THE BIG 10 EMPLOYER BLUNDERS, MISCUES AND MISSTEPS

THE BIG 10 EMPLOYER
BLUNDERS, MISCUES AND MISSTEPS

Susan K. Sapp

Cline Williams
Wright Johnson & Oldfather, L.L.P.

1. Failing to Create Boundaries Between Life Issues and Work Issues

In Marchioli v. Garland Co. Inc., 2011 U.S. Dist. LEXIS 54227(N.D.N.Y. May
20, 2011), the plaintiff was a sales representative and performed well and received
positive evaluations. Six weeks into his new position he learned his girlfriend was
pregnant and told his employer. After sharing the news, he alleged his employer
started giving him negative evaluations. For example, one of his supervisors wrote
him the following:

I’m not hear to tell you how to live your life, but the situation with
your girlfriend spells big trouble to me. The distractions you are
going to have over the next 10 months are going to be too much if
you’re constantly being pulled back to Buffalo...You need to decide if
you want to totally commit yourself to this endeavor. If you don’t
want to “buy in” and put maximum effort into developing your career,
do me and Josh a favor and quit now...if you do not want to work
under that kind of scrutiny, leave now.

The plaintiff said such negative evaluations continued, and he was fired
even though he was only one of two people in his class who achieved 100% of his
sales quota.

The Court ruled that the behavior was reprehensible, but not illegal under
Title VII of the Pregnancy Discrimination Act. The Court ruled that pregnancy is
not a disability. The plaintiff did not prove associational discrimination under the
ADA, because he did not prove that the termination resulted from perceived
healthcare costs for his relative; his termination was not based on a fear that the
employee would spread the relative’s disease to other employees; and the
termination did not result from a concern that the employee would be so
distracted about his relative’s disability that he could not perform his job.

Employer Takeaway: Employers need to train supervisors and managers to
create appropriate professional distance between an employee’s personal life
issues and his or her work performance. Had this employee been female, the

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outcome would have been much different. Had the girlfriend had a disability as
opposed to a pregnancy, the outcome could have been different as well.

2. Not Educating Employees, Managers and Supervisors Regarding
USERRA, Sexual harassment, ADA, Reasonable Accommodations and
Retaliation

Jezwinski v. City of Jacksonville, No. 4:08CV4211 JMM, 2011 U.S. Dist.
LEXIS 56584 (D. Ark. May 23, 2011).

Plaintiff was hired as deputy city clerk. She joined the military without
notifying the city clerk. After she was sworn into the military, she told the City
Clerk (and other members of the city's HR department). She went on military
leave. Before she left she filed a formal complaint with the HR department
claiming the City Clerk had expressed displeasure about her military involvement
and said she was not sure if Plaintiff's job would be held. Plaintiff was re-instated
after returning from military leave. The City Clerk was then critical of her work
and asked "if mistakes were part of her military training."

Plaintiff then committed a clear act of misconduct. She admitted she could
see the voting booths from her desk and had watched how nine out of ten people
voted. The City Clerk told her such behavior was illegal and she needed to stop
watching how people voted. They both went to the HR department to discuss the
issue.

Plaintiff then notified the City Clerk that she would be taking additional
military leave for deployment. A week later, the City Clerk terminated Plaintiff's
employment because Plaintiff had observed people while voting.

Defendant's summary judgment was denied.

Reasoning:

• USERRA protects returning veterans by prohibiting discrimination after
deployment. USERRA is violated when veteran status is a motivating
factor in an employer's adverse action, unless they can show that action
would have occurred absent veteran status.

• Plaintiff alleged the City Clerk said that women shouldn't be in the
military and became upset when she requested leave for active
duty/deployment.

• Such evidence is material in determining whether USERRA was violated,
i.e., whether the military status was a motivating factor in the decision

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to terminate or whether she would have been terminated regardless of
such status

Employer Takeaway: The employer’s failure to educate the city clerk on the
protections provided under USERRA created a factual issue whether the city clerk
was critical of the USERRA request, made critical comments upon the employee’s
return, opined that women should not be in the military, and become upset when
the USERRA leave was requested. These alleged behaviors, plus the delay in firing
the plaintiff for the clear rule violation, confounded the clear basis for termination.

EEOC v. Prospect Airport Services, Inc., 621 F.3d 991 (9th Cir. 2010).

This case involved a female sexually harassing a male. The plaintiff
presented sufficient evidence that the employer knew about the harassment but
did not properly respond. Rather, the court found that the assistant general
manager did nothing about the alleged harassment. Instead, he told the male
employee “to console himself by singing ‘I’m too Sexy For My Shirt.’”

Employer Takeaway: Train your managers!

Miller v. Illinois Department of Transportation, No. 09-3143, 2011 U.S. App.
LEXIS 9534 (7th Cir. May 10, 2011).

Plaintiff worked on a bridge crew which involved working from heights. He
had a fear of heights but could still work at elevated heights in a “snooper bucket”
or if he was secured. The employer informally accommodated his fear of heights
by allowing other team members to handle tasks he was uncomfortable
performing. There was evidence that the employer covered other duties for other
employees who were uncomfortable or unable to perform them. The employee had
a panic attack when he was working at a height and had to unhook from his
lifeline. He was placed on sick leave and submitted to a fitness for duty
examination. He was diagnosed with acrophobia, and the doctor said he was unfit
for the job. He challenged the conclusion and filed a request for reasonable
accommodation. His manager told him, “I’ll tell you right now, we don’t grant
requests.” He was then evaluated by two psychiatrists who concluded that he was
fit for duty and should be accommodated. His manager denied his
accommodation request. Plaintiff still returned to work and shortly thereafter
made the following comment about a co-worker: “Right there is Arch enemy
Number 1. I have never hit a woman. Sometimes I would like to knock her teeth
out.” This statement was construed as a threat and he was discharged. He

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brought a lawsuit for discrimination under the ADA and retaliation. The appeals
court reversed the district court’s summary judgment for the employer and the
case is headed to trial.

Reasoning:

• Before being diagnosed, his supervisors knew he couldn't work above
ground in unsecured conditions and permitted him to swap tasks if
needed.

• Once he was formally diagnosed, they immediately stopped him from
performing any tasks, even those done from the ground. They forced him
to take non-occupational disability. Even after two psychiatrists cleared
him to work, they precluded him from returning to the job.

• Plaintiff’s requested reasonable accommodation was to be able to return
to work as he had worked before being diagnosed.

• Working at heights is an essential function of the bridge crew as a whole
team; however, the crew did not work in a way that required every
individual be able to perform every task of the entire crew. No one
member was permanently assigned to one task. While some members
have to be able to work at heights, not all have to do so.

• A jury may find that plaintiff's statement about the co-worker was not
a threat. Further, plaintiff has evidence of other people making threats
without termination. The manager's statement about not granting
requests could be construed as hostility towards requests.

Employer Takeaway: Employers must train managers and supervisors not to
interpose their own evaluation of the severity of an employee’s disability and their
own beliefs about whether reasonable accommodations should be provided. When
an employee who has successfully challenged an accommodation issue returns
to work and commits an act of potential misconduct, the act must be carefully
compared to other similar acts of misconduct. The discipline imposed must be
consistent with other similar situations, or the inconsistency must be clearly
explainable for reasons other than the employee’s disability or prior complaints
of discrimination.

3. Not Monitoring Employment Practices for Disparate Impact

Van Poperin v. Hewlett-Packard Co., No. 10-11110, 2010 U.S. Dist. LEXIS
71442 (July 15, 2010).

HP instituted a "Workforce Reduction" plan where it used a forced ranking
employee evaluation system to compare the employees to each other. The results

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of that system were used to determine who to terminate. The system resulted in
a disproportionately larger number of older employees than younger employees.
Plaintiffs claimed age discrimination (they were 62) and brought claims under the
ADEA.

Disposition: Plaintiffs did not assert disparate treatment, but they did
establish disparate impact. Therefore, the defendant's motion to dismiss was
denied.

Rules of Law:

• Claim of disparate treatment requires that age was a determining factor
in an adverse action by the employer.

• Claim of disparate impact involves facially natural employment practice
that impacts a protected group more harshly than other non-protected
individuals.
o A prima facie case for disparate impact includes (1) specific
employment practice to challenge; (2) proof, through relevant
statistical analysis, that the challenged practice has an adverse
impact on the protected group
o The prima facie case may be established when plaintiff shows (1) age
40 or over; (2) subjected to adverse employment action; (3) qualified
for the position; (4) replaced by younger person

Employer Takeaway: Especially in reduction in force cases, employers need to
double check their own statistical methods to make sure they are not
inadvertently having a disparate impact on a protected group of employees.
Objective criteria should be used as often as possible, but if the objective criteria
has a disparate impact, it can leave employers vulnerable to discrimination
lawsuits. Employers need to make sure that evaluators and decision-makers are
not inadvertently considering protected class members differently when personnel
decisions are being made. Seniority is the safest non-discriminatory criteria, but
often cannot be or should not be the only criteria.

4. FMLA Retaliation

Schaaf v. Smith Cline Beechum Corp., 603 F.3rd 1236 (11th Cir. 2010).

Employer did not violate the FMLA by demoting the employee for past errors in her
work discovered while she was out for the birth of her child, even if the errors
would not have been discovered but for the protected leave.

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Employer Takeaway: Erros and mistakes discovered are actionable, just as if the
employee had been present when they were discovered. Deciding that someone
else is better at the job, or deciding FMLA leave is a time to deal with subjective
performance problems not dealt with previously, is very dangerous during FMLA
leave.

5. Retaliating Against a Family Member or Close Associate of an
Employee for Filing a Complaint of Discrimination

Thomson v. North American Stainless, LP, 131 Sup. Ct 863 (2011).

An individual claimed to be terminated in retaliation for his fiance’s decision
to file a gender discrimination claim against their common employer. The Court
held that the employee had standing under Title VII even though he was not the
direct object of the discrimination. The Court expanded the associational
definition to include non-family members on the basis that the termination might
well “have dissuaded a reasonable worker from making or supporting a charge of
discrimination.” The Court found that termination of someone’s fiancé could
dissuade them from filing a complaint.

Employer Takeaway: Employers must look at relationships within the workplace.
If adverse action is being taken against someone closely associated with, or a
family member of, an employee who has engaged in protected conduct, there must
be a well-documented and clear reason to take the adverse employment action to
avoid a claim of retaliation.

6. Not Asking Enough Questions

Staub v. Proctor Hospital, 131 Supreme Court 1186 (2011).

HR terminated the employment of an employee protected under USERRA.
The human resources professional who decided to terminate the employee’s
employment was not involved in the anti-military animus, but the information
given to that human resources professional by supervisors was motivated by
anti-military animus. Under the “cat’s paw” theory, the Court held the employer
responsible because the supervisor giving information to support the termination
was motivated by anti-military animus and it was the employer’s fault, because
one of its agents committed an action based on discriminatory animus that was
intended to cause, and did in fact cause, an adverse employment decision.

Employer Takeaway: Independently investigate each situation before taking
adverse action and make sure to provide an opportunity for the employee being
accused of misconduct to provide information about “the rest of the story.”

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Question decision-makers to make sure motivations are legal so that you do not
become “the cat’s paw.”

7. Telling an Employee Not to Put Their Complaint in Writing!

Tull v. Brigham and Woman’s Hospital, 211 U.S. App. LEXIS 18003 (1st
Circuit August 29, 2011).

The employer was liable in a harassment case because the plaintiff reported
the alleged harassment to the hospital’s chief medical officer, who encouraged her
not to file a formal complaint. He further testified that the plaintiff’s fear of
retaliation was known to him and she was reasonable to feel that way. This case
cost the employer $3.4 million.

Employer Takeaway: Do not tell an employee not to file a formal complaint and
do not intimate in any way that their fear of retaliation is reasonable.

8. Not Taking Oral Complaints Seriously

Kirsten v. Saint-Gobain Performance Plastics Corp., 131 Supreme Court
1325 (2011).

An oral complaint of a violation of FLSA is adequate. The plaintiff engaged
in multiple oral complaints but no written complaints. The employer’s position
was that they were not put on notice because there was not a written complaint.
The Court held that as long as a “reasonable, objective person would have
understood the employee to have put the employer on notice that the employee is
asserting statutory rights under the act,” the fair notice requirement is satisfied
irrespective of the fact that it was not in writing.

Employer Takeaway: Take oral complaints seriously. Ask the employee to put
the complaint in writing but do not disregard the complaint if it remains an oral
complaint. Clarify with the employee exactly what they are complaining about
and then document it.

9. Ignoring the Obvious

Weber v. Univs. Research Assn., 621 F.2d 589 (7th Cir. 2010).

Men who viewed pornography at work were not similarly situated
comparators to the plaintiff because they did not spend as much time on personal
websites as the plaintiff had. The employer “could reasonably view using company

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resources to further an outside business as more offensive to the company’s policy
than simply wasting company time” (presumably viewing pornography).

Employer Takeaway: Do not go to federal court over the issue of whether male
employees viewed pornography at work as often as the plaintiff spent company
time on personal websites. Deal with the obvious before it gets that far.

Smith v. Hy-Vee, 622 F.3d 904 (8th Cir. 2010).

The plaintiff complained of sexual harassment 66 times. The plaintiff was
clearly harassed by a female co-worker. After extensive litigation, the Court found
for the employer because the offensive co-worker “treated all employees, both male
and female, in the same vulgar and inappropriate way.”

Employer Takeaway: Equal opportunity jerks should be eliminated from the
workplace when possible so that employers do not go to federal court trying to
prove that they employed someone who was a jerk to everyone, not just to the
plaintiff.

10. Common Wage/Hour Mistakes Which Can Create Employer Liability

A. Misclassifying Hourly Employees as Exempt

1. "White Collar" Exemptions: The minimum wage and overtime
requirements do not apply to an "employee employed in a bona
fide executive, administrative, or professional capacity, . . . or
in the capacity of outside salesman." 29 U.S.C. § 213(a)(1).
These exemptions are often referred to as the FLSA's
"white-collar" exemptions. The FLSA does not define the words
"executive," administrative,""professional," or "outside sales."
In 2004, the DOL issued comprehensive revisions of
regulations governing these exemptions.

2. Salary "Test" for Exemption:

a. Employees who earn $455 per week are exempt if they
meet the duties tests for the particular exemption. The
salary tests do not apply to (1) teachers, lawyers, doctors
or outside sales people; or (2) computer professionals
paid at least $27.63 per hour.

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b. The regulations also exempt "highly compensated
employees," who earn $100,000 per year and perform
office or non-manual work. An employee is exempt if he
or she performs any one of the specified duties set forth
in the exemption tests and need not perform all of the
specified duties.

3. "Duties" Test for Exemption:

a. Executive exemption - The employee's primary duty is
managing the enterprise or a customarily recognized
department or subdivision; directing the work of two or
more employees; and having authority to hire or fire (or
make such recommendations which are given particular
weight).

b. Administrative exemption - The employee must perform
approved work directly related to the employer's
management or general business operations and must
exercise "discretion and independent judgment" with
respect to matters of significance.

c. Professional exemption - In the 2004 revisions the
"learned professional" definition was expanded to exempt
employees who gain equivalent knowledge and skills
through a combination of job experience, military
training, attending a technical school, or attending
community colleges. "Creative professionals" are exempt
if their primary duty involves invention, imagination,
originality or talent in a recognized field of artistic or
creative endeavor.

d. Outside sales exemption - The employee must (1) make
sales or obtain orders or contracts for services or the use
of facilities and (2) be customarily and regularly perform
that primary duty away from the employer's places of
business.

4. Danger of Misclassification: If an employee's job duties fail to
qualify the employee as exempt, the employer can be held liable
for unpaid overtime, liquidated (double) damages, and
attorneys' fees.

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a. The burden is on the employer to substantiate that an
employee qualifies for an exemption.

b. Professional, executive, administrative exemptions and
outside sales exemptions depend on employees' actual
job functions, not their job title ("Duties Test").

c. Paying a salary does not automatically make an
employee exempt from overtime pay requirements.

d. An employer cannot agree with nonexempt employees to
pay them a salary and avoid payment of overtime.

5. Bottom Line: Employers should regularly review all exempt
employee job classifications to ensure that the work that the
employee is actually performing meets the qualification for
exemption.

B. Misclassifying Computer Professionals

1. Many employers classify all information technology ("IT")
employees as exempt under the Computer Professional
exemption. In reality, this exemption applies to a narrow group
of people who work with computers.

2. Computer professional exemption is a favorite of plaintiffs' bar.
Cases have successfully the exemption of employees having job
titles such as network engineer, help desk representative,
technical writer, software tester, and network administrator.

3. Computer Professionals Exemption:

a. Salary Test - Computer professionals who are paid either
(1) a salary of at least $455.00 per week or 2) an hourly
wage rate of at least $27.63 per hour with
time-and-a-half for overtime.

b. Duties Test - Their primary duty consists of one or more
of the following:

i. The application of systems analysis techniques
and procedures, including consulting with users,

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to determine hardware, software, or system
functional specifications;

ii. The design, development, documentation,
analysis, creation, testing or modification of
computer systems or programs, including
prototypes, based on and related to user or system
specifications;

iii. The design, documentation, testing, creation or
modification of computer programs related to
machine operating systems; or

iv. A combination of (1) through (3) the performance
of which requires the same level of skills. 29
C.F.R. §541.303(b).

4. Although the computer professional exemption has been in
place since 1992, there are few DOL opinions or helpful court
decisions to guide compliance. There is a broad spectrum of
duties between employees who work with end users or resolve
user problems (non-exempt) and employees who design
networks or write code (exempt).

5. Bottom line: Classifying computer employees is high-risk.
Employers should review all exempt positions under this
classification on a regular basis.

C. Making Improper Deductions from Exempt Employees' Salaries

1. "Salary Basis" Requirement: To maintain eligibility for a
professional, executive or administrative exemption, an
employee must be paid "on a salary basis" ("Salary Test").

2. An employee will be considered to be paid "on a salary basis"
within the meaning of the regulations if, under his/her
employment arrangement, he/she regularly receives, each pay
period on a weekly, or less frequent basis, a predetermined
amount constituting all or a part of his/her compensation,
which amount is not subject to reduction because of variations
in the quality or quantity of the work performed. Subject to the
exceptions provided below, the employee must receive his full

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salary for any workweek which he/she performs any work
without regard to the number of days or hours worked. 29
C.F.R. § 541.118.

3. Some Limited Deductions Permitted: An employer may deduct
pay for unpaid disciplinary suspensions of a full day or more
imposed in good faith for violations of workplace conduct rules
without defeating the exemption.

4. Partial-Day Deductions for Other Absences: The possibility of
deductions from salary for absences of less than a day can
result in the loss of the "white collar" exemption and result in
a requirement to pay overtime.

a. Deductions from Paid Leave - A reduction in an
employee's paid leave time for an absence of less than a
full day does not affect the employee's status as a
"salaried" employee.

b. Deductions from Salary - Reductions in an employee's
salary for absences of less than a day may affect an
employee's status as a "salaried" employee. Abshire v.
County of Kern, 949 F.2d 611 (2d Cir. 1990).

c. Policy - The existence of a policy to reduce an employee's
salary for less than a day even if no reduction occurs
may affect an employee's status as a salaried employee.

5. Departing Employees: Deducting from salaries paid to
departing employees who fail to return equipment (such as
laptops) can defeat the "salary basis" test for exempt
employees. The DOL has issued an opinion that it was
improper for an employer to make deductions from an exempt
employee's salary for failing to return office equipment.

6. Bottom Line: Employers should review their policies to be
certain that they do not allow for impermissible pay deductions
from exempt employees' salaries.

D. Treating Employees as Independent Contractors

1. FLSA requirements apply only to workers who are "employees"
under the Act. Independent contractors thus are not governed

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by the provisions of FLSA and thus are not subject to the
minimum wage, maximum hours, equal pay, or child labor
provisions of the Act.

2. Employers may be tempted to overuse the "independent
contractor" classification to avoid paying overtime and giving
employee benefits.

3. State law and the tax laws restrict the situations where an
individual can be considered an independent contractor. There
are penalties if an employer attempts to make an individual an
independent contractor when it is inappropriate.

4. Issues can also arise where organizations, either public and
private, use volunteers or interns.

5. Bottom Line: Any use of persons designated as "independent
contractors" should be closely scrutinized.

E. Failing to Accurately Calculate Overtime Pay

1. Under the FLSA, non-exempt employees are entitled to
time-and-a-half for all time worked over 40 hours each week.
One of the most common mistakes is failing to add
nondiscretionary bonuses to the hourly rate when calculating
overtime pay.

2. Discretionary bonuses are not included in the regular rate of
pay. These are sums paid in recognition of services during a
given period if (1) both the fact that the payment will be made
and the amount of the payment are determined at the
employer's sole discretion; and (2) the payment is not made
pursuant to any prior contract, agreement or promise causing
the employee to expect such payments regularly. Gifts made
at Christmas or other special occasions are not included, so
long as the bonus amount is not measured by hours worked,
production, or efficiency. 29 C.F.R. §778.211, §778,212.

3. Non-discretionary bonuses must be included in determining
the regular rate of pay if the employer agrees or makes a
promise to pay it. Examples include production bonuses,
attendance bonuses, bonuses for quality and accuracy of work,

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or bonuses to remain with the employer. 29 C.F.R. §778.211
(c).

4. Bottom Line: Employers should review the various components
which comprise an employee's regular wage to be certain that
he/she is receiving all overtime which is due.

F. Allowing Employees to Work "Off the Clock"

1. Overtime compensation must be paid for all overtime work
whether or not overtime is formally authorized. To the extent
an employer is aware, or should be aware, that the employee
is working overtime, the employee must be paid as such.
Employees who, with the knowledge of their employer, come in
early or continue to work after their shift is over are engaged in
compensable working time.

2. The reason for the work is immaterial, so long as the employer
is aware of or acquiesces in the work. 29 C.F.R. §785.11.

3. Working at home with the employer's knowledge also must be
compensated. 29 C.F.R. §785.12.

4. Merely publishing a rule that employees may not work overtime
is not sufficient to avoid liability for additional hours worked;
an employer must take affirmative steps to ensure that
unwanted "volunteer" work is not being performed. 29 C.F.R.
§785.13.

5. Current Issues:

a. Must non-exempt employees be paid for time spent
"booting up" computer and logging in or shutting down
their computers off the clock? The safest course is to
require that employees only boot up after the start of
their work shift.

b. Should employers be concerned about non-exempt
employees who are checking e-mail or making
work-related calls when they are not at work? This is
generally compensable time and will often be overtime.
Employers should have policies about off-site work and

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watch for signs that employees are working outside of
the office on "their own time."

6. Bottom Line: Employers should evaluate their policies in
defining work time. If the activity is essential for the
employees' principal activities, the DOL and the courts will
treat it as "hours worked." These decisions are often
fact-intensive, so employers should err on the side of including
the activity as work time.

G. Failing to Pay for Travel Time

1. The wage-hour regulations provide guidelines to determine
whether an employee's travel time is compensable. 29 C.F.R.
§785.33 et seq.

a. Ordinary commuting time to and from the worksite is
not compensable, unless the employee is required to
perform tasks before arriving. §785.35.

b. Time spent by an employee in travel as a part of the
employer's principal activity must be counted as hours
worked. §785.38.

c. Where out-of-town travel is involved, an employer may
exclude the travel time between the employee's home
and airport or railroad station as "home-to-work" travel
time; but other travel time is compensable. §785.37.

d. The issue becomes more complicated where overnight
travel is involved. The regulations provide that travel
time is compensable work time when it occurs during
the employee's regular working hours, whether the
employee actually performs work or not. Also, if the
travel occurs during normal working hours on
non-working days, then the time is compensable.
§785.39.

e. The DOL does not count as working time overnight travel
which occurs outside of regular working hours as a
passenger on an airplane, train, boat, bus or car, if the
employee is free to relax. §785.39. Employees who

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perform work while traveling must be compensated.
§785.41.

f. If an employee is required to drive or required to be a
passenger in an automobile, the employee must be
compensated for all travel time. §785.39.

g. If an employee is offered the option of public
transportation but chooses to drive, the employer may
count as hours worked either the time spent driving or
the time which would have had to be counted if public
transportation had been taken. §785.40.

2. Bottom Line: Employers who require non-exempt employees
to travel as a part of their job, should ensure that their pay
policies comply with the wage-hour rules for employee travel.

H. Failing to Pay for Training Time

1. The wage-hour regulations also provide guidelines for
compensability of time spent in training programs. Training
time must be counted as working time unless all four of the
following criteria are met:

a. Attendance must occur outside the employee's regular
working hours;

b. Attendance must in fact be voluntary;

c. The employee must do no productive work while
attending; and

d. The program, lecture or meeting should not be directly
related to the employee's job, i.e., the focus should be on
teaching the employee another job or a new or additional
job skill, rather than aiding the employee in handling his
or her present job better. 29 C.F.R. §785.27 et seq.

2. Bottom Line: Where non-exempt employees are receiving
work-related training, especially if it is outside of normal
business hours, employers need to consider whether it is
compensable or non-compensable time.

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I. Giving Compensatory Time Off

1. Many private employers mistakenly believe that they allow
non-exempt employees to take "comp time" in lieu of overtime.
Typically, they have informal arrangements under which hourly
employees who work "extra" hours to take time off at a later
date.

2. Public agencies (states and political subdivisions) are allowed
some flexibility in granting employees compensatory time in
lieu of paying overtime. 29 U.S.C. § 207.

3. The DOL has recognized a very limited form of "time-off" plan,
allowing private employers to give "comp time" if two narrow
requirements are met:

a. for each overtime hour that an employee works, the
employee must receive one and one-half hours of comp
time off; and

b. all comp time must be used ("cashed out") during the
pay period in which the overtime was worked and may
not be accrued or rolled forward beyond the pay period.

4. Because of the pay-period requirement, the DOL policy is so
narrow that it is of limited used to most employers and
employees. Therefore, most private employers who allow comp
time typically violate both requirements for its use.

5. Bottom line: Employees of private employers cannot waive
overtime pay. Employers who attempt to offer comp time in
lieu of paying overtime face a serious liability risk.

NOTE: This outline is not intended as a comprehensive outline of the FLSA or
the minimum wage and maximum hours provisions. The FLSA and
implementing regulations are complex, and there are a multitude of
provisions that can be misapplied in calculating wages due to
employees. Because of the possible severity of both civil and criminal
penalties for violation of the provisions of the FLSA, employers should
review the applicability of this law to their employment practices on a
regular basis.

THE BIG 10 EMPLOYER
BLUNDERS, MISCUES AND MISSTEPS

17

POP QUIZ

1. If two salaried managers share supervision of three full time G Yes G No
employees do they both meet the executive exemption from
minimum wage and overtime?

2. An employee at a non-profit is employed as a custodian twenty G Yes G No
hours a week. The employee actually works 30 hours a week,
but donates the extra 10 hours per weeks as a tax deductible
donation. Is this allowed?

3. Same custodian at the non-profit is paid for twenty hours a G Yes G No

week as custodian, but works another 10 hours as a volunteer

custodian. Is this allowed?

4. Same custodian at the non-profit is paid for twenty hours a G Yes G No

week as custodian, but volunteers another 10 hours a week as

a teen mentor and child care provider. Is this allowed?

5. If a non-exempt hourly employee takes unpaid lunch breaks, G Yes G No
but carries a work cell phone and responds to work phone
calls during the lunch break, does the employer have to pay
for the lunch break?

6. Can you require salaried employees to work specific scheduled G Yes G No
work hours and require them to keep a time record of their
hours worked?

7. A discretionary bonus is whenever the employer decides how G Yes G No
much the employee's bonus and non-discretionary is when the
employee tells the employer how much of a bonus they want to
receive.

8. If an employee owes the employer money when the employee G Yes G No
resigns or gets terminated, can the employer withhold the
money owed from the last paycheck if the employee agrees to
it in writing?

9. Employers can let employees clock in early and go to their G True G False
work stations to perform preliminary tasks, but then round
their time card to the actual start time of their shift.

10. Employers can let employees finish up a few tasks after their G True G False
shift is over, but then round their time card back to the actual
end time of their shift.

11. All employers must give a lunch break every 8 hours and G True G False

cannot require employees to stay on site for their lunch break.

THE BIG 10 EMPLOYER
BLUNDERS, MISCUES AND MISSTEPS

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ND: 4835-7616-7953, v. 1

THE BIG 10 EMPLOYER
BLUNDERS, MISCUES AND MISSTEPS

19