By: Morris Jennings

Wage and Hour Consulting Services

Last month’s “OFF THE CUFF” discussed the most common factors that trigger litigation or administrative legal action by DOL. This article is related, in that the actual types of legal action are reviewed.

The most common types of FLSA legal actions filed by DOL are:

• Suit to recover unpaid minimum wage and/or overtime compensation, plus liquidated damages (generally equal to the back wages)

• Injunctive action, to obtain both future and retroactive compliance

• “Hot goods” action*, seeking a civil injunction restraining the removal of goods for shipment in interstate or foreign commerce

• Suit to recover unpaid civil money penalties (if the defendant failed to contest the penalty assessment or has exhausted administrative appeals)

• Administrative legal actions may come into play subsequent to civil money penalty assessment. If the employer contests the assessment, a hearing is scheduled before a DOL administrative law judge.

*A “hot goods” action is usually filed when there is a need to quickly prohibit shipment of “tainted goods” by obtaining a temporary restraining order. This type of litigation is intended to pressure an offending employer to promptly achieve compliance and pay back wages under DOL supervision. It is possible for “hot goods” litigation to be filed under criminal provisions of the FLSA, but the usual approach is civil injunctive action. The injunction is normally sought against the offending employer (the producer of the goods). If the producer has already shipped the goods, the possessor of the goods (other than a common carrier or the ultimate consumer) may be sued to restrain further shipment into commerce.

Civil action that seeks a court order requiring payment of back wages reaches back three years when willfulness is proved. Absent willfulness, the standard FLSA two-year statute of limitations applies.

The FLSA includes a provision that allows the filing of criminal charges against an employer. The WHD District Directors instruct investigators to prepare the most egregious cases for criminal prosecution, based on WHD National Office policies. As criminal development of a case is done against the worst offenders, and the FLSA allows for imprisonment only after a second conviction, the case development includes sufficient evidence to also permit charges of violations of other federal criminal statutes (e.g., mail or wire fraud, peonage, or slavery). Conviction on such multiple counts may result in a prison term, even for first offenses.

The DOL Office of the Solicitor litigates only civil and administrative law cases. Criminal cases are prosecuted by the U. S. Department of Justice. It has been my experience that DOL believes civil litigation to be sufficient in most cases. FLSA criminal litigation is rare, but I see an occasional DOL news release about a conviction of an employer who had been charged with criminal violations of the FLSA (and usually other statutes).

In addition to the legal actions described above (that may be filed by the DOL Office of the Solicitor or the DOJ United States Attorneys), employees have a private right to file suit for recovery of unpaid minimum wage and/or overtime compensation, liquidated damages, court costs, attorney fees, etc.  

See http://www.dol.gov/elaws/esa/flsa/screen74.asp for a synopsis of how the DOL Wage and Hour Division enforces the FLSA.

The author, a former enforcement agent with the DOL Wage and Hour Division, offers consultation and technical guidance to attorneys and employers. You may contact him at Morris@FLSA-SCA.com or 866-895-3572.

 The fact that the agency possesses the ability to “haul employers into court” does not mean that it prefers to do so. Investigation, negotiation, and persuasion are the most efficient means of securing compliance and payment of back wages. Investigators and their superiors generally will attempt resolution “administratively” (the DOL term for enforcement procedures other than litigation).

 The WHD investigators and managers operate under established litigation policies and priorities. Certain types of cases are much more likely to trigger litigation early on, while the investigator and WHD District Office management will have some degree of discretion in others. Examples of cases that fit the WHD “potential litigation” criteria are:

1.  Repeat offenders (i.e., violations have been asserted in one or more previous investigations)
2.  Falsification or concealment of records, or misrepresentation of facts (reflecting monetary or child labor compliance when there actually are violations)
3.  Refusal to achieve prompt compliance after being informed of the results of an investigation 
4. Refusal to pay back wages

 If the back wage total is not substantial and any child labor violations are not “serious” or extensive, a repeat offender can usually avoid litigation (if records have not been falsified or concealed, or facts misrepresented) by displaying full cooperation, achieving prompt compliance, and paying back wages. It is a virtual certainty, however, that there will be administrative legal action (civil money penalty assessment). In exchange for agreeing to not file suit, the WHD may require that the employer sign a stipulation of compliance.

Falsification or concealment is how an employer “can write his/her own ticket” to a U. S. District Court. Such cases not only fit the “potential litigation” criteria for civil litigation, they may be elevated into the criminal category. Even so, such an employer might be able to persuade the WHD to refrain from development of the case for criminal prosecution, or filing a civil suit, by agreeing to comply, pay back wages, and sign a stipulation of compliance.

An employer who does not agree with WHD assertions of violations may elect to have a court decide whether violations have actually occurred and whether current practices must be modified. Therefore, refusal to comply is not ordinarily considered for criminal action (absent falsification or other potentially criminal factors). However, when an employer does not agree to comply with the investigator’s instructions regarding how to achieve compliance, civil litigation is essentially automatic. There are exceptions. DOL often avoids filing suit if the outcome is in doubt, such as when there is an unsettled question of law. The WHD District Director mails notification letters to affected employees (advising them of their right to sue for back wages, liquidated damages, court costs, attorney fees, etc.).  

Even though DOL has elected to not pursue a “refusal to comply” case through the courts, civil money penalties may be assessed (if violations were repeated or willful). When the employer is subsequently reinvestigated, civil money penalty assessment is extremely likely (if violations have continued).

When an employer agrees to achieve compliance, but declines voluntary payment of back wages, litigation is a possibility. When back wages are substantial, there is a strong probability that DOL will file suit. If the total back pay liability is insubstantial, and none of the other “potential litigation” elements are present, DOL is ordinarily inclined to close the case and mail notification letters to affected employees.  

FLSA litigation by DOL generally extends back three years. The statute of limitations period will ultimately be two years if the court does not find that the violations were willful.

It is possible, in most cases, for an employer to disagree with the assertions of violation, yet avoid or postpone litigation. The following suggestions should be helpful.

First, it is important to ensure that you are in compliance (preferably long before the WHD investigator comes a’ knocking on your door). See the FLSA self audit area of BizKeys. If you are prepared for an investigation, there will probably not be any assertions of violations.

If violations are asserted:

• Listen carefully to the investigator’s presentation, and make meticulous notes. You will not receive a written report.
•  Ask for clarification and explanations if you do not understand why certain practices are being held to be non-compliant.
•  If it is not clear to you that the investigator’s position is correct, request citations in the statute and/or regulations supporting his/her position.
•  At the conclusion of the conference, you have four options: 

                                      Refuse to comply 

                                     Agree to comply  

                                    Do not agree to comply, but request time to consider and research the matter (a week will usually be allowed)

                                    Inform the investigator that you wish to schedule a “second level” conference with WHD District Office management (this will usually be the Assistant District Director who is the immediate supervisor of the investigator             

•   If you have agreed to comply, and if litigation is not already a certainty, the investigator will ask you to agree to pay back wages.
• If you have asked for time to consider the matter (no compliance agreement yet), feel free to raise the back wage issue. However, it is probable that the investigator will not discuss back wages without a compliance agreement.

• Use your time wisely while evaluating your situation. The first step should be to confer with an experienced FLSA consultant and/or engage the services of an employment law attorney. Inform your attorney or advisor that your immediate quandary is whether or not to “agree to comply” and that you need prompt assistance; this cannot be “put on the back burner.” Keep in mind that you have not yet promised the WHD that you will achieve compliance; under those circumstances, litigation can happen quickly.

• I do not recommend, in most cases, that the employer ask to meet with District Office management prior to performing independent research and securing technical advice and assistance.

• You may subsequently ask to meet with District Office management even if the investigator has allowed some time for you to make a decision.

• If you ultimately schedule a meeting with District Office management (i.e., a “second level” conference), your employment law attorney should be present (in my opinion).

• Convincing the Assistant District Director that the investigator is incorrect will not be an easy task. It is futile to schedule this meeting unless you are quite certain that there are clear errors in the investigator’s assertions.

 The preceding discussion concerns an employer’s probable options when future compliance is in question. The same options are generally available when the dispute concerns payment of back wages. The focus should be to avoid leaving the impression that you are refusing to pay back wages, but that you question the validity of asserted facts, application of the law, or accuracy of computations. If an employer and his/her advisors prepare compelling arguments and present them to the Assistant District Director, there is a possibility that back wages will be reduced. The assertion that back wages are owed, however, will not be dropped unless WHD District Office management is persuaded that the investigator erroneously asserted violations. This is rare, but it happens.

Something to keep in mind – if the investigator refuses to allow you to devote a week or so to ponder the allegations (an immediate decision regarding compliance and/or voluntary payment of back wages is demanded), engage the services of an employment law attorney without delay. The investigator has probably been instructed to submit the case file for “hot goods” action. That type of litigation, and others, will be discussed in next month’s “OFF THE CUFF.”

In summary -

Investigators do make mistakes. They are under time constraints, often leading to failure to fully consider all of the facts or to thoroughly research the law. Do not be reluctant to ask questions, request time to consider your options, seek professional guidance, and/or meet with WHD District Office management. Until you are prepared to suffer the consequences, do not inform the WHD representatives that you will not comply and/or pay back wages. Make it clear that you intend to reach resolution, and the WHD District Office management will usually allow you to present your arguments.

Even when a case meets one or more of the “potential litigation” criteria, the WHD may opt to decline litigation in order to conserve its resources or for the reasons previously mentioned. Civil money penalties (if warranted) will be assessed, and employees will be notified (via letters) of their private right to sue. Such notifications often lead to a very inconvenient, time-consuming, and expensive outcome for the employer. It is usually preferable to nail down the best deal you can get from the WHD, achieve compliance, and pay back wages. This reduces the probability of plaintiffs’ collective action suits.

If back wages are being paid as a result of an investigation, and the investigator does not make available the official receipt forms, you should request them. The form number is WH-58.

This article refers to WHD procedures and employer options in typical FLSA investigations. There are sometimes exceptions or unusual circumstances. Further, this is not intended to be an exhaustive treatise on the subject.

I mentioned the possibility that you might be asked to sign a stipulation of compliance. Another document that you will be pressured to sign is a “Summary of Unpaid Wages.” I recommend that you not sign either document until your employment law attorney has advised you to do so.

http://www.dol.gov/whd/regs/compliance/whdfs44.htm is a fact sheet that explains how a typical investigation proceeds.

Next month’s “OFF THE CUFF” will discuss the various types of legal actions utilized by the DOL Wage and Hour Division in order to ensure FLSA compliance, collect back wages, and/or to collect civil money penalties.

The author is retired from an enforcement career with the DOL Wage and Hour Division. You may contact him at Morris@FLSA-SCA.com or 866-895-3572.

   The National Labor Relations Board (“the Board”) recently held that an employer violates the National Labor relations Act (“the Act”) by announcing during a union organizing campaign that it hired a bi-lingual human resources manager to improve workplace communications.  The Board found that the hiring was made to address an issue of poor employee communications that existed in the workplace.  The hiring was presented as an improvement in working conditions allowing employees to better communicate with managers.  The Board reasoned that the violation was committed by announcing the change as an improved working condition.  Presumably, hiring a bi-lingual manager would have been legal if the employer had not made a big fuss over it and presented it as a solution to an employee grievance.  What employers should take away from this is that if a campaign issue involves the hiring or firing of management personnel to appease employees, do not make the change and tell employees it was done to remedy their dissatisfaction.  If the change is made and the employees figure it out on their own, the same benefit will be attained.  The case is Newberg Eggs, Inc., 357 NLRB No. 171. 

Decision on Work Rules:

   The Board has ruled that a work rule stating: “unauthorized soliciting of contributions on company premises” was prohibited violated Section 8(a)(1) of the Act because it was not limited to working time and because it expressly restricted protected activity.  Even though it was limited to solicitation of contributions, a solicitation of contributions to support an incipient organizing drive, to help a fired fellow employee, and for many similar purposes is protected. 

   A rule subjecting employees to discipline for the “inability or unwillingness to work harmoniously with other employees” was, also, found to violate the Act because the rule was sufficiently imprecise such that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7.  The Board’s precedent for finding a violation was a case holding that a rule prohibiting “loud, abusive or foul language” was a violation because it did not define abusive or insulting language.  Good thing the Board doesn’t have jurisdiction over kindergarten children. 

   Employers will be glad to know, however, that work rules prohibiting “leaving a department or the plant during a working shift without a supervisor’s permission” and “stopping work before a shift ends or taking unauthorized breaks” are valid, but a rule that simply prohibits “walking off the job” is a violation because employees will think that they are not permitted to strike since the term “walk out” is commonly used as a synonym for a strike.  The case is 2 Sisters Food Group, 357 NLRB No. 168.

 Back Pay to Undocumented Immigrants:

   The Supreme Court ruled in Hoffman Plastics Compound v. NLRB that the Board cannot award back pay to employees who were not authorized to work in the U.S.   The current Board does not like this decision and is doing what it can to limit it.   Recently, the Board ruled that a Respondent employer cannot raise a defense to back pay liability based on an employee’s legal work authorization status unless the employer can show facts at the stage in which it is called upon to raise all of its defenses that the employee was not allowed to lawfully work in the country.   In some cases, this ruling will result in undocumented workers receiving back pay awards even though the Hoffman decision prohibits that result.  Member Hayes dissented and stated that Congress, not an administrative agency, is the appropriate body to re-write the law if it disagrees with the Supreme Court.  The case is Flaum Appetizing Corp., 357 NLRB No. 162.   Given that the Board will prohibit an employer from inquiring into lawful work status unless it knows for certain at the time it has to file its answer that the employee is here illegally, it is fairly certain that the Board will not make any independent inquiry of anyone. 

 For more information or any questions concerning labor law or related issues, please contact Bill Trumpeter at 423-785-8318.   The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations.  As always, readers should consult a qualified attorney for specific legal guidance.  Should you need assistance, please call 1-800-275-7303.ext 318

Unless you want a union, do not accept the cards or the petition from the individual.   What he wants you to do is accept the cards and say that it looks like the employees want a union.   If you do that, you may very well have granted recognition  to the union as your employees’ exclusive bargaining agent. 

If presented with such a situation, tell the person presenting you with the cards or petition that you do not believe that a majority of your employees would voluntarily designate a union as their exclusive representative and that if the union wants to waste its time it should file a petition with the National Labor Relations Board (NLRB) and ask for a secret ballot election so your employees can make a voluntary, uncoerced decision in the privacy of a voting booth. 

The next thing you should do is call your labor lawyer because you are already behind the eight-ball and will have a lot of campaigning to do to reverse the momentum the union will have established.   

For more information or any questions concerning labor law or related issues, please contact Bill Trumpeter at 423-785-8318

The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations.  As always, readers should consult a qualified attorney for specific legal guidance.  Should you need assistance, please call 1-800-275-7303.ext 318.

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• The National Labor Relations Act provides for a pre-election hearing to determine whether there exists a “question of representation” to be resolved by an election. Currently, parties can raise issues at the hearing that are not relevant to that question, which can result in unnecessary, expensive, and time-consuming litigation for the Board and all parties. The first proposed amendment gives the hearing officer authority to limit the hearing to matters relevant to the question of whether an election should be held.
   
• Most cases involve only routine issues based on well-known principles of Board law. In such cases, regional directors can reach a fair and sound decision based on the record from pre-election hearing, including closing arguments. Parties may currently file briefs after the hearing, but the briefing adds nothing to the regions’ decision-making process in such routine cases and substantially increases the parties’ litigation costs. The second proposed amendment authorizes the hearing officer to decide whether to permit briefing depending on whether the case presents issues that would benefit from it.
   
• The Board’s current rules require parties to file two separate appeals to seek Board review of pre-election issues and issues concerning the conduct of the election, respectively. Appeals concerning pre-election issues must be filed before the election, and are often subsequently mooted by the results of the election. The third amendment reduces unnecessary litigation by consolidating the two appeals into a single post-election procedure and by avoiding altogether appeals of issues that become moot as a result of the election.
   
• The fourth amendment follows directly from the third, by ending the practice of delaying the scheduling of elections to permit time for a pre-election appeal. (In any event, even under the current rules, the delay does not serve its stated purpose because the Board typically permits the election to be conducted and directs that the ballots be impounded while it considers the appeal.)
   
• In keeping with the effort to avoid multiple appeals in a single case, the fifth amendment would narrow the circumstances in which a request for special permission to appeal to the Board would be granted. Such permission would be granted only in extraordinary circumstances when it appears that the issue addressed in the appeal would otherwise evade review. (Board review would remain available following the election on all issues for which permission to appeal was denied or not sought.)
   
• The sixth amendment would simplify appeal procedures and avoid litigation of appeals that do not present a serious issue for review. It would do this by giving the Board discretion to hear and decide any appeals to the election process, whether they concern pre-election or post-election issues. 

     What this means to employers is that the time between the filing of the petition and the holding of the election will be substantially reduced.   Employers wishing to remain union free will have to be proactive.   Supervisors and management should be trained to recognize early warning signals of possible union activity and be  equipped  with information as to what they can and cannot do in such circumstances.  Work rules and policies need to be reviewed for legality and implemented before the union comes knocking.

     The current Board’s labor law reform has occurred through issuance of decisions in unfair labor practice cases that overrule employer-friendly precedent in favor of labor unions, aggressive use of discretionary injunctive procedures, enhanced remedial measures, and controversial rule-making efforts such as the new quickie election rules and the notice posting rule that was adopted earlier this year.

For more information or any questions concerning labor law or related issues, please contact Bill Trumpeter at 423-785-8318

The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations.  As always, readers should consult a qualified attorney for specific legal guidance.  Should you need assistance, please call 1-800-275-7303.ext 318.

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The 3-to-1 decision in Specialty Healthcare and Rehabilitation Center of Mobile finds that Certified Nursing Assistants at a nursing home may comprise an appropriate unit without including all other nonprofessional employees. It overrules the Board’s 1991 decision in Park Manor, which had adopted a special test for bargaining unit determinations in nursing homes, rehabilitation centers, and other non-acute health care facilities.  The majority stated that the appropriate unit determinations for  employees in non-acute care medical facilities will be subject to the same “community of interest” standard  traditionally applied at other workplaces.  The NLRB ruled that where an employer argues that a proposed unit inappropriately excludes certain employees, the employer will be required to prove that the excluded employees share “an overwhelming community of interest” with employees in the proposed unit.  

In dissent, Member Brian Hayes stated that he would adhere to Park Manor. “which established a balanced legal standard maintained in non-acute care health care unit cases without controversy for 20 years (and without any objection from the party seeking review in this case).” 

He also disagreed that the majority’s statement of the community of interest test was consistent with precedent.  In his view, “the majority accepts as the definitive standard for unit determinations in all industries an ‘overwhelming community of interest’ test that will make the relationship between petitioned-for unit employees and excluded co-workers irrelevant in all but the most exceptional circumstances.

As Member Hayes points out, the test approved by the majority not only impacts cases in the non-acute health care area, but all employers.  If the “overwhelming community of interest” standard, which the majority says is “existing” law, is followed, it would mean that in almost all cases, the union’s petitioned for unit will likely be deemed appropriate, despite the fact that Section 9(c)(5) of the Act itself says that the extent of the union’s organizing is not controlling.  While extent of organizing may be considered as a factor, when this majority says that the employer will have to prove an “overwhelming community of interest” of employees outside the union’s proposed unit in order to get them in the unit, that is code for meaning the employer loses.   This decision could result in a union going in any company and picking off distinct groups of employees in a plant or office, petitioning for an election in that small unit, then moving on to the next group.  Couple this decision and the NLRB’s expected issuance of the proposed ”quickie election” rules and employers will have little opportunity to defend against the fracturing of its workforce into many small units of employees who have a community of interest among themselves, to the exclusion of other employees who will also be impacted by the decisions of the unit petitioned for by the union.    The standard set forth by the majority effectively eliminates Section 9(c)(5) from the Act. 

  Miller & Martin P

          btrumpeter@millermartin.com

The National Labor Relations Board (NLRB) has decreed by its rulemaking authority, that employers that are covered by the National Labor Relations Act (“the Act”) must post an official notice to all employees who are protected by the Act advising them of their rights under Section 7 of the Act.   Those rights are: the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or for mutual aid or protection, or to refrain from any or all of the above.

The original date for the posting was November 14, 2011, but that date has been postponed until January 31, 2012.   There are at least three lawsuits filed by employer organizations that are challenging the legality of this new rule. Those lawsuits are pending.   Employers need to think about what they will do if the rulemaking authority is upheld and a notice is required to be posted. 

Many employers object to the posting of the NLRB notice as an infringement of their right of free speech.  There is nothing in the Act itself that requires a notice be posted.  A notice has not been required since the original passage of the Wagner Act in 1935.    Section 8(c) of the Act protects the employers’ right of free speech to express their views about unions so long as the statements do not constitute threats of reprisal or force or promise of benefit.

In the comments accompanying the rule, the NLRB has made it clear that employers retain the right guaranteed by Section 8(c). Therefore, an employer, should it choose to do so, may post a notice of its own explaining its views on unionization.   The decision as to whether to post a side notice, or publish a statement about unionization of its workforce, is a call each individual employer will have to make.  

Some employers may choose to post a notice alongside the NLRB official notice explaining that the NLRB’s notice is required to be posted.   The employer’s notice could go on to lawfully state its reasons why it believes unionization would be wrong for its employees and the company.   It could lawfully emphasize that the employees also have the right to NOT engage in union activities, that they have the absolute right to refuse to sign a union authorization card or petition, and that no one has the right to illegally harass or threaten them if they refuse.  

Many employers have similar provisions in their handbooks or policy manuals.  Many feel that the best way to head off union organizing is to educate the workforce as to what it means to sign an authorization card.   Many times employees sign such cards simply because they are asked by a friend to do so or because they think the company doesn’t care.   Sometimes they are told it is just to get an election.  Frequently, as evidenced by secret ballot results, many employees simply sign to get their co-workers or union organizers to leave them alone.   If the workforce is educated, the chances that the organizing campaign will go on undetected by management will decrease dramatically.     

Other employers might choose not to post such a notice or have such a provision in their handbooks because they do not perceive a union threat or because they have public relations concerns about the effect of such an “anti-union” message.   Perhaps they have unions in other facilities and such a notice would only antagonize that union.  

The decision to post a side notice or to have a separate statement expressing one’s views about unionization is a business decision.  If you decide to develop such a message, it is always wise to have a lawyer experienced in labor law review the language to make sure it is in compliance with the very latest NLRB and court rulings.   

I investigated a transportation business that had classified its drivers as independent contractors and paid them a percentage of revenue derived from their hauls. No overtime wages had been paid. The motor carrier exemption did not apply (rock was hauled from Texas quarries to Texas construction sites). The drivers worked long hours, in part because of arriving several hours before the quarry opened in order to be near the front of the line.

The “final conference” (to disclose findings) was conducted with the owners and management officials, and the firm’s attorney, at the attorney’s office. I explained that the drivers are FLSA employees and that they are subject to FLSA provisions (including overtime compensation). I explained how to comply (required records, hours worked rules, correct way to compute overtime wages, etc.). Before I could ask for an agreement to comply, the attorney went on a tirade against me personally and the DOL. He stated that I had no business even investigating his clients, as they were doing nothing wrong, and that the drivers are independent contractors. I finally was able to insist on an agreement to comply, but that was a mere formality. The attorney continued to insist that the drivers are not employees, and that his clients will not pay overtime compensation.

DOL policy is that, when an employer refuses to comply, the case is referred to the DOL Solicitor for injunctive action to secure a court order for compliance and payment of back wages. I submitted the case file to my superiors with a litigation recommendation. After suit was filed, another investigator and I spent several days copying records in the defendants’ office. At a deposition hearing, the defendants and their new attorney apologized for the rudeness of the initial attorney. I informed them that I had dealt with very few attorneys who were less than diplomatic, and that the initial attorney in this case was far from representative of the legal profession. The new attorney agreed with that assessment.

Settlement was ultimately reached, the defendants agreed to an injunction, and back wages were paid.

This case would not have been considered for litigation had the employers agreed to comply and to pay back wages. Even upon their initial reluctance to comply, they would have been afforded an opportunity to meet with the Wage and Hour Division District Office management prior to a litigation decision had their representative been reasonable. Resolution was clearly possible at much less expense and inconvenience to the owners of this business.

Suggestions for employers from this experience:

•  Much time and money can be saved by conducting a self-audit. This should be accomplished long before you become the subject of a DOL investigation.
  • Ensure that your employment relationship and exemption determinations are correct and that your pay plans meet FLSA requirements.
  • If nonexempt employees are paid commissions, make certain that overtime wages are being correctly computed. This DOL opinion letter http://www.dol.gov/whd/opinion/FLSANA/2008/2008_09_22_12NA_FLSA.htm includes a clear explanation of the correct method to be used in computing overtime compensation. The same approach is usually applicable to job rate or piece rate arrangements.
•  If your FLSA practices are questioned by a DOL investigator -
  • Listen to the explanations provided and ask relevant questions.
  • Keep in mind that it is possible to disagree with the investigator without being arrogant.
  • If you are not convinced that the investigator is correct in his/her assertions, request a “second level” conference with a District Office management official.
  • If you have representation, make certain that your attorney will not be a “loose cannon” and that he/she is knowledgeable of the FLSA (or is willing to learn).
  • Do not refuse to make needed corrections until you are certain that “fighting the battle” will be worth the investment.

 Concluding Remarks

If the Wage and Hour Division conducts an investigation of your business or organization, be open-minded as to the possibility that there are violations. The investigator is probably more knowledgeable of technical FLSA rules than you or your attorney. However, that does not mean that you should not raise questions. DOL investigators do make mistakes. In some cases, the investigator reaches conclusions without considering key facts. Exemptions are occasionally overlooked. An intelligent and open-minded dialogue can encourage the investigator to reconsider the initial conclusions. Even if the assertions are essentially correct, there might at least be room for negotiation. The investigator should agree to allow you or your attorney a reasonable period of time (at least a week) to review the matter. Further, as I previously indicated, it is often productive to request a meeting with a District Office management official to discuss unresolved issues.

During the “final conference” or other discussions with the investigator, make extensive notes. A written report will not be provided to you.

If the investigator presents a “summary of unpaid wages” and asks you to sign it, do not do so until you are convinced that you owe the back wages and that computations have been done accurately. You have the right to secure a copy of computations.

You should always consider obtaining representation when under DOL scrutiny. DOL does not have the authority to prevent an employer from securing professional guidance. In more than three decades of DOL enforcement experience, I dealt with hundreds of attorneys and consultants. They generally “brought to the table” knowledge, expertise, and negotiating ability that the employer did not possess. The attorney in this case study was clearly an exception.

I encourage you to review the self audit guide I prepared for BIZKEYS.  This self audit guide “Wage & Hour – Fair Labor Standards Act (FLSA)” can be found in the Self Auditing section of the BIZKEYS website.

You can contact Mr. Jennings at:  Morris@FLSA-SCA.com

In order for a staffing company to best serve you and their employees, they must know as much as possible about the jobs and workplace where they will be working.  How many employees does your company hire without first showing that person the job site and letting them experience the general environment in which the work will be performed?  Probably none.  HR professionals know and understand the value of visits to the various departments/work areas to get a general sense of how employees are doing, to compliment them when you hear good things about their work habits, and encourage them when you hear they are falling short of expectations.  In general, you give them an opportunity to speak with you regarding any employment or personal issues they may have.  It allows you to “sense the pulse” of the workforce.  It can provide valuable information regarding  potential problem areas.  These and other meaningful functions cannot be effectively accomplished without access to the work areas.  Of course, these visits must be done with minimal disruptions to the work activity of employees and must always be scheduled and approved by the client (especially with the supervisor or manager over the specific work area).  Good communications and procedural requirement must always be adhered to when making on-site visits.  If permitted, you should draft a protocol for staffing company workplace visits.  It can be a very helpful tool if used properly.

Investigating workplace accidents and  injuries involving temporary employees is just as important to a staffing company as for you when your employees are involved in an workplace accident or injury.  The temporary help company is confronted with unique challenges in providing a safe work place for their employees in that they have no control or responsibility over the various work sites where they place employees.  A top notch staffing company normally has a Safety and/or Risk Control Manager, with sophisticated policies and procedures governing all aspects of safety, ADA, drug free workplace policies, accident investigation, etc.  Hopefully, you are familiar with the safety policies of the staffing company you use and have met the staffing company’s person responsible for safety/workers’ compensation compliance.  If not, contact them and ask to meet with them to review safety policies and establish protocol for accident investigation and other safety issues regarding temporary employee.  You should provide emergency information to supervisors and managers should a temporary employee be injured on the job (client supervisors and managers need to know the protocol).

Participation In Client Meetings, Activities, and Goals

I believe much can be gained from participation of temporary employees in client employee meetings, activities, goals, and other workforce initiatives.  First, it seems to help promote the one goal, one purpose philosophy.  Quite often temporary employees feel as though they are not a part of the team or are seen just as temporary workers that will probably work a day or two and then quit.  Including them in department meetings and activities and giving them recognition for good performance helps to make them feel a part of the ”team”.  Being friendly and speaking to them as you do other employees does wonders for their morale.  One example is to include them in safety meetings.  I often attended client supervisor meetings and was given time to address issues involving temporary employees and to ask questions of how to make our service better.  It was very productive and brought out a lot of good thoughts and ideas that greatly improved our service and overall relationship with those clients.

Our Risk Control Manager often gave presentations during client safety meetings and helped many of our clients set up and develop safety plans.  In addition, our temporary employees and staff were occasionally invited to client company picnics.  

There were many such occasions that brought a sense of accomplishment to me, and I feel it brought the same feeling to the clients we served.  As was mentioned earlier in this article, staffing companies bring with them a multitude of resources and helpful ideas.  Hopefully, you will see the benefit of some of these suggested opportunities and will invite your staffing company to participate in selected meetings, events, etc.

Good Communications Are Essential

It is not easy to be proactive.  It requires a specific plan with quality checks, audits, evaluations, certifications, training, policy reviews and process reviews.  Candidly, it requires a constant, scheduled review of the entire scope of employment and workforce issues.  

I have witnessed the worst of work stoppages and unionization, the anxiety, stress and repercussions of discrimination and EEOC complaints, the disruptions and financial cost of non compliance and poor business practices and policies.

I have also seen the value and rewards of compliance and good business practices and policies.  As a consequence I became a strong advocate of being proactive.  There will always be those employees who will challenge you with frivolous complaints and charges and law suits.  However; there is great satisfaction and defense of those charges and complaints that comes with having your “house in order”. 

 I have often used and quoted the wisdom and inspiration of the great and legendary coach of the Green Bay Packers, Vince Lombardi.  I would like to share one that I have read many times, that hung on my office wall for most of my business career, and remains there today.  I see it each day as I enter my office.

“Winning is not a sometime thing; it’s an all-the-time thing.  You don’t win once in a while, you don’t do things right once in a while, you do them right all the time.  Winning is a habit.  Unfortunately, so is losing”. 

 And this final thought from Coach Lombardi.

“I believe in God, and I believe in human decency.  But I firmly believe that any man’s finest hour – his greatest fulfillment to all he holds dear – is that moment when he has worked his heart out in a good cause and lies exhausted on the field of battle – victorious”.

You can be victorious; it just takes hard work and constant vigilance.  BizKeys can help!

Jack Hobbs,

Founder and President, BizKeys, LLC