Technology Working for (and Against) Us

I read yesterday that the Department of Labor (DOL) is launching a Wage and Hour application (app) for Smartphones. This app will allow employees to track their hours worked and when their paycheck does not accurately reflect their records, they can submit their complaint to the DOL. There is even a connection the DOL has to the American Bar Association that offers attorney referral services to employees whose cases the DOL chooses not to take on. Sounds good, right?

According to the DOL, there was a significant increase in 2010 of wage and hour lawsuits (close to 6,800 about 700 higher than 2009). While that number may seem low in the grand spectrum of employment, the DOL has added a few hundred more examiners to combat the forecasted increase in these types of claims. The DOL’s thought process is that this app will make it easier for effected employees to issue complaints and receive their proper pay. Employees who work for companies that may not follow all wage and hour regulations (whether intentionally or out of ignorance) will surely be benefitted. For those companies that follow the rules, this could be a problem. Wage and hour claims can take up valuable resources and cost companies large amounts of money – even if the company is compliant with the law!

From an employer standpoint, this new app should be concerning – if not alarming. As with any computer related application, the information that is input is only as relevant and factual as the person entering it wants it to be. Therefore, any unhappy or disgruntled worker could potentially wreak havoc for a company who follows the guidelines. Most Wage and Hour claims are related to improper classification of exempt employees and not paying non-exempt employees the right amount of overtime. Having a firm grasp on your company’s pay practices is the best remedy to future claims.

This is a great time to make sure your pay policies and compensation programs are in line with the law. Using the exemption tests to check the status of each position helps to alleviate wage and hour complaints. Also, communicating to all non-exempt staff that they must log all hours worked is a good idea. There is always an employee who might stay an extra 15 minutes to finish a project or who may come in early to help cover the office and not log this extra time (for whatever reason). One area that seems generate questions is off site training classes that may or may not include work hours. Check with your compensation team or consultant to find out the criteria paying employees correctly. If an employee happens to work unapproved overtime, they can be disciplined but they must be paid for that time. The important thing to remember is that they must log and be paid for all time worked.

If you follow the DOL rules and regulations, it does not guarantee that you will be safe from wage and hour allegations however you will have a solid standing and response if there is a case brought against your company. Another to remember is to not give any impression of retaliation against an employee who brings either a false or legitimate Wage and Hour claim. That could lead to a whole other set of problems.

The rule we should always remember is – Do what you can to prevent the DOL from knocking on your door.

Don’t forget to CELEBRATE!