being paid for all time worked, which could include them checking email at home once they leave the office and/or working over their lunch hour.
Ensure you have an appropriate overtime policy in effect that is monitored and enforced.

Here are a few helpful hints for employers as this could be a liability producing event in addition to being a fun event:

If it is a mandatory party, be prepared to grant exemptions for those employees who are unable to participate due to religious or medical reasons.
Watch for potential hazards, which could result in a work injury (i.e. falling off a ladder while hanging decorations).
If costumes or holiday sweaters are being worn, advise employees to avoid offensive or revealing costumes. If someone shows up in such a costume, send the employee home to change unless a modification can be made at work (i.e. covering up an offensive logo) but be careful not to infringe on anyone’s religious practices or beliefs.
Watch for potential food allergies if food is being served and label any food items that may contain allergens (i.e. nuts, milk, gluten).
Be cautious of the level of alcohol consumption by your employees.