Hot Topics in Total Rewards

  • 04 Jun 2020 9:54 AM | Bill Brewer (Administrator)

    Employers face a minefield of issues as workplaces reopen, particularly when it comes to wage and hour law, Fisher Phillips' Samantha Bononno writes.

    Samantha Bononno is a partner at national labor and employment law firm Fisher Phillips where she represents employers in workplace disputes, including wage and hour, FMLA, discrimination and retaliation claims. She may be reached at Views are author's own.

    As states lift stay-at-home orders and businesses prepare to reopen their doors to employees, employers face a minefield of issues on the employment law front. One major area is wage and hour law, as many employers had to quickly implement layoffs, furloughs and wage cuts in the wake of the pandemic. As employers bring back employees and adjust wages, the following questions are likely to arise.

    1. What should employers consider when reducing or reinstating wages?

    There is a myriad of reasons why employers might adjust wages right now. Some may need to further reduce costs while others may want to bring back as many employees as possible, even if at a lower pay rate. This may be especially true for businesses taking advantage of a Payroll Protection Program loan and trying to make the most of the proceeds by paying as many employees as possible.

    As a general rule, employers are free to change an at-will employee's wages so long as the wages are not reduced below the federal minimum wage under the Fair Labor Standards Act (FLSA) and the change is on a go-forward basis — employers cannot reduce an employee's wages for work already performed. However, many states have further restrictions, such as advanced notice and a higher minimum wage below which the wage rate cannot be reduced. Employers should review state and local law to ensure they are compliant when making these changes.

    There are additional implications for exempt employees, or those not subject to the overtime requirements of the FLSA. Exempt employees must meet the salary basis requirement of the FLSA, which is not less than $684 per week (annualizing to $35,568) in 2020. If an employer reduces an exempt employee's salary below this rate, the employee will lose exempt status and be subject to the FLSA's overtime requirement for all hours worked beyond 40 hours in a workweek. For those employees usually working more than 40 hours, such a reduction effectively could increase an employer's overhead instead of lowering it.

    Additionally, changing an employee from exempt to non-exempt for short periods or repeatedly can undermine the exempt status of the position in other workweeks, opening up the employer to misclassification vulnerability. To prevent red flags in the eyes of the U.S. Department of Labor, employers should not change from exempt to non-exempt and back more than once.

    2. Can an employer change or eliminate PTO policies?

    Many employers are considering modifications to their paid time off (PTO) or vacation policies, either because they anticipate employees taking a significant amount of time off before the end of the year or having a significant number of hours to rollover into the next year because the employee was unable to take any time off during the chaos of the pandemic. The FLSA does not generally regulate paid time off; however, many states have restrictions. For example, some states prohibit "use it or lose it" or forfeiture upon termination provisions in paid leave policies. Other states merely require the employer to follow the terms in the policy, but that still means care must be taken when making changes.

    Lawful implementation of changes can include providing sufficient notice to allow employees to use up accrued PTO before the change takes effect, paying out accrued vacation and starting over with a new policy, or eliminating accrual on a go-forward basis for a period of time. Which option is best for a business will depend on state law and the employer's current policy.

    3. Is COVID-19 temperature-taking compensable time?

    Now that the U.S. Equal Employment Opportunity Commission has made clear employers can take employee temperatures without violating disability laws, the question left for many employers is whether the time spent taking temperatures is compensable. While there is no court decision exactly on that point (yet), a 2014 U.S. Supreme Court case, Integrity Staffing Solutions v. Busk, held that post-shift security checks for warehouse workers were not "principle activities" and, thus, not compensable under the FLSA. Some employers may take the position that temperature screenings similarly are not compensable, but others will include the time as hours worked to minimize the risk of a challenge or to ensure state law compliance.

    The Supreme Court has also said that time spent waiting to perform a principal activity is not compensable under the FLSA. This suggests that the time employees spend waiting in line to have their temperatures checked may be excluded from hours worked.

    On the whole though, otherwise non-compensable activities can become hours worked depending on when they take place. Thus, a review of the principles is only the starting point to an employer's analysis. A thoughtful plan (such as staggering arrivals and ensuring that no compensable activities have occurred already) to minimize the risks, when possible, is key.

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    Source: HR Dive

  • 04 Jun 2020 9:50 AM | Bill Brewer (Administrator)

    Panera Bread Co.

    By Heather Lalley on Jun. 02, 2020

    Covelli Enterprises, the country’s largest Panera franchisee, wrongly excluded assistant managers from overtime protections, the court found.

    The country’s largest Panera Bread franchisee, Covelli Enterprises, must pay $4.6 million to settle a class-action case involving overtime pay, according to a deal that received final judicial approval late last week.

    The lawsuit dates back to January 2018 when a group of Panera assistant managers in Ohio filed suit against the operator claiming that they were being forced to work without overtime pay after being wrongly classified as exempt from overtime protections.

    Under the settlement, Covelli must pay $4.62 million into a settlement fund for members of the protected class, made up of more than 900 assistant managers

    Covelli owns and operates more than 300 Panera locations in eight states.

    Panera did not immediately respond to a request to comment on the legal action.

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    Source: Restaurant Business

  • 04 Jun 2020 9:41 AM | Bill Brewer (Administrator)

    by Lauren Stiller Rikleen | June 03, 2020

    The long-term toll of the coronavirus is unknown, but its effects on our health care system and the economy have already been catastrophic. And while the immediate concerns of skyrocketing unemployment and a stalled economy must be addressed today, employers also need to begin considering how to rebuild for the employees returning to the workforce — or entering it for the first time.

    This includes Gen Z, the youngest members of the workforce and those currently in secondary school or college. Many who were just beginning their career journey have been furloughed or fired. Those in school were suddenly confined to their homes. Collectively, they are experiencing the greatest national trauma since the Great Depression and World War II.

    Ultimately, for the workforce to be equipped to move forward and thrive, employers will need to address the fallout resulting from Covid-19 on their youngest — and future — employees. 

    How Events Shape Generations

    As the Pew Research Center notes, looking at world events and other formative experiences through a generational lens helps provide an understanding of how people’s views of the world are shaped. Young people who grew up during the Great Depression and defended and supported the nation in World War II were coined “The Greatest Generation.” Once past the traumas of these extraordinarily difficult years, this generation shared characteristics that included a patriotism manifested by reverence for American ideals, a belief in the wisdom of government, and a frugality born of severe want.

    For Millennials, the horror of 9/11 and the global economic crisis that began in 2007 were calamitous events that were life-altering for their generation. As many were sitting in classrooms, word of airplanes crashing into buildings spread through their school; frightened teachers, family members, and friends were unable to offer their usual reassurance that everything would be okay. The chaos that followed became the touchstone for a future where potential terrorist attacks were an ever-present theme in the way Millennials interacted with the world around them.

    As they later began to make their way into the workplace, the economy collapsed. Job offers were rescinded, full-time opportunities became part-time without benefits, and many new hires were the first fired. A generation with an undeserved reputation for disloyalty had to change jobs frequently simply to keep up with basic bills and crushing student debt. Together, these experiences contributed to a profile of a generation more likely to seek order in their world and meaning in their work.

    Today, even as the coronavirus has been merciless in its impact on people of all ages, the long-term effects on the Gen Z cohort of adolescents are likely to be particularly severe.

    For the rest of their lives, the time the world stopped will be seared in Gen Z’s collective memory, a generation-defining moment that instilled deep fears about their uncertain future. Overnight, they lost their daily interactions with the teachers who trained them, coaches who mentored them, clubs that fulfilled them, and friends who sustained them through the painful ordeals of youth. Milestones such as proms, plays, athletics, and the ritual of graduation can be crucial to social and emotional development, each experience serving as a rite of passage to the next stage of life. These lifecycle markers of adolescence that were nervously anticipated and excitedly shared swiftly vanished.

    How Companies Can Support Gen Z Employees

    It will be years before sufficient data exist to quantify the full impacts of this experience on Gen Z. Existing research, however, can help employers learn what they should expect and how they can best manage their Gen Z employees, today and in the future.

    Research in three areas offers a good start for this analysis: skill development, stress management, and building emotional intelligence.

    Skill development. Gen Z’s learning has been disrupted in a way that schools were unequipped to manage. Some converted course work to online formats, often implemented by teachers and professors untrained for such a platform. Others minimized direct instruction, urging students or (depending on the grade level) parents to turn to independent projects and digital resources.

    In most instances, learning has been attempted in the presence of entire families similarly house-bound and juggling multiple responsibilities — environments that are not conducive to instruction without any preparation. Grades have been converted to pass/fail, tests have been abandoned, and deadlines extended.

    These options may be right for the moment, but likely will have costs. Research shows that Gen Zers already experience a difficult cultural transition between college and the professional world that can leave them feeling disoriented and confused. Now that their structured learning has been upended, employers and employees may need to develop greater patience with Gen Z’s adjustment to the professional world and a greater focus on intergenerational mentoring and support.

    Employers should consider thoughtfully designed programs to ease Gen Z’s transition by, for example, rethinking orientation programs, early assignments, and mentoring focusing on the development of expertise. For example, orientation programs generally consist of a short-term introduction to manuals, computer systems, and other basics of the workplace. A more comprehensive approach could extend orientation throughout the first-year work experience, offer rotations throughout the organization, and include programs to help new hires integrate into the culture of the workplace. Programming can also address substantive job requirements, offer strategic career support, and provide training on the organization’s goals and objectives, allowing employees to appreciate where they fit and why they matter.

    Mentoring, too, can be a powerful way to leverage generational diversity. Research demonstrates that, properly coached, new professionals will develop faster because their learning has been enhanced and guided. To maximize the opportunity for a successful mentorship program, employers should ensure managers understand the benefits of strengthened intergenerational relationships, dispel negative perceptions that could weaken engagement, and provide the needed time and resources. One way to accomplish such buy-in is by including reverse mentoring programs where young employees help senior workers improve their skills in technology and social media. For members of Gen Z, such mutually-supportive relationships can enhance their expertise and ease their transition into the workplace, offering employers the added bonus of a stronger multigenerational culture.

    Of course, the most significant and potentially enduring adjustment that workplaces had to make during this pandemic has been the implementation of remote working arrangements. The sudden shift was forced on employers by a crisis, but workplace experts have long advocated for greater flexibility based on changing gender and age demographics, globalized businesses, and technology improvements. As businesses begin to rethink how they open their doors, they should also consider building new transition and learning opportunities into the culture of flexibility that younger workers are seeking.

    Stress management. For more than a decade, researchers have noted an alarming trend: Gen Z reports higher levels of anxiety and depression than other generations. Studies also tell us that childhood exposure to significant stress can impact brain development and affect mental and social development. If Gen Z’s baseline already shows high levels of stress, what will the impacts of this pandemic be when it comes to their work and careers?

    Most companies are aware that unaddressed employee stress and anxiety can also result in absenteeism, turnover, and lowered productivity. Recent data estimate that the annual cost of job stress to U.S. businesses exceeds $300 billion. But too few firms have developed effective programs to help their employees with mental health struggles. In fact, studies shown that an effective stress management policy operates at the employee, workplace, andorganizational levels. In particular, organizational approaches lead to more sustainable results than interventions solely directed to individuals.

    Further, because Gen Zers are starting their careers with higher levels of anxiety exacerbated by the coronavirus pandemic, employers can adapt existing research and best practices to create customized programs for young workers. This could include early-career affinity groups that encourage open conversation in a supportive environment. In addition, coaching interventionscan boost an individual’s confidence in their ability to succeed and reduce anxiety, helping to keep minor performance challenges from becoming career-damaging incidents.

    Emotional intelligence. Research demonstrates that emotional intelligence, consisting of self-awareness, self-regulation, motivation, empathy, and social skills, is a critical element of effective leadership — and can be taught and learned. Employees who develop emotional intelligence can provide a foundation for a respectful work environment and a talent pool of future managers. This area of research offers both challenges and opportunities for Gen Z employers.

    In having to cope with a shut-down of life as they knew it at such a young age, many Gen Zers have experienced a massive interruption in their ability to discover what motivates and fulfills them. Because of this, they’ll need more time in their young adult years to undertake this self-exploration. Employers can help fill this gap by offering programming that helps build emotional intelligence from the outset of their careers — not several years down the road. One note: I would recommend eliminating the phrase “soft skills,” a term that actually denigrates the importance of training and development in these important areas.

    Employers are likely to benefit from the likelihood that Gen Z enters the workplace with a greater level of empathy and adaptability, qualities that are critical components of emotional intelligence. Having experienced both the significant disruption to their own lives and the pain and sorrow felt by friends and loved ones who suffered during the pandemic, Gen Zers are likely to be vigilant to the emotions of others at work.

    Companies have the opportunity to help members of Gen Z become the Next Great Generation of leaders. Having been tested at a very young age, they will bring a special blend of resiliency and humanity to the workplace. Employers can take advantage of these unique formative experiences by providing structured support to their younger employees that will smooth their transition and ensure their place as valued members of the workforce.

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    Source:  Harvard Business Review 

  • 01 Jun 2020 10:13 AM | Bill Brewer (Administrator)

    Businesswoman on phone talking to client

    May 27, 2020  Posted by Dominique Fluker

    It’s no surprise that COVID-19 has altered the way we work and interact with each other in and outside of the workplace. Many organizations have shifted to remote work for safety reasons. Still, as we journey deeper into being sheltered in place, many employees are wondering when we’ll be returning to the workplaceDue to COVID-19, several companies like Twitter and Facebook recently made the tough decision to transition their organizations to remote work permanently, adapting the work from home model. 

    “There’s no one-size-fits-all model for employers preparing to re-open their offices. While many workers are eager to return to the office, employers considering re-opening offices should clearly communicate that the workplace is going to look very different and keep employees informed on what that means for them. Now more than ever, employers must closely monitor local guidelines and listen to their employees to ensure they are meeting the needs of the people that fuel their business.” – Glassdoor Chief People Officer, Carina Cortez

    A new survey from Glassdoor conducted by The Harris Poll revealed that 45% of employees expect to return to their company’s office this summer, and nearly 3 in 4 employees are eager to return.

    The new survey found that of U.S. employees who are exclusively working from home due to COVID-19:

    Employees Are Ready to Get Back to the Office

    Eagerness to Return: 72% say they are eager to return to their company’s office, and among those:

      • Men (79%) are more likely than women (61%) to say they are eager to return to their company’s office.
      • Nearly half (45%) expect to return to working in their company’s office in some capacity in Summer 2020.

    Top Factors: Socializing with coworkers (52%) and in-person work collaboration (46%) top the list of reasons employees are eager to return to their office.

    Trust in Sr. Leaders: 83% trust their company’s senior leaders to make an informed decision about when to re-open their office.

    Employees’ Expectations for Health and Safety at Work

    U.S. employees who are exclusively working from home due to COVID-19 expect their employer to do the following when their company’s office re-opens:

      • More than 3 in 4 (79%) expect their employer to provide disinfectant/hand sanitizer.
      • Over half (54%) expect their employer to mandate employees to wear masks/gloves in the office.
      • 45% expect their employer to space out workstations at least six feetfrom other co-workers.
      • 38% expect their employer to check employees’ temperatures upon arriving at work.

    COVID-19’s Impact on the Future of Work

    More Flexible Work Options: 65% would work from home full-time after COVID-19 restrictions are lifted if given the option.

    Consider Remote Openings: 60% would be more likely to apply to a position that is entirely remote if they were looking for a new job.

    This survey was conducted online within the United States by The Harris Poll on behalf of Glassdoor from April 29 – May 1, 2020, among 1,188 U.S. employed adults ages 18 and older, 472 of whom are exclusively working from home due to COVID-19 and were surveyed on their expectations for re-entering the workplace amid COVID-19.

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    Source: Glassdoor

  • 29 May 2020 4:15 PM | Bill Brewer (Administrator)

    Lisa Burden | May 29, 2020

    Dive Brief:

    • An employee's "unabated absenteeism" rendered her unqualified for her job and Americans with Disabilities Act (ADA) protections, the 7th U.S. Circuit Court of Appeals ruled (Moens v. City of Chicago, No. 19-1913 (7th Cir. May 19, 2020)).
    • The city of Chicago granted Elizabeth Moens schedule adjustments to accommodate impairments, but she continued to miss work, according to court documents; Moens was absent 50 times in one year. She was suspended twice and eventually fired. She sued, alleging, among other things, that the employer failed to accommodate her, in violation of the ADA. The employer argued that Moens' absenteeism rendered her unqualified for her job — a prerequisite for ADA coverage. A federal district court agreed, noting that an employee whose disability prevents her from coming to work regularly cannot perform the essential functions of her job. 
    • On appeal, the 7th Circuit agreed, stating that "[a]fter the City offered Moens numerous accommodations — including extended leave, a shortened workday, and delayed start times — she still missed work hours over 50 times in her last year at the City. With that record of unabated absenteeism, a reasonable jury could not conclude that Moens was a qualified individual with a disability."

    Dive Insight:

    The ADA protects applicants and workers with disabilities who, "with or without reasonable accommodation, can perform the essential functions" of the job, the Moens court noted. While the ADA requires that employers accommodate workers with disabilities, essential functions don’t have to be removed.

    The question of whether in-person attendance is an essential function of a job can differ depending on the job and many courts have answered this question in fact-specific ways. The 9th Circuit held that regular attendance can be an essential function for supervisors. The 8th Circuit decided that a worker at an Iowa meat and processing facility who was absent 195 days was not qualified for ADA protection. And the 6th Circuit ruled last year that an employee who was absent nearly 60% of the time was unqualified under ADA and that allowing her to arrive late or leave early would not have "come close to solving her attendance problem."

    Of course, full-time attendance isn’t always required; the 6th Circuit ruled that full-time presence might not be essential for an HR generalist, for example.

    Courts often examine job descriptions to determine the essential functions of a job, if they are up-to-date and accurately reflect an employee's duties. According to guidance from the U.S. Equal Employment Opportunity Commission (EEOC), "a written job description prepared before advertising or interviewing for a job will be considered by EEOC as evidence of essential functions."

    Because courts often rely on employer determinations of essential functions, written, up-to-date job descriptions that spell out what is essential and what is not essential can be important in litigation. Experts recommend that HR conduct job description reviews at the same time as annual performance reviews and have employees sign off on them at that time.

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    Source: HR Dive

  • 27 May 2020 9:11 AM | Bill Brewer (Administrator)

    By: Kathryn Mayer | May 26, 2020

    Many of the rewards are a way to thank employees—and keep them working—during the COVID-19 outbreak.

    The majority of retailers are turning to bonuses, more pay and enhanced benefits to keep employees working during the coronavirus, according to new data.

    A new survey of more than 50 major U.S. retailers by consulting firm Korn Ferry finds that 43% of essential retailer respondents to its May 6 survey say they have increased hourly pay, while 17% say they are offering a bonus to be paid into the future, and 22% say they are offering both increased hourly pay and a bonus. Only 17% say they are not offering premium pay, or “hero pay.” The largest percentage (43%) say they are paying store employees an extra $2 an hour on average.

    Meanwhile, a third (33%) of essential retailers say they are also offering additional paid time off to store workers, 14% are offering an increased employee discount and 5% are offering increased overtime pay.

    One reason employers are turning to these rewards is due to “recognizing that these employees were being asked to work in the public while much of the rest of America was asked to stay at home to limit their risk of catching the virus,” says Craig Rowley, senior client partner and retail expert at Korn Ferry.

    Additionally, he says, most retailers have provided furloughed employees with health insurance and some paid the premiums. “This was recognizing that employees need healthcare more than ever during this pandemic and companies didn’t want employees to forgo it due to cost,” he says.

    Korn Ferry’s research is backed up by a number of recent employer moves.

    Last week, Walmart said it will hand out another round of cash bonuses to thank its employees for working during the coronavirus pandemic. The retailer says it will pay a bonus of $300 to full-time hourly associates and $150 to part-time hourly and temporary associates—totaling more than $390 million. Rewards will be given to hourly associates in stores, clubs, supply chain and offices, and drivers and assistant managers in stores and clubs. This will be the company’s second cash bonus in response to the coronavirus pandemic. In early April, it handed out the same amount—$300 for full-time hourly associates and $150 for part-time hourly associates, amounting to $365 million.

    McDonald’s also said it’s awarding bonuses to every worker at its company-owned stores—equivalent to 10% of the workers’ pay earned in May. Other retailers, including KrogerLevi Strauss & Co. and Target, have expanded paid leave benefits for workers.

    Korn Ferry’s report follows another report by Willis Towers Watson, which also looked at the benefits changes employers at large are making in response to the pandemic. Nearly half of employers surveyed by Willis Towers Watson say they’re enhancing healthcare benefits and broadening wellbeing programs as a result of the current environment. More yet are turning to leave programs and other offerings as employees report significant challenges during the pandemic.

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    Source: Human Resource Executive

  • 26 May 2020 4:45 PM | Bill Brewer (Administrator)

    The Dell Technologies Inc. logo is displayed at the company's booth during the SoftBank World 2019 event in Tokyo, Japan, on Thursday, July 18, 2019. The founders of Southeast Asian ride-hailing giant Grab, indoor farming startup Plenty, Indian hotel chain OYO Rooms and payments service Paytm took the stage at an annual SoftBank conference to explain how artificial intelligence helps them stay on top in their respective fields.

    Nico Grant and Ian KingBloomberg News | May 21, 2020

    Dell Technologies Inc. has suspended some employee benefits, signaling that the computer hardware giant is cutting costs to contend with the weakening global economy.

    The company will discontinue contributions to employees’ 401(k) retirement plans under a matching program, beginning June 1 and continuing at least until the end of the fiscal year, Dell Chief Operating Officer Jeff Clarke wrote to employees in a recent memo, citing the contracting economy and estimates of shrinking spending on information technology.

    Dell has also frozen external hiring, internal promotions and raises for the rest of the fiscal year, a person familiar with the matter said. The company suspended an incentive program with so-called “inspire points,” which let employees translate commendations from managers and colleagues into prizes that included gift cards, grills and toys, said the person, who was not authorized to speak publicly. Dell hasn’t yet conducted mass layoffs or cut the salaries of rank-and-file employees.

    “While it’s difficult to predict the shape of the slowdown and a recovery, our job is to prudently manage our business so that we’re in a strong position on the other side of this situation,” Clarke wrote in the memo. “Given the economic uncertainty that continues, we’ve made another tough decision to maintain the strength of our team and future of our company.”

    Round Rock, Texas-based Dell has 165,000 employees around the world. The maker of personal computers, servers and software entered the COVID-19 pandemic with some existing challenges, including falling demand for data-center hardware, computer component shortages and a massive pile of debt stemming from its acquisition of EMC Corp. Chief Executive Officer Michael Dell has agreed to take a pay cut during the coronavirus crisis, temporarily forgoing most of his salary as a gesture of solidarity with his employees.

    “Like all companies right now, we’re constantly evaluating our business to plan for resiliency in the current environment and to support our team members, customers, and community in a way that sets us all up for success on the other side of this pandemic,” a Dell spokesman wrote in an emailed statement.

    Dell hasn’t reported results since February, so it’s unclear how high a toll the pandemic has taken on the hardware maker. Software maker VMware Inc., which Dell owns more than 80 per cent of, also reportedly cut salaries, executive pay and 401(k) matches in response to the faltering global economy.

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    Sounrce: Bloomberg News

  • 21 May 2020 6:39 PM | Bill Brewer (Administrator)

    AUTHOR: Katie Clarey | PUBLISHED May 21, 2020

    Dive Brief:

    • The Sherwin-Williams Company will pay $3,650,000 to settle claims brought by its managers and associates that it failed to pay proper overtime and provide all meal periods, among other violations of California law (Anderson v. The Sherwin-Williams Company No. 5:17-cv-02459 (C.D. Calif. May 12, 2020)).
    • Workers’ allegations also included claims that the paint store failed to authorize, permit and compensate all rest periods, and that it failed to fully reimburse work expenses.
    • The settlement class includes about 5,700 Sherwin-Williams workers, court documents stated. The company did not respond to request for comment by publication time.

    Dive Insight:

    Sherwin-Williams workers brought their claims under California law, but the federal Fair Labor Standards Act (FLSA) is often invoked for these types of allegations, which are common and frequently result in large settlements like this one.

    Meal breaks have been responsible for many wage and hour-related claims, especially when they involve automatic deductions. Workers at an Alabama nursing home, for example, filed suit alleging their employer automatically deducted 30-minute meal breaks from their pay without ensuring they stopped working during that time.

    The FLSA does not expressly prohibit such deductions, but it does require employers to pay employees for all hours worked and to keep accurate records of the hours worked. "While auto-deducting meal breaks is not a per se violation of the Fair Labor Standards Act (FLSA), employers could face exposure to 'off the clock' wage and hour lawsuits if employees are actually working during meal breaks and not being paid," Freeborn & Peters Partner Erin McAdams Franzblau previously told HR Dive. "Auto-deducting meal breaks can also expose employers to claims that they are skirting the overtime wage requirements of state and federal law."

    Alleged overtime violations make up another source of claims invoking the FLSA. The law obligates employers to pay non-exempt workers time and one-half for all hours worked beyond 40 in a workweek. Steak 'n Shake paid more than $7.7 million to workers it misclassified as managers and denied overtime pay.

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    Source: HR Dive

  • 20 May 2020 9:01 AM | Bill Brewer (Administrator)

    Ben Penn, Reporter | May 20, 2020, 6:03 AM

    • DOL final rule clarifies fluctuating workweek method
    • Use of alternate overtime method projected to rise

    The Labor Department has finalized a regulation to give employers more flexibility and legal clarity by allowing them to incorporate bonuses when using an alternate overtime pay calculation for workers with irregular schedules.

    When it takes effect in 60 days, the final rule will give companies more protection from wage lawsuits, but it also could lead employers to abuse their newfound regulatory freedom by reducing salaries—a concern worker advocates have raised. The DOL framed the regulation, which revives a George W. Bush administration initiative that was quashed by the Obama DOL, as a “final rule to expand American workers’ access to bonuses.”

    The rule updates “fluctuating workweek” overtime calculations, an option available for employers under the Fair Labor Standards Act. The method allows businesses to pay certain workers whose hours vary widely each week at half their regular rate, instead of at one-and-a-half times, for any hours worked over 40 each week.

    The rule states that bonuses, premium payments, hazard pay, and other incentives are compatible with the regular-rate calculation, rescinding language from the Obama-era rule.

    That 2011 regulation blocked employers from including bonuses and other forms of premium payments when calculating the regular hourly rate of pay, which is then cut in half for overtime calculations. The Obama rule was meant to stop employers from reducing salaries by shifting large portions of compensation models to reflect performance and other incentives.

    Sparking a Trend?

    The fluctuating method isn’t utilized often, but the new rule could lead more companies to consider adopting it as a way to control payroll costs for workers whose hours vary significantly from week to week, while paying them on a partially incentive-based structure.

    Fearing a lawsuit, some employers have played it safe by not using the fluctuating workweek method at all, or using it without including bonuses, management attorneys have said.

    The rule, after being proposed last year, was the subject of critical comments from Democratic state attorneys general, the National Employment Law Project, and the plaintiffs’ bar. The criticism echoed the Obama DOL’s justification in 2011 for killing the Bush initiative, which had been proposed in 2008.

    “The proposed regulation could have had the unintended effect of permitting employers to pay a greatly reduced fixed salary and shift a large portion of employees’ compensation into bonus and premium payments, potentially resulting in wide disparities in employees’ weekly pay depending on the particular hours worked,” the Obama DOL said in justifying the 2011 decision not to finalize the proposal.

    That 2008 version was issued too late in Bush’s second term for the administration to complete it. While the Trump administration’s effort also comes in an election year, it stands a greater chance of longevity because it’s finalized and scheduled to take effect in July. That would make it tougher and more time-consuming for a potential new president to reverse course next year.

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    Source: Bloomberg Law

  • 19 May 2020 11:54 AM | Bill Brewer (Administrator)

    U.S. employers wary of coronavirus 'immunity' tests as they move ...

    Caroline HumerTimothy Aeppel | MAY 15, 2020 / 4:21 AM

    NEW YORK (Reuters) - U.S. employers have cooled to the idea of testing workers for possible immunity to the coronavirus as they prepare to reopen factories and other workplaces.

    Blood tests that check for antibodies to the new coronavirus have been touted by governments and some disease experts as a way to identify people who are less likely to fall ill or infect others. Italian automaker Ferrari NV has made antibody testing central to its “Back on Track” project to restarting factories.

    But many U.S. companies are not planning to use them, relying on face masks, temperature checks, social distancing, and diagnostic tests for those with symptoms, employers and healthcare experts told Reuters.

    Mercer, which advises companies on healthcare benefits, has surveyed more than 700 U.S. employers in industries from high tech to retail to energy, and found 8% of companies said they would include antibody tests in plans to screen employees.

    Interest in antibody tests from employers has fallen in recent weeks as reports have suggested that it is too early to conclude that antibodies to the new coronavirus translate into immunity. The American Medical Association cautioned on Thursday that these tests do not determine an individual’s immunity.

    “Many employers ... are realizing that antibody testing isn’t going to be a silver bullet and really isn’t going to bring them any value,” said David Zieg, a lead consultant on clinical services at Mercer.

    Other employers worry about their liability if they administer and interpret such tests, or are concerned about test costs and availability. Some were spooked by a flood of tests that hit the market before being reviewed by regulators for accuracy, which has contributed to confusion over results.

    A new antibody test from Roche Holding AG that has shown itself to be highly accurate could potentially help answer questions about antibodies and immunity and change corporate demand, but it has not done so yet, consultants and companies said. 

    Governments, however, are interested in antibody tests, particularly if they are accurate. Britain on Thursday said it is in talks with Roche over buying tests that it could use to create a certificate of immunity once there is a better understanding of the science.

    Collective Health, a healthcare technology company that has built back-to-work strategies for large companies, is advising employers to use diagnostic tests, not antibody tests.

    “There has been a proliferation of low-quality antibody tests and the antibody tests themselves don’t necessarily answer any questions about immunity,” said Rajaie Batniji, Collective Health’s chief health officer.


    When General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV reopen production next week, they intend to offer diagnostic tests to workers, not antibody tests. Officials at the Detroit carmakers said it was because it was not clear what the antibody tests show. Inc’s on-site testing plan, now in development, does not include antibody testing. Those views were echoed in interviews with a handful of smaller U.S. manufacturers.

    Shawn Kitchell, chief executive of Florida-based plastics manufacturer Madico Inc, is not planning to use antibody tests for his 250 employees. He questions their costs, accuracy, and the fact that the timing of tests can lead to different results, requiring multiple tries.

    “How frequently would we need to test to make it safer for our co-workers?” Kitchell said.

    Employers are also wary of an unregulated U.S. market for antibody tests. Since March, the U.S. Food and Drug Administration (FDA) has allowed more than 200 tests into the market without regulatory review to make them available quickly, opening the door to questionable vendors and inaccurate tests, Reuters found.

    Last week, the agency set a deadline for all vendors to prove to the FDA that their tests work or remove them from the market. It has also authorized two highly-accurate tests from Roche and Abbott Laboratories, which are able to supply millions of tests per week.

    One of the biggest U.S. testing providers, LabCorp, on Thursday said it was rolling out a program to make diagnostic tests and antibody tests available at workplaces.

    LabCorp’s chief medical officer, Brian Caveney, said interest in antibody testing is coming from companies in coronavirus hotspots, such as New York, while other areas with fewer COVID-19 cases see diagnostic testing as more important.

    As the new FDA process shows which tests work and which don’t, that will help advance research on how many people recovering from COVID-19 develop antibodies and at what level, and show if they are truly immune to infection, said Howard Koh, a professor at the Harvard T.H. Chan School of Public Health.

    “Until we go through those steps, I don’t see how we can translate this for the typical person who wants to go back to work,” Koh said.

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    Source: Reuters

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