The immediate future will be especially challenging for employers. Changing Fair Labor Standards Act overtime rules, increased scrutiny of independent contractor classifications, new and amended state and local work laws, as well as other changing legal requirements are creating a never-ending compliance struggle for employers. While there is still much in flux and workloads and compliance risks are rising, there are strategies to better protect your business. Join Paul Kramer, director of compliance at WorkForce Software, for this insightful webinar and gain the knowledge and practice tips you will need to stay compliant in an employment world where change is the only constant. You can expect to come away with: The latest on FLSA overtime rule changes. Trends and events to watch in state labor laws. New and re-emerging enforcement threats. Techniques to minimize your risk.

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The Quickly Changing Wage and
Hour Landscape: Are You Ready For
It?

2. #WFwebinar
Speaker: Paul Kramer
Director of Compliance
Workforce Software
Moderator: Lauren Dixon
Associate Editor
Workforce magazine
The Quickly Changing Wage and
Hour Landscape: Are You Ready For
It?

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8. #WFwebinar
Lauren
Dixon
Associate
Editor
Workforce
magazine
The Quickly Changing Wage and
Hour Landscape: Are You Ready For
It?

9. #WFwebinar
Paul
Kramer
Director
of
Compliance
Workforce
So*ware
The Quickly Changing Wage and
Hour Landscape: Are You Ready For
It?

10. Time
&
A:endance
•
Scheduling
•
Absence
&
Leave
•
Labor
Analy6cs
•
Fa6gue
Management
GLOBAL
WORKFORCE
MANAGEMENT
Time
&
A:endance
•
Scheduling
•
Absence
&
Leave
•
Labor
Analy6cs
•
Fa6gue
Management
GLOBAL
WORKFORCE
MANAGEMENT
The
Quickly
Changing
Wage
and
Hour
Landscape:
Are
You
Ready
for
It?
September
16,
2015

11. What
We
Do
WorkForce
SoFware
delivers
a
complete
workforce
management
plaIorm
for
large
employers.
Its
EmpCenter
suite
includes
best-­‐in-­‐class
soluNons
for
Nme
and
aOendance,
scheduling,
absence
and
leave
management,
labor
analyNcs,
and
employee
faNgue.
WorkForce
SoMware
‘At-­‐a-­‐Glance’
Quick
Facts
Employees:
500+
Founded:
1999
Headquarters:
Livonia,
MI
Client
Community
450+
clients
>1.6
million
users
Core
Products
• Time
&
AOendance
• Advanced
Scheduling
• Absence
&
Leave
• AnalyNcs
• FaNgue
Management
Corporate
Headquarters:
38705
Seven
Mile
Road,
Livonia,
Michigan
48152
California:
2061
Business
Center
Drive,
Suite
120,
Irvine,
CA
92612
United
Kingdom:
Atrium
Court,
The
Ring,
Bracknell,
Berkshire,
RG12
1BW
Australia:
Level
3,
69
Regent
Street,
Chippendale
NSW
2008
11

12. § PracNcing
aOorney
for
31
years,
more
than
two
decades
specializing
in
employment
law
§ Expert
in
FMLA,
FLSA
and
state/province
employment
laws
and
regulaNons
§ Frequent
presenter
on
employment
law
issues
and
compliance
best
pracNces
Today’s
Presenter
Paul
Kramer,
Esq.
Director
of
Compliance
WorkForce
SoFware
@WorkForce_Paul
12

13. Agenda
13
Topics
Employee/Contractor
ClassificaNons
FLSA
OverNme
Mandatory
Sick
Time
Tracking
Time
for
All
Employees
Mobile
Device
Use
Closing
Thoughts

14. Disclaimer
This
presentaNon
is
for
educaNon
only.
It
is
meant
to
provide
you
with
a
general
understanding
of
the
law
but
it
is
not
legal
advice.
There
is
no
aOorney-­‐client
relaNonship
between
you
and
the
presenter
or
with
WorkForce
SoFware.
OrganizaNons
should
always
retain
a
licensed
aOorney
when
dealing
with
issues
pertaining
to
their
parNcular
circumstances.
14

15. Proper
classificaNons
are
crucial
Employee/Contractor
Classifica6ons

16. The
Source
of
Much
Confusion
“…there
is
no
defini6on
that
solves
all
problems
relaNng
to
the
employer-­‐employee
relaNonship
under
the
Fair
Labor
Standards
Act”
-­‐Department
of
Labor
website
16

17. § Independent
Contractors
can
take
many
forms:
seasonal
workers,
freelancers,
consultants,
even
mislabeled
volunteers
or
interns
§ MisclassificaNons
are
an
‘evergreen’
concern
§ Ready-­‐made
for
mulN-­‐plainNff
lawsuits
• Many
law
firms
specialize
in
these
cases
because
they
can
be
lucraNve
§ DOL
Wage
&
Hour
Division
is
on
a
mulN-­‐year
campaign
to
crack
down
on
what
it
perceives
to
be
abuses
of
independent
contractor
classificaNons
17
Contractor
Classifica6ons
–
the
Basics

18. 18
What
is
an
Independent
Contractor?
The
DOL
applies
a
six
factor
“economic
reali6es”
test
to
dis6nguish
between
employees
and
independent
contractors:
1. The
extent
the
worker’s
services
are
integral
to
the
employer's
business
2. The
permanency
of
the
relaNonship
3. The
amount
of
the
worker's
investment
in
faciliNes
and
equipment
4. The
nature
and
degree
of
control
by
the
employer
5. The
worker's
opportuniNes
for
profit
and
loss
6. The
level
of
skill
required
to
perform
the
job

19. § “Administrator’s
InterpretaNon”
No.
2015-­‐1
• First
InterpretaNon
issued
by
new
Administrator
• Seemingly
broadens
definiNon
of
employee
§ Key
Takeaways
• Expansive
definiNon
of
“economic
realiNes”
test
• Stresses
that
degree
of
control
over
the
worker
is
not
determinaNve
• Economic
dependence
is
the
key
19
2015
Guidance
David
Weil
WHD
Administrator

20. 20
Notable
Quotes
“[A
worker
is
an
employee]
if,
as
a
maOer
of
economic
reality,
the
individual
is
dependent
on
the
enNty”
-­‐
DOL
Administrator’s
InterpretaNon
No.
2015-­‐1
“[The
proposal’s
language]
essenNally
declares
war
on
the
use
of
independent
contractors
in
certain
industries”
-­‐
Tammy
McCutchen,
Principal,
LiOler

21. § Hard-­‐Hit
Industries
Include:
• TransportaNon
• Trucking
• ConstrucNon
• Janitorial
services
• Home
health
services
• Oil
&
gas
• Auto
retailing
• ConsulNng
21
Some
Sectors
In
the
Spotlight
Source:
www.akbizmag.com
Source:
forbes.com
Source:
joc.com

22. § Use
independent
contractors
judiciously
• Per
the
DOL,
“most
workers
are
employees
under
the
FLSA”
• Apply
each
element
of
the
economic
realiNes
test
against
all
independent
contractor
classificaNons
§ Review
job
descripNons
and
independent
contractor
agreements
regularly
• At
least
annually
• Focus
on
worker’s
duAes,
not
worker’s
Ntle
§ Confirm
that
the
work
performed
matches
the
job
descripNon
• DuNes
can
change…
and
so
can
classificaNons
22
Tips
to
Minimize
Risk

23. Changes
are
coming…
Over6me
Rule
Revisions

24. Sequence
of
Events
§ March
2014
–
President
Obama
signed
a
Memorandum
direcNng
the
DOL
to
“modernize
and
streamline”
FLSA
overNme
rules
§ July
6,
2015
–
DOL
publishes
NoNce
of
Proposed
Rulemaking
to
update
FLSA
overNme
regulaNons
• Last
update
occurred
in
2004
• Proposed
changes
would
make
millions
of
previously
exempt
employees
eligible
for
overNme
§ Sept
4,
2015
–
60
day
comment
period
closed.
DOL
now
working
on
final
rule
• Revised
FLSA
overNme
regulaNons
expected
in
2016
DOL
Ordered
to
Revise
FLSA
Over6me
Regula6ons
24

25. § Currently,
a
white
collar
employee
must
meet
the
following
requirements
to
be
classified
as
exempt:
1. The
salary
paid
must
be
a
predetermined
and
fixed
salary
2. The
salary
paid
must
meet
a
minimum
specified
amount
3. The
job
must
primarily
involve
execuNve,
administraNve,
or
professional
duNes
as
defined
by
the
regulaNons
§ The
proposed
changes
primarily
target
the
second
requirement
• Salary
threshold
would
increase
more
than
2x
• Increases
would
be
automaNc
going
forward
25
Background

26. § So-­‐called
“white
collar”
workers
earning
$455
or
more
per
week
($23,660
per
year)
are
exempt
from
overNme
§ That
rate
remains
flat
unless
expressly
changed
by
lawmakers
§ The
new
threshold
would
be
the
40th
percenNle
of
weekly
earnings
for
full-­‐Nme
salaried
workers
§ Projected
to
equal
$50,440
in
2016
§ The
salary
threshold
would
automaNcally
increase
yearly
Current
Status
Proposed
Changes
Salary
Thresholds
–
Current
&
Proposed
26

27. 27
Significant
Impacts
By
the
DOL’s
own
esNmate,
this
proposed
rule
could
‘clarify’
or
change
the
status
of
11
million
workers.
-­‐
FAQ:
OverNme
NPRM,
DOL.gov
Raising
the
threshold
to
$50,000/year
would
make
more
than
half
(51%)
of
all
salaried
workers
eligible
for
overNme,
according
to
the
Economic
Policy
InsNtute

28. § Determine
the
potenNal
cost
impacts
to
your
business
• Model
using
thresholds
above
and
below
the
projected
$50.4K
figure
• Consider
upgrading
your
Time
&
AOendance
reporNng
and
analyNcs
tools
§ ConNnue
to
track
developments
• Changes
to
the
duNes
tests
were
not
menNoned…
yet
• Some
bonuses
may
be
eligible
to
count
towards
the
salary
test…
§ Open
a
dialogue
with
your
employees
• Uncertainty
can
create
fear
and
sNfle
producNvity
• Their
take-­‐home
pay
may
be
impacted…
this
is
a
big
deal!
28
How
You
Can
Respond

29. § Employers
can
make
changes
to
work
schedules
or
pay
rates
to
make
this
change
affordable
§ If
your
business
is
contemplaNng
any
such
changes,
think
through
the
communicaNon
plan
early
§ Your
reacNon
to
the
overNme
rule
changes
could
be
a
divisive
issue
with
workers
29
Managing
Employee
Concerns

30. 30
Another
issue
gaining
ground
Sick
Time
Laws

31. § NYC
§ District
of
Columbia
§ MulNple
ciNes
in
N.J.
• Push
at
the
state
level,
also
§ ConnecNcut
§ MassachuseOs
§ CiNes
in
CA,
OR,
WA
§ California
§ Oregon
East
Coast
West
Coast
31
What
Started
as
a
Coastal
Trend…

32. 32
Is
Steadily
Expanding
Source:
LiDler.com
Source:
WTOP.com
Source:
Phila.gov

33. 33
With
Execu6ve
Branch
support
Source:
CNN.com

34. PotenNal
Challenge
Areas
§ Scheduling
PracNces
• More
reasons
for
absences
§ Overlapping
rules
• State
&
municipal
laws
may
apply
• DisNnct
eligibility
requirements
§ Pay
pracNces
• Is
an
absence
paid
or
unpaid?
§ ClassificaNons
• Another
benefit
generally
reserved
for
employees
34
Why
It
Ma:ers

35. § Secure
a
source
of
legal
info
and
updates
• Confirm
that
policies
reflect
enacted
leaves
• Ensure
consistent
applicaNon
of
exisNng
laws
• Clarify
the
flow
of
legal
knowledge
to
HR
and
managers
§ Empower
managers
with
self-­‐service
tools
• Receiving
and
approving
employee
leave
requests
• Scheduling
visibility
to
manage
adjustments
How
You
Can
Respond
35

36. Tracking
Hours
for
All
Employees
Covering
your
bases

37. Tracking
Hours
–
Why
It
Ma:ers
§ Tracking
Nme
has
oFen
been
reserved
for
non-­‐exempt
staff
§ That
percepNon
is
changing
–
with
good
reason
§ There
are
a
number
of
reasons
to
track
hours
for
exempt
employees
§ Benefits
span
mulNple
areas,
including:
• Workload
planning
• Risk
miNgaNon
• Financials
37

38. § Workload
planning
38
Reasons
for
Tracking
Hours
Labor
uNlizaNon
• Firmer
sense
of
how
work
is
distributed
across
staff
and
locaNons
Revenue
achievement
• More
precise
and
Nmely
calculaNon
of
billable
hours
Work/life
balance
• Warning
signs
of
employee
faNgue
come
into
view

39. § Risk
mi6ga6on
39
Reasons
for
Tracking
Hours
Benefits
determinaNons
• Employee
rights
(e.g.
LoA)
are
calculated
in
part
by
hours
worked.
ACA
compliance
• Requirement
to
offer
health
coverage
hinges
on
hours
of
service
averages
Hedging
your
bets
• The
Dept
of
Labor
(DOL)
has
reversed
a
a
posiNon’s
overNme
classificaNon
before.

40. § Cost
management
40
Reasons
for
Tracking
Hours
Revenue
achievement
• BeOer
tracking
of
billable
hours
yields
faster,
larger
payments
Time
off
leakage
• If
vacaNon
and
sick
Nme
aren’t
precisely
tracked,
they’ll
be
overused
FMLA
leakage
• Can
you
prove
whether
employee
has
less
than
1250
hours?

41. § From
my
legal
perspecNve:
rarely!
§ However,
if
I
only
tracked
Nme
for
one
exempt
group,
it’d
be:
employees
under
the
AdministraNve
ExempNon
• Especially
in
light
of
pending
changes
to
FLSA
overNme
41
When
Is
“Excep6on
Time”
Good
Enough?
“The
employee’s
primary
duty
includes
the
exercise
of
discreNon
and
independent
judgment
with
respect
to
maOers
of
significance”
-­‐
DOL
Fact
Sheet
#17C

42. Mobile
Device
Use
Smartphones
and
other
mobile
devices
are
an
ongoing
challenge

43. § The
world
has
changed:
• Prevalence
of
“smart”
mobile
devices
&
connecNvity
• Availability
of
work
programs
online
(email,
apps,
etc.)
§ Wage/hour
legisla6on
has
not
• FLSA
rules
don’t
reflect
realiNes
of
contemporary
workplace
§ “De
minimis”
6me
is
vague
• Dates
back
many
years
• A
few
minutes?
Less
than
ten?
Technology
Outpaces
Regula6on
43

44. § Mobile
device
use,
and
compensaNon,
is
in
the
crosshairs
• Specifically
called
out
in
DOL’s
Spring
2015
regulatory
agenda
• DOL
to
seek
feedback
via
RFI
44
The
Gap
May
Be
Closing...

45. § Experts
see
several
potenNal
outcomes
• May
become
more
firmly
defined
• May
be
scrapped
enNrely
§ Many
scenarios
increase
complexity
and
risk
for
employers
• Stricter
Nme
recording
rules
may
be
coming
• ImplicaNons
for
labor
costs,
as
well
45
The
Fate
of
“De
Minimis”
Time
is
Uncertain

46. § Prohibit
overNme
unless
approved
in
wriNng
• Remind
managers
and
employees
of
this
rule
§ Limit
sending/receiving
messages
aFer
hours
• Managers
should
not
send
messages,
if
pracNcable
• Non-­‐exempt
employees
should
not
respond
unNl
next
business
day
§ Do
not
supply
mobile
devices
to
non-­‐exempt
employees
§ And,
again…
watch
for
signs
of
change
46
Tips
for
Minimizing
Risk

47. A
few
closing
thoughts
Themes
and
Pa:erns

48. § Historic
rate
of
regulatory
change
• Largest
overNme
adjustment
in
at
least
a
decade
• More
local/municipal
acNon
on
leave
§ Current
administraNon
is
employee-­‐friendly
• New
WHD
Administrator
as
of
2014
• IniNal
acts
suggest
broader
regulaNons
§ Changes
can
take
years
to
unfold
• Compliance
knowledgebase
and
managers
tools
are
essenNal
48
Final
Thoughts

49. Q
&
A
Session
49

50. Time
&
A:endance
•
Scheduling
•
Absence
&
Leave
•
Labor
Analy6cs
•
Fa6gue
Management
GLOBAL
WORKFORCE
MANAGEMENT
Time
&
A:endance
•
Scheduling
•
Absence
&
Leave
•
Labor
Analy6cs
•
Fa6gue
Management
GLOBAL
WORKFORCE
MANAGEMENT
Thank
You.
Paul
Kramer,
Director
of
Compliance

51. #WFwebinar
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