Wage & Hour Update

1. Wage & Hour Update Richard D. Tuschman, Esq. Epstein Becker & Green, P.C. Robert Cap, Esq. Markel Corporation

2. Coverage • Enterprise Coverage • Employees who work for certain businesses or organizations (or “enterprises”) are covered by the FLSA. These enterprises must have at least two employees, and meet the following criteria:

3. Enterprise Coverage: • Must have employees engaged in interstate commerce AND • Annual gross volume of sales made or business done is not less than $500,000

4. Enterprise Coverage: OR • Hospital, business providing medical or nursing care for residents, school or preschool, government agency

5. Ultimate Consumer Defense? Does employees’ handling of interstate goods or materials establish FLSA enterprise coverage if the employer is the ultimate consumer of those goods or materials?

6. Coverage • Individual Coverage • Even when there is no enterprise coverage, individual employees are protected by the FLSA if their work regularly involves them in commerce between States (“interstate commerce”)

7. Individual Coverage: • Examples of employees involved in interstate commerce include Employees who: • Produce goods (such as secretary or factory assembly worker) that will be sent out of state • Regularly make telephone calls to persons located in other States

8. Individual Coverage: • Examples of employees involved in interstate commerce include Employees who: • Handle records of interstate transactions • Travel to other States on their jobs

9. Coverage – Bottom Line The vast majority of employees are protected by the FLSA, either because their employer is covered as an enterprise, or because the employee is covered as an individual

10. Blue Collar Basics

11. FLSA – Non-exempt Employees • Minimum Wage • $6.55/hour (current federal) • $7.25/hour (federal effective 7/24/09) • ($7.21 Florida) • Overtime (more than 40 hours per week) • 1 ½ the Regular Hourly Rate

12. FLSA – Non-Exempt Employees • Regular Rate generally Includes all Remuneration • Shift and Holiday Premiums • Commissions • Non-Discretionary Bonuses • Measured on a Work Week Basis • No Comp Time

13. Break Time • Breaks are not required • Permitted Breaks of 20 Minutes or Less are Compensable • Unauthorized Work Breaks or Extensions of Work Breaks Are Not Compensable When Employer Has Communicated that the Break is Unauthorized

14. Bona Fide Meal Periods Bona Fide Meal Periods (30 Minutes or More) Are Not Compensable Working Time

15. Travel Time Home to Work Travel: • An employee who travels from home before the regular workday and returns to his/her home at the end of the workday is engaged in ordinary home to work travel, which is not work time

16. Travel Time Travel That is All in a Day’s Work: • Time spent by an employee traveling as part of his/her principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.

17. Travel Time Travel Away From Home: • Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is clearly work time when it cuts across the employee’s workday. This includes not only hours worked on regular working days during normal working hours but also during corresponding hours on nonworking days. • As an enforcement policy, DOL does not consider as work time the time an employee spends in travel away from home outside of regular working hours as a passenger on an airplane, train, boats, bus, or automobile

18. Waiting Time and On-Call Time Engaged to Wait vs. Waiting to be Engaged

19. Working from Home • If employer knows, or has reason to know about it, it’s compensable • Track employee’s hours

20. Blackberry Time • If more than de minimus - compensable • Require employees to report time • Implement policies setting limits on employees’ use of the devices

21. FLSA – Youth Employees • Must be 14 years of age • Limited hours worked by minors under the age of 16 • Minors are prohibited from performing hazardous work (e.g., excavation, driving, operating power-driven equipment)

22. FLSA – Youth Employees General Exceptions: • Newspaper delivery • Babysitting • Minor chores around a private home • Theatrical, TV and Radio Entertainment

23. FLSA – Youth Employees Agricultural Exception: • Youth of any age may work on their parents’ farm

24. Recordkeeping Posting: • Employers must display an official poster outlining the provisions of the FLSA

25. Recordkeeping • Employee’s full name and social security number • Address, including zip code • Birth date, if younger than 19 • Sex and occupation • Time and day of week when employee’s workweek begins • Hours worked each day Required Records (electronic or paper format):

26. Recordkeeping Required Records (electronic or paper format): • Total hours worked each workweek • Basis on which employee’s wages are paid (e.g., “$9 per hour”, “$440 a week”, “piecework”) • Regular hourly pay rate • Total daily or weekly straight-time earnings

27. Recordkeeping Required Records (electronic or paper format): • Total overtime earnings for the workweek • All additions to or deductions from the employee’s wages • Total wage paid each pay period • Date of payment and the pay period covered by the payment

28. Recordkeeping • Payroll records, collective bargaining agreements, sales and purchase records must be retained for three years How Long Records Should be Retained

29. Recordkeeping • Records on which wage computations are based should be retained for two years(e.g., time cards and piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages) How Long Records Should be Retained

30. White Collar Exemptions

31. Executive Exemption • Salary - $455 per week • Primary Duty - Managing • Direct the Work of Other Employees • Hire/Fire Authority

32. Administrative Exemption • Salary - $455 per week • Office/Related to General Business Operations • Discretion/Independent Judgment

33. Professional Exemptions • Learned • Creative

34. Learned Professionals • Salary - $455 per week • Advanced Knowledge • Science or Learning • Prolonged Specialized Intellectual Instruction • Veteran Status Insufficient • College Degree Requirement Generally Insufficient

35. Creative Professionals • Salary - $455 per week • Invention, Imagination, Originality, talent • Artistic or Creative Endeavor • Case-by-Case • Journalists

36. Highly Compensated Employees Exemption • Salary - $100,000 or more • Office/Non-Manual Work • Customarily and Regularly Perform at least One of the Duties of Executive, Administrative, or Professional

37. Outside Sales Exemption • Sales, Orders, Contracts for which Consideration will be Paid by Client or Customer • Customarily and Regularly Engaged Away from the Employer’s Place or Places of Business

38. Computer Related Occupations Exemption • Salary - $455 per week OR • Hourly - $27.63 per hour • Must be Skilled Employee

39. Computer Related Occupations Exemption Primary Duties Must Consist of: • Application of Systems Analysis Techniques and Procedures • Design, Development, Creation, Testing, Modification – Hardware or Software

40. Computer Related Occupations Exemption • Employees Engaged in Manufacture, Service or Repair are Not Exempt • Help Desk Employees

41. Penalties

42. Penalties • Back Wages • 2 years • 3 years for willful violation • Liquidated Damages • Attorneys’ Fees • Can Substantially Exceed the Wages Recovered • Officer Liability • Injunctive Relief

43. Collective Actions • Opt-in vs. Opt-out • Potential for large classes and huge verdicts x x

44. Thank you for your time! Richard D. Tuschman, Esq. rtuschman@ebglaw.com Robert Cap, Esq. rcap@markelcorp.com