It’s summer and time for the annual ritual of students searching for summer jobs.  Unfortunately with almost 10% unemployment, jobs for high school and college students are harder to find.  Students who are unable to find a paying job, but want to productively utilize their summer (and maybe get a foot in the door if a job were to come available) are offering to “work for free” as interns or trainees.  Employers, particularly smaller companies, may see these offers as an opportunity to benefit the students by providing training and benefit the company by filling in the gaps with “free labor.”  However, as the saying goes, the road to you know where is paved with good intentions.

This arrangement is fraught with legal minefields. As the DOL recently reminded employers in its Fact Sheet #71, there are few instances in which unpaid “interns” or “trainees” can be utilized.  The DOL uses certain factors to evaluate whether a worker qualifies for unpaid intern status.  These factors are as follows:

• Is the training similar to that which would be provided at a vocational school or academic institution?
• Is the training for the benefit of the trainee or the employer?
• Does the trainee displace regular employees?
• Is the employer providing the training deriving an immediate benefit from the “work” of the trainee?  On occasion, does the training actually impede the employer’s operations?
• Does the training necessarily entitle the trainee to a job at the conclusion of the training period?
• Does the trainee (and employer) each understand and agree that the trainee is not entitled to wages for the time spent training?

As a general rule, the closer the training is more intertwined with and related to an academic program, the more likely it will be found to be an extension of the educational experience and thus qualify as training that does not require compensation. Unless these factors are met, employers must compensate individuals for all hours worked at the current minimum wage as well as pay them for overtime where appropriate.

If you have any questions regarding a wage question, you may contact Judith Sadler at 713-877-8111 or by email at jsadler@sadlersykes.com.

As part of the U.S. Department of Labor’s ongoing enforcement efforts (See my April Article on DOL’s “We Can” campaign), the DOL has expanded its database of enforcement actions.  What this means is that anyone, including plaintiff’s attorneys, can search by employer to find the type of violation, number of violations, amount of back pay, number of employees who received back pay, and penalties assessed under the Wage and Hour Division (enforces the FLSA), the Office of Federal Contract Compliance Programs and the Employee Benefits Security Administration.

Before you settle a complaint filed by a DOL agency, it is strongly recommended that you talk with an attorney regarding the effects of the settlement.  While employers may not be technically “blacklisted,” this information could be used for any number of purposes, including denial of contracts (even if the employer is not told this is the reason he lost the bid), and lawsuits against the employer.  Unions may also find this information helpful in trying to organize the employer.

With the DOL’s increase in investigators (150 new investigators added to its field offices to refocus the agency on these enforcement responsibilities and 100 investigators to ensure that contractors on stimulus projects are in compliance with the applicable laws), employers need to expect an increase in investigations and thus an increase in complaints being issued.  The employers who take steps to ensure that they are in compliance before getting hit with a complaint are going to be the ones who avoid the negative publicity.

With regard to these statutes, a good offense really is the best defense.  If you have any questions regarding handling a DOL complaint, you may contact Judith Sadler at 713-877-8111 or by email at jsadler@sadlersykes.com.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (H.R. 3590) (the “Reform Act”) as amended by the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872) (the “Reconciliation Act”).  This legislation included an amendment to the Fair Labor Standards Act (“FLSA”).

Effective immediately, employers covered by the FLSA must provide “reasonable” breaks (in terms of both time and number of breaks) to mothers to express milk for their infants who are up to one year old.  This provision also mandates that employers provide a private location, other than a restroom, where mothers may express milk. The Reform Act does not require that breaks for breast pumping be paid. This provision does not apply to employers with fewer than 50 employees if its requirements would “impose an undue hardship by causing the employer significant difficulty or expense.”

Employers must adhere to the standard that is more favorable to the employee. Thus, if the employer is located in a state that mandates, for example, paid breast pumping breaks or breaks for mothers of children who are older than one year, the employer will still need to satisfy the more generous state law requirement.

Twenty four states (Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Indiana, Maine, Minnesota, Mississippi, Montana, New Mexico, New York, North Dakota, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, and Wyoming), as well as the District of Columbia and Puerto Rico, currently have laws relating to breast pumping in the workplace.  In Texas, the following laws are relevant:

• Tex. Health Code Ann. § 161.071 (2001) requires the Department of Health to establish minimum guidelines for the procurement, processing, distribution, or use of human milk by donor milk banks. (HB 391)

• Tex. Health Code Ann. § 165.112 (1995) authorizes a woman to breastfeed her child in any location.

• Tex. Health Code Ann. § 165.003 et seq. provides for the use of a “mother-friendly” designation for businesses who have policies supporting worksite breastfeeding. (HB 340)  The law provides for a worksite breastfeeding demonstration project and requires the Department of Health to develop recommendations supporting worksite breastfeeding. (HB 359)

Employers with employees in states with existing breast pumping laws should review these laws and their current policies and practices related to breast pumping to ensure that they comply with the more favorable standard. Employers not already subject to state laws at least as stringent as the newly enacted section of the FLSA should consider adding wellness rooms (with locks to protect employee privacy) at each employee location as well as taking other reasonable measures to accommodate breast feeding mothers who are in their employ.

The Department of Labor issued a fact sheet discussing the terms and enforcement procedures.   See Fact Sheet #73 at the Department of Labor website.  Employers will likely be required to post a notice advising employees of these rights.  Employers should begin compliance and should anticipate litigation over the requirements, such as what constitutes a reasonable break, whether the break area is satisfactory, whether employers have the right to verify that the woman’s child is less than one year old and whether it is an undue hardship for an employer with less than 50 employees to comply.

If you have any questions regarding compliance with this new law, the FLSA or new health care Reform Act, you may contact Judith Sadler at 713-877-8111or by email at jsadler@sadlersykes.com.

On April 1, 2010, the U.S. Department of Labor began its promised enforcement efforts by launching the We Can Help campaign. The effort is designed to educate workers about their rights under the Fair Labor Standards Act (FLSA). Employers should not consider this campaign an April Fool’s Day joke. The DOL’s website states that it is focusing on employees’ and workers’ rights and pay issues and is reaching out to those who are among the traditionally lowest paid workers, including non-citizens and/or undocumented workers.

The campaign instructs employees on how to file a complaint with the Wage and Hour Division and it encourages employees to provide such data as pay stubs, hours of work, and other information relating to an employer’s pay practices. This campaign is being launched in conjunction with the DOL’s increased enforcement efforts in 2010 and 2011. Employers are urged to conduct attorney-client privileged self-audits to identify and correct any problems or errors in pay practices BEFORE a complaint is filed or a government investigation begins.

If you have any questions regarding wage and hour concerns or the potential misclassification of your workers, you may contact Judith Sadler at 713-877-8111 or by email at jsadler@sadlersykes.com.

As employers fight their way back from the recession, they may be faced with the problem of how to get work covered when the amount of work is too much for their current workforce, but not enough to justify hiring another full-time employee. As a solution to this problem, employers often turn to staffing companies to provide temporary workers for short term assignments. According to the U.S. Bureau of Labor Statistics, the number of temporary help services employees in the U.S. workforce has reason to an estimated 1.9 million in December 2009. This number is up from the low of 1.7 million in July 2009.

When contracting with a staffing agency, employers may assume that the contract they sign with the staffing company that designates the staffing agency as the employer of the temporary employees will protect them from lawsuits. However, in reality, employers face many of the same concerns that they would have had if they hired the temporary employee directly. Most employment laws and benefit laws apply to protect all individuals who are ”employees” or ”workers,” regardless of whom issues the paycheck. To protect themselves from unintended consequences of using a staffing agency, employers should clarify that their temporary employees are just that – temporary. Assignments should be clearly defined. Contracts and/or employment policies regarding benefits should be reviewed to ensure that the policies and contracts do not inadvertently apply to temporary employees. Temporary employees should not be keep for extended periods of time. Moreover, temporary employees should be trained regarding the employer’s avenues for reporting perceived discrimination or harassment. Employers should also ensure that supervisors understand additional steps that must be taken to address problems they might experience with temporary employees. Supervisors and employers should notify the staffing company of any issues that arise and work with the staffing company to address those issues.

If you have any questions regarding wage and hour concerns or the potential misclassification of your workers, you may contact Judith Sadler at 713-877-8111 713-877-8111 or by email at jsadler@sadlersykes.com.

Question: What is the best way to avoid employment litigation?

Answer: Don’t have employees!

Unfortunately, that solution does not work for those who have businesses and want to keep them. Employers can take steps to prevent or at least minimize the risk of being sued. Additionally, these steps will help employers successfully defend against claims by employees. The following are five steps that we recommend employers take to help protect the business and themselves from getting sued.

First, formulate clear policies to be uniformly applied to all employees. One of the easiest ways to end up in a lawsuit is to operate on the fly. By establishing set policies with regard to matters like attendance, work attire, and work expectations, employers can avoid accusations of discrimination. If each employee is required to follow the same policy, regardless of the nature of the policy, then the employee may be unable to successfully claim that he or she has been treated differently because of a “protected characteristic” such as sex, race, age, disability, gender or national origin. If the employer has a clear policy prohibiting harassment and requiring the immediate reporting of any conduct that is perceived as harassing, then the employee may be unable to successfully claim that he or she had no avenue to seek assistance when they were subjected to harassing conduct.

Second, document any problems with employees when the problems arise. If an employer documents misconduct or poor performance at the time it occurs, then the employer will be able to substantiate any disciplinary actions such as suspensions or terminations. If an employee does decide to sue, the employer is able to defend its actions and decisions by providing objective evidence of the basis for the disciplinary action.  An added benefit to performing timely corrective reviews is that the employees may take the suggestions to heart and change their work performance.

Third, review handbooks, employment agreements and policies to make sure they are consistent with the actual business practices of the employer. An easy way for an employer to lose a trial is to have members of management testify that employment situations are handled in a particular manner, which is inconsistent with the actual policies provided to employees.  Likewise, such inconsistencies are frustrating to employees because the employees do not know which set of policies to follow – the ones in the employer’s documents or the verbal instructions of a supervisor.

Fourth, retain your documents and records, including electronic documents and records, such as email, for the required period of time. Many statutes and laws require employers to retain certain documents and records for specific periods of time. Employers need to establish and follow record retention policies that comply with the various laws.  Failing to retain the records and documents may result in fines or worse yet, the loss of a lawsuit.

Fifth, remember the “golden rule” and treat your employees as you would want to be treated. Employees understand that their employer must set guidelines to be followed and that an employer is only going to be able to pay a reasonable wage. Employees do not understand or accept being yelled at, cussed at, threatened or humiliated. Employees who are valued for their contribution to the business and who are treated with respect will understand when hard decisions must be made. Employees who are treated as if they are expendable and as if they are not valued will react poorly when they are laid off or fired.

If a policy is not legally correct, that policy can result in unintended legal ramifications. Consulting with an attorney in establishing employment policies or in reviewing these policies is often the best option. Yes, attorneys fees are an expense that employers prefer not to incur, but remember: “An ounce of prevention is worth a pound of cure” or in other words, a little money up front may save a significant amount of money later.

If you have any questions regarding employee policies and preventing employment litigation, you may contact Judith Sadler at 713-877-8111 713-877-8111 or by email at jsadler@sadlersykes.com.

One of the most frequent misconceptions held by employers about the classification of a worker is that the employer may legally treat the individual as an independent contractor for purposes of wages, benefits and taxes if the individual signs a contract stating he or she is an independent contractor. This belief is incorrect; the contract is not, in and of itself, the controlling factor under the law.

The “Fair Labor Standards Act” (FLSA) and case law interpreting that statute provides that individuals can not legally waive their rights under this law; therefore, the mere fact that an individual signs a contract or agreement stating that he or she is an independent contractor and not an employee DOES NOT determine the status of the worker. The worker’s status depends on a number of factors, including, most importantly, whether the employer exercised control over the individual.

To determine whether an individual who is classified as an independent contractor really is an independent contractor, one must look at the factors that the Department of Labor, the IRS and the courts have identified as being determinative. We recommend that employers conduct this review in conjunction with an attorneys who specializes in the area of employment law because each factor has legal implications. The courts interpret the various factors and how they interact to decide whether the worker really is operating as a separate business entity rather than as an employee.

One of the most important factors that the courts, the IRS and the Department of Labor consider is the degree of control that the company exercises over the worker. Question that are asked in reaching the conclusion as to the status of the worker include: Are the hours of employment set? Canthe worker come and go as he pleases? Must specific procedures be followed? Is the worker required to provide reports on his progress ? Does someone else at the company sign off on the work being performed? How the employer answers these questions will have a direct effect on whether the employer will win a lawsuit or wage claim.

For those employers who think that it is not worth paying an attorney to preemptively determine if there are problems and to correct those problems, consider the following:

1. Last year, the number of FLSA claims filed against employers by individuals claiming they were mis-classified as independent contractors increased.

2. If an employer if found to owe an employee overtime, the employee can seek to recover overtime pay for up to three years before the date the lawsuit was filed. The court MUST award the winning employee attorneys’ fees and these fees may exceed the actual claims in the lawsuit.

3. On February 2, 2010, the Department of Labor asked Congress for an additional $25 million. The request includes $12 million for hiring 90 new investigators and conducting 4,700 investigations of “industries with mis-classification characteristics,” including construction, child care, home health care, grocery stores, business services, and poultry and meat processing; $11.3 million to fund competitive grants to help states focus on mis-classification and reward the states that are most successful at detecting and prosecuting employers that mis-classify; and $1.6 million to help DOL’s Solicitor of Labor sue employers.

If you have any questions regarding wage and hour concerns or the potential mis-classification of your workers, you may contact Judith Sadler at 713-877-8111 or by email at jsadler@sadlersykes.com.