4/20/2015. Two Areas: Federal & State. Federal. News from the Wage Hour Front: FLSA Developments and Colorado s Wage Protection Act

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1 News from the Wage Hour Front: FLSA Developments and Colorado s Wage Protection Act Andy Volin avolin@shermanhoward.com Two Areas: Federal & State Federal Fair Labor Standards Act (FLSA) Establishes standards for minimum wage and overtime pay for covered nonexempt employees State Colorado Minimum Wage Order Creates substantive rights for private sector employees in covered industries (minimum wage and overtime) Colorado Wage Claim Act, amended by Wage Protection Act Defines wages and provides enforcement mechanism to assure timely payment of agreed upon wages Federal Fair Labor Standards Act (FLSA) Anticipated new regulations on Part 541 exemptions Other developments Practical advice 1

2 Part 541 Exemptions White Collar exemptions Executive, administrative, professional, computer employees, outside sales, highly compensated employees Duties Test vary by exemption Salary basis Part 541 Exemptions Regulations Pres. Obama announced this Spring 2014 Anticipated Fall 2014 Delays continue Spring 2015? Part 541 Exemptions Regulations OMB review Notice and comment Final rule 2

3 Part 541 Exemptions Regulations Duties Test: Simplify Primary duty 50% rule Part 541 Exemptions Regulations Salary Test: Increase Current: $455/week (under $24K/year) Double? Other DOL Activity Timesheets product Mobile app Workers Owed Wages (WOW) Press releases regarding back wages, litigation 3

4 Supreme Court and Wage Hour Issues Integrity staffing Security line wait time not compensable Supreme Court and Wage Hour Issues Perez v. Mortgage Banker s Ass n No judicial review of non-apa agency action such as interpretive rules (opinion letters) D.C. Circuit review test rejected for lack of statutory authority Consequence? Attorney Client Privilege/ Wage Hour Issues Good Faith Defense Liability (259) Reliance on opinion/ruling, act in conformity with good faith Liquidated Damages (260) Good faith Chipotle Waiver of privilege through assertion of good faith defense to liquidated damages 4

5 Federal Legislation: Paycheck Fairness Act Protect workers from retaliation for sharing information about their wages, require employers to explain any pay disparities among workers performing the same job, and allow employees to seek unlimited punitive damages in wage bias cases. Paycheck Fairness Act (D) (S. 862, H.R. 1619) Federal Legislation: Workplace Fairness Act Ban retaliation for pay inquiries and discussions without shifting the burden of proof in wage discrimination cases (for employers to assert nondiscriminatory reasons for their actions) or authorizing unlimited punitive damages. Workplace Fairness Act ( R) (S. 875) Practical Advice Prepare for New Regulations Check Job Descriptions Identify Salary Challenges Determine Communication Points Provide Comments to Proposed Regulations 5

6 Litigation and Collective Action/ Class Actions Misclassification Exempt or Non-Exempt Independent Contractor or Non-Exempt Employee Litigation and Collective Action/ Class Actions Time worked Off the Clock Pre and post shift Meal Periods Remote work Policies in Industries Automatic Meal Period Deductions in Healthcare Litigation and Collective Action/ Class Actions Overtime Calculation Regular Rate Inclusions/Exclusions 6

7 Litigation and Collective Action/ Class Actions Plaintiffs Counsel Forum Shopping Use of Social Media awareness, notice Combining firms Industry Focus Restaurants Health care Litigation and Collective Action/ Class Actions Procedure Pleading requirements Conditional Certification Practical Advice: Policy Review Self audit with counsel Employee knowledge Work time and recording Supervisor knowledge Common situations 7

8 Practical Advice What is working time How to accurately report it What to do if not paid correctly or improper instruction How to report remote/unusual work How to report missed meals/breaks Who to contact Supervisor Education Key legal requirements What is working time When can edits be made to time records How to handle questions/complaints How to handle missed breaks/meals Resources Policy Review Clear statements Wage verification Complaint mechanism Correction mechanism 8

9 Wage Verification Non-exempt workers review time records Daily/weekly Certify accurate or identify changes Paycheck confirmation/notice Identify problem areas (meals, remote, etc.) Complaint Mechanism DIY vs. 3P/Litigation Choice of avenues: 800#; HR; Supervisor/Manager Specifically include WH Well publicized Document process Confidentiality Closure Problems Fixed Exemption Disputes - Duties Job descriptions Performance appraisals employer/employee Certification regarding duties File justifying exemption decision 9

10 Exemption Disputes - Salary Policy Complaint mechanism Safe Harbor for correction Colorado State Law Colorado Minimum Wage Order Creates substantive rights for private sector employees in covered industries (minimum wage and overtime) Colorado Wage Claim Act, amended by Wage Protection Act for 2015 Defines wages and provides enforcement mechanism to assure timely payment of agreed upon wages Colorado Minimum Wage Order Applies to 4 private sector industries: 1. Retail and Service 2. Commercial Support Service 3. Food and Beverage 4. Health and Medical 10

11 Colorado Minimum Wage Order Minimum wage: $8.23 per hour for adult employees and emancipated minors $5.21 per hour for tipped employees (tips combined with wages must equal minimum wage) Annual changes Colorado Minimum Wage Order Overtime: Time and one-half of regular rate of pay for any work in excess of 40 hours per workweek 12 hours per workday 12 consecutive hours without regard to start and end time of the workday Colorado Wage Claim Act Applies to private sector employers Not public sector Not independent contractors Assures timely payment of agreed upon wages Wages are all earned, vested, and determinable amounts for labor or services preformed by employees, regardless of the method of calculation (e.g., time, task, piece, commission, etc.) 11

12 Colorado Wage Claim Act Provides enforcement mechanisms Liability for owed wages Penalties Attorney s fees Colorado Wage Protection Act Creates a new administrative procedure for resolving wage complaints Applies to: Wages and compensation earned on or after January 1, 2015 Claims of $7,500 or less, exclusive of penalties and fines Wage complaints of both current and former employees Employee can choose: Division of Labor s administrative procedure Court action Or both! Process Overview Employee files complaint with Division of Labor Division sends Notice of Complaint to Employer Employer has 14 days to respond Division conducts investigation Division issues determination The Division may formally order the payment of unpaid wages, impose penalties, and issue fines The Division is not permitted to award Attorney s fees Either party can appeal Employee can terminate and go to court 12

13 Administrative Procedure Initiated Division sends Notice of Complaint to employer by mail, electronic means, or personal delivery Includes: Name of complainant Nature of complaint Amount of potential liability Administrative Procedure Initiated Employer must respond to the Division within 14 calendar days after Notice of Complaint is sent Pay all earned and unpaid wages within the 14 day period to avoid penalties $250 fine for failure to respond, which the Division can waive for good cause Investigation and Determination Investigation: Complaint assigned to division investigator May include: Interviews of employer, employee, other parties Information gathering, fact-finding, and reviews of written submissions Any other technique to enable determination 13

14 Investigation and Determination Determination: Within 90 calendar days after NOC is sent, unless the Division extends for good cause Compliance = Notice of Dismissal Violation = Citation and Notice of Assessment Citation and Notice of Assessment Pay amount of wages and compensation owed within 14 days after Citation and NOA are sent Division may waive or reduce fines and may reduce penalties by up to 50 percent Fine of up to $50 per day, per employee, for each failure to pay an employee without good faith legal justification, commencing from the date that the wages were due and payable Penalty of 125% of the wages owed, or up to 10 days of the employee s average daily earnings, whichever is greater Citation and Notice of Assessment Upon payment by employer and acceptance by employee Payment shall constitute full and complete satisfaction by employer and bar employee from pursuing any further action based on complaint addressed by Citation and NOA 14

15 Judicial Review Either party may appeal the Division s determination to a Division Hearing Officer Within 35 days after the Division s determination is issued If not, determination is final Either party may appeal the Hearing Officer s decision to the district court Within 35 days after Hearing Officer s decision is issued Review is limited to briefs and designated record Judicial Review Termination Instead of appeal, within 35 days after determination by the Division, employee can elect to terminate the administrative procedure and go to court Notice of Dismissal or Citation and NOA revoked The Good with the Bad Administrative procedure provides quick resolution at more reasonable cost Enhanced employee rights For both current and terminated employees Second bite at the apple for employees 15