Total Articles: 20
Exempt Employees, Paid Leave, and Partial Day Absences [Webinar Q&A]
Another in our series of answers to questions from our September 28 webinar on wage and hour law in higher education:
Can An Employer Pay An Exempt Employee Extra Compensation? [Wage & Hour FAQ]
My Company anticipates embarking on a big project this fall that will have extreme importance to the Company’s future and require extra hours at the office. The Company wants to give a little extra pay to employees who work on this important project. A number of these employees are classified as exempt. May the Company provide extra compensation to exempt employees for their work on this project?
Are Pharmaceutical Companies Losing the Exemption Battle?
Recently, another group of pharmaceutical sales representatives successfully demonstrated that they are not exempt from overtime under the FLSA. Kuzinski, et al., v. Schering Corp Focusing on the administrative exemption, the District Court of Connecticut held that the sales representatives’ work was not directly related to Schering’s management or general business operations and they lacked the necessary exercise of discretion and independent judgment to meet the requirements of the exemption. The sales representatives did not directly sell pharmaceutical products, instead individualizing Schering’s canned sales pitch to promote certain products to identified customers. At the end of the day, the sales representatives simply used the core messages and promotional strategies developed by Schering, rather than developing those messages and strategies themselves.
Renewed Attempt To Destroy The FLSA's "Companionship" Exemption
Another effort is afoot to limit the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption to the point of non-existence in any practical sense. Last week, apparently-identical bills (S. 1273 and H.R. 2341 -- see currently available version below) were introduced in the Senate and the House which would have precisely this effect. Similar measures were proposed last year, but the newer ones would impose even-narrower restrictions.
THE OUTSIDE SALES EXEMPTION TO WAGE-HOUR LAW
Employers and courts have been busy in recent years shaping wage-hour laws that were long dormant. The applicability of several, limited “exemptions” to the rules that entitle employees to minimum wage, overtime, and other wage and hour protections has been the subject of a great deal of litigation.
Quick Quiz Answer: Recovering Losses From Non-Exempt Employees
The answer to our March 14 Quick Quiz is "$110". The federal Fair Labor Standards Act does not prohibit the employer from recouping some of the loss in that workweek, but it does restrict the amount.
Quick Quiz: Recovering Losses From Non-Exempt Employees
Store Associate Alex is paid on an hourly basis at the rate of $10 per hour. On Monday, he accepts a $150 check in payment for merchandise. He was so busy that he forgot to get the necessary customer information, and now the check has been returned because the account is closed. Alex's employer is unable to contact the customer.
SmithKline Beecham Wins On "Outside Salesman" Exemption
The Ninth Circuit U.S. Court of Appeals (Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has added another chapter in the saga of whether pharmaceutical sales representatives (PSRs) qualify for the federal Fair Labor Standards Act's "outside salesman" exemption. The court recently ruled in Christopher v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline that the Glaxo PSRs did fall within the exemption. The decision creates a split in the federal appellate courts by finding that the exemption applied to PSRs performing duties essentially the same as those found to be non-exempt by the Second Circuit in the Novartis case about which we previously reported.
Hot-Button Issue: FLSA's Outside Sales Exemption
Wage-hour lawsuits are (and have been) popping up everywhere, with employers of all sizes defending against various claims. In recent years, popular claims have included failure to pay overtime for all hours worked, requiring workers to work "off the clock" (before they clock in or after they clock out), incorrectly classifying certain workers as being exempt from overtime, and requiring workers to work during their unpaid meal or break time.
A Ray of Sanity in the FLSA Collective Action Morass: Half-pay in Misclassification Cases.
Given the overwhelming number of FLSA collective actions that continue to be filed, it is hard to find very much encouraging news, but one ray of sanity is the 4th Circuit's opinion in Desmond v. PNGI Charles Town Gaming, (4th Cir. 1/18/11) [pdf].
Wage & Hour Insights: Salary Deductions of Exempt Employees.
If you missed our webinar, Are You Ready For A Wage & Hour Audit, earlier this month a recording of the program is available here.
Pharmaceutical Company Outside Sales Representatives Deemed Nonexempt Employees.
In a recent decision, the federal Second Circuit Court of Appeals decided that outside pharmaceutical sales representatives were nonexempt employees, and therefore were entitled to overtime and subject to other nonexempt requirements. The court found that: (a) these sales representatives did not qualify under the outside salesperson exemption to the overtime laws because they did not actually "sell" pharmaceutical products to anyone, including the physicians they called on, and (b) they did not qualify under the administrative exemption to the overtime laws because they did not exercise the requisite level of discretion and independent judgment. This decision is especially important for pharmaceutical companies, and other employers in regulated industries that do not allow their outside representatives to actually sell products to customers. It suggests that such employers should evaluate their exempt classifications for all employees in positions similar to pharmaceutical sales representatives.
Employee Misclassification: $25 Million Reasons Why Your Company May Be At Risk
When President Obama revealed his proposed $3.8 trillion budget for fiscal year 2011, it provided $117 billion to the Department of Labor (DOL) for worker protection programs. The Wage and Hour Division would receive $244 million, a $20 million increase over last years budget. The Division plans to allocate $25 million to its new Misclassification Initiative. The initiative is a joint effort between the DOL and the U.S. Department of the Treasury to eliminate incentives for employers to misclassify employees and to impose sanctions and penalties on employers who do not properly classify workers. A key area of enforcement will be on employees who are misclassified as independent contractors. As an employer, do you know how to determine if someone legally is an independent contractor or if they should be classified as an employee?
Do Exempt Employees Have to Be Paid for Snow Days?
With the weather forecast predicting record-setting snowfall in the Northeast, many employers are preparing to close operations again tomorrow. But how to handle snow days when it comes to calculating payroll? Here's the run-down.
Shutdowns May Have an Impact on Employees FLSA-Exempt Status.
Many companies affected by the current economic downturn are searching for ways to help weather that storm. Occasional reduction in work hours, implementing mandatory vacations, or instituting short-term furloughs can help an employer to retain experienced employees, while allowing the company to achieve cost savings in this time of economic crisis. The Department of Labor (DOL) recently released three opinion letters written in January of this year in response to employer inquiries about the effect of such short-term shut-downs on employees exempt status under the Fair Labor Standards Act (FLSA).
The Vacation Nobody Wants.
The difficult financial environment is causing many employers to consider cost-savings in the area of employee compensation. The ideas sometimes include a temporary or intermittent scheduling of unpaid days off for employees whom the employer classifies as exempt executive, administrative, or professional employees under the federal Fair Labor Standards Act.
Pro-Ration of Minimum Salary for Part-Time Exempt Employees Disallowed.
The U.S. Department of Labor recently issued an opinion letter on the topic of pro-rated salaries for exempt employees.
Salary Deductions to Recover the Cost of Lost or Damaged Company Property Could Backfire (pdf).
Your employee leaves his company-provided
BlackBerry on the roof of his car and drives away.
Another employee accidentally downloads a virus
while surfi ng the Internet and corrupts the hard
drive of her company laptop. Do you deduct the
cost of repair or replacement of these items from the
employees salaries? If you do, a March 10, 2006
opinion letter from the U.S. Department of Labor says
those deductions could cause the affected employees
and others in their job classifi cations to lose their
exempt status, subjecting you to liability for unpaid
overtime and liquidated damages.
U.S. Department of Labor Issues Opinion on Salary Deductions for Absences Due to Inclement Weather (pdf).
In an October 2005 opinion letter, the U.S. Department
of Labor (DOL) provides guidance to private employers
regarding permissible deductions from exempt employee
salaries for absences caused by inclement weather such
as heavy snow or other types of disasters.
Exempt Professionals' Overtime Suit Fails (pdf).
Court Finds Employer May Reduce Pay Without Jeopardizing Exemption.
