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Proceed with Caution on Wage and Hour Issues

By Alan H. Bowie, Jr. & Nick Zaino on November 14, 2019
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A common pitfall for employers is the misclassification of employees as exempt from overtime pay and the misclassification of workers as independent contractors. These misclassifications often occur because an employer is taking an aggressive legal position or does not, understandably, know all the legal requirements and nuances. Misclassifications can also occur because an employer mistakenly assumes that the classification is proper because the individual has consented to it or even requested it.

An individual’s consent or desire to be classified as an independent contractor or an exempt employee does not make it legal. So, an employer should avoid this temptation if there is not a solid legal basis for the classification. An “agreement” with an employee that seems to have no immediate practical consequence could easily become an issue down the road if the individual files a complaint with the DOL, files for unemployment compensation benefits (for individuals classified as independent contractors), or there is DOL audit.

Given the federal DOL’s recent announcement that effective January 1, 2020, the minimum weekly salary level for exempt status will increase from $455 to $684, now is a good time for employers to review their exempt/non-exempt classifications and independent contractor classifications. Employers should also review and address other common wage and hour compliance issues, such as:

  • Improper deductions from the salary of exempt employees;
  • Time-keeping practices that do not accurately record hours of work and meal breaks;
  • Allowing non-exempt employee to work “off the clock” without compensation;
  • Failing to pay non-exempt employees for compensable travel time, training time, and on-call time;
  • Failing to include bonuses, shift-differential pay, and other compensation in calculating a non-exempt employee’s regular rate of pay on which overtime is paid;
  • Deducting, without DOL authorization, an employee’s wages upon separation of employment for various reasons, such as the overuse of paid time off and/or the damage or theft of company property;
  • Providing non-exempt employees compensatory time off instead of overtime pay; and
  • Not having a clear bonus and/or commission pay plan.

While not always easy, being proactive in addressing these issues is much better than trying to address them after a complaint has been filed or the DOL comes knocking!

Photo of Alan H. Bowie, Jr. Alan H. Bowie, Jr.

Alan H. Bowie, Jr. is a member of Carmody’s Labor and Employment group. During law school, Alan served as a judicial intern to the Honorable Juan R. Sanchez, Judge of the Eastern District of Pennsylvania and judicial extern to the Honorable Mark A.

Alan H. Bowie, Jr. is a member of Carmody’s Labor and Employment group. During law school, Alan served as a judicial intern to the Honorable Juan R. Sanchez, Judge of the Eastern District of Pennsylvania and judicial extern to the Honorable Mark A. Davis, Judge of the North Carolina Court of Appeals.

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Photo of Nick Zaino Nick Zaino

Domenico Zaino is a partner and co-practice group leader of the firm’s Business and Personal Services Group. He practices primarily in the area of labor and employment law and has extensive experience counseling, representing, and training employers on all aspects of the employment…

Domenico Zaino is a partner and co-practice group leader of the firm’s Business and Personal Services Group. He practices primarily in the area of labor and employment law and has extensive experience counseling, representing, and training employers on all aspects of the employment relationship. Nick’s clients range from small to large companies in various industries such as banking, medical, education, manufacturing, engineering, retail, construction, and non-profit. Working closely with C-level executives, in-house counsel, human resource professionals and business owners, Nick assists in managing risk by counseling on compliance and preventative strategies.

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  • Posted in:
    Employment & Labor
  • Blog:
    Carmody @ Work
  • Organization:
    Carmody Torrance Sandak & Hennessey LLP
  • Article: View Original Source

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