DOL Stands for Department of Labor NOT Department of Employers

I have written numerous times about the efforts of the US Department of Labor to increase their compliance efforts. They have taken a much more advesarial stance to dealing with employers. To find those posts I have written just do a search on this blog on USDOL. One of the posts you will find deals with their "WE CAN HELP" program. This is designed to help your employees report you, their employer, to the DOL so you can be investigated.

My fellow blogger Jon Hyman, an employment attorney, was poking around on the We Can Help pages and he came across something very interesting. He discovered something called the Work Hours Calendar. It is a tool for your employee to track their work time. It provides a way for employees to record arrival time, start time, break and meal times, stop time and when they actually leave. It gives lessons on overtime, misclassification, and what are called donning and doffing rules. These are the activities employees engage in to prepare for and to conclude work. They are told to keep these records and then to send them to the DOL. You can find this worksheet here.

Jon and I both believe that the Wage & Hour division is looking in particular for violations that can be classified as "off the clock". I strongly suggest that you go to Jon's blog and read his take on this. He can be found at  Do you know? The DOL is encouraging employee covert ops in your business.

Pay particular attention to his final line. Can you really put off that wage & hour audit? I don't think so. Find yourself a good consultant or good attorney and get this done. (In great modesty, I can make a very personal recommendation for a great consultant. )

What Companies Are Getting Sued Over!

Thanks to Jon Hyman over at the Ohio Employer's Law Blog who wrote the other day on Do you know? Employment Litigation Expected to increase in 2010. It was an eye opener. I clicked through from his blog to the Fulbright & Jaworski Fifth Annual Litigation Trends Survey and Highlights and read through the employment law section. Here is some of the information I gleaned from that report, but I would recommend you look at Hyman's analysis and also the actual report itself.

The report deals with multi-plantiff cases (aka class-action suits?) and here are some of the results (Note: I am only report results from the U.S., but there are results from the U.K. as well):

• In the U.S. largest increase in multi-plantiff cases where in FLSA wage & hour (19%), discrimination (14%), and Americans With Disabilities Act (10%).
• Increases in FLSA wage & hour cases were highest in California, the South and the Midwest.
• Education and retail had the highest increase in wage & hour cases.
• Discrimination increases where highest in education, financial services and retail.
• ERISA cases were highest in the Midwest and retail and engineering/construction sectors.
• Age discrimination cases rose the highest in education, financial services, retail, and technology/communication.
• Privacy cases were most common in California, but were generally a smaller percent of the overall cases.
• For small companies discrimination was the biggest issue followed by wage & hour. For big companies the reverse was true.

The costs associated with dealing with these cases, excluding settlements often exceed $50,000 per case and almost a quarter of the time exceed $100,000. For a small company that can be devestating. The areas that cost the most to deal with are race, sex and wage & hour cases.

What are we to conclude from these facts and figures? Well the overall conclusion of the report is that companies are going to be spending more on litigation in 2010. Other conclusions that I reached are:

• Education is having some difficulty. That arena made it on just about every list. Anyone have a reason for this? Suggest some.
• Small businesses probably need to do alot more training and education to both supervisors and employees, with race and sex discrimination still being the big expensive issues.
• There is still alot of misunderstanding of the Fair Labor Standards Act, which has only been around since 1938. My experience has been that many companies unknowingly and knowingly violated the FLSA.
• The recession is probably driving alot of this litigation. As people are let go and then have difficulty finding work they start grasping at straws to provide income. One way to do that is to sue your former employer. All the TV ad lawyers will tell you that.

How can you avoid some of this litigation increase? Three things pop to my mind.

1. Understand the laws, train supervisors on the laws, train HR on the laws and abide by the laws. (I can hear all the bitching and moaning about compliance now.)
2. Document that training, document your decisions, especially your compensation decisions (Ledbetter requires it) and document your actions with employees.
3. Treat people with respect and dignity, even when you are firing them for gross misconduct. People are more likely to sue you when they feel like they have been mistreated.

So there you go. As Jon concluded in his blog post about this topic "What does all this data mean for your business? Your legal budgets will likely increase next year. The question you need to answer is whether you want those funds to pay to defend lawsuits, or to proactively audit your internal personnel and employment practices to limit your litigation costs?" I vote that you be proactive! And of course I know a good consultant that would be more than happy to help you. LOL. 

Follow Up on Non-Discretionary Bonuses

In my post yesterday, Getting Punished for Doing Good, about QuikTrip's fine at the hands of the USDOL for not calculating non-discretionary bonus into overtime for nonexempt employees I was asked on Twitter if that included non-cash bonuses. Well I was not sure, though I suspected it might if it was production related. So I asked around. Good blog friend Ann Bares pointed me in a couple of directions and I also asked, via Twitter. two attorneys, Eric B. Meyer and Jon Hyman. Both replied that the answer was a resounding YES! I was pointed to the following fact sheet from the US Department of Labor, Fact Sheet #23, which clearly states on page 2 "Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate."

So clearly, if you are giving non-discretionary bonuses based upon production standards, the amount of the bonuses or the value of the award must be added to the base pay rate of the employee and then overtime must be calculated on this amount. If you fail to do so you run the risk of falling into the same trap that caught QuikTrip and many others. Go back and read the comments from yesterday, they are very informative.

As additional resources on this topic see also Ann Bares post on Compensation Force entitled
Know Ye the Regs When Awarding Bonuses or Lump Sums to Nonexempts and Michael Moore's post entitled Bonus and other Lump Sum Payments to Nonexempt Employees may Impact Overtime Calculations . Both are very informative.

Now you have no excuse for making this mistake and you can make yourself an HR HERO in your company.

Be a Bit Better at HR by the end of the day: Blog Posts You Should Read

Here are links to six blogs I think you should read. Aren't I nice for saving you the time of finding the good ones? LOL

1. Seth Godin, When Smart People Are Hard to Understand. Great advice on making yourself smarter when you don't understand something said. Clue: Acting like you know is not it!


2. Kris Dunn at the HR Capitalist, If you think HR owns turnover, you are already dead. Great story of what should be said to a manager who want HR to take ownership of the manager's problem.


3. Ann Bares at Compensation Cafe, The Excuses you may NOT use to defend gender pay disparities. With equitable compensation so prominent in the news these days this is an important tidbit of information.


4. Michael Moore at The Pennsylvania Labor and Employment Blog, Employment Law Implications of obesity and BMI after the ADA Amendments Act. Michael discusses some of the technical implications of being considered "overweight" and makes a prediction on whether or not obesity becomes a protected catagory or not. Wanna make a prediction on his prediction???


5. KJK, The Ohio Employer's Law Blog. 3 Lessons in handling workplace harassment. Harassment, especially sexual harassment, is still alive and well in the workplace. Here is a case and the lessons that can be learned from it.


6. Cathy Martin, Profitability Through Human Capital. Hey HR, please no more TABLE talk. If you have been in HR for any period of time you will get this one and agree. Time for action not talk.

Well that is enough for one Friday. There are about another 25 I could (and probably should) include on this list. But if you read these today you will be a better HR person at the end of the day.