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Wage-hour issues to consider during the holidays

BY CSA STAFF

By Bruce M. Cross, [email protected]

In the holiday rush, it’s easy to overlook wage-hour issues. This article discusses common ones to which retailers should be alerted, including: temporary workers and independent contractors; unpaid interns and trainees; “off-the-clock” work, meal and rest breaks; seating requirements; cost of uniforms; workplace safety; and overtime exemptions.

Temporary workers
Many employers obtain temporary workers from staffing agencies. That’s perfectly okay, so long as the agency is properly compensating them, paying payroll taxes and withholding FICA and federal income taxes from their wages. If the agency does not do that, the receiving employer may be held responsible. The same is true for overtime compensation because the receiving employer is likely a "joint employer" with the staffing agency. Therefore retailers should review the agreements they have with staffing agencies and be sure that the agencies are handling payroll matters properly.

Employers using agency workers should also check the language of their benefit plans to be sure that agency workers are not covered. Even if the employer does not regard agency workers to be employees, if the eligibility language of the formal plan documents is not precise, the workers may legally be entitled to those benefits.

Independent contractors
Just calling a worker an "independent contractor" does not make it so. Many so-called independent contractors are really employees, entitled to protection under a variety of employment laws, such as minimum wage and overtime compensation laws, nondiscrimination laws and labor laws — not to mention payroll taxes and withholding.

Although the legal definitions for independent contractors vary from one law to another, the basic idea is that if an employer controls the manner and means by which the work is done, as opposed simply to the end result, the worker is likely an employee, no matter what characterization the parties use. Also, some workers who in fact meet the IRS test of independent contractors are still considered employees for state unemployment and worker compensation payroll taxes.

State and federal tax authorities routinely audit employers for compliance, assessing back taxes and penalties for noncompliance. In addition, if an independent contractor is injured on the premises, the employer may be liable for the injuries, whereas most employee injuries are covered by worker’s compensation. Therefore it pays to be sure that workers treated as independent contractors really are.

Unpaid interns and trainees
Well publicized lawsuits are being filed by unpaid interns claiming protection under the wage and hour laws as employees. As a matter of fact, it is very difficult for a private-sector employer to legally have unpaid workers, whether they are called interns or trainees, although many employers do not understand this. The U.S. Department of Labor has very stringent requirements for unpaid interns/trainees. The result is that if a person is doing work for a private employer, he or she is probably an employee who must be paid at least minimum wage and overtime pay and who may also be entitled to participate in the employer’s benefit plans.

Off-the-clock work
Employees must be paid for all time worked, even if it is before they clock in or after they clock out. Common types of off-the-clock work include:

  • Call center employees logging into their computers, getting ready to answer calls;
  • New hire orientation and training;
  • Changing into and out of work clothes or uniforms;
  • Standing by for work; and
  • Tidying up after closing.

Depending on the circumstances each of these activities may constitute work that must be paid for, perhaps at overtime rates.
Employees must be paid for overtime work even if they did not get permission to work it, so long as the employer knew of the work or was on "notice" of it. The fact that the employee violated instructions not to work overtime may not be a defense.

Finally, if employees are working off-the-clock, the employer has an additional problem: it’s not complying with its record keeping obligations. The absence of accurate records makes it much easier for employees to pursue wage claims.

Meal and rest breaks
Many states have stringent requirements for meal and rest breaks. Some have penalties for noncompliance; others simply require additional pay if the breaks are not taken. When employees are scheduled to work full time, the pay for missed breaks may be at overtime rates.

Seating requirements
Some states require employers to provide suitable seating for employees. In those states, additional seating may be required for the holidays due to increased staffing.

Costs of uniforms
If employees are required to wear special clothing, there are at least two potential ramifications. Under federal law, if employees are required to pay for and maintain special clothing, the cost may be considered a reduction of their wages — which may result in minimum wage violations. Some states make employers pay for and maintain special clothing at no cost to the employee.

Workplace safety
Workplace safety laws protect all employees. Some state laws require safety orientation and training before newly hired employees are assigned to work. Failing to do that exposes the employer to citations and penalties — especially if a new employee is injured due to lack of training. All employees are protected by safety and health laws dealing with exposure to hazardous chemicals, and these laws apply even to ordinary household chemicals if the employee has a greater exposure to them than he or she would have at home.

Overtime exemptions
Misclassifying employees as exempt from overtime pay is a widespread problem due, in large part, to common misconceptions. For example, just because someone is paid a salary does not mean that he or she is exempt. Also, outside sales people may be exempt from overtime requirements, but merchandisers typically are not. Similarly, although some retail commissioned sales people may be exempt, most inside sales employees are not.

The wage-hour laws of some states are far more demanding than federal laws. For example, in California store managers and assistant store managers are not exempt if they spend more than 50% of their time on non-exempt work. During the holiday season, it’s pretty easy to exceed that threshold.

The bottom line
The wage-hour laws are not suspended during the holiday season. If an employer has any questions about them, it’s good to ask for advice — in advance.

Bruce M. Cross is a partner in the Labor & Employment practice of law firm Perkins Coie LLP, in the Seattle office. He has extensive experience representing companies throughout the country, including those in the retail sector, on a variety of labor and employment issues. Cross can be reached at [email protected].


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J.Zune says:
Feb-13-2013 08:13 pm

I get your way of writing and I really appreciate it as a visitor as I am here to give you some good suggestions all about fashion for men and their wears to make their selves nice as look however mens ORANGE Blazer the all used stuffs in it are unique and are also comfort as wear.Thanks and Regards

J.Zune says:
Feb-13-2013 08:13 pm

I get your way of writing and I really appreciate it as a visitor as I am here to give you some good suggestions all about fashion for men and their wears to make their selves nice as look however mens ORANGE Blazer the all used stuffs in it are unique and are also comfort as wear.Thanks and Regards

J.Smith says:
Dec-05-2012 08:59 am

There are a few wage and hour laws that need to be considered. First, regarding non-exempt employees, such employees do not have to be paid for hours they do not work. Thus, such employees need not be paid during the closure. If non-exempt employees have paid vacation time accrued but unused, they should be given the opportunity to use that paid vacation time during the closure, but they should not be forced to do so. Of course, if the employer has a policy offering paid holidays for Christmas and New Years Day, employees should be paid for those two days and should not have to use their vacation time. Jason from http://bit.ly/N1y0Iq

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Pacific Sunwear and Demandware launch multichannel commerce solution

BY Katherine Boccaccio

Burlington, Mass. — E-commerce solution-provider Demandware said Monday that Pacific Sunwear of California has launched Demandware’s Multichannel Commerce Solution, powered by the Demandware Commerce platform, across its web, mobile and tablet channels as well as its brick-and-mortar stores.

Pacific Sunwear replaced its legacy platform with the new cloud-based platform.

“With technology continually evolving, we need a platform that is easily extendable and enables us to quickly and cost-effectively adapt to serve our demographic across various channels and devices,” said Mondy Beller, VP e-commerce for Pacific Sunwear.

As part of its strategy to extend the consumer shopping experience, Pacific Sunwear has integrated web and mobile into its stores. If a product is not available in a store, sales associates help consumers make purchases via tablets, with shipping included at no cost.

With the new launch, Pacific Sunwear can now operate a central platform for managing multiple consumer touch points and a seamless brand experience regardless of channel; deploy complimentary technologies such as social sign-in through the solution’s pre-built integrations; provide an online community for idea exchange; and personalize product and content views based on gender, location and interests.

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Nov-15-2012 05:02 pm

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Nov-15-2012 05:02 pm

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Ikea gives former foster kids a head start

BY CSA STAFF

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The Ikea "starter kits" included sheets, a comforter, pots and pans, towels and other in-home necessities.

"To be able to help young people establish a comfortable and welcoming home for themselves is a great fit with our vision and our business idea. Ikea is happy to be able to support these young adults and we hope it makes a difference in their lives," said Martin Grieder, distribution anager of the IKea Tejon Ranch Distribution Center. "At Ikea, we believe in helping to create a better everyday life for the many people."

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