Wage and hour violations continue to be a favorite with government and plaintiffs’ lawyers. Despite some recent decisions that are favorable for employers, a long list of employers have experienced significant settlements and verdicts in the wage and hour arena. However, unlike other types of employment claims, these claims are relatively easy to prevent with a few simple, proactive steps.1) Start with Good Policies
The first step toward minimizing claims is establishing proper job descriptions that clearly spell out job duties, including the exercise of discretion and control that would affect business operations and/or management duties. Based on the job duties outlined in the job description, a position may or may not be covered by an exemption to the Fair Labor Standards Act (FLSA) or the state equivalent. The two most likely exemptions that could apply are the administrative and managers exemptions. Whether either of those exemptions apply begins with the job description.
2) Train Your Managers
Aside from good job descriptions, you need to train your managers as well. The job description doesn’t mean anything if a manager changes a person’s duties and responsibilities. In fact, most of the fight in these types of litigation matters concerns a person’s actual duties as opposed to the duties outlined in their job description. Accordingly, managers need to be aware of how and when these exemptions apply and ensure that their actions do not erode the wage and hour exemption. Also, documenting a person’s duties and responsibilities in performance evaluations can be very helpful and ensure a person’s position remains covered by an applicable exemption.
3) Conduct an Audit
Conducting an internal audit (under the direction of an attorney to make it privileged), is also necessary to determine where the organization has risk and exposure to FLSA lawsuits. The audit must assess actual practices and job duties in addition to what is outlined in the job descriptions. To the extent there are discrepancies between actual duties and the job description and/or exemptions that were not properly applied, the organization should address those weaknesses as quickly as possible before they are addressed by the government or a plaintiffs’ lawyer.