April 16, 2021

Employers have become more flexible, especially in the midst of the coronavirus crisis. But during the pandemic and beyond, employers can run into wage and hour violations if they don't stay on top of employees' remote work locations, job responsibilities and more, attorneys say. 

Here, Law360 examines the common mistakes employers can avoid.

. . .

Miscategorizing Employees, or Trying to Have Your Cake and Eat It Too

Employers should also be careful when designating a position as overtime exempt under the Fair Labor Standards Act's administrative carveout, especially since a worker's actual duties don't always match what's described in human resources paperwork.

The administrative exemption of the FLSA relieves employers of minimum and overtime wage requirements if an employee's responsibilities involve mainly nonmanual, managerial and business-operations work and if that employee exercises discretion on important issues, among other requisites.

. . .

Christine Webber, a partner at Cohen Milstein Sellers & Toll PLLC who represents workers in wage and hour and discrimination suits, said that as with the independent contractor versus employee misclassification debate, employers tend to "want it both ways" when it comes to exempt and nonexempt employees.

Employers, she said, need to pay attention to how a worker's time is actually spent. Webber said employers shouldn't chip away at a worker's duties — however well-intentioned — to the point where there's "really almost no management authority left in the so-called manager."

For example, by offering to take care of conducting interviews with job applicants so that an employee can instead unload widgets from a truck, employers can in effect take out the very management responsibilities that are meant to justify, at least in part, treating that employee as an exempt professional, Webber said.

. . .

Starting Off on the Wrong Pay

To prevent steep salary and wage disparities among workers, employers should think about nipping the issue at a common source: starting pay.

. . .

To prevent pay gaps from cementing and growing larger, Webber, of Cohen Milstein, said employers should ask themselves, "Where in our system is this being introduced?"

In some states and cities, certain employers cannot ask about a job applicant's salary history or use prior salary as a benchmark to establish starting pay. Proponents of these bans say they stop people from getting locked in at low pay in perpetuity.

Speaking more broadly about pay equity and how employers should evaluate their practices, Webber said, "The idea is not to be relatively less bad but to see are you actually where you should be and to set your goals accordingly."

Playing Whack-A-Mole with Compliance

Worker-side attorneys said employers tend to only focus on remedying a single worker's complaint instead of zooming out and checking the entire system.

Daniel Hutchinson, a partner at Lieff Cabraser Heimann & Bernstein LLP, said employers should consider thinking about a worker's complaints "as the canary in the coal mine that could potentially be a reason to make broader changes or to get at cultural issues at the company."

Webber also said employers should check whether an issue is systemic and not just "put a Band-Aid on fixing the one individual who spoke up."

The complete article can be viewed here