Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

Additionally, also effective July 1, 2010, the Illinois minimum wage increased as follows:

• Employees aged 18 and older must be paid $8.25 per hour.
• Employees aged 18 and older may be paid a training wage of $7.75 per hour for the first 90 consecutive calendar days of employment, unless that individual is a day or temporary laborer, or he or she is only occasionally or irregularly employed for less than 90 days.
• Employees under 18 may be paid $7.75 per hour.
• Tipped employees must be paid at least $4.95 per hour after 90 days of employment. During the initial 90-day period, tipped employees can be paid $4.65 per hour.
   

With this announcement, Secretary Solis promised, "America's workers should rest assured that protecting worker rights is a top priority at the Department of Labor." Her press release warned, "[t]here is no excuse for employers who disregard federal labor standards--especially those that are designed to protect the most vulnerable in the workplace."

Broad Investigative Powers

The Department's Wage and Hour Division investigates allegations that employers failed to pay minimum wage or overtime, as well as alleged misclassification of employees as exempt or independent contractors.¹ DOL investigations can be triggered by complaints from employees, unions, or competitors, and routine audits also can be performed, often focusing on a particular industry or type of employer.

The Department has broad investigative powers, including the power to subpoena employment records. Assuming wage and hour violations are discovered, the Department will seek a settlement. If an out-of-court agreement is not reached, the Department can sue to enjoin an employer's violation of the law as well as to compel the payment of back pay to all employees. The Department also has the power to seek reinstatement with back pay of any individual employee who was discharged for attempting to enforce the law.

Should the Department bring suit and prevail, it will recover liquidated damages equal to the unpaid wages the employer owes, unless the employer can prove that it acted in good faith with a reasonable belief that its pay practices complied with the law. Interest and attorney's fees are likely to be awarded as well, even if liquidated damages are not.

Significant Settlements

The threat of such enforcement actions can result in employers agreeing to settlements that provide significant recoveries. For instance, in July 2009, the Department announced a settlement of almost $750,000 with a convenience store chain in nine states accused of failing to properly include performance-related bonuses in the regular rate used to calculate overtime pay.

The Department also is planning a "public awareness campaign" to inform workers of their "rights," which presumably also will assist the Department in finding errant employers to investigate and prosecute.

Wake-Up Call

The federal government's increased manpower and desire to enforce federal labor standards should be a wake up call to United States employers to ensure that their procedures and practices comply with federal labor laws.

Audits conducted by or through counsel can catch technical problems with pay practices, recordkeeping, and employee classification that can be corrected to reduce exposure. Training of managers in employment laws such as when overtime is required can avoid violations caused by managers' ignorance of legal obligations.

These proactive steps can save employers the expense and embarrassment of reacting to a government investigation or a costly class action.

This entry was written by Alison Hightower.

¹ The Wage and Hour Division also governs the hours and conditions for employment of children under 16 years old and it enforces the labor standards provisions of the Immigration and Nationality Act (INA) that apply to aliens authorized to work in the U.S. under certain nonimmigrant visa programs.

Similarly, in 2009-15, the Department of Labor concluded that required study time for required training seminars – even though performed outside of the regular work day – also was compensable. The DOL reasoned that, because the training course was mandatory and, in order to pass the training course the employee was required to study, the study time was compensable.

In another decision, FLSA 2009-1, the DOL found that time spent by childcare employees in state-mandated training programs offered by the employer and required by the employer as a condition of maintaining the employee’s state certificate, was not hours worked under the FLSA. This opinion turned on an important exception to the requirement that the training not be directly related to the employee’s job. As the DOL recognized, where the training is for the benefit of the employee and corresponds to courses offered by independent bona fide institutions of learning, voluntary attendance by the employee outside normal working hours is not hours worked even though the training is clearly related to the employee’s job. In this case, the DOL found that the employees were not required to take the employer’s particular training class so long as they take a class to keep up their state certification. Accordingly, while the state certification was mandatory, the particular training was not. The DOL wrote that childcare training is for the benefit of the employees when it provides instruction of general applicability that enables an individual to gain or continue employment with any childcare service provider.

This entry was authored by Bradley Sherman.

In the second letter (FLSA2008-17), the DOL concluded that a school district’s Certified Occupational Therapist Assistants (COTAs), who assist occupational therapists in providing therapeutic educational programs for students, are not exempt from the minimum wage and overtime requirements. The DOL reasoned that (1) the 60-credit certification program required to become a COTA does not qualify as “a prolonged course of specialized intellectual instruction” under the professional exemption; (2) COTAs specifically do not meet the DOL’s definition of a “registered or certified medical technologist” under the same exemption; and (3) COTAs do not qualify for the administrative exemption for educational institutions because their jobs relate to the “health of . . . students,” and not academic instruction or training.

In the final opinion letter (FLSA2008-19), the DOL stated that store managers who otherwise satisfy the requirements of the Act's executive exemption do not lose that exemption when they participate in a seven-week training program aimed at preparing them for promotion to a similarly exempt area sales manager position. Despite the fact that the managers do not perform exempt work during some of the weeks of training, the DOL emphasized that the training does not change the character of the manager’s job as a whole – their “primary duty” under the executive exemption remains that of an exempt store manager.

This blog entry was authored by Casey Kurtz.