How Off Duty Conduct Can Cost You Your Job

by Renee Mielnicki, Esquire

By now we are all familiar with the tragedy that happened in Charlottesville, Virginia over the weekend. As a recap, white nationalists assembled in Charlottesville to protest the city’s plan to remove a statue of Confederate General Robert E. Lee from a local park. What started as a protest turned into a firestorm of hatred and violence leaving one dead and many injured.

Many of us were shocked at the images we saw on television. You would think that in 2017, we, as a nation, were far past this type of thinking and behavior, but this weekend has proven we are not. In fact, one could argue that this display of hatred has set us back decades. I know I, myself, started wondering, who are these people? Where does someone who belongs to such extreme racist organizations even work today? I mean, who would hire them? Does the employer even know they belong to such organizations? Probably not. As I listened to the radio and watched television coverage of this story, I learned that these extremists could be working right alongside of you and me and we would have never known it. I think a lot of people were probably shocked to learn that those involved were people they would never have expected.

Given the nature of my profession, I started thinking about the types of consequences this could have on the careers of the people involved. If one of my clients called to tell me that one of their employees was seen on television carrying a torch or white supremacist materials, wearing extremist garbs, involved in an act of violence or spewing racial slurs, I already know the advice I would give. It’s true that this conduct did not occur at work. However, this event was covered nationwide on television for the whole world to see. These images are not going to go away anytime soon, especially those on the internet. Continuing to employ a person that has such hatred, rage and violent tendencies carries several risks for an employer. First and foremast is the threat to the reputation of the employer. All employers are in the business of selling something that they want someone to buy. A continued association with such an employee could cause consumers to not want to buy from the employer anymore. Business would ultimately be lost and a reputation permanently damaged. Second, one could also argue that such behavior might suggest that the employee is a potential danger to the safety of other employees in the workplace. Third, bringing such an employee back to work after engaging in this type of behavior is likely to cause conflict with other employees, including the potential for workplace harassment.

I often counsel clients on terminating employees for off-duty conduct and their question to me is always the same. “Am I allowed to do that?” In most cases, yes you can. This past weekend highlights the type of circumstances where such would be appropriate. Of course, before I made any final decisions I would investigate the matter. I would make sure the video or photos that I was relying upon were in fact the employee in question. In addition, I would make sure that state law did not prohibit me from firing an employee for off-duty conduct (and most don’t, by the way). As long as my investigation confirmed that the person in the video or picture was actually the employee in question, I would advise them to immediately move to sever the employment relationship (of course, I’d still double-check state law on off-duty conduct — but remember in most instances there aren’t any).

I would also give the same type of advice to an employer who was in the midst of hiring one of the participants and stumbled across a photo or video of the person from this past weekend. The same issues would be at hand. Hiring this type of person could tarnish the company’s reputation, lead to potential workplace violence and create huge conflicts within the organization. Denying employment for these reasons would also be legal.

As both an American and a human being, I feel sad that this happened. I wondered if these people gave any thought beforehand to the repercussions that this type of conduct could have on their lives and jobs. Too late now because the damage is already done, not only to them (not that there is any empathy for that) but also to the people they hurt in the process. But on a positive note, employers do not have to, nor should they, put up with this type of behavior, even if it didn’t occur on the job.

Employees need to beware that what you do off duty can have serious implications in your career and can ultimately cost you your job.

If you are an employer with questions, please contact East Coast Risk Management at 724-864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , ,

Cell Phone Use: Hands-free is not Liability-free for Employers

by Laura Pokrzywa

The driver in front of you is all over the road — making hard stops, cutting corners, and even crossing the center line. The problem isn’t drugs, alcohol or fatigue. The problem is distracted driving. The distraction is the driver’s cell phone.

According to the National Highway Traffic Safety Administration, 3,477 people were killed and 391,000 were injured in motor vehicle crashes involving distracted drivers in 2015. Texting and talking on cell phone are leading causes of distracted driving. Since just about everyone has a cell phone these days, the problem seems to get worse every year. In response to the rising risks, in 2010 and 2011 Federal law banned commercial truck drivers, bus drivers, and drivers transporting hazardous materials from using hand-held cell phones and messaging on electronic devices. Many states and municipalities have also taken action to try to reduce the statistics. Today every state but one (Montana) has some kind of law restricting cell phone use by drivers. For example: text messaging is banned for all drivers in 47 states (up from 35 states just 2 years ago). The use of handheld cell phones has been banned for drivers in 15 states (up from 9 states 2 years ago) and more states are considering similar bans.

None of these state laws specifically define an employer’s responsibility concerning company-owned vehicles, cell phones or an employee using a personal phone to conduct company business while operating a vehicle. Though the use of hands-free devices remains legal in all states, the laws do little to limit an employer’s liability.

Hands-free or not, if one of your employees is involved in an accident while using a cell phone to conduct company business, you may be liable. According to the National Safety Council (NSC), employers can and have been held liable for actions that are actually allowed by federal regulation and individual state laws. In fact, the NSC says employers are being held liable up to $25 million for employee crashes, even when employees use hands-free devices.

Establishing a company policy that prohibits drivers from using a hand-held device will not remove liability completely, nor will it guarantee that your drivers won’t have other distractions, but it will go a long way in protecting you and your employees.

In their publication, Employer Liability and the Case for Comprehensive Cell Phone Policies, the NSC says, “Employers who expect employees to use cell phones while driving as part of their business must recognize that doing so exposes their employees to preventable crash risk.” In fact, the NSC recommends that employers go further than state laws and prohibit the use of hands-free devices while driving.  It goes on to recommend, “The best action for employers is to implement a total ban policy that includes handheld and hands-free devices and prohibits all employees from using cell phones while driving.”

Whatever your company’s policy, it must, at a minimum, clearly require compliance with applicable state laws. You can find more information about specific state’s laws by visiting the Insurance Institute for Highway Safety website or by contacting your state’s office of highway safety.

If you need assistance with your cell phone or safety policies, please contact East Coast Risk Management at 724-864-8745. We have safety and human resources professionals ready to help.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,

Are Job Descriptions Really Necessary for My Business?

by Derek Ross

The answer is a resounding, “YES!”

No matter how big or how small your business is, written job descriptions are an essential piece to any organization, both in a practical and legal sense. But not just any job descriptions. Be warned that inaccurate or outdated job descriptions are no more beneficial than no job descriptions at all. Without accurate, up-to-date job descriptions, you run the risk of complications that could cost you back pay for misclassified employees with up to three years for unpaid wages, liquidated damages, attorney fees and court costs, to name a few.

The lack of accurate job descriptions can also affect:

  • Productivity – “That’s not in my job description!” Create a concrete set of expectations for the employee from day one.
  • Recruiting – How can you attract the best candidates for the position if the description is outdated or just plain inaccurate?
  • Return to work requirements – if you haven’t established the physical demands of a job, how can you expect a healthcare provider to certify that your employee is physically able to return from FMLA or a disability leave?
  • Reasonable accommodations under the Americans with Disabilities Act (ADA) and some state laws – Just like returning to work, without an accurate job description, you cannot expect a healthcare provider to establish what accommodations may be needed to help your qualified, but disabled employee perform the essential functions of their job.
  • Properly classifying employees – Compliance with the Fair Labor Standards Act (FLSA) requires that all employees are classified as exempt or non-exempt. That information should be captured in every employee’s job description. For more information about correctly classifying employees, see Jim Spencer’s June blog Wage and Hour: Back to Basics.

So, how do you write a good job description?

A good job description should describe the tasks, duties, functions and responsibilities of a position. It outlines the details of who performs the job, the specific type of work, and the frequency and the purpose of the work as it relates to the company’s mission and goals.

A job description gives an employee a clear and concise outline for their job performance. Likewise, a supervisor can use a job description as a measuring tool to ensure that the employee is meeting their expectations.

Once enough information has been gathered, write a thorough, detailed job description. Common components of a well-written job description include:

  • Up-to-date and accurate job title
  • Overall position description
  • Responsibilities and tasks that will be required
  • Essential functions of the position, with examples of each
  • Required knowledge, skills and abilities
  • Required education and experience
  • Description of the physical demands
  • Description of the work environment

Standardize the information for each position: All of the job descriptions within your company should follow the same format. Be sure to include the following:

  • Date—when job description was written.
  • Job status—exempt or non-exempt under FLSA, include full-time or part-time.
  • Position title—name of the position.
  • Objective of the position—what the position is supposed to accomplish, how it affects other positions and the organization. Keep this brief and to the point.
  • Supervisor’s title—the position to whom the person reports.
  • Supervisory responsibilities—direct reports, if any, and the level of supervision.
  • Job summary—an outline of job responsibilities.
  • Essential functions—detailed tasks, duties and responsibilities.
  • Competency or position requirements—knowledge, skills and abilities needed.
  • Quality and quantity standards—minimum levels needed to meet the job requirements.
  • Education and experience—required levels.
  • Time spent performing tasks—percentages, if used, should be distributed to equal 100%.
  • Physical factors—type of environment associated with job: indoor/outdoor.
  • Working conditions—shifts, overtime requirements as needed.
  • Unplanned activities—other duties as assigned.

If you need assistance with job description creation or simply would like an audit of your current descriptions, please reach out to one of our experienced Human Resource professionals by calling East Coast Risk Management at 724-864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , , , , ,

A New Form I-9 . . . Again

by Laura Pokrzywa

It’s happened again. The Form I-9 has once again been updated by the U.S. Citizenship and Immigration Services (USCIS). The new form was just released this week, on July 17. If you are feeling a bit of déjà vu, you are probably not alone. The ink is barely dry on the previous revision, which became the required form at the end of January this year!

According to the USCIS, employers can use this revised version or continue using Form I-9 with a revision date of 11/14/16 through Sept. 17. On Sept. 18, employers must use the revised form with a revision date of 07/17/17. In the meantime, the USCIS says employers should continue to follow existing storage and retention rules for all of their previously completed Forms I-9. Those rules will not change.

Changes to the form itself are not immediately noticeable. Look closely and you’ll see that the USCIS changed the name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices to its new name, Immigrant and Employee Rights Section. They also removed “the end of” from the phrase “the first day of employment.”

The other revisions are found in the List of Acceptable Documents in List C. The USCIS added a form of ID (the Consular Report of Birth Abroad), combined all the certifications of report of birth issued by the Department of State into one section on the list, and renumbered all List C documents except the Social Security card.

They are also offering a new and improved Handbook for Employers: Guidance for Completing Form I-9 (M-274).

Best to get familiar with the requirements and stay current on the form. Employers who violate the law may be subject to civil fines as much as $2126 per form for substantive and uncorrected technical I-9 mistakes (also known as “paperwork violations”), criminal penalties, debarment from government contracts, and a court order requiring an employer hire and pay back pay to individuals who have suffered discriminatory treatment.

The easiest and quickest way to verify the eligibility of new hires is using the internet-based system called E-Verify. It is free and required for federal contractors and all employers in certain states. With a completed Form I-9 and the new hire’s social security number, an employer can determine eligibility within seconds. This system does not replace the legal requirement to complete and retain those I-9 forms, but it is one more way to ensure legal compliance and avoid costly mistakes.

For more information about E-Verify, Form I-9, or for directions for renewing green cards or re-verifying an employee’s eligibility to work, visit the U.S. Citizenship and Immigration Services website.

Employers with questions about work authorization compliance, or any other HR issue, can contact one of our HR professionals by calling 877-864-3311.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this Web site do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,

How to Conduct a Workplace Investigation

by Derek Ross

In 2016 there were 91,503 total charges filed with the Equal Employment Opportunities Commission (EEOC) costing employers more than $482,100,000. Yes, that is 482 MILLION dollars!!! Even if your recruiting and hiring process is perfect, all your policies are in place, and you carefully train all employees, you can’t guarantee that you will never have issues among your employees. Unfortunately, you may still have to deal with complaints of bullying, theft of company property, discrimination, or harassment.  You may not be able to prevent all these issues, but you will save your company a lot of money and headaches if you manage these issues properly when they do come up.

Having a strong workplace investigation process could help your company avoid shelling out big bucks to employees and their lawyers. It may also help you avoid one of the most prevalent complaints the EEOC reviews – retaliation.

Let’s take a look at best practices for performing a workplace investigation:

Planning to investigate
To properly perform an investigation, a company needs to lay out a plan. First and foremost, the company will need to find out what policies and guidelines apply to the complaint, who will conduct the investigation, how have similar complaints been handled in the past, and what questions to need to be asked. For this example we will be looking at a sexual harassment allegation.

First remove the accused from the situation if possible. That could include moving the employee’s work space away from the accuser or requiring them to take a leave of absence until the investigation is complete. Never fire the employee prior to the completion of an investigation. On the flip side, be very careful that you never take an action that could be considered retaliatory against the employee making the claim.

Employers have a legal obligation to conduct an internal investigation and could be held liable if the investigation is not handled properly and fairly. The person conducting the investigation should be skilled in this area. Ideally, this person should be trained, unbiased and unprejudiced. In most cases, they will come from your Human Resources Department.

The interview (fact-finding) process
During the interview portion with the accuser:

  • The employee heading the investigation should have a comfort or trust level with the accuser. This will ensure that the accuser will be fully cooperative.
  • The investigator should identify all of the issues by asking only questions pertinent to the complaint and gathering all of the necessary facts. This should be done in a timely manner.
  • The investigator should determine if the accuser has facts to back up their accusations such as emails, texts and/or witnesses. If so, the accuser will need to divulge these.
  • The investigator will also want to determine if the incident was severe or pervasive enough to create a hostile work environment and find out if the accuser has confided in another employee.
  • The investigator should assure the accuser that this is a confidential meeting and information discussed will only be revealed to other employees on a need to know basis, as part of the investigation process.
  • And lastly, the investigator must reassure the accuser that the company will not tolerate retaliation, which, by the way, is the number one charge addressed by the EEOC (45.9% of all claims in 2016 were related to retaliation. Need to see more details? Click this link: https://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm)

During the interview portion with the accused:

  • You should provide as many details from the interview with the accuser as is needed. Be aware that the accused may become irritated or combative.
  • You should review the company’s Anti-Harassment Policy with the accused. (If you don’t have an Anti-Harassment Policy, you need to establish one right away.)
  • Ask open-ended questions and continue the questioning until you feel comfortable that you have all the information you need or that all of the questions were answered. Stick to only the facts that pertain to the employee’s complaint and do make assumptions or come to conclusions on your own.
  • Just as you did with the accuser, assure the accused that this is a confidential meeting and information discussed will only be revealed to other employees on a need to know basis, as part of the investigation process.

Documentation during the investigation
Take as many notes during the investigation as possible. During the entire investigation and interviews, documentation will become paramount. Again, collect as much data as you can from both sides and document entire conversations. This will ensure that you have all of the necessary information to make the best determination. After the investigation has been completed, the investigator should write a report and recommend appropriate action.

Discipline
If the accused is found to be in the wrong and in need of discipline, consider applicable laws, the employee’s previous history, as well as how similar situations have been handled in the past. Stay consistent with the company’s previous disciplinary actions. Review the policy from the handbook and follow your disciplinary policy.

Next time you need to investigate an accusation, here are a few basic rules to remember:

  • Do not fire the employee until the investigation has been completed
  • Either move the accused employee’s work space if possible or have the employee put on leave until the investigation is completed
  • Remind the accuser and managers involved that retaliation will not be tolerated
  • Stick to the facts
  • Document the entire investigation
  • Keep the complaint and investigation confidential and on a need-to-know basis
  • Follow company policy and be consistent with past practice with regards to discipline
  • Do not retaliate against the accuser or anyone participating in the investigation.

Lastly, make certain that managers are trained on their legal responsibilities regarding harassment, discrimination and retaliation. East Coast Risk Management can assist your company with HR-specific trainings. Employers can reach us by calling (724) 864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , ,

Wage and Hour: Back to the Basics

by Jim Spencer

Earlier this month I wrote a blog regarding when it’s appropriate to pay overtime. In the blog, I had mentioned making sure your employees were properly classified into exempt and non-exempt categories in accordance with Fair Labor Standard Act (FLSA) rules. Since that blog was posted, we have received a lot of questions regarding classifications. So I thought it would be a great idea to return to the basics — the basics of wage and hour.

First, we’ll look at the difference between exempt and non-exempt; then the importance of job descriptions; and finally the penalties for non-compliance. Before I begin, I want to stress the fact that just because an employee is paid a salary does not make them an exempt employee. The FLSA has laid the rules out to help employers determine if an employee is exempt. Let’s begin there.

What exactly does exempt mean? Exempt generally means the employee is exempt from overtime pay. Although there are many exemptions, the most common are the “white-collar exemptions” which are executives, professionals, administrative, outside sales, computer professionals and highly compensated employees. Be careful here. Just because your employee has the word “professional” or “administrative” in their job title or description does not necessarily mean they are exempt from overtime. It will be the employee’s actual duties that primarily classify them as exempt or non-exempt. In addition to the duties test, the employee must pass a salary level test. They must be paid a salary not less than $23,600 per year ($455 per week). Last year that salary level was the subject of much debate as a proposed increase to the minimum salary requirement stalled in the courts. Employers may have breathed a sigh of relief when the proposed increase failed, but their obligation to comply with the already-existing FLSA overtime provisions remains. So let’s take a look at those white-collar exemptions.

Executives: To qualify for this exemption, the employee must be compensated on the minimum salary basis ($455 per week). Their primary duties must consist of managing the enterprise or managing a customarily recognized department or subdivision of the enterprise. They must also possess the authority to hire/fire employees and advancement, promotion or any change of status of other employees must be given particular weight. An example of this would be a Vice President, or Plant Manager.

Administrative: To qualify for this exemption, the employee must be compensated on the minimum salary basis ($455 per week). The employee’s primary duties must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers. Also, the employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. An example of this might be a Controller or Purchasing Agent.

Professional: This exemption applies only to employees with a learned profession. These employees must be compensated on a salary or fee basis at a rate of at least $455 per week with the exception of certain professions like lawyers and teachers. The employee’s primary duty must be the performance of work requiring advanced knowledge defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgement. The advanced knowledge must be in the field of science or learning and must be customarily acquired by a prolonged course of specialized intellectual instructions. An example of this would be a doctor or a teacher. There’s also a creative professional that would qualify for exemption so long as the employee met the above criteria and also their work performance must consist of invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. An example of this would be a Human Resource Manager.

Computer Employee Exemption: This employee must be compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour. The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly-skilled worker in the computer field. The employee’s primary duties must consist of: 1) The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional specifications; 2) The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; 3) The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or 4) A combination of the aforementioned duties, the performance of which requires the same level of skills. This exemption does not include a technician that simply helps employees with computer issues.

Outside Sales Exemption: The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer. The employee must be customarily and regularly engaged away from the employer’s place or places of business (including a home office).

Highly Compensated Employee: This exemption applies to office employees doing non-manual work that are paid a total compensation of $100,000 or more if they customarily and regular perform at least one of the duties of an exempt executive, administrative, or professional employee, as identified above. This would not include non-management production line workers, non-management employees in maintenance, construction, and similar occupations such as carpenters, electricians, plumbers, etc.

If your employee does not fall into one of the above exemptions, chances are they should be classified as a non-exempt employee and will be entitled to overtime. For more information on that, I would recommend reading my blog from last week, How to Calculate Overtime Correctly.

Please also note that the exemptions above are exemptions under federal law. Even if an employee fits into one of the exempt categories above, they must also be exempt from overtime under state law. For instance, in Pennsylvania there is no exemption for computer or highly compensated employees. Therefore, a computer programmer in Pennsylvania would have to fit into the Administrate or Executive exemption to be exempt from overtime pay.

Now that there’s an understanding of an exempt and a non-exempt employee, the most crucial step in the process is to have good, clear and concise job descriptions for all positions within your company. If you’re ever in a meeting with the Department of Labor (DOL) on an FLSA audit, you can best believe the first thing requested along with payroll records is your job descriptions. Having your employees properly classified in your job descriptions can be the difference between no fine and a huge penalty including back pay to employees.

A key to remember when creating your job description is job title alone is insufficient to establish the FLSA exempt status of an employee. Rather, the DOL has said exempt or non-exempt status of any particular employee must be determined on the basis of whether the employee’s salary and duties meet the requirements of the law. Just because you give a janitor a title of VP of Sanitation does not mean the employee will be exempt. The same is true of an Administrative or Executive Assistant. Whether these jobs are exempt from overtime will be determined by their job functions and salary. The best way to avoid any FLSA issues is to ensure that your job descriptions accurately reflect the actual job being done, then have the professionals at East Coast Risk Management review your job descriptions to make sure they are sufficient and classify each position as exempt or non-exempt. Errors on these classifications can cost your business big time because you will owe back pay for any overtime not paid, as well as other damages.

In my last blog, I listed the top 5 industries that are at risk for wage and hour violations and also at a serious risk of the dreaded DOL audit. As a quick review they were: Accommodation & Food Services, Healthcare and Social Assistance, Retail, Construction, and Manufacturing. One of the top risks for wage and hour liability is classifying a non-exempt employee as exempt from overtime pay when they are not. Some of the penalties include back pay for up to three years of unpaid wages and overtime owed but not paid, liquidate damages up to two times the original amount owed, attorney’s fees, court cost, and as an added kicker, most insurance policies do not cover these types of losses or claims!

I cannot stress enough how important it is to properly classify your employees through job descriptions. If you are unsure, don’t risk it. The HR professionals at East Coast Risk Management are here to help. Give us a call.  Employers can reach us by calling (724) 864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Uncategorized |

How to Calculate Overtime Pay Correctly

by Jim Spencer

As Lady Gaga found out the hard way, the Fair Labor Standards Act (FLSA) is cracking down on employers who fail to pay their employees overtime in accordance with state and/or federal law. Her personal assistant sued the Poker Face singer for $400,000 under the New York state law and the FLSA alleging the pop superstar failed to pay her for several hours of overtime. This is certainly not an isolated incident as several celebrities have come under fire for alleged overtime hours that were not paid. But it’s not just celebrities being taken to court. As we all know, businesses have also been severely penalized for not calculating the correct overtime.

Let’s examine the proper way to calculate overtime pay and when it’s required by law. By using these tips, you should be able to avoid a potential lawsuit like Ms. Gaga’s. But then again, unlike Ms. Gaga, I’m sure you don’t request your personal assistant to sleep in bed with you. If so, that’s another serious issue.

Let’s start with the issue of properly classifying your employees as exempt or non-exempt, because that’s very important. The significant difference between exempt and non-exempt is that non-exempt employees are entitled to overtime compensation of 1.5X their regular rate. Their job duties will primarily determine if the employee is exempt from overtime. Please note that even if you pay a non-exempt employee a salary, that does not make them exempt from overtime pay. If a non-exempt employee is paid a salary, the employer will have to convert their salary to a regular hourly rate to determine what their overtime rate is.

It is very important to also understand what exactly goes into that regular rate of pay calculation. First, it’s based on hours actually worked. So it does not include holiday, PTO/vacation time, or other fringe benefit payments such as gifts, discretionary bonuses, benefit plan contributions, certain premium payments, certain stock related income, or reimbursement for work-related expenses. However, it does include wages, commissions, non-discretionary bonuses, shift differentials, and some on-call payments.

There is one piece of this that I know causes a lot of questions — or as I like to say, heartburn — and that’s the difference between a discretionary and non-discretionary bonus. Let’s clarify this before moving on. To qualify as a discretionary bonus (and therefore not be included in the regular rate of pay), the amount of the payment must be determined within the sole discretion of management. A key to maintaining the discretionary status of a bonus is to vary the bonus amounts to coincide with company performance. In other words, it is similar to a profit-sharing bonus. I would also advise against paying a discretionary bonus that is regularly paid each year (for example, a Christmas bonus) as it may lose its discretionary status after some period of time if the employees come to expect the payments.

Conversely, a non-discretionary bonus would include: production bonuses (encourage the employee to work steadily, rapidly, or efficiently), retention bonus, attendance bonus, quality assurance bonuses, cost of living bonus (usually given in lieu of a cost of living adjustment), or finally a bonus that is intended to attract employees to an isolated or less desirable job or job site. The easiest way to spot a non-discretionary bonus is if it is tied to some type of metric. If it is, it must be included within the regular rate of pay and will then increase the amount of overtime pay that will be owed.

Another important concept to explain when discussing overtime pay is compensable time or hours worked before we discuss how to calculate overtime pay. The FLSA has a continuous workday principle where all hours between the beginning and the end of the workday must be paid. Sure that makes sense and that’s only logical . . . right? Well, defining when the workday starts and ends is not as easy as just clocking in and out. It includes ANY hours the employer has required work or the employee has been allowed to work. This includes, donning and doffing (the putting on and taking off protective gear, clothing, uniforms), preliminary and postliminary activities, travel time, waiting or on call time, training and testing.

Non-exempt employees must record all hours worked on a daily basis. Employers should ensure accuracy of these records by having the employee sign their time records. It would also be a prudent idea to have a time and attendance policy that requires them to record all hours worked. In the policy, require that the employees and supervisors sign off on any changes made to time records. Also, train your managers and employees on the policy and the practice of recording their time and train them to understand “off the clock” and to recognize what are recordable working hours. By having your pay practices in writing and having them signed off by the employee, you will be able to show that the employee understands the policy and will report any errors immediately for resolution.

Ok, so now, let’s get into the teeth of this blog and that’s how to pay overtime. First, overtime must be calculated on a workweek basis which is defined by a fixed, regularly occurring, 7-day period (or 168 hours). Please note that you cannot average hours over a period of two weeks or more. So even if your company pays on a bi-weekly or semi-monthly basis, you must calculate overtime by the 7-day workweek. Employees can be paid on a piece rate, commission, or some other basis, but all the earnings must be converted to an hourly rate (a.k.a. the regular rate). The regular rate is typically calculated by dividing the total pay in a given workweek by the total number of hours actually worked in that workweek.

Let’s look a “quick” example. Let’s say John makes $12/hour. He works 56 hours in a workweek and earns $50 in commission (or bonus). Let’s look at the math for that:

  • Straight time (ST) compensation is 56 hours x $12 an hour + $50 bonus = $722 (total ST compensation)
  • $722 (ST)/ 56 hours worked = $12.89 (regular rate)
  • $12.89 (regular rate) x ½ = $6.45 (half time premium)
  • $12.89 (regular rate) + $6.45 (half time premium) = $19.34 (overtime rate)
  • 40 hours straight time x $12.89 (regular rate) = $515.60 (ST earnings)
  • 16 overtime hours x $19.34 (OT rate) = $309.44 (OT earnings)
  • $515.60 (ST earnings) + $309.44 (OT earnings) = $825.04 (total weekly earnings)

Let’s look at another example, this time using a bonus. Everyone knows the difficulty in attracting nursing staff. There are job postings all over the place. So, let’s say in order to attract nursing candidates you decide to give hourly LPN’s and RN’s a $2,000 bonus after being employed for 6 months. This would be considered a non-discretionary bonus (i.e., it’s tied to a metric) so it must also get factored into the regular hourly rate of pay. Let’s also say that this is a deferred bonus that will be paid out over a series of pay periods.

A retention bonus was earned over 6 months of 26 weeks for a weekly equivalent of $76.92 ($2000/26 weeks). If the employee worked OT during the 26-week period, the increase in the regular rate is calculated by dividing $76.92 by the total hours worked during the overtime week.  If the employee worked 10 hours of overtime in their 9th week, the employee would be due an additional $7.70 of overtime earnings as follows:

  • $76.92 / 50 hours -$1.54 (increase in regular rate)
  • $1.54 x ½ = $.77 (increase in half time premium)
  • $.77 x 10 hours of OT worked = $7.70 (increase in OT earnings due to bonus)

Believe it or not, wage and hour violations are the number one litigated employment law topic right now in the country. In addition, the DOL was given extra money as an initiative to crack down on wage and hour violations. They are targeting five (5) industries as part of this initiative. That means if you are in one of them, you are at a higher risk of getting an audit and having to pay all those fines if you are not compliant.

The top five (5) industries at risk for wage and hour violations and an audit by the DOL are:

  1. Hospitality & Food Services
  2. Healthcare & Social Assistance
  3. Retail
  4. Construction
  5. Manufacturing

Failure to follow these rules can result in large fines and damages including back pay for up to three years for unpaid wages and overtime owed but not paid, liquidated damages (up to two times the original amount owed), attorney’s fees and court costs. In addition, wage and hour violations are one of the few employment laws that can result in personal liability to the owners and decision makers who violated the law. Lastly, most insurance policies do not pay for any of the damages associated with violating wage and hour law.

If you’re unsure about how to remain compliant with overtime laws, ECRM’s Human Resources professionals are ready to help!  Employers can reach us by calling (724) 864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , ,

FMLA: What to Know BEFORE it Happens

by Nancy Owen, PHR

The Family Medical Leave Act (FMLA) is a federal law that provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons. Eligible employees may take up to 12 or 26 workweeks of leave in a 12-month period for eligible reasons.

In addition to providing eligible employees an entitlement to leave, the FMLA requires that employers maintain employees’ health benefits during leave and restore employees to their same or an equivalent job after they return from the leave.

What is the big risk?  Over time organizations have been challenged in ensuring that their employees are treated fairly when it comes to the FMLA. The task can be daunting for employers because they have to comply with the law which has many moving pieces. Employers with leave processes that are not compliant expose the company to enormous risks and potential expense. Employees have two years to file a claim against an employer for a FMLA violation. If they win their case, the employee may be entitled to lost back pay, lost front pay, liquidated damages, punitive damages, and attorneys’ fees and costs. As you can imagine, this can quickly add up to hundreds of thousands of dollars.

Understanding what the FMLA requirements are and determining the risks to your organization are necessary when deciding who will be your administrator. Do you outsource the administration of your FMLA or do you process it in-house? This decision can be a critical one to lower your risk of a claim. You need to guarantee your workforce the ability to safeguard their jobs and give them the peace of mind that they can care for their family issues. It will benefit all of the employees in your organization.

Let’s look at the requirements:

On August 29, 2016, the Equal Employment Opportunity Commission (EEOC) issued what is referred to as the Enforcement Guidance on Retaliation and Related Issues document. This Enforcement Guidance replaces the EEOC’s Compliance Manual Section 8: Retaliation, issued in 1998. Since that time, the Supreme Court and the lower courts have issued numerous significant rulings regarding employment-related retaliation. The percentage of EEOC private sector and state and local government charges alleging retaliation has essentially doubled since 1998. That means that retaliation is now the most frequently alleged basis of discrimination in all sectors, including the federal government workforce.

Each of the Equal Employment Opportunity laws clearly prohibit retaliation and related conduct when it comes to FMLA, Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act (ADEA), Title V of the Americans with Disability Act (ADA), Section 501 of the Rehabilitation Act, The Equal Pay Act (EPA) and finally Title ii of the Genetic Information Nondiscrimination Act (GINA).

According to the Department of Labor’s (DOL) Wage and Hour Division, “Since its existence in 1993, FMLA has served as the cornerstone of the Department of Labor’s efforts to promote work-life balance and we have worked in support of the principle that no worker should have to choose between the jobs they need and the family they love. With the FMLA, our country made it a priority to give workers the ability to balance the demands of work and family. It made the healthy development of babies, healthy families, and healthy workplaces a priority. It was a remarkable accomplishment at the time and, since its enactment, the FMLA has been used more than 100 million times to help workers balance the demands of the workplace with the needs of their families and their own health.”

The law protects employees from interference and retaliation for exercising or attempting to exercise their FMLA rights. The law also includes certain employer recordkeeping requirements.

Here are some examples of what would constitute interference or denying rights:

  • Refusing to authorize FMLA leave, or discouraging an employee from using such leave.
  • Transferring employees from one work site to another to keep a work site below the 50-employee head count.
  • Changing the essential functions of a job before an employee takes leave, or
  • Manipulating an employee’s work hours or schedule to avoid the employee’s eligibility under the FMLA.
  • Counting FMLA leave under a regular attendance policy, or
  • Failing to provide benefits to an employee on unpaid FMLA leave if the employer provides those benefits to employees who use other types of unpaid leave.
  • Not counting temporary or part-time employees in the 50 or more headcount calculation.

Who is a covered employer? Covered employers include private employers with 50 or more employees in 20 or more workweeks in the current or preceding calendar year. For the purposes of FMLA, that count must include staffed or shared employees (more on integrated and joint employers in a bit). FMLA also covers public agencies and public or private elementary or secondary schools, regardless of the number of employees.

Let’s take a minute to look a little more closely at the requirements for private employers. Once a private employer meets the requirement for FMLA coverage, the employer is a covered employer and will remain covered as long as it employs 50 or more employees in 20 or more workweeks in either the current calendar year or in the previous calendar year.

For example, last year during its busy season from June 1st to October 31st, a restaurant had more than 50 employees on their payroll. In the current year, the same restaurant employs fewer than 50 employees and an employee has requested FMLA leave. Because the restaurant employed more than 50 employees for more than 20 workweeks in the previous year, the restaurant is considered to be covered at the time of the request and must offer the FMLA benefits and protections to its eligible employees. This count included full-time, part-time, and temporary employees.

Another thing that you want to consider is if you are an Integrated or Joint employer. For the purposes of FMLA coverage, determining if you are an integrated employer is not a simple test. Basically, an integrated employer is a single employer that has separate entities or divisions. Factors to be considered in determining if separate businesses are an integrated employer include:

  • Common management,
  • Interrelation between operations,
  • Centralized control of labor relations, and/or
  • Degree of common ownership or financial control.

For purposes of determining employer coverage under the FMLA, the employees of all entities making up the integrated employer must be counted.

Employers may also qualify as a Joint Employer if two or more businesses exercise some control over the work or working conditions of an employee, such as with a temporary employment agency. For purposes of determining employer coverage under the FMLA, employees jointly employed by two employers must be counted by both employers, even if the employees are maintained on only one of the employer’s payrolls. Two (or more) businesses may simultaneously employ an employee, making them joint employers of the employee. For example, joint employment ordinarily will exist when a temporary employment agency supplies employees to a second employer. In that case, the employee must be counted by both employers when determining FMLA coverage.

Here are some facts you may find helpful:

Did you know that . . .
Employers who willfully violate FMLA’s posting requirement may be assessed a civil money penalty for each separate offense. Employers may download the DOL’s FMLA Poster for no charge by visiting the DOL’s website.

Did you know that . . .
An employee is eligible for FMLA if they have worked for a covered employer for at least 12 months (these do not have to be consecutive) and have worked 1250 hours in the 12 months leading up to the FMLA leave. In addition, they must work at a work site that employs 50 or more employees within a 75-mile radius.

Did you know that . . .
Covered employers who employ FMLA-eligible employees must maintain records that include the following:

  • Payroll employee data that includes the employee’s name, address, and occupation
  • Your employee’s rate of pay and terms of compensation,
  • The hours your employees work on a daily and weekly basis for each pay period
  • Additions to and deductions from wages, and total compensation paid.
  • The dates that the FMLA leave is taken
  • The hours of FMLA leave that is taken by your employee including hours taken in increments of less than a day,
  • All copies of FMLA notices that are provided by an employee to the employer and by the employer to its employees regarding FMLA (including any written request for leave from the employee)
  • Documents that include electronic records, describing your employees benefits or employer policies and practices regarding the taking of paid or unpaid leave as well as premiums paid

In addition, keep all documents regarding any disputes between the employer and an employee regarding the designation of leave as FMLA leave, such as emails or other written statements.

Did you know that . . .
As soon as an employer has enough information that indicates an employee may have a qualifying reason to take FMLA leave, the employer should initiate the FMLA leave process.  It is extremely important that the leadership team as well as the administrators play a vital role in ensuring FMLA compliance is met. This team must be able to recognize FMLA-qualifying reasons for leave as well proper initiation of the required notifications and eligibility requirements to satisfy the law. Providing FMLA training regularly helps to make sure those responsible for implementing the FMLA are up-to-date on the requirements of the law and the employer’s policy, procedures and practices. Making sure your leaders are in the know will help you stay in compliance and lower your organization’s risk.

Did you know that . . .
An employer could be exposing itself to risk and liability by failing to make a timely determination of eligibility or failing to provide notice to employees within the required time frame. Failure to timely notify employees of their eligibility status may constitute interference with, restraint, or denial of the exercise of an employee’s FMLA rights.

Did you know that . . .
The right to take FMLA leave applies equally to all employees regardless of their gender. For example: fathers are equally entitled to take up to 12 workweeks of FMLA leave for the birth or placement for adoption or foster care of a child and to bond with the child within 12-months from the date of birth or placement.

Did you know that . . .
Employers may not request a certification for leave to bond with a healthy newborn child or a child placed for adoption or foster care. However, employers may request documentation to confirm the family relationship such as a written confirmation or the birth certificate of the child.

Did you know that . . .
After receiving sufficient certification, an employer is not permitted to ask for more information, such as requiring a doctor’s note for each absence associated with that already-approved leave. Such a requirement may be considered interference with the employee’s use of FMLA leave.

Did you know that . . .
FMLA leave and workers’ compensation or short-term or long-term disability can run concurrently, provided the reason for the absence is due to an FMLA-qualifying serious health condition and the employer properly notified the employee that the leave would be counted as FMLA leave. Also worth noting, even though most state’s laws do not require an employer to continue an employee’s benefits while receiving workers’ compensation benefits, as long as workers’ compensation is running concurrently with FMLA, the employer is required to continue to provide benefits at the same level prior to leave.

Did you know that . . .
Separate from the employer’s ability to request that the employee provide a fitness-for-duty certification, employers may also require an employee to submit to an examination at the employer’s expense by the employer’s medical staff provided the examination by the employer’s medical staff is job-related and consistent with business necessity. An employer may not deny or delay reinstating an employee who has been absent on FMLA leave pending an examination by the employer’s medical staff. The employer may require the employee to submit to examination after reinstatement, including the first day of the employee’s reinstatement.

With so many moving parts, FMLA compliance is no simple task. Be sure you have a clear understanding of what is involved. Does your FMLA administrator have the knowledge, resources and time needed to properly administer, track and follow-up with FMLA leaves? If not, outsourcing this task may be the best way to lower your risk of a FMLA claim.

If you have any questions about East Coast Risk Management and the services we offer, please explore our website (www.eastcoastriskmanagement.com) or call (724) 864-8745.

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,

PTO: Is it Best to Combine Vacation and Sick Time?

by Nancy Owen, PHR

How does your company pay for employee time off? Vacation time? Sick leave? Or does it combine both into Paid Time Off (PTO) days?

Many employers simply do what they’ve always done and have never thought about other options. But it is worth considering the advantages and disadvantages of using the combined method before deciding what works best for your organization.

The advantages of the combined method:

  • When employees were asked how they felt about PTO, many reported feeling more empowered because they have more control over their own days off. They do not feel micromanaged. Instead, they appreciate the freedom to take whatever days they have accrued, for whatever reason, without the need to explain it to anyone. If they have accrued the time, they can simply request it without telling their supervisor about personal business or medical issues.
  • Your employees most likely think of PTO as a benefit. If they don’t they should. Combining vacation and sick time allows employees to take more time off for rest and relaxation if they do not need as much sick time during a year.
  • PTO leaves employees feeling less obligated to make excuses when they simply need a day off but are not sick enough to see a doctor and get a note. When vacation and sick time are combined, they won’t have to distinguish between a day to simply rest and relax and a day in which they are actually too sick to work.
  • PTO can be easier to administer. Since all days off fall under the same category, there is no need to establish or track the reason for the time off. You simply track the number of hours used.

The disadvantages of the combined method:

  • If your company is located where the law dictates that all accrued vacation is treated as wages upon termination, then the whole accrued PTO balance may need to be paid if an employee is separated. This expense may cause some companies to think twice about terminating an employee whose performance or conduct would otherwise warrant termination.
  • Employees who want to save all their PTO for vacation time, or who have already used up all of their PTO, may come to work when they are ill and may infect other employees.

What if sick leave is required by law? According to the Department of Labor, most private employers are not required by any federal law to offer paid sick leave to their employees. However, federal law does require public and private employers covered by the Family Medical Leave Act (FMLA) to give unpaid sick leave to their eligible employees, according to the provisions of the act. FMLA provides up to 12 weeks of unpaid leave for certain medical situations for either the eligible employee or a member of the eligible employee’s immediate family. Covered employers may choose to require employees to use any paid time off they have available while on an FMLA leave, as long as they require the same for a non-FMLA medical leave.

Federal law does require some employers to offer paid sick leave. Employers affected by Executive Order 13706, signed by President Barack Obama on September 7, 2015, includes companies that enter into covered contracts with the Federal Government. Covered employers must provide covered employees with up to seven days of paid sick leave annually, including paid leave allowing for family care.

Paid sick leave also may be required under state or local law. An increasing number of states, counties and municipalities are implementing paid sick leave laws. Below is a list of states who currently have statewide paid sick day laws:

  • Arizona – Earned Paid Sick Time (2016 approved ballot measure; takes effect July 1, 2017)
  • California – Healthy Workplaces, Healthy Families Act of 2014 (AB 1522)
  • Connecticut – Paid Sick Leave Act
  • Massachusetts – Earned Sick Time for Employees (2014 approved ballot measure)
  • Oregon – Mandatory Provision of Sick Time (SB 454)
  • Vermont – Act 69 (H 187)
  • Washington – Paid Sick Leave (2016 approved ballot measure; takes effect Jan. 1, 2018)
  • Washington D.C.- Employee Sick Leave

Each state or local law has unique provisions and your organization must stay on top of any new laws and any amendments. Be sure to check the requirements for all the areas in which your company operates. Even in these areas, a separate sick leave policy may not be needed as long you have a PTO policy that offers adequate allowances.

Legislators at the federal, state and local levels continue to consider various new laws pertaining to paid sick leave and paid family leave. Be sure to watch our blog for updates as news develops. In the meantime, if you have any questions about East Coast Risk Management and the services we offer, please explore our website (www.eastcoastriskmanagement.com) or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this Web site do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.

Posted in Human Resources | Tagged , , , , , , ,

Travel Time: When to Pay and What to Pay?

by Nancy Owen, PHR
and Laura Pokrzywa

Do you always have to pay your employees for time spent traveling? The answer, of course, is “it depends.”

The first consideration is the Fair Labor Standards Act (FLSA) which is the federal law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards. The FLSA also gives the Department of Labor the authority to recover back wages and liquidated damages (owed to the employee), and to assess civil money penalties (owed to the government), in instances of minimum wage and overtime violations. So it is worth ensuring that you are paying your traveling employees correctly. The FLSA has a lot to say about travel time. One of the most basic provisions is this: time spent traveling during normal work hours is considered compensable work time.

In addition to federal law, employers must look at state laws. Many states have labor laws that give employees greater rights than federal labor laws – rights that go beyond just the time spent traveling. For example, although federal law does not require reimbursement for employee travel expenses, California law does have such a requirement. California mandates that employers indemnify employees for all necessary expenditures and losses that are work related. When it comes to travel pay, like all other employment issues, employers must know and follow the labor laws for each state in which they operate.

As we look into more details, remember that we are only considering travel pay for non-exempt employees. We are not referring to exempt employees because they are paid the same salary each week regardless of how many hours they work. When an exempt employee travels after hours or travels on days off, including weekends or holidays, their salary is unaffected. So, for the rest of this article, “employee” refers to non-exempt employees, including those that are paid by salary.

You’ll be glad to know that commute time is generally not considered compensable time. When your employee travels to work before their regular workday begins, and from work after the regular work day ends, that time is not considered work time and therefore it is not payable time.

Let’s look at when your employees should be paid:

  • One exception to the general rule regarding to and from work is if an employee is called back to work for an emergency. In that case travel time from his home to the work site and back is compensable and he must be paid for that time.
  • If an employee is asked to report to a location other than the normal work location, you would have to pay for any travel time that exceeds the employee’s usual travel to and from their normal reporting location.
  • When your employee travels during the workday as part of their job, such as travel from one job site to another, or from one client location to another, that time is counted as hours worked and therefore must be paid.
  • If your employee is traveling away from home for an overnight, he/she is paid for any travel time that occurs during the employee’s regularly scheduled work hours — even if the travel falls on a day they are not normally scheduled, such as a weekend or holiday. For example, let’s say Mary is regularly scheduled to work from 7:30 AM to 4:00 PM, Monday through Friday. She is given a special assignment that requires her to travel by train on Sunday, from 2:00 PM to 6:00 PM. Mary is owed travel pay for the time she spent traveling between 2:00 PM and 4:00 PM on Sunday, because that is the portion of her travel that cut across her regular work hours, even though it is not a regular work day.
  • Time traveling away from home for an overnight assignment, travel outside of regular working hours as the driver of a vehicle must be paid. NOTE: As we saw in the example above, the time the employee spends traveling away from home outside of regular working hours as a passenger in a car, van, airplane, train or bus does not have to be paid. If Mary was driving a vehicle to get to her new assignment, she would be owed travel time pay for all four hours of her trip, not just the time that cut across her regular work hours.
  • Time spent traveling to training must be paid if any one of the following circumstances apply:  (1) the training is within the employee’s normal work hours; (2) the training is NOT voluntary, but is required; (3) the training is job-related; or (4) the employee is performing work during the training time.

Just a few more considerations as you decide who must be compensated for travel time:

  1. Is your employee engaged in work before they commute or during their commute (taking phone calls or running errands for work, for example)? If so, it’s compensable work time.
  2. Is your employee required to stop by the shop to pick up necessary tools, equipment or instructions before traveling to the worksite? If so, travel to the worksite is compensable work time.
  3. Is your employee traveling on a special assignment that does not require an overnight stay? If so, the time spent in traveling to and returning from the other city is work time, but you may deduct the time the employee would normally spend commuting to the regular worksite.

Now that you have determined what time is compensable, did you know that you can pay for travel time at a different rate?

Compensable travel time can be paid at a different rate of pay than the employee’s regular straight pay rate, as long as that travel pay rate is not lower than minimum wage. Please note such an arrangement should be clearly spelled out in a written wage agreement that the employee has signed. Care also should be taken to accurately record all compensable travel time as distinct from regular work time.

Of course, all compensable time must be included in overtime calculations, including compensable travel time. So how do you calculate overtime due when an employee is being paid two different rates of pay in one workweek?

According to the U.S. Department of Labor Wage and Hour Division’s publication, Regulations Part 778: Overtime Compensation, “Where an employee in a single workweek works at two or more different types of work for which different non-overtime rates of pay (of not less than the applicable minimum wage) have been established, his regular rate for that week is the weighted average of such rates. That is, his total earnings (except statutory exclusions) are computed to include his compensation during the workweek from all such rates, and are then divided by the total number of hours worked at all jobs.”  Let’s consider an example to clarify.

EXAMPLE: Bob worked 50 hours in one week. He spent 40 hours at worksites @ $15/hr and 10 hours driving between worksites @ $8/hr.

Overtime is always one and one half the “regular rate.” The regular rate in this case is the “weighted” rate calculated by dividing the total money earned ($680) by the total hours worked (50).

Bob earned a total of $680 (40 hours at jobsites @ $15 PLUS 10 hours traveling @ $8 = $680), before overtime is added. Bob’s “weighted” rate for this workweek will be $680 divided by 50 hours total, for a rate of $13.60. This is the straight time for all 50 hours. Bob is now due the additional “one half” for the 10 hours of overtime he worked. So we need to multiply $13.60 by .05 to get the overtime rate of $6.80. That rate times the 10 hours of overtime means Bob is owed an additional $60.80 for overtime. Add that to his regular pay of $680 and we owe Bob a total of $740.80 for the workweek.

Don’t forget that all compensable travel time must be considered when calculating overtime for the workweek.

If you have any questions about East Coast Risk Management and the services we offer, please visit our website (www.eastcoastriskmanagement.com) or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,