FLSA Violations: Avoid Having the DOL Come After Your Organization!
One of the hottest topics for employers right now-- and one that
employers need to make sure they “get right”-- is the Fair Labor
Standards Act (FLSA).
The Department of Labor (DOL) has promised to wage an all out war of
enforcement on misclassification of employees, targeting employers in
coming years that misclassify employees as independent contractors
rather than employees and/or as exempt when, in fact, they should be
non-exempt.
The Department of Labor has set aside $25 million of its 2011 budget to
help combat employee misclassification. The proposed 2012 Department
of Labor budget includes $46 million dollars specifically to address
worker misclassification, which includes hiring 90 new DOL
investigators. You can expect increased enforcement by the DOL this
year with regard to FLSA misclassifications by employers. This
crackdown is supposed to bring in at least $7 billion for the federal
government over 10 years.
Not only is the Department of Labor increasing its FLSA enforcement but
in addition, employees are coming up with new and innovative claims to
make under the FLSA: i.e., claims that they were not paid overtime they
were due when they were required to respond to text messages, e-mails
and instant messages after work hours on their smartphones. Another
major issue for employers is not accurately counting the time that
employees spend booting up and down their computers and therefore
failing to pay their non-exempt employees overtime for this.
Now more than ever, employers need to make sure that they are
understand FLSA requirements, including how to properly classify their
employees as exempt vs. non-exempt and how to properly classify their
workers as employees vs. independent contractors. They also need to
understand what counts as compensable time in the 21
st century, with smartphones and PDAs that allow employees to work and be available 24/7.
In addition to HR understanding these FLSA compliance issues, they must
also train their managers to ensure that managers do not take any
actions that violate the FLSA or cause their exempt employees to lose
exemption under the FLSA.