ATLANTA—HR professionals may be familiar with the ins and outs of wage and hour laws, but managers often are not, Gregory Hare, an attorney at Ogletree Deakins in Atlanta, told attendees at a concurrent session on Monday.
Equally troubling is employees’ argument that they were unaware of an employer’s wage and hour policies. Don’t leave room for that argument—it could spell trouble in wage and hour litigation, he cautioned.
But what are employers to do when there is no such thing under the Fair Labor Standards Act (FLSA) as a lawful waiver by employees?
“Get a signed statement,” Hare recommended. The statement might say, right at the outset, “I accept the check and hereby acknowledge I have been fully compensated and my employer has a good-faith intention to comply with wage and hour rules. I have not worked off the clock.”
“That’s as good as a waiver or release,” he asserted. And, he added, “It’s about as good as you can do.”
Sometimes managers give employees orders that they are to get everything in tiptop shape, no matter how long it takes, but will not be paid overtime. This happens even though it’s clearly a violation of the FLSA.
Employers can help avoid or reduce liability in such circumstances by having employees complete signed acknowledgments during orientation. The acknowledgments would state that they understand that the company pays its employees fairly and that all work is compensated and no supervisor may authorize work off the clock.
Employees also might acknowledge that they must record time worked and should contact HR, their boss or their manager’s manager with any questions. The acknowledgment should include a warning: If the employee works off the clock and does not record his or her time, the employee will be disciplined.
Include this acknowledgment along with acknowledgments of anti-harassment policies and safety procedures, Hare recommended, noting that some employers even require this acknowledgment with every paycheck.
“You do not want to be in a situation where the employee says, ‘I didn’t know,’ ” he remarked.
Most HR professionals know that salaried, exempt employees’ pay can’t be docked, except in limited circumstances. But managers frequently are left in the dark on this requirement, and companies sometimes have destroyed the salary basis for exempt employees by erroneously assuming that pay can be docked in unusual circumstances such as furloughs.
Suppose an employer institutes a furlough to save money and makes all employees take off two Fridays a month to limit payroll. It pays exempt employees $1,000 one week and $800 the next week. Can it do that?
No. The employer will have destroyed the exemption if it does that, Hare cautioned. However, the employer can reduce exempt employees’ salaries another way, such as paying them $900 each and every week across the board.
There are a few exceptions to the anti-docking rule, he noted.
For example, if an employer places a supervisor on leave for two days for making improper comments, the leave may be unpaid. Similarly, if an employee is placed on leave for a major safety violation, pay may be docked.
In general, employers don’t win that often before juries in wage and hour cases, Hare said. “You are at great risk unless you do things exactly right.”
Allen Smith, J.D., is manager, workplace law content, for SHRM.