Wage and Hour Update

By Lehr Middlebrooks Vreeland & Thompson, P.C.

February 24, 2020

This article was prepared by Lyndel L. Erwin, Wage and Hour Consultant for the law firm of Lehr Middlebrooks Vreeland & Thompson, P.C. Prior to working with the firm, Mr. Erwin was the Area Director for Alabama and Mississippi for the U. S. Department of Labor, Wage and Hour Division, and worked for 36 years with the Wage and Hour Division on enforcement issues concerning the Fair Labor Standards Act, Service Contract Act, Davis Bacon Act, Family and Medical Leave Act and Walsh-Healey Act. Mr. Erwin can be reached at 205.323.9272.
 

Effects of the Change in Administration

Since the current Administration has been in office, they have made several changes in how they operate. Prior to the previous Administration, and for as long as I have been involved with Wage Hour enforcement, they have had a practice of issuing “opinion letters” that could be used by employers desiring to ensure they were complying with the Fair Labor Standards Act. Early in 2018, Wage Hour began issuing new letters and since then they have published 45 letters. All the letters that have been issued since early in the 21st century are available on the Wage Hour website.

Even though it appears that the current administration is taking a lower key enforcement policy, Wage Hour collected some $322 million in back wages during the FY ending on September 30, 2019, an increase of almost $20 million from the previous year. In addition, there continues to be much private litigation. Consequently, employers should remain diligent to ensure they are complying with the various wage hour statutes.

Increases in Minimum Wage

While there has not been an increase in the federal minimum wage for many years, twenty-nine states have instituted state minimum wages greater than $7.25 per hour. Some organizations are continuing to advocate a $15.00 minimum wage. Five states in the Southeast, including Alabama, do not have a state minimum wage.However, Florida’s rate in 2020 is $8.56 per hour. If you operate in states other than Alabama, I suggest that you check to make sure that you are not required to pay a higher minimum wage. A list containing the minimum wage for each state can be found on the Wage Hour website under “State Laws”. If you have employees for whom you taking a tip credit toward the minimum wage, you should also check the Wage Hour website as several states either do not allow an employer to take a tip credit or only allow a smaller amount of tip credit.

Attendance at Training Meetings

From time to time employers may desire to have employees attend training programs or meetings and may not be sure whether the employee must be paid for this time. The Wage Hour regulations state that an employee’s attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met:

(a) Attendance is outside of the employee's regular working hours.
(b) Attendance is in fact voluntary.
(c) The course, lecture, or meeting is not directly related to the employee's job; and
(d) The employee does not perform any productive work during such attendance.

If a non-exempt employee fails to meet any of the criteria above, then the employee must be compensated for these hours. Of course, the employer does not have to provide additional compensation to exempt employees for any time spent attending such training meetings.

Outside the employee’s regular working hours - The training meeting must be during hours or days that are not during the employee’s regularly scheduled work hours. For example, consider an employee who is scheduled to work from 8 AM to 5 PM Monday through Friday. For the training not to be considered as work time, it would either have to be on Saturday or Sunday, or after 5 PM and before 8 AM Monday through Friday.

Attendance must be voluntary – Where the employer (or someone acting on his behalf) either directly or indirectly indicates that the employee should attend the training, the attendance is not considered voluntary. For example, a vendor tells the employer that he will provide a dinner for the employees at which they will discuss a new product, or a proposed marketing method and the employees are encouraged to attend. Thus, the time spent at the dinner would be considered as work time.

However, where a state statute requires individuals to take training as a condition of employment attendance would be considered as voluntary. An example would be the childcare worker who must complete a 40-hour class before than can work in the childcare industry. Conversely, if a state requires the employer to provide training as a condition of the employer’s license then attendance at the training would not be considered as voluntary. Therefore, this criterion would not be met, and employer would have to consider the training as work time.

Training must not be directly related to the employee’s job – Training that is designed to make the employee more efficient at his job would be considered as work time while training for another job or a new or additional skill would not. Training, even if job related, that is secured at an independent educational institution (i.e. – trade school, college & etc.) that is obtained by the student on his own initiative would not be considered as work time. Also, training that is established by the employer for the benefit of employees and corresponds to courses that are offered by independent educational institutions need not be counted as work time. An example would be a course in conversational English that an employer makes available to his employees at his facility.

The employee performs no productive work during the training course – Training that is conducted away from the employer’s facility usually does not pose a problem, but that conducted at the employer’s business can potentially cause a problem. Many times, the employee receives the training using the employer’s equipment, which could have some benefit to the employer and thereby make the time compensable.

Prior to a nonexempt employee attending a training course, the employer should make sure that attendance meets each of the four criteria listed above, otherwise he or she must be prepared to compensate the employee for the time spent attending the training. Employers should also remember that when the training hours are determined to be work time then this time must be added to the employee’s regular work time for overtime purposes.

New Employee Orientation & Completion of Employment Related Documents

In today’s world of electronic records, many employers are now having their new employees complete the employment related documents on-line prior to physically reporting to work. Also, some employers are having the new employees view on-line videos as a part of their orientation to the firm. Once the employee is hired, any time spent in these activities is considered as work time and must be paid for at a rate not less than the current minimum wage of $7.25 per hour. You should track this time and record it in the payroll records. If the time spent in these activities when added to the employee’s hours in their initial workweek causes the employee to work more than 40 hours, then you should pay them time and one-half for all hours over 40.