Wage & Hour Defense Blog : Wage & Hour Lawyer & Attorney : Epstein Becker Green Law Firm : DOL Enforcement, FLSA Coverage

By: Dean Silverberg, Evan Spelfogel, Peter Panken, Douglas Weiner and Donald Krueger

Reversing its prior stance, the U.S. Department of Labor (“DOL”) proposes to extend the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) to domestic workers who provide in-home care services to the elderly and infirm. See Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. In 1974, when domestic service workers were first included in FLSA coverage, the DOL published regulations that provided an exemption for such “companions”, whether employed directly by the families of the elderly and infirm, or by a third party employer/staffing agency. Now, heeding calls from organized labor and certain members of Congress, the DOL is moving to close this “loophole.” See“Is the Department of Labor Considering a Revision to the Domestic Service Exemption for Home Health Care Aides?” .

Specifically, the proposed rule would eliminate the exemption for third-party employers, like service staffing agencies, even if the employee is jointly employed by the staffing agency and the family. The new proposal if implemented, would likely drive up costs for families who wish to care for their elderly and infirm at home.

The change would be particularly onerous for Home Health Agencies if it is deemed to be merely a correction of a “misinterpretation” and given retroactive effect. This could lead to claims of past liability for extra overtime compensation for Home Health Agencies that had relied on the Department of Labor’s prior interpretation. The DOL’s prior interpretation, exempting third party employers and staffing agencies from FLSA overtime requirements had been upheld by the United States Supreme Court in the Coke case.

The change in the federal DOL’s interpretation could also affect State Wage Hour Regulations (like New York). These provide favorable treatment for employers of employees who are exempt under the FLSA.

The public has been invited to comment on the proposed new rule. Potentially adversely affected employers may use the public comment period to point out the impropriety of the proposed change after thirty five years of consistent industry wide application of the current rule. Employers might also point out that an unintended effect of the changed rule may be to force the care of the elderly and infirm from their homes to an institutional setting, such as a nursing home or assisted care facility.

By:  Peter M. Panken, Michael S. Kun, Douglas Weiner and Larissa Lalor-Rosado

Misclassification of employees as exempt from overtime compensation has become a cottage industry for plaintiff’s lawyers and for the United States Department of Labor (“DOL”) in the Obama years.  One of the most difficult issues is whether employees meet the so-called administrative exemption to the Wage Hour laws.  In Hines v. State Room, the United States Circuit Court in New England offered some clarity and help to beleaguered employers holding that former banquet sales managers were exempt from overtime requirements under the Fair Labor Standards Act (“FLSA”).

The FLSA, requires overtime pay at the rate of one and one half times the regular rate of pay for all hours worked in excess of 40 hours in a seven day period unless the employee is exempt. The three pronged test for exemption for administrative employees is whether the employee is (1) salaried (paid a regular amount of at least $455 for all hours worked in a workweek); (2) the employee’s primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (3) the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Plaintiffs were banquet sales managers whose job included seeking potential customers for events at the employer, developing the elements of the party or other event and submitting the proposed contract terms for approval by senior officials of the Banquet Halls.

The Court found that Plaintiffs met the first two prongs for exemption: Plaintiffs were paid on a salary basis, and their work was primarily administrative because it was ancillary to the employer’s actual business of providing banquet services.

Plaintiffs claimed that they did not meet the third prong for exemption because they lacked the authority to make any decisions of financial consequence, supervisory authority or policy-making authority.

The Court found that while the plaintiffs’ discretion in matters having significant financial impact was subject to managerial approval, such restrictions did not detract from the judgment exercised in developing a proposal for the client. Plaintiffs’ duties included maintaining primary contact with a client, tailoring an event to their needs, and overseeing the event through to execution. The Court ruled that plaintiffs exercised adequate discretion as sales people to be designated as exempt.

Other Factors Considered for Exemption

The preamble to the current DOL regulations identifies a host of factors that courts have found sufficient to demonstrate that employees exercise independent judgment. 69 Fed. Reg. at 22144. Such factors include:

·                     the ability to exercise discretion and independent judgment,

·                     freedom from direct supervision,

·                     personnel responsibilities,

·                     trouble-shooting or problem-solving activities on behalf of management,

·                     use of personalized communication techniques,

·                     authority to handle atypical or unusual situations,

·                     responsibility for assessing customer needs, primary contact to public or customers on behalf of the employer, the duty to anticipate competitive products or services and distinguish them from competitor’s products or services,

·                     advertising or promotion work, and coordination of departments, requirements or other activities for or on behalf of employer or employer’s clients or customers.

Unfortunately these factors are very fact intensive and do not provide a bright line test for exemption, But the Hines case does offer some useful precedent and guidance for employers. In any event, care must be taken to be sure that the law in a particular state or in a particular circuit does not impose a stricter limitation on the discretion and independent judgment issue.

Take-Away

An employer may retain the right to review an employee’s ability to create financial and contractual obligations and still properly classify the employee as exempt. Requiring managerial approval for these purposes does not necessarily detract from the judgment exercised by the employee at arriving at the proposal in the first place. In addition, as set forth above, there are numerous other factors that courts can consider in determining whether an employee should be designated as exempt.

By:      David Garland and Douglas Weiner

In February 2011, the U.S. Court of Appeals for the Ninth Circuit gave a resounding victory to employers in the pharmaceutical industry by finding that pharmaceutical sales representatives are covered by the outside sales exemption of the Fair Labor Standards Act (“FLSA”). Christopher v. SmithKline Beecham, No. 10-15257 (9th Cir. Feb. 14, 2011). Plaintiffs, and the U.S. Department of Labor (“DOL”) in an amicus brief, had argued the exemption did not apply because sales reps are prohibited from making the final sale. Prescription medicine in the heavily regulated pharmaceutical industry can only be sold to the ultimate consumer with the authorization of a licensed physician. Sales reps use their “selling skills” to persuade doctors to prescribe their employer’s products when the doctor’s patients have a medical need for them. Sales reps do not transfer title to the medicine themselves.

Previously the Second Circuit, in In Re Novartis, took a contrary view and adopted the Secretary of Labor’s position that the outside sales exemption did not apply to pharmaceutical sales representatives specifically because they were prohibited by regulation from making direct sales. The Ninth Circuit rejected the plaintiffs’ and DOL’s “rigid, formalistic interpretation” of the FLSA’s definition of “sale,” which provides that “Sale” … includes any “sale … or other disposition.” 29 U.S.C. 203(k). Because of the uncertainty in this unsettled area of law, both the employee plaintiffs and the employer asked the U.S. Supreme Court to review the Ninth Circuit’s decision.

Pertinent to the aggressive approach the DOL has recently taken in submitting unsolicited amicus briefs in significant cases, another issue the Supreme Court may review is the degree of deference, if any, the court owes to an amicus brief submitted by the DOL. Again in stark contrast, the Second Circuit gave the DOL’s amicus brief “controlling deference” to interpret the DOL’s own regulations while the Ninth Circuit gave the DOL’s amicus brief “no deference” finding it was a departure from established industry norm that the DOL used to short-cut the public notice – and – comment rule making procedures.       

It would be a most welcome development for the Supreme Court to affirm the Ninth Circuit and resolve this dramatic split in the circuit courts. However, even if the Second Circuit’s view of the “outside salesman” exemption is upheld, there are circumstances when sales reps may be exempt by virtue of the administrative exemption. Employers need clarity to structure employment practices without the ever-present threat of class action litigation.

by Michael S. Kun, Eric A. Cook, and Jennifer A. Goldman

California Governor Jerry Brown has signed two employment-related bills into law, raising the stakes for employers doing business in California. The two laws, which increase the penalties for employers that wrongly classify employees as independent contractors or engage in "wage theft," both go into effect on January 1, 2012.

Read the full advisory online

By Kara M. Maciel

As Hurricane Irene is moving up the East Coast and threatening states from North Carolina, Virginia, Maryland, New Jersey, New York and Massachusetts, employers should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.

A few brief points that all employers should be mindful of under the FLSA:

• A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if the employer has a collective bargaining agreement or handbook policies, the employer may obligate itself to pay through such policies.
• An exempt employee generally must be paid for absences caused by office closures due to weather, if he/she performs work in that week. The Department of Labor has stated that an employer may not dock a salaried employee for full days when the business is closed because of weather. Partial day deductions for weather related absences are not permitted.
• If certain employees are required to be on-call (such as public safety, IT, or other essential personnel) during the storm, and the employee cannot use the time effectively for his or her own purpose, the on-call time is compensable and the employee must be paid. However, if the employee is simply at home and available to be reached by company officials, then the time is not working time and an employer does not have to pay for that time.

Policies and procedures to keep in place:

• Decide whether your company will offer “weather days” for non-exempt workers who are absent because of disasters.
• Ensure that your payroll systems are prepared for employees working from home, longer shifts, or not taking lunches.
• Decide whether employees absent because of weather will be allowed / required to use vacation or PTO time.
• Ensure safety of payroll records and ability to process payroll from alternate location if needed.

Natural disasters pose a myriad of employment and HR issues from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time. Our reference tool contains answers to common questions, and while aimed at employers in the Gulf Coast, if you have operations anywhere along the East Coast, you should find it helpful.

By Kara M. Maciel and Jordan Schwartz

As many employers are aware, the federal Fair Labor Standards Act (“FLSA”) mandates that employers pay non-exempt employees one and one-half times their regular rate of pay for all hours worked in excess of 40 in a workweek. However, as discussed by our colleague, Richard Tuschman, in his blog post “Reducing Your Company’s Exposure on FLSA Exemption Claims,” depending on the nature of an employee’s work schedule and salary arrangement, an employer can take advantage of the “fluctuating workweek” method. In so doing, an employer may compensate a non-exempt employee for overtime compensation at a rate of one-half his or her regular rate – as opposed to the usual rate of one-and-one half times the regular rate – because such hours have already been compensated at the straight time regular rate, under the salary arrangement.     

Earlier this month, in Urnikis-Negro v. American Family Property Services, 616 F.3d 665 (7^th Cir. 2010), Ms. Urnikis-Negro, a former clerical employee at a real estate appraisal firm, sought relief from the U.S. Supreme Court and requested that it clarify the “fluctuating workweek” method that employers can use in calculating overtime. Before the trial court, Ms. Urnikis-Negro contended that although she routinely worked more than 40 hours a week, she never received any overtime pay. American Family Property Services argued that she was exempt for overtime as an administrative employee. While the trial court rejected the employer’s exemption classification, it concluded that it could pay her overtime based on the Department of Labor’s (“DOL”) “fluctuating workweek” method.             

In general, pursuant to DOL regulations, the “fluctuating workweek” method applies only when all the following factors are met: 

•  The employee’s hours fluctuate from week to week;
•  The employee receives a fixed salary that does not vary based on the number of hours worked each workweek;
• There is a “clear mutual understanding” between the parties that the fixed salary is compensation for all hours worked each workweek;
•  The fixed salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage for all hours worked each workweek; and
• The employee receives additional compensation (in addition to the salary compensation) for all overtime hours worked at a rate of at least one-half the employee’s regular rate of pay. 

On appeal, the U.S. Court of Appeals for the Seventh Circuit noted that the propriety of relying on the DOL’s regulations regarding the “fluctuating workweek” method in cases where the employee has been misclassified by her employer as exempt from the FLSA’s overtime provision has divided federal courts. Nevertheless, the Seventh Circuit affirmed the trial court’s application of the “fluctuating workweek” method because the evidence demonstrated that the employee’s hours varied from week to week and she understood at the time of her hiring that her fixed salary was intended to cover all of the hours that she worked in a given workweek, even if they exceeded 40 hours per week. 

If the Court reviews the case, it will resolve the question of whether the “fluctuating workweek” method can use used to calculate the amount of overtime liability in cases where an employer has misclassified an employee as being exempt from the FLSA’s overtime provisions. And, as a practical matter, the Court’s decision to hear and subsequently rule on this case will have a significant impact on the extent of employer liability in misclassification cases in the future. 

On October 14, the IRS announced that the Health Care Reform Law's requirement that employers report the cost of health insurance on W-2's along with wages will be delayed by one year.  Now, employers must report health insurance cost on the 2012 W-2s, which in most cases will be issued to employees in January 2013. 

The announcement explained that “the Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement."   The announcement also clarified that health insurance amounts listed on W-2s are not taxable as wages.

by Kara M. Maciel

The healthcare industry continues to be the main target in the onslaught of wage and hour claims asserting violations of unpaid overtime and missed meal periods. These claims often result in millions of dollars being paid out to settle lawsuits and government investigations. 

As recently reported by the New York Times, the Obama Administration and the Department of Labor continue to focus on the healthcare industry over its pay practices. Armed with significant financial resources and additional investigators, the DOL has increased its enforcement efforts across the country, with notable results. For example, the DOL recovered more than $2.7 million from a Boston hospital system for 700 employees in overtime back wages. Similarly, in St. Louis, a healthcare employer recently settled with the DOL for $1.7 million for over 4,000 employees. Residential nursing homes and assisted-living centers are facing similar investigations.    

Many of the cases focus on overtime violations as a result of missed meal breaks. Under the federal Fair Labor Standards Act, an employee is entitled to a bona fide meal period during which the employee must be completely relieved from duty. If an employee is called back to work or is otherwise performing some patient tasks during the meal break, then the entire break period becomes compensable work time. Often, employers set their time clocks to automatically deduct 30 minutes per day in accordance with their policy that employees are required to take a full meal break during their shift. If an employee fails to report to his manager or to accounting that he worked during all or part of his meal break, the employer inadvertently could fail to pay the employee for all time worked.  For hospitals and other healthcare employers, monitoring duty-free meal breaks is especially difficult considering the importance of patient care which complicates regular, set schedules. Also, these claims are difficult to defend because the employer does not have complete and accurate records of when the employee worked during the meal break.   

The explosion of wage and hour actions against healthcare employers is due in large part because it is one segment of the economy that is growing and expanding its workforce, especially now with the enactment of health reform. Plaintiffs’ attorneys are also becoming much more aggressive in their efforts to target vulnerable employers. No longer waiting for a disgruntled employee to make a complaint, plaintiffs’ attorneys are using the ease of the internet to identify potential class members and highlight their investigations against susceptible hospitals and healthcare providers.   

In response to the renewed attention by the government and plaintiffs’ counsel, all healthcare employers must be on alert and understand that they are increasingly the focus for a government investigation or a class action lawsuit. The tidal wave of claims is not receding and employers must be vigilant in their compliance with federal and state wage hour laws. Employers should ensure that they have compliance programs in place with a strategic plan for handling potential audits and enforcement actions. Additionally, establishing a defensive game plan in the event a lawsuit is filed is essential to limiting exposure to liability early in the case. If a comprehensive payroll practices compliance audit has not been performed yet this year, now is the time to spot potential vulnerabilities and implement corrective solutions. Areas to check include time spent before or after scheduled shifts, missed meal breaks, travel time spent between patients’ homes, recordkeeping and proper classification of exempt employees. Spending the time and effort proactively reviewing pay practices can pay off significantly in the event the government knocks on the door or a class action lawsuit is filed.        

By:  Douglas Weiner

The following sounds like a “win-win” situation, doesn’t it? An enthusiastic and energetic individual approaches you with a proposal to volunteer his or her time and services to gain valuable experience in your industry. “After all,” reasons the prospective volunteer, “how can I get my first job if I have no experience in the field of my choice?” Ambitious job seekers may approach an employer volunteering to work as an unpaid “trainee” or “intern” to gain skills, experience and contacts in their chosen field.

However, vigilant employers will not merely accept the prospective intern’s agreement to do volunteer work, but will apply the required legal analysis.  Despite the individual's offer to work for free, the Department of Labor may reclassify the individual as an employee, and require the employer to pay back wages for all hours worked, including overtime.     

An unpaid internship must be primarily for the benefit of the trainee, rather than the employer. Certain employers have established training programs for interns that do qualify for exclusion from the Fair Labor Standards Act. The criteria an employer must satisfy is set forth in Fact Sheet #71: The Test for Unpaid Interns  When all six criteria are met, an employment relationship does not exist under the FLSA, and the federal minimum wage and overtime provisions do not apply to the individual. 

For employers considering an unpaid internship program for one or more individuals, we recommend certain policies, practices and procedures be implemented as precautionary measures.

• Distinguish interns from employees. Create written policies devoted exclusively to the interns; avoid using the same policies and handbooks for both interns and employees.
   
• Review handbooks to remove terminology from written policies that blurs the line distinguishing interns from employees (for example, written policies should not say that an intern is being “hired”, or refer to interns as “Associates” or “Summer Associates” .).
   
• Require a signed written statement from the prospective intern evidencing the understanding that the intern has no expectation of wages, and the employer makes no guarantee of a job at the end of the internship.
   
• Document expense reimbursements, if any, to specific expenses with receipts to evidence that there were bona fide expenses incurred by the intern that were, in fact, reimbursed. Without records the DOL may conclude the “expense reimbursements” were disguised wages.

Conclusion

Employers must carefully assess the benefits, and risks, of managing an unpaid internship. Unless an employer is able to establish that the criteria set forth in Fact Sheet #71 are met, the DOL is likely to find that an intern is an employee who must be paid minimum wage and overtime.

Florida led the nation in Fair Labor Standards Act lawsuits in 2009. Statistics generated from PACER (Public Access to Court Electronic Records) show that about 2000 new cases were filed in United States District Courts in Florida last year, far more than in any other state. 

Of course, Florida is not the only hotbed of wage-hour litigation. California, which has its own, more rigorous wage-hour laws, has a large number of wage-hour cases filed in its state court system. Texas and New York are also seeing increasing numbers of wage-hour cases.

But when it comes to the FLSA, the Sunshine State rules. The reasons for this are somewhat mysterious. Are Florida employees more litigious than in other states? Do Florida employers violate the FLSA more often? Is there a more active plaintiff-side employment bar in Florida? I suspect the answer is a combination of all these factors, plus good old-fashioned word of mouth. Here’s what I mean: the vast majority of FLSA cases settle before trial. FLSA settlements generally must be approved by a court, see Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982), and many judges refuse to allow FLSA settlements to be confidential. And even if the terms of a settlement are confidential, a settling plaintiff can always disclose that the case has been “resolved amicably,” or words to that effect. Whatever the exact words, the message is clear – the plaintiff got a nice check. It’s like that old shampoo commercial from the 70’s: a settling plaintiff tells two friends, and they tell two friends, and so on and so on… Pretty soon you have 2000 FLSA cases on the docket.

So what can a Florida employer do to avoid being named in an FLSA lawsuit? Well, the best advice I can offer is to make every reasonable effort to comply with FLSA. That may seem obvious, but it’s not as easy as it sounds because the FLSA can be counterintuitive; its rules are often inconsistent with what seem to be reasonable and ethical business practices. But if you learn what the FLSA requires, and adopt policies and practices that are consistent with the law, you will go a long way toward avoiding a lawsuit. And, yes, get the advice of a qualified employment lawyer if you are unsure about what to do. Believe me, it will be far less expensive than litigation.

It is that time of the year when most companies start thinking about handing out year end or Christmas bonuses to their employees.  For exempt workers, such payments are not a concern.  For non-exempt workers, however, bonus payments raise the prospect of adding to the employee's regular rate, which could result in additional overtime liability.  For example, if an employee works overtime in the week he receives a bonus check of $400.00, the Department of Labor may require the bonus to be included in the "regular rate" upon which the time and one half overtime calculation is based (i.e. add $10 per hour to regular rate).

Companies can easily avoid the overtime problem by carefully crafting their bonus policies to fit within the Department of Labor's exclusion for "discretionary payments" (29 CFR 778.211).  The relevant regulation provides:

The employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid. The sum, if any, to be paid as a bonus is determined by the employer without prior promise or agreement. The employee has no contract right, express or implied, to any amount. If the employer promises in advance to pay a bonus, he has abandoned his discretion with regard to it. Thus, if an employer announces to his employees in January that he intends to pay them a bonus in June, he has hereby abandoned his discretion regarding the fact of payment by promising a bonus to his employees.

For employers, this means it is critical that bonus policies be scrutinized to ensure there are no promises or guaranties of payment, and that the appropriate discretion language is included.  If not, your Company could be on the hook for a much larger Christmas bonus this year than you anticipated.

Several of the firm's labor lawyers in our New York office provided the following update on recent changes to New York wage and hour laws.

As we previously reported in our Summer 2009 New York State Employment Law Update, as of October 26, 2009, New York Labor Law Section 195(1) requires employers to notify all newly hired employees of the following: (i) rate of pay, (ii) regular paydays, and (iii) hourly rate and overtime pay rate (for all non-exempt employees). Employees must sign a statement acknowledging receipt of the written notice, and employers must keep the signed statement for at least six years.

On October 28, 2009, the New York State Department of Labor ("DOL") published an official form entitled, "Labor Law Section 195(1) Notice and Acknowledgement of Wage Rate Hourly Rate Plus Overtime," to be used for newly hired, non-exempt, hourly employees. The DOL also published Fact Sheets for both Employers and Workers, each of which state that notice must be given on the official form from the DOL. The notice must be provided to employees at the time of hire, before they do any work. The DOL's Forms and Fact Sheets may be accessed at the DOL Web site.

The DOL has informed us that it is currently preparing additional Notice and Acknowledgment Forms for other categories of employees, such as commissioned salespersons, non-exempt salaried employees and exempt employees. In addition to the forms, the DOL will also publish guidelines to assist employers in complying with the new requirements. The DOL has already published guidelines for temporary employment agencies on its Web site, along with a Notice and Acknowledgment Form to accommodate pay rates that vary for temporary assignments.

The DOL has advised that employers are no longer permitted to satisfy the new-hire notice and acknowledgment requirements by simply incorporating the required terms in offer letters or other "unofficial" forms. According to the DOL, employers must use the recently published official DOL Notice and Acknowledgment Form for all categories of employees (even though this form was created for use with non-exempt hourly employees). Once the DOL publishes its other Notice and Acknowledgment Forms, the appropriate form should be used. We will provide additional information regarding these other Notice and Acknowledgment Forms, as well as the related guidelines, when they are published by the DOL.

In a recent Client Alert prepared by Jeff Landes, the firm summarized several new laws passed by the New York legislature which will affect employers.  Among these laws was a very important change to the wage and hour laws, which will affect all companies with employees in New York.

Rate of Pay, Regular Pay Day and Overtime Rate Must Be in Writing and Acknowledged by New Hires

Labor Law Section 195(1) currently requires employers to provide newly hired employees with information regarding their rate of pay and the employer's regular pay days – such notice need not be written. On July 28, 2009, however, the New York Labor Law was amended to require employers to provide all employees hired on or after October 26, 2009, with written notice of their rate of pay and the employer's regular pay days. In addition, employees who are eligible for overtime (including non-exempt, salaried employees) must be notified of their regular hourly rate and their overtime rate of pay. Employers will be required to obtain a written acknowledgment of receipt of such notice from each new employee. The legislature has not specified the content and form of the acknowledgment, but indicated that the Commissioner of Labor may provide guidance.

A client this week asked us to provide an opinion letter regarding the exempt status of certain supervisors, and some tips on how to avoid lawsuits regarding mis-classification.  Although some of the advice was specific to the client's business, much of the advice is applicable to a wide variety of industries.  An excerpt from the memo is below.

• Carefully craft job descriptions to emphasize exempt duties over non-exempt duties – require employees to acknowledge their job descriptions in writing.
• List the two or more employees supervised by an exempt manager in the job description (either by name or by title). This ensures this requirement is not inadvertently overlooked.
• Ensure that managers are involved in both hiring and termination decisions.  The Company should have a paper trail easily proving this element.  Even if managers do not typically make termination decisions, consider having them “sign off” on the termination of employees at their location, thus establishing their participation in the process.
• Supervising two or more employees is a minimum requirement, not necessarily a safe guidepost. Often, supervising only a handful of employees is not a full time job, leaving a manager with most of their time spent on non-exempt work. If the manager does not have a sufficient number of subordinates to justify spending most of his or her time on management, reconsider whether the employee should be classified as exempt.
•  Exempt managers should be paid differently than non-exempt workers. For example, a manager’s pay should be notably different from those he or shesupervises, not only in amount but also in type. A manager’s pay should be related primarily to management performance (i.e. performance of the department or office as a whole), not the performance of non-exempt tasks. Likewise, bonuses and other incentives should not be tied to non-exempt tasks.
• Consider how the number of managers in an office or location will be perceived by a judge or jury reviewing the facts. Someone has to be in charge, and one manager of a department or office is likely to pass muster as a valid exempt employee. As the number of exempt managers in a single location rises, however, the defensibility of the exemptions goes down. 

As hurricane season is fast approaching, we thought it an appropriate time to offer some thoughts and tips on the wage and hour issues that should be addressed in your company's policies and procedures.  The attached reference tool contains answers to common questions such as:

• Can we dock the salaries of exempt employees who do not come to work during a hurricane or timely return to work afterwards?
• What rules must we follow regarding paying employees who are absent because of weather?
• What do we do if we can't find employees to give them their paychecks?

Although the attached brochure is aimed at Texas employers, if you have operations anywhere along the Gulf Coast, you may find it helpful.