Emerging Wage and Hour Investigations and Litigation in the Health Care Industry

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2 Notice This presentation has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal, state, and/or local laws that may impose additional obligations on you and your company. Cisco WebEx can be used to record webinars/briefings. By participating in this webinar/briefing, you agree that your communications may be monitored or recorded at any time during the webinar/briefing. Attorney Advertising 2

3 Presented by Adam Abrahms, Member Epstein Becker Green Labor and Employment and Health Care and Life Sciences practices Los Angeles, CA Aaron F. Olsen, Associate Epstein Becker Green Labor and Employment practice Los Angeles, CA 3

4 Agenda 1. Fair Labor Standards (FLSA) Enforcement Practices - Potential Threat Areas 2. Meal Breaks 3. Off-the-Clock Work 4. Travel Time 5. 8/80s, Alternative Workweeks and Other Overtime Issues 6. Exempt and Non-Exempt Classifications 7. Differentials and Other Regular Rate Issues 8. California: A Trip to the Wage and Hour Behavioral Health Unit 9. Q&A 4

6 FSLA Enforcement DEPARTMENT OF LABOR SECRETARY THOMAS E. PEREZ Expanding opportunity means ensuring a level playing field for workers and employers in every industry through fair and aggressive enforcement of our wage and hour laws. Last year alone, we recovered a record $280 million dollars in back wages, and we will continue to make use of liquidated damages provisions in cases involving egregious offenders. - Source: AFL-CIO 27th Constitutional Convention Increased DOL funding and enforcement initiatives Favorable decisions to plaintiffs Large and growing industry Potential Misclassifications FLSA litigation reached record level 7,764 in the year long period ending March : Claims increased by over 50 percent 6

7 Private Class Actions Wage & Hour claims are the most frequently filed employment-related class action lawsuits Private Wage & Hour class/collective actions exceed all other types of employment class actions combined Wage & Hour suits increased some 70% in last decade Record high of over 7,700+ new cases filed under FLSA in

8 Recent Settled Wage and Hour Cases By Claims 20% 4% Most Common Claims 3% 3% 42% Overtime Off-the-Clock Misclassification Missed Meals and Breaks Donning and Doffing 19% 9% Minimum Wage Other 8

9 Potential Threat Areas Meal breaks Off-the-Clock violations Unpaid travel 9

10 Potential Threat Area MEAL BREAKS Work Performed During Meal Periods FLSA: No requirement that employer provide meal period State law typically sets forth certain requirements Requirements in Collective Bargaining Agreements; Employer Policies If meal period is provided in compliance with state law or employer policy, FLSA regulates certain aspects of the meal time: Meal period of less than 30 minutes generally must be paid Meal breaks of 30 minutes or more need not be compensated if NO work is performed Employee must be COMPLETELY relieved of duties during meal break to deduct this time from wage and overtime calculations 10

11 Potential Threat Area MEAL BREAKS Healthcare employers have faced wave of class action litigation in which employees claim they worked during meal periods that were automatically deducted from their pay by computerized wage & hour programs. Class actions sizes vary Damages potentially in the tens of millions Suits are now beginning to settle - $5 million to $10 million Class action defenses 11

12 Potential Threat Area MEAL BREAKS Best practice to minimize risks of unlawful meal period deductions Record, enforce and auditing meal periods As part of hours work submission process, employers may: Ask employees to certify whether they received an uninterrupted 30 minute consecutive meal period break; Provide a reporting mechanism for missed and interrupted meal periods; and A method to pay any extra compensation that may be due In some cases, meal waivers may be appropriate. Employers may consider requiring their non-exempt employees to clock-out for meal periods and then clock-in at conclusion of break to establish a clear record of the meal period. Automated systems: advisable for employer to have policy and procedures with forms that allows employees to override automatic deduction. 12

14 Potential Threat Area OFF THE CLOCK WORK OFF-THE-CLOCK Pre-Shift and Post- Shift Compensation Changing Into Uniform Donning & Doffing Training Work Outside of Work Such activities are compensable if they are an integral and indispensable part of the principal activities of a job Required paperwork/charting Mandatory meetings Changing at work is compensable if required by law, the employer, or the nature of the work. Compensable unless all the following elements are met. Time spent is Voluntary Not job related Outside normal work hours No other work is concurrently performed Checking s Offsite Access Communication with Supervisors Work-Related Phone Calls Giving Reports Required Testing 14

16 Potential Threat Area TRAVEL TIME Travel time Travel that is integral and indispensable to a principal activity of employment is compensable. Frequently affects home health care workers 16

18 8/80s ALTERNATIVE WORKWEEKS AND OTHER OVERTIME ISSUES Hospitals and other health care institutions may calculate overtime based on a fourteen day period. Known as eight and eighty overtime system Overtime calculated on work over 80 hours in a regular 14 day period and for work over 8 hours in a work day Advance agreement of affected employees/union required Flex Time Schedules Pay Equalization Plans Require agreement with employee Require advance payment of fixed overtime Can only be used for employees with fixed or regular schedules 18

20 Exempt and Non-Exempt Classifications Professional Employee Exemption Pay on salary/fee basis: $455 week/minimum Work requires advanced knowledge: Such as in a field of science Academic training prerequisite to entry to the field Licensing requirements academic degrees Recognized Professionals Registered or certified medical technician that requires a degree Registered nurses Physicians assistants Dental hygienists Not generally recognized as professionals LPNS Technologist where four year degree not required Medical Doctor, Practicing Medicine, completely exempt 20

22 Differentials and Other Regular Rate Issues Non-discretionary Bonuses (I.E., Performance Incentives) Must be included in an employee s regular rate of pay to determine overtime payment obligations Extra-Compensation for Specific Time Worked Premium pay for employees working on a holiday, weekend, regular day off is not included as long as it is at least time and a half of the regular hourly rate. In other works a $1 Weekend Differential is included On-call Time Included if paid (controlled vs. uncontrolled) Call Back Minimum Guarantee guaranteed pay beyond hours actually worked is not included Longevity Differentials Included Shift Differentials - Included 22

24 California Wage and Hour BHU Daily Overtime CA Alternative Workweeks Meal and Rest Periods Pay Requirements Etc. 24

25 California Daily Overtime In addition to the federal law requirements, California also generally requires that employees be paid overtime for all hours worked over 8 hours in a workday at the following rates: 1 ½ times their regular rate of pay for all hours worked over 8 hours in a workday up to 12 hours; 2 times their regular rate of pay for all hours worked over 12 hours in a workday; For all hours worked on the 7th consecutive day of work at the following rates: 1 ½ times their regular rate of pay for the first 8 hours worked 2 times their regular rate of pay for any hours in excess of 8 hours worked 25

26 California Alternative Work Weeks California has a special election process that permits avoidance of daily OT under: Established regular alternative schedules Applicable to identifiable work units With no OT for up to 12 hours a day for healthcare industry employers (only 10 hours for not healthcare employers) Failure to follow the strict process will invalidate a AWS and could result in significant liability. California s process is very specific Requires notice, disclosure, election and reporting Must be approved by 2/3rds of the work unit Cannot use 8/80 format with California AWS 26

27 California s Strict AWS Process A California AWS Requires a Four- Step Process A Proposed Written Agreement Employer Disclosure and Education The Secret Ballot Election Reporting to the State Or Established pursuant to CBA 27

28 California Meal and Rest Periods General rule for meal periods: Employees may not work more than 5 hours without a meal period of at least 30 minutes (unless the employee works no more than 6 hours in which case the meal period may be waived by mutual consent or unless the employee works no more than 12 hours in which case the second meal period may be waived by mutual consent). Employers must make meal periods available but need not ensure that they are taken. On-duty meal periods are permitted only when: the nature of the work prevents the employee from being relieved of all work; the employee agrees in a writing which states that the agreement may be revoked at any time; and only one on-duty meal period is taken in a day Employees are entitled to a 10-minute rest break for each four hours of work (or major fraction thereof) 28

29 Pay Requirements Voluntary Resignation Involuntary Termination Detailed Wage Statement Requirements 29

30 California Miscellaneous Travel Time Rules Are Different California law requires that employees be paid for all time (except sleep time and time spent in personal pursuits) spent away from home on overnight travel (even if the time does not coincide with the employee s normal work hours as provided under federal law). Minimum Wage The state minimum wage increased from $8.00 to $9.00 per hour on July 1, The state minimum wage will further increase to $10 per hour on January 1, Impacts Exemption Analysis 30

31 Question and Answer 31

33 EBG Services Wage Hour Compliance FLSA Compliance Department of Labor Audit Single Plaintiff or Class Actions Wage Hour Experts Counsel to include policies and procedures / employee handbooks Train HR Managers and Supervisors Lead an Investigative Team Defend and Litigate All EBG Offices 33

34 Stay Alert and Be Advised 34

35 Stay Informed Health Employment And Labor Blog healthemploymentandlabor.com Wage and Hour Defense Blog wagehourblog.com 35

36 Contact Us Adam Abrahms, Member Epstein Becker Green Phone: Aaron F. Olsen, Associate Epstein Becker Green Phone: