Welcome to the burn white webinar Fair Labor Standards Act, and underlying state law.
My name is Jennifer Kelly, I'm the Manager of Marketing and Business Development at Fern white and I wanna thank you for joining us today. For those of you that are not familiar with our firm or in white as a litigation defense firm that provides employment regulatory and corporate council services to clients from a broad spectrum of industry, our attorneys offer, our clients, big law performance with a more personal touch taking a hands-on approach to building long-term relationships and aligning legal strategies with our client's business objectives.
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All attendees have been automatically notice so that there is no interference during the presentation. If you would like to ask questions, please use the chat feature. It is the icon of a blue located at the bottom of the screen. We will make every effort to answer all questions submitted at the conclusion of the program, but any event, we do not have time to address all questions we will respond to any un-address questions via email after the program you'll receive a brief summary, please take a moment to answer the questions as your responses will help us to shape future programming and the overall win our experience for participants. So our figure today is Mark Sicily mark as a skilled trial attorney focusing on employment and commercial litigation.
He brings insight and experience to matters both in and out of the court room, and work with clients in a variety of industries, in all phases of litigation. He litigated hundreds of claims under a number of federal statute namely Title 7 sate and ADA and handles matters persons to the FLSA, and state cases under the New Jersey law against discrimination and the Pennsylvania Human Relations Act for various forms of employment discrimination. So I now turn it over to Mark.
Thank you, Joker. I could have turned everyone makes Mark utility and I'm an employment after even practicing almost exclusive a point... Low for about seven years.
Interestingly, I actually started my career off as a plant's attorney then I saw the light, and I moved over to the defense that where I represent employers, particularly small employers generally under 5 through the 50 employees, my practice is split between litigation after the case has been solved, but also a counseling and I can count on it, especially important.
You talk about the LA 'cause you wanna prevent litigation, you wanna ensure that your client in this case, an employer is complying with the applicable laws. Just looking at the list here, it seems that we have a number of people with us today from a number of areas of expertise from attorneys with great deal, it experience, but also HR employees, and management and staff that I think that's good 'cause my my presentations geared to people from all different areas. I didn't wanna just go on down legally. So I hope that I can take this on difficult topic and the Falls is a difficult topic and just getting some broad appeal or some broad application.
With that being said, I think that post say probably... Other than sexual harassment cases is a topic which is most come in for the media to any... Yes, today law makers in California past law that's going to characterize gig workers typically Uber or Lyft, employees as employees, rather than independent contractors. This Optus implications for overtime "nepos say on other benefits anyone is local and such. There's the A soccer restaurant in chest on hill photo. Of course, I should say there was they just closed down after they had with a 1 million dollar judgment from the Department of Labor for not paying hundreds of employees over the years... Over time, again. So this is very topical issue. I think the pay, it's usually important and also it's usually important for employers to understand even though it is often misunderstood.
Just a brief break down of a... It covers non-exempt employees for 40-hour work week, so it's seven days straight so that's the key 40, hours seven days, I doesn't matter, if it's when the day Thursday to Thursday for the typical schedule it's seven days. And if you work generally more than 40 hours a week as in some exemption, you should be paid over time and over time as you may know, time-and-a-half.
So wages of 10 now become 50 an hour, 20 very, for some basic math to lawyers, I do think that you can already see how this would have enormous financial implications for an employer, especially a small employer. If someone works 50 hours a week, you're already paying them the time and a half more so you can see that there is unfortunately an incentive to not pay employers, employees, over time, but more often too, it also can lead to more people being hired so they can avoid paying that extra wage.
As I noted, previously with respect to the Uber and Lift employees independent contractors are not "infilled over time. So, it's specifically... So I intend, I... You might wonder what Pentecost actor is, it's someone that has control over their employment maybe someone that shows up at a hair on a couple of times a week to perform some extra work, someone who does some consulting and then submit an invoice. They would not be impaled over time. But it seems that there is a trend at least nationally, towards characterizing individuals, that's employees rather than independent contractors.
Although I'm just going to touch on if there is depending... "inayat I know there are people with from New Jersey, as well as Pennsylvania but is generally Safir over Standards Act. And for purposes of this presentation, I'm just don't focus on the similarities which are... "arsonist-ons with respective damages, but the relatively minor but in Pennsylvania that if an employer is to the sauna dependant on Wack will follow again, talking about application a fairly of our standards act, it applies on a work week basis, it doesn't matter which days but it must be seven days since again, 16 hours over seven executive days and the key numbers 40 hours but doesn't need to coincide with the calendar week.
You could probably already see how this would provide a number of headaches. First.
Small employers, even big employers. So I pose software is extremely advisable. How could we possibly keep track of all the schedules, especially because you can't expect employees to keep track of schedules and you do have an obligation to do record-keeping. So the you think you have a clock in, clock out, system that's preferable, but if not, you definitely some form of record-keeping and we'll talk about the significance of record keeping in greater details. This presentation goes on.
But I really do wanna emphasize that point.
So I think there's a "canonic "eston especially among small employers I have a number of friends and clients that small business owners maybe 10 20 employees, and they think, "Oh if I pay someone a salary, I don't have to pay an over time over time for our employees.
No, I think if there's one take away from this presentation, that should be it. Just because I just encounter this, I know it's just anecdotal but... And maybe, 10-15 friends that are small business owners that have called me over the years and asked about this and that's just simply not true. And I do think this get some employers again, small employers that don't have an HR department that aren't sophisticated and not talking about the wall much of the world because they think just because there's a salary being paid that over time is not applicable if someone's making 20 000 a year, that's about 400 a week, that's still 80 an hour. But if they're working 50 hours a week, then they're making below the overtime rate, they're not even being paid you over time rate. So it's an important point to note to the extent the case got litigation or potential damages, there's back pay damages which can you go back two years or even three if the fact-finder tend to be a judge or a jury, the terms that there was bad face only the liquidated damages double damages. So potentially say someone... So 10000 and over time, if there's a jury verdict, the employee's favor, then an additional 10000 will be rewarded. Again, I talked about the importance of record keeping, aside from just the practice applications, of record-keeping is essential into the PO say you can avoid having to pay liquidated damages should you lose by showing you kept records that you made a good face or to track over time for employees? This is a key defense. And I had run into a small employers, or as I really don't keep records, but I can't stress enough how records are important, and I've seen some employers get burned because they just didn't have any records, so they couldn't report what the employee was saying.
The only... Yeah, I was working 60 hours a week. And the employer can receive that, but if there's no documentation to support that contention then the question is going to be left to a jury.
Another big concern at cases as fishing Satu. So we have an employee of 10000 and over time that they PREVAIL trial. Their attorney will get seeds which can be in the six figures so you have a small violation telling the pain employee over time and it could yield to six bigger payout. And for most small employers, that's really in a possibility.
So again, that's why it's streaming important to keep records of the hours that you're in. peoples are working.
We talked about the general put... Say, "I wanna talk about exemptions, which are more common than you. birthin.
There's exactly exemption. And I know when the term executive is us, people probably tend to think of a CEO of a major corporation but this Executive Exemption is more commonly applied to managers, and assistant managers.
I think in a fast... So, restaurant, think at a garage. Those are the type of employees or job titles were these overtime cases tend to pop up, and there's also administrative exemption that goes... Someone does clerical work, secretaries clerks as well as the Professional Exemption, lawyers, doctors, and actually even artists focus on these exemptions thing about these exemptions. You probably know people that are covered on these exemptions. I wouldn't say there is generally any rhyme reason for them other than maybe certain industries had a lot of living power and they were able to obtain these exemptions 'cause they didn't wanna have to pay their employees go over time.
But let's go into each exemption with in more detail first again, The Executive Exemption the employee must be compensated on a salary basis, at a rate not less, 455 Creek. So you can't say someone's a manager, and then pay them 400 a week. So again, less than 455 and say, "Oh well, they're a manager. I don't have to pay them over time. That's the way to get yourself in the trouble of the employees. primary duty must be managed by the enterprise managing enterprise or managing a customarily recognized department or subdivision, a enterprise, the employee must customarily and regularly direct the work of at least two more other full-time employees, and then that the... Are other employees or at least the authority to make recommendations about that you can see how that would have definitely applies to a manager whether at a bar, or fast we restaurant or even an assistant manager, but really the key that I see a lot of employer struggling with this, they're designating someone, assistant manager, but then they're not supervising any employees. Has no one there and bulletin.
That's a huge criteria, and I think it's one that was instead there by Department, of Labor and forearm on there 'cause they knew the employers and try to get around the law. I just designated people as assistant managers, or managers and hope so they wouldn't have to pay them over time.
And then there's the Administrative Exemption. Again, the same salary threshold of 455 per week, primary duties non-manual xenon manual clerical work again, you often see this to secretaries or clerks and office locations and there's a professional exemption, to earn a professional.
This is someone with a high degree of education in a particular field, I say lawyers or doctors that they're not Intel over time. Again, I don't think there's any particular rhyme reason for that, but this is the law and that's why you probably know of any attorneys or doctors that are being paid over time and related-ly there's professional event exception as it applies to create professionals. This can include someone like an artist that does feel does work in a field which is artistic or creative.
There's also retaliation provision of the pulse. I'm not sure how many of you know what retaliation is but that's when someone complains about not being paid over time and then the eternity is because of that. This is probably something I see most often whether or expect to... That all say or other discrimination cases that I've litigated. There are easy cases to bring because you can just assert whether it's true or not. As the plaintiff. Oh yeah, I complain. And I was fired.
Two days later.
Or written complaints are acceptable. You don't have to submit a complaint to Department of lay and read on to submit the email to your boss.
You can just say, "Hey I don't think you're paying you sufficient over time. We just... What's most problematic? And this is in a short run in to, is that the complaint doesn't eat to be true.
You can be an attorney, and you can approach the partner and say, Hey, I'm not being paid over time that's ridiculous to... And the either a partner I say, Get lost your fire. That was a complaint man in good face.
Now, with the partner should it says you're not entitled to being paid over time because you're a professional, but never less a good faith complaint could be protected activity, and could be actionable under the law, even if it's not accurate. I think a better example would be maybe an employee as an assistant manager and working 50 hours a week because I think there's more ambiguity as to whether they should be paid over time but... And then there are never less you. So, understand that example and realize that someone complains that over time it should be taken seriously irrespective of whether it's true.
I talked about the Uber case the lift case as well of the UCI restaurant case of soccer and chest it. You might have seen some other big headlines with respect to false, and I really think these headlines are representative of a larger problem of people just not being paid overtime of small businesses, and big bets to not understanding the law in the case of some big businesses intentionally just regarding the law in 2013, there was a 7-7 feline class action settlement with respect to Enterprise I really thought this case was extremely elusive of what I've been talking about. The plaintiffs were former and current employees that were designated managers, and assistant managers, but their job duties were largely non-managerial in fact they were actually could be called Blue Collar duties cleaning cars, moving cars, around a lot or to other lots picking up trash and at that has some friends were working enterprise at the time to participate in the lawsuit and they decline for other reasons but it really was a far-reaching, case and I think it shows an employer that was willing to tempt state and see if they could designate people of assistant managers. We're working 60-70 hours a week as in his salary even though they were definitely tied to, over time, based on the law more locally, chicken pieces. They're about 10 locations in the "philp area with original location. In South Philadelphia, we probably saw in the headline as they pay a milligram of waver, 2014 employees weren't being paid minimum wage employees weren't being paid over time, employees weren't being paid for mandatory meetings and training. You do have to pay employees and mandatory meetings and training.
So is allocated a month, more than 1000 please? But again, this was a tremendous pay-out for this restaurant.
In fact, at the time, I think it was one of the biggest Pathe Department of Labor, had I been able to obtain at with this type of discreet issue there was also Cerner. June 21. more recently, is health IT firm again do the list did not pay employees over time, it's the matter. So for 45 million, I look at the details of this case. I think it's certainly more ambiguous in the other two cases, where I thought that they're seen to be that face, by enterprise. I chants.
I thought in Cerner, case that the employees are saying, one thing, an employers are saying another with respect to how the book time, we just are calculated.
However, I will say this. And re-doing the fact this case and this is just as instructive the reopening with the respective "cere software they're using is low and that's just as important. And I can't trust hasn't think there's any bad state.
And I think they also made the payment to make this case go way so they can voter business operations, but if they made any mistake it was just a bad record keeping. And for an employer, this size of this level certification in other areas is really not acceptable. I talked about my time. The plans Attar. I just wanna talk about some war stories just because I think they are helpful. I think they do provide a context for these facts for these laws that'll really help people understand what we're dealing with and how to deal with these situations. There's one played in 2014. I represent an employee who is classified as an assistant manager.
You go on to claim because he was not being paid over time by a McDonalds. We worked at one several sons, franchises and although he was called an assistant manager, he had very limited authority, he was paid 8 an hour, he couldn't hire he could fire he couldn't discipline and much of his job was spent cleaning taking orders really minor tanks, that were non-managerial.
And again, I think this might have been the design of the employer, to try to classify employees as decision managers, so they could avoid paying them over time. 'cause this gentleman, I was working very long in-house.
This is another plaintiff's case this is an auto body shop employee. He was working, cleaning cars, assisting on the reminding of cars, about 50 hours a week. Maybe a little last book is never paid over time.
I think this body shop is a good example because they were well intentioned and they were kind of a foot so they were never Leslie business with more than 50 employees, and they should have known better, they should have had a handbook they should have had strict policies about that, well say, they should have had a more suited clock-in clock out system, I just think they kinda disregarded their obligations in the FSA, and it came back to bite them.
I think this case is also helpful because it talks about, or at least tangentially what's called mini-Miss over time. If you have an employee who maybe works 41 hours a week, once in a while, 42 hours a week, once in a while because they spend a little bit your time cleaning out the shop or whatever that's okay, that is at a sense and I'm sure that might have happened in this auto body shop over that can problematic when That minimus time transitions into several hours a day, or subroutine then you get called the case, and of course, 455 hours a week over a year, really starts to add up with the back pay.
So, be wary of that. Again, I told you I switch to the pensive and I much prefer that. I feel like most of my clients, most of my friends, that one small businesses are extremely well-intentioned it good employers they wanna do right by their employees, they're just anything a little confused by the archaea that "Wolsey they're just unaware of her obligations and I don't frankly plain, the times, 'cause it can be someone confusing.
This case, I represented it was a nation-wide clean service, but this was a one particular franchise that was owned by on-call a worker that saw as a divine opportunity and I think he is representative on... Or that I was talking about, too, well-intentioned, hard working, I can want to do right by his employees, he was the... Because of former cork plain that she was in pudding paid over time how she was a car. He exclusively administrative functions, he didn't engage in an intensive labor and this case was Ettrick 'cause we were at an ERP from the defense I talked about earlier, the Administrative Exemption, which was really clear cut, and I think it was a more experience, plan attending the Catawba in the first place because this was really the poster child for is Administrative Exemption.
I talk about council work. I know I think that's especially important with Fats because someone use cases can be avoided, they just need to be Nitin the bike and the employer just seems to make sure it's for in a loss. So if there's an employee that wants to sue down the road because they're dispute because they're greedy, frankly, we have the records, yeah, the documentation that can show that they would properly paid over time that there's no issue and their records will speak for themselves. This was a Case, Assistant Manager of hotel. He could fire he could hire you, good discipline he was properly designated as an assistant manager.
You do provide multi-employees. And there was nothing Affairs about this designation. Never less. He misunderstood the law, and was "angra is employer and complained about it.
We Mae documented complaints about not being paid over time that is protected activity. If you were to be fired, he could probably bring retaliation lawsuit who ever and talking to this hotel owner who was very certain spec" that didn't care the employee for these complaints was really first on angry and subordinate behavior and they were able to continue working. So again, that's why it's important to take that. But a seriously Tiger applications in the desolate seriously, and realize that someone isn't the complaint is incorrect, is engaging and protect activity when they make is complete on the best all say.
I think if there's any case that I've ever litigated with respect to pulse that really was informative and everything, that employers should know it was the case in, about to talk about right now, there's a small medical sales company. They kept extremely detailed pay records, their owner was a younger gentleman very sad, very in tune with delay as well as the clickable state laws. They had a software system even though they are small employer and records for each every employee I respect whether they were salaried or paid hourly data handbook, which detailed that fall a policy as well as the break policy, and they even talked about in examples from that employer, how EFs say apply to certain employees. They're break, their lunch time.
And so for the, again, for a small employer, it was just exactly an attorney. Wants to sit at a client. In fact, they'd even hired another attorney to look over their policies and make sure they were compliant unfortunately, they let go to employees that were just extremely Romani for reasons that had nothing to do with over time, they brought a lawsuit probably kept their plans attorney in the dark about what really transpired at their employer 'cause they wanted to green case they want in vengeance and they wanted money, the case went away immediately because we were able to present the pay records that show that they are properly paid over time the day engaged in behavior that precipitated their termination and nothing to do with over-time wall is, or any discrimination laws.
And again, because this employer was diligent, because it's imported to the right thing, but unfortunately with suit anyway, they were able to make this case go away and it's just really the best example. And man, doing everything right and following a low and as a result, anything from that? And they also had another mantra. I wasn't documented didn't happen, and again that was true. I respect their pay records. It was to perspective, discipline that they gave and to pay the huge dividends cost some probably thousands of dollars on "Sastry t000, and they go to US down, road.
I know I've talked about a number of things with respect of TOSA but I just wanna leave you with a couple... No, things to remember. That maybe sounds simplistic, but I think their applications to false is extremely beneficial. First and foremost, plays other rules.
You saw the cases. I've gone over. He saw enterprise where it looked like they were not playing by the rules and they paid out a multi-million element, then you saw checking piece where, again, it was pretty obvious that plus we were not being paid for training, but there are not many pay for mandatory at the... That having the tip taken, and therefore not earning a time and a half for overtime? Work again, the employer was not playing by the rules, they're trying to save money and for a while they got away with it and there probably the checking piece.
And then you contrast that with some of the employers that I have the opportunity... Represent, for example, the medical sales company, they did play about the rules, they had to hand they had an attorney review their policies, they had policies that were specific to the employees working there had detailed pay records, again, and not underscore that enough, they have a software system that kept track on police hours function and punch out and you saw the ramifications of that extremely positive. They were sued nevertheless because it is American people, so people all the time, regrettably, but the case went away immediately because the other lawyer realized there was nothing there, and again, contrast that with enterprise and Chip who thought they had assistant P.
And if they cut off with them in the end.
So, again, I'm a big believer in karma and I think that flows say, is a perfect example of that.
Manta detailed pay records, this dog tails with the previous bullet point.
I talked about Cerner the IT, health IT company again, very Pisces. Large company, should know better, should have kept that a record should have paid poison time, but with disorganized had a software system based on my reading the case with the same plot and they openly paid the several million dollars so that again, I don't think they were... Had any ill intentions, but because their record, even was floppy.
He came back to face over the end.
And that's a bigger company, but you can see how small our employers can really run into trouble, with this many employers. My friends and even clients, that's how ISIS just don't keep records.
They expect their employees to come in a certain time and leave at a certain time. You have one opportunity is stick one in greeting plaintiff who says, "Oh yeah, I was working 60 hours a week. And then you have no records or about that?
You can see how that, the truly problematic and trying to disprove that during litigation, maintain and update a handbook again: many of the small employers but I've worked with just don't have a handbook. They just never got around to it.
This is to me an issue for a multitude of reasons, but we're just talking about that pallet. Have an excellent on a say in the handbook, talk about the break policy. So nothing is misconstrued. Talk about the... Whether short breaks or lunch breaks, talk about time and a half, talk about the different exemption is just having in the handbook that way, even if someone happens to complain, can say, "look at the handbook. Very secretary. You're not Intel to over time, your professional, you're not tiller time, your assistant managing you're not intel to the time. I know many employers do have a big placard maybe in the lunch room that laid out that Bill say, but having a handbook is just another level and I've just really seen it help certain employers in defending a case or even prevent in a case from being filled in the first place, by talking to the employee and educating employee who might be "erato set review the policies. Again, this only relates to the previous full point with respect to the handbook of reviewing the policy, is having the employee review the policies, having training on the policies will prevent ignorance in a lot of these cases really spend from inert a lot because you can make a good faith complaint even if you're wrong, and if you're terminated, because of that, you can see, based on retaliation again, have the employee sign for the handle, as that's possible but at a minimum, but training would be the most helpful and in fact, more and more employers that I've seen, even some employers are educating their employees on the topic with that. I don't have anything more to add absent questions but I really just wanna stress it.
Yeah, I say which is received. A lot of "Hanno is complicated, but if you really break it down, it's very understandable and I think it does reward employers that wanna take just a seriously and wanna play by the rules, and follow the handle and follow applicable State laws as well.
Okay, so Mark we're starting to get some questions. Then the first one we're looking at is are you seeing any for more claims for reimbursement of business expenses tacked on to over time, or other FLA claims? Are they considering are they considered all say clans?
I've never seen that issue come about pursuant to... That's all I say. I'd certainly say that employees are entitled to reimbursement of ISIS expenses, and I can also see how certain employees where they have to pay for equipment or maybe paper like whether it's boots, or their uniform, and doctor from their pay that could be a violation of that false... I think it's a little bit of a creative argument and I can see on a large scale how that could be actionable, but I personally, have not seen that.
Okay, she workers receive extra pay for working on weekends and holidays, actually know and that's another misconception. The metal say. I know that there are some employers apically hospitals that pay people extra maybe even time. And a half for working Christmas working weekends. But under that pose it's strictly the seven-day 40 per... So, do on-call employee you pay over ten.
That's one of those interesting questions and the answer is It depends like, with a lot of sand just employment laws in general. If you're on call, and you're actually on site you have to wait in the caster, you have to wait in your office and there's really not much you can do by way of use a personal time then you have to be paid for that however maybe you're a nero call and you're permitted to be on the beach a couple of hours away if you're so... And you have to be there, but you're allowed to do anything you would otherwise be able to do basically. So for that you wouldn't necessarily need to be on a... That at least not paid over time for that.
Our employees compensated for short breaks. Anything listen to... So that's another issue that has come up with some of my litigation cases and it's another thing that's, I think, misconstrued or just misunderstood. You often see that employees don't need to be paid for a 30-minute mandatory, lunch break for a lot of employees that you know received said lunch break so long as they're not have to do any work during that time. However, when you get to break no less than 20 minutes between 50 and 20 minutes, you actually do need to be paid for them.
Of course that doesn't mean an employee is able to take excessive brake, but generally two breaks during the day. 25-20 minutes whether it's: smoke break or water break, you actually should become states. In fact, there's a great dose case on that topic, recent that these are vital to a Workday and the breaks are necessary to tool to refuel and re-juvenile.
Does the SSA, applies all employees?
And I hope that my presentation rate that clear. Certainly, there are some but there are so many exemptions. And I talked about the big three, the executives, the professional, the administrative, but you really do wanna focus in on the employees. So, it does apply.
Okay, alright, so that's all the questions that were submitted. So again, thank you for attending today, and we hope that you will join us for the upcoming webinar Pennsylvania evolving cyber security law, what Employer Should Know, and that's being held on Wednesday, October first at 12 Eastern Standard Time.
Thank you, Your... Alright, thank you and have a great day, thanks everyone.