In our last post, guest author Stephanie R. Thomas, Ph.D., reviewed some of the disturbing employment litigation trends we witnessed in 2010. In this follow-up post, Dr. Thomas provides suggestions to employers on how to remain proactive in 2011 and reduce the risk of being subjected to an employment related lawsuit.
Wage and Hour Compliance
To prepare for Wage and Hour compliance in 2011, employers should focus their initial compliance efforts on four main areas:
1. Recordkeeping - review your recordkeeping practices to ensure you are keeping information about hours worked each day and each workweek, total daily or weekly straight-time and overtime earnings, and weekly regular hourly rate of pay.
2. Exempt versus Non-Exempt Classification – proper classification is essential to compliance. If your employees are misclassified, it’s likely that you’re going to be out of compliance with other wage and hour laws for these employees.
3. Determination of Hours Worked – ensure that on-call time, waiting time, travel time, setup time and all of the other time required or permitted is included in hours worked, as appropriate.
4. Calculation of Overtime Pay – verify that your overtime calculations are based on the regular rate of pay, not the employee’s file rate of pay. This is one of the most common mistakes employers make.
Retaliation Claims
There are three simple steps employers can take to reduce their exposure to retaliation claims in 2011:
A. Adopt a stand-alone anti-retaliation policy that sets out the prohibition against retaliation and the procedures for redress. A stand-alone policy not only demonstrates that the employer is committed to non-retaliation, it can also be used as evidence in the event that an employee files a retaliation claim in the future.
B. Before an adverse employment action is taken against an employee who has participated in a “protected activity”, that action should be reviewed by appropriate management personnel and legal counsel. The reviewers should consider whether the proposed action is consistent with the employer’s typical practice and whether the action is supported by appropriate documentation.
C. Counsel and train managers and supervisors about retaliation, the organization’s anti-retaliation policy, and how to respond when a complaint is brought to their attention. The employer should also keep documentation on the training (e.g., who received training, what was covered, when the training took place, etc.).
While these three steps won’t guarantee that you’ll be free from retaliation claims, they will help to minimize the risk and can assist in your defense should you find yourself in retaliation litigation.
The Importance of Being Proactive
Based on the recent history of increasing employment litigation, employers should prepare for that trend to continue into 2011. We’re also likely to see more aggressive enforcement efforts from the Department of Labor. To meet this challenge, employers should engage in proactive analyses that assess and minimize the risk of employment-related litigation. These proactive analyses can identify potential problem areas and give the employer an opportunity to take corrective action, where appropriate. In my experience, many matters that resulted in litigation could have been prevented, had the employer performed some basic statistical analysis of its data with respect to equity.
Stephanie R. Thomas, Ph.D. can be reached via the Proactive Employer.