This webinar will demonstrate how the use of job analysis can help you limit your company’s risk of experiencing wage and hour issues and turn around those issues you may now face.

1. Wage and Hour Law: Your Company’s Not
Exempt From Litigation
Speaker: Toni Locklear, Ph.D.
Industrial Psychologist and Managing Director
APTMetrics, Inc.
Robert Lewis, Ph.D.
Industrial Psychologist and Vice President
APTMetrics, Inc
Moderator: Mike Prokopeak
Vice President, Editorial DIrector
Talent Management magazine
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3. Tools You Can Use
• Polling
– Polling question will
appear in the
“Polling” panel.
– Select your
response and click
on “Submit.”
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5. Wage and Hour Law: Your Company’s Not
Exempt From Litigation
Mike Prokopeak
Vice President, Editorial Director
Talent Management magazine
#TMwebinar

6. Wage and Hour Law: Your Company’s Not
Exempt From Litigation
Robert Lewis, Ph.D.
Industrial Psychologist and Vice President
APTMetrics, Inc.
Toni Locklear, Ph.D.
Industrial Psychologist and Managing Director
APTMetrics, Inc.
#TMwebinar

7.
Wage
and
Hour
Law:
Your
Company’s
Not
Exempt
from
Litigation
Presented
by
Robert
E.
Lewis,
Ph.D.
and
Toni
S.
Locklear,
Ph.D.
September
13,
2011
! 2011 APTMetrics, Inc.

8. Agenda
• Introduction
to
wage-­‐hour
law
• Why
care
about
wage-­‐hour
laws?
• Difficulties
implementing
wage-­‐hour
laws
• How
to
limit
risks
associated
with
wage-­‐hour
laws
8 Privileged and Confidential

9. Introduction
to
Wage-­‐Hour
Law
• What
is
regulated
by
wage-­‐hour
law?
• Federal
law:
• overtime
pay
• minimum
wage
• child
labor
• record-­‐keeping
requirements
• State
law:
• meal
and
rest
breaks
• discharge
notices
• pay
upon
discharge
9 Privileged and Confidential

10. Introduction
to
Wage-­‐Hour
Law
• Key
issue
in
wage-­‐hour
litigation:
Exemption
• Exempt—not
subject
to
overtime
pay
regulations
• Non-­‐exempt—subject
to
overtime
pay
regulations
10 Privileged and Confidential

11. Exemption
Standards
• Based
on
the
work
as
it
is
done
• Individual
determination
• Exemption
types:
• Executive
• Administrative
• Professional
• Computer
Professional
• Outside
Sales
11 Privileged and Confidential

12. Exemption
Standards
• Key
work
tests:
• Salary
level
test
• Duties
test
• Discretion
• Independent
judgment
• Authority
• Hire/fire
authority
• Prolonged
course
of
specialized
instruction
12 Privileged and Confidential

13. Polling
Question
1. What
percent
of
jobs
in
your
company
are
classified
as
exempt
from
federal
and
state
wage-­‐
hour
laws?
a. Less
than
20%
b. 20
–
40%
c. 41
–
60%
d. 61
–
80%
e. 81
-­‐
100%
f. I
don’t
know
13 Privileged and Confidential

14. Little
Known
Facts
• Classifying
jobs
as
exempt
is
voluntary
• No
requirement
to
claim
exemption
for
any
job
• Employers
bear
the
burden
of
proof
when
claiming
exemption
• The
Department
of
Labor
estimates
70
percent
of
employers
are
not
in
compliance
with
the
FLSA
in
some
way
14 Privileged and Confidential

15. Wage-­‐hour
Issues
are
Important
• Lawsuits
are
on
the
rise
• Wage
hour
suits
outpace
others
(e.g.,
discrimination)
• 77
percent
rise
in
lawsuits
filed
between
2004
and
2009
• Multi-­‐million
dollar
settlements—
• $1.77
billion
in
settlements
in
2007-­‐2010
• Average
settlement
of
$12.8
million
per
case
• Damages
• Back
pay
for
lost
wages,
interest,
liquidated
damages,
and
attorneys’
fees
• Treble
damages
in
some
states
• Changing
exemption
status
can
create
litigation
risk
15 Privileged and Confidential

16. Difficulties
Implementing
Wage-­‐hour
Laws
• Wage-­‐hour
administration
crosses
organizational
lines
• The
HR,
finance,
legal
functions
generally
have
some
responsibility
• Little
coordination
among
them
• Key
players:
legal
and
HR
• Work
is
changing
• Leaner
staffing
levels
require
managers
to
do
more
“non-­‐managerial”
work
• Laws
require
interpretation
• What
is
“work
time”?
• When
is
doing
non-­‐management
work
“essential”
to
doing
management
work?
16 Privileged and Confidential

17. Polling
Question
2. Which
jobs
do
you
wrestle
with
most
regarding
wage-­‐hour
issues?
a. Assistant
managers/team
leaders
b. Computer
technicians
c. Accountants
d. Project
managers
e. Other
17 Privileged and Confidential

18. Key
Wage-­‐hour
Concerns
• Employees
working
off
the
clock
• Ensuring
that
employees
take
meal
breaks
• Determining
a
job’s
exemption
status
18 Privileged and Confidential

19. Reactions
to
Wage-­‐hour
Challenges
• Delegate
wage-­‐hour
compliance
to
field/
district
management
• Conduct
compensation/market
analyses
Level of Effectiveness
• Empower
Staffing
to
make
exemption
decisions
at
hire
• Create
policy
manual
section
on
wage-­‐
hour
compliance
• Regular
audits
of
wage-­‐hour
policies/
implications
• Train
managers
on
managing
meal
breaks
and
overtime
• Conduct
job
analysis
19 Privileged and Confidential

20. Case
study
–
Guinup
v.
Petr-­‐All
Petroleum
Are
retail
store
managers
entitled
to
overtime
pay?
• The
Plaintiff’s
Claim
-­‐-­‐
the
company
misclassified
all
of
its
store
managers
as
exempt
from
both
the
FLSA
and
state
wage-­‐hour
law
• Plaintiff
managed
a
convenience
store/gas
station
in
NY
state
• Plaintiff
spent:
• 80%
of
her
time
on
nonexempt
duties
such
as
counting
cigarettes
and
verifying
gas
readings
• 20%
of
her
time
on
exempt
duties
such
as
scheduling,
supervising,
and
evaluating
employees
• Most
of
her
day
free
from
supervision;
the
regional
manager
was
generally
not
in
the
store
20 Privileged and Confidential

21. Limiting
the
Risk
of
Wage-­‐hour
Issues
• Knowing
the
work
that
is
done
is
the
number
one
way
to
limit
wage-­‐hour
risk
• Job
Analysis
is
the
preferred
method
for
documenting
work
requirements
• Structured
• Defensible
• Drives
coordination
• Documents
critical
job
components
• Frequency
and
importance
of
work
activities
• Entry
requirements
for
knowledge,
skills
and
abilities
• Level
of
discretion
and
autonomy
• Policy
creation
versus
enforcement
versus
execution
21 Privileged and Confidential

22. Limiting
the
Risk
of
Wage-­‐hour
Issues
• Job
analysis
process
• Determine
jobs
that
present
risk
• Collect
structured,
verifiable
data
• Develop
a
comprehensive
work
activity
and
knowledge/skill/ability
list
with
job
experts
• With
your
employment
attorney,
decide
which
activities
are
exempt
• Identify
the
ratings
you
need
based
on
your
state
(importance,
time
spent,
level
of
autonomy,
etc.)
• Administer
the
survey
to
the
entire
population
• Analyze
the
data,
including
for
exemption
implications
• Means
and
standard
deviations
• Illustrate
the
findings
using
visuals
to
facilitate
comparing
jobs
on
relevant
dimensions
22 Privileged and Confidential

23. Limiting
the
Risk
of
Wage-­‐hour
Issues
Job
Analysis
Results
• How
important
are
these
job
activities
for
the
Manager
job?
• 3
–
Critically
important–
this
activity
has
significant
impact
on
profit,
performance,
or
safety
• 2–
Important-­‐-­‐
poor
performance
on
this
activity
hinders
performance
• 1-­‐-­‐
Minor
Importance–
this
activity
must
be
done
but
has
little
impact
on
profit,
performance
or
safety
• 0–
Not
Applicable–
this
activity
is
not
performed
in
this
job
23 Privileged and Confidential

24. Limiting
the
Risk
of
Wage-­‐hour
Issues
Job
Analysis
Results
• Including
both
exempt
and
non-­‐exempt
activities
allows
you
to
assess
the
degree
to
which
job
respondents
meet
exemption
criteria
24 Privileged and Confidential

25. Limiting
the
Risk
of
Wage-­‐hour
Issues
• Develop
job
descriptions
based
on
the
job
analysis
• Key
activities
and
responsibilities
• Key
and
required
KSAs
• Minimum
and
preferred
qualifications
25 Privileged and Confidential

26. Job
Profiles
26 Privileged and Confidential

27. Job
Profiles
27 Privileged and Confidential

28. Job
Profiles
28 Privileged and Confidential

29. Limiting
the
Risk
of
Wage-­‐hour
Issues
• HR
Audit
• Policies—are
wage-­‐hour
considerations
reflected
in
policies?
• Use
of
pagers
and
smartphones
for
email
access
• On-­‐call
duty
for
computer
operators/technicians
• Use
of
company-­‐owned
vehicles
• Practices—are
processes
in
effect
for
managing
issues
on
an
ongoing
basis?
• Grievance
process
for
work
time
complaints
• Active
training
program
for
managers
to
understand
their
responsibilities
• Cross-­‐functional
committee
responsible
for
wage-­‐hour
issues
that
meets
regularly
• Regular
employee
survey
to
determine
how
employees
spend
their
time
in
important
work
activities
29 Privileged and Confidential

30. Summary
• Wage-­‐hour
issues
require
cross-­‐functional
management
• Typically
from
Legal,
HR
and
Finance
• Knowing
the
job
is
your
best
proactive
and
defensive
measure
• A
job
analysis
is
a
court-­‐tested
method
of
determining
status
• Changing
an
employee’s
exemption
status
without
knowing
and
changing
activities/skills
is
a
recipe
for
litigation
• Audit
your
policies
and
practices
to
ensure
coordination
and
proactive
measurement
• Policies
to
ensure
guidance
• Practices
to
ensure
execution
30 Privileged and Confidential

31. Questions and Answers
Robert Lewis, Ph.D.
Industrial Psychologist and Vice President
APTMetrics, Inc.
Toni Locklear, Ph.D.
Industrial Psychologist and Managing Director
APTMetrics, Inc.
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