In recent years, wage and hour class actions have become very popular for plaintiffs' counsel and can lead to extraordinary potential liabilities for employers. As a preliminary matter, it is important for employers to properly classify employees as either non-exempt or exempt under the applicable wage and hour laws. Non-exempt employees must be paid overtime for any work performed over 40 hours in a given workweek; exempt employees are not entitled to receive overtime. Professional, administrative and executive employees, certain computer professionals, and outside sales staff are generally considered exempt from the overtime laws. Federal regulations, as well as judicial decisions interpreting those regulations, provide guidance as to who falls within those classifications. Many employers incorrectly assume that if an employee receives a “salary,” he or she is automatically exempt.
Non-exempt employees must be compensated for time worked under all circumstances, including (a) when the time worked was not specifically authorized, (b) for work performed at the beginning and end of a shift, and (c) for time spent working from home via a blackberry or other similar device. This last category has proved to be especially problematic and the subject of recent litigation, given the difficulties in tracking time worked remotely, as well as the culture to be available 24/7. As a suggested method of controlling this issue, employers may wish to consider addressing this issue in their employee handbooks and to prohibit non-exempt employees from working beyond their scheduled work hours. Although non-exempt employees still must be paid even if they work without authorization, this can and should be addressed as a performance management issue as well.
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