"You can call a busboy a dining room manager all you want, but he's still a busboy."
Wage & Hour Law 2014: Employee Classification Workshop & New
Walmart, Google, Starbucks, T-Mobile ... they've all been slapped with millions in damages (in Walmart's case, about a cool half billion) because of overtime violations, whether they were committed in good faith or otherwise. The #1 reason for such violations? Not misreported hours. Not getting sly with the time clock. Rather, it's usually because an employee just did not meet the duties test to be considered an exempt executive. Whoops.
Anniken Davenport, Esq. warned us that keeping up with the ever-confusing exemption classifications is about to get even trickier, as President Obama continues his pressure on the Labor Department to work on existing regulations with a hammer and chisel. "If you're here today and you're an employer in an industry like food service, health or retail, be aware that you are really being looked at," Anniken said. "In particular, the home health care industry is facing the biggest changes I've ever seen." Official regulations changing pay rates for these workers take effect January 1, 2015—but recently, the DOL's blog angered and confused many workers (and lawyers) by announcing that it wasn't going to enforce those regulations just yet; after a six-month total grace period, there would then be a time of "selective enforcement." Come again?
And guess what—that doesn't mean employees can't jump on the litigation train sooner. "I expect a bunch of class action lawsuits to be filed in January, after the first pay period when home health care workers don't see minimum wage and overtime rules actually taking effect on their checks," Anniken warned.
She believes that, as usual, the primary duties test will be the main focus for the DOL's continuing crackdown, and cautioned that the first thing you need to be aware of is that titles mean nothing. You need to know definitively what an employee does—and make sure to read through everyone's job descriptions annually. Ask yourself: Is a worker doing more now than they were last year which might put them into another category?
An attendee to this session posed a question preying on many a mind: What if we realize that a worker has been misclassified for some time? Are we sunk? The good news, Anniken reported, is that the DOL does reward good faith efforts to make things right. As long as you pay the employee the wages they should have been making all along, you need only go back through about two years' worth of records. But if you can't prove good faith, you may have to make it three.
"Whether an employee is exempt from the is very seldom a clear-cut question," Anniken mused at one point. "I wish it were..."
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