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Employment Law Update: Feds Unveil Plans That Assist Employees in Bringing Wage and Hour Claims Against Employers
In April, I wrote about the federal Department of Labor issuing the final regulations amending the Fair Labor Standards Act (FLSA), particularly with respect to tip pools. See Employment Law Update: DOL's Final Rule Amends Wage and Hour Regulations. But that’s not all that the agency has been up to. It is now implementing two initiatives that it believes will assist employees in bringing wage and hour claims against employers.
The “App” for Timekeeping
In May 2011, the DOL’s Wage and Hour Division announced the launch of a timekeeping application for smartphones that allows employees to independently track the hours they work and determine the wages they are owed. It is available in English and Spanish, and is compatible with the iPhone and iPod Touch. The application does not account for taxes, deductions, and similar amounts. Rather, it is a basic time tracker that records hours worked, break times and overtime.
The agency anticipates future versions for other smartphone platforms, such as the Android and BlackBerry, with additional features that will track and calculate tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials, and pay for regular days of rest.
For employees who do not have an iPhone or iPod Touch, the agency has a printable work hours calendar in English and Spanish to track the rate of pay, work start and stop times, and arrival and departure times. The calendar also has a link to the agency website where there is information about workers’ rights and how to file a wage and hour violation.
Employers are understandably concerned about this initiative. Many employers find it is hard enough to get employees to clock in and out using the employer’s own timekeeping system. Now, with this application, these failures will be exacerbated by an employee who claims that while he failed to use the employer’s system, he remembered to use his personal system. It is also foreseeable that employees will incorrectly count time as “worked,” e.g., paid holidays, or will otherwise incorrectly record time as “worked,” leading to more disputes and claims for unpaid wages.
Automatic Referrals to Private Attorneys
The second initiative, dubbed “Bridge to Justice,” was implemented in December 2010. Under this initiative, if the department decides not to pursue a claim for a wage and hour violation under federal law, or a claim under the federal Family and Medical Leave Act (“FMLA”), it automatically gives the claimant a toll-free number to contact a newly created attorney referral system. This service will provide the claimant with the name and contact information for an attorney in the claimant’s area. The claimant will also be provided with the agency’s determination regarding the alleged violations at issue and back wages owed. It is anticipated that this will be very helpful to the private attorney who may be contacted to consider representing the claimant.
The impact of this procedure is yet to be assessed. However, in the fiscal years 2009 and 2010, the agency received 35,000 and 40,000 complaints, respectively. While it resolved the vast majority of them, it informed approximately 10% of the claimants that it was declining to pursue their claims but that the claimant might have a private cause of action. If those numbers continue, it means that between 3,500 and 4,000 claimants could be referred to private counsel – counsel who in this economy may be happy to take a marginal claim in the hope of wresting a settlement out of an employer, including a claim for attorneys’ fees.
The agency has described its current enforcement priorities as focusing on minimum wage and overtime violations against low wage and vulnerable workers, child labor, recidivist employers, retaliations or discrimination, or criminal violations. In addition, for fiscal years 2011 to 2016, it plans to target those industries that increasingly rely on a wide variety of organizational methods that have redefined employment relationships, e.g., subcontracting, third-party management, franchising, independent contracting, and other contractual forms that alter the identity of the employer of record or make the worker-employer relationship tenuous and less transparent. These industries include the agricultural, construction, janitorial, and hotel/motel industries.
Conclusion
These two initiatives, whether considered singly or together, are likely to increase the number of marginal or unmeritorious claims filed and litigated against employers. Furthermore, while the federal government has taken the lead in developing these initiatives, state agencies will probably not delay in implementing similar initiatives at the state level.
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©2011 Gladstone Michel Weisberg Willner & Sloane, ALC. All Rights Reserved.