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$1.75 Million Penalty Newest Evidence of Wage and Hour Crackdown

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When it’s necessary to get a drink of water, quickly text a spouse or even answer nature’s call, most employees don’t think about tracking the time they spend seeing to these personal needs. However, this was not the reality for the employees of one Pennsylvania company, that required workers to clock out for “any time not spent working,” including trips to the restroom and other breaks lasting just two to three minutes. At the end of the week, break times would be deducted from employees’ hours worked. As a result, some employees’ earnings dropped below minimum wage.

In 2013, the U.S. Department of Labor filed a lawsuit citing that the practice, and its effect, violated the federal Fair Labor Standards Act (FLSA). On Dec. 16, 2015, a federal judge ruled the company and the company’s owner were liable for up to $1.75 million in back wages and liquid damages. A payment proposal is currently in the works. USA Today reported the business owner plans to appeal the decision.

While it’s clear why the minimum wage issue is problematic, the rules surrounding employee breaks may be less so. According to the department’s website, the law doesn’t require employers to offer breaks. However, it does govern the process once employers choose to do so. The law describes breaks lasting anywhere from five to 20 minutes as “rehabilitative,” which means they are compensable time that should be included in an employee’s total number of hours worked.

Implications for employers

According to one attorney at the U.S. Department of Labor’s Philadelphia office, “This action underscores how aggressively we plan to enforce the law to ensure that workers receive the proper wages.” Employers in every state should take this warning to heart as the department continues to crack down on all manner of wage and hour violations.

In the past, the agency typically acted in response to employees who claimed they were not receiving overtime. However, the Wage and Hour Division (WHD) has increased the number of investigations that are launched independently of an employee complaint. The department reported that “in the fiscal year 2014, more than 43 percent of investigations were agency-initiated, up 35 percent from just five years ago.”

Additional statistics provided by the U.S. Department of Labor illustrate the agency’s recent increase in wage-recovery efforts and its intent to continue aggressive enforcement of the FLSA:

  • Since 2009, the agency has recovered $1.3 billion in back wages.
  • The WHD found wage violations in 78 percent of agency-initiated investigations, up from 65 percent in fiscal year 2009.
  • In the fiscal year 2014, WHD collected an average of more than $659,000 in back wages every day.

Unfortunately, the scrutiny employers face regarding their timekeeping and payroll practices will only be compounded by the proposed implementation of overtime expansion. Now’s the time employers should consider examining company policies, auditing their workforce and looking at how payroll and HR technology can help them manage the increasingly heavy burden of complying with all aspects of the FLSA.

For more news and resources about upcoming overtime expansion, subscribe to our blog


Amy Double

by Amy Double


Author Bio: Amy, a tenured professional in sales and marketing with over 10 years of experience, is dedicated to creating content focused on helping organizations achieve their business goals. As an experienced writer, Amy is committed to researching and blogging about topics that affect businesses across multiple industries, including manufacturing, hospitality and more. Outside of work, Amy enjoys reading, entertaining and spending time with family.

Office Drama

It’s an Office, Not a Theater: Managing Office Drama

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Office drama is a distraction that could be costing your company millions. In her new book, No Ego, drama researcher and New York Times best-selling author Cy Wakeman defines drama as any disruptive behavior or thought process that takes energy away from results or a great work climate.

Need to minimize workplace drama?

Listen to the HR Break Room podcast episode “It’s an Office, Not a Theater: Managing Workplace Drama” with author Cy Wakeman.

Drama is expensive

According to Wakeman, employees spend nearly three hours a week on workplace drama, totaling an estimated 816 hours being wasted per year. This isn’t just a nuisance that hurts employee morale and eats up management’s time, but also lowers productivity and, ultimately, profits. With so much at stake, it’s important to remember that organizations can minimize this type of financial drain.

Egos fuel the fire

Wakeman identifies five key causes of workplace drama:

  1. lack of accountability
  2. lack of engagement
  3. withholding buy-in
  4. resisting change
  5. ego-driven work environment

Each cause manifests itself differently, but perhaps the ego’s most common way of creating tension is through employee venting allowed by open-door policies.

Creating an approachable environment is important, but often, in an effort to give employees access, members of management invite toxic conversations that can last as long as 45 minutes, according to Workman’s research. Instead of colluding or sympathizing with employees, the best way to minimize the drama is to bypass their ego; train managers and employees to reflect on their challenges instead of blasting the faults of others.

Self-reflection: the cornerstone of accountability

Becoming more self-aware and learning how to edit your own story is a critical life skill that helps minimize drama, personally and professionally. Most times, the stress that arises from drama does not come from reality, but from a story we make up about our reality. If we hold ourselves accountable to the truth, we realize that most of what we are upset about did not even happen.

Recruit for a low-drama workforce

Recruiting is one way to reduce workplace drama. It is crucial to find people who not only perform, but are able to stay emotionally ready for what’s next.

Finding highly accountable top talent can be challenging, which makes implementation of an applicant tracking system essential. These prospective employees are in high demand, and recruiting them successfully requires swift, seamless action before they go somewhere else. Organizations lacking the tools to attract and recognize quality applicants could be at a disadvantage.

HR’s role in minimizing drama

A big opportunity exists for HR to cut the cost of workplace drama and, more importantly, put an end to the entitlement that feeds such conflicts. HR needs to be especially careful about its employee engagement philosophies, because engagement without accountability creates entitlement. HR should not be afraid to challenge conventional wisdom that does not yield positive results. For example, one popular idea is that employees can be engaged by perfecting their circumstances. This may sound great on paper, but in actuality, there is no way you can perfect their reality; instead, you grow them to become better equipped to live in their reality.

HR can create surveys to send to top performers in order to get a better understanding of their day-to-day environment, including pressure points. Using this data, HR can implement trainings that enrich the mental processes of managers, and eventually, all employees within the company.

Office drama may be an inevitable part of today’s workforce, but by training managers and employees on the right mental processes based on self-reflection, your organization can save countless hours of employee time and untold wasted dollars.

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Posted in Blog, Featured, HR Management, Leadership, Talent Management

Chelsea Justice

by Chelsea Justice


Author Bio: Chelsea is co-host Paycom’s HR Break Room podcast, editor-in-chief of its corporate culture magazine, Paycom Pulse and is Paycom’s communications supervisor. During her more than eight years in marketing, corporate training and communications, she has created hundreds of magazines, training guides, videos and webinars for multiple industries. In her free time, Chelsea is planning her next travel adventure, perfecting her most recent baking recipe, devouring a good book and, above all, spending time with family.

Political Conversations

Knowing the Limits of Political Conversations at Work

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Having political conversations in the office can be difficult, especially in the wake of a divisive post-election season. When employees from various walks of life work in the same space, there’s more opportunity for political disagreements and potentially toxic office conversations.

Determining how your organization will handle political activity in your organization remains a blind spot for many organizations. A 2016 SHRM survey reported that 72% of HR professionals said their companies discourage political activities in the workplace, but only 24% of organizations have a written policy. To further muddy the waters, 8% reported having an unwritten policy that was not communicated explicitly.

 For more tips on how to manage political conversations at work, check out our  HR Break Room podcast episode, Political Conversations at Work: Should HR Pass It or Veto It

These heated conversations make way for an important question for employees and HR to consider: What are your organization’s rules and limits in participating in politics?

Private institutions are king.

It’s important to note that not all organizations operate under the same rules and regulations when it comes to engaging in political discourse or being active in political campaigns. For instance, because of the U.S. Supreme Court’s Citizens United ruling in 2010, private employers have the right to make their opinions and preferences known to both employees and the public.

This ruling also gives private organizations a great deal of leeway in handling political discourse and policy on their own terms. They are not prohibited from restricting employees’ speech and even can have employees participate in political campaigns on the clock.

What’s even more surprising? The Bill of Rights doesn’t protect workers in the private sector from being fired over speech in or outside the workplace – it only prevents the government from infringing upon citizen’s speech.

What can nonprofits do?

The rights of private organizations differ quite a bit from the rights of nonprofits. Organizations that want to maintain the highly sought-after 501(c)(3) tax-exempt status are forbidden from participating in partisan “political campaigns” or else risk having that status revoked by the IRS.

However, the definition of “political campaign” can be ambiguous, especially when nonprofits are allowed to participate in such nonpartisan activities as voter registration drives and legislative advocacy programs.

Here’s a quick breakdown of nonprofit advocacy groups and what they can/can’t do in the political arena:

  • 501(c)(3) groups – are religious, charitable, scientific or educational organizations and are not supposed to engage in any political activities, though some voter registration activities are permitted.
  • 501(c)(4) groups – are social welfare groups and organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(5)groups – are labor and agricultural organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(6)groups – are business leagues, chambers of commerce, real estate boards and boards of trade may engage in political activities, as long as these activities do not become their primary purpose.

 

The next three nonprofit groups exist FOR political purposes:

  • 527groups – are tax-exempt groups organized under section 527 of the Internal Revenue Code to raise money for political activities. These groups are typically parties, candidates, committees or associations organized for the purpose of influencing an issue, policy, appointment or election, be it federal, state or local.
  • Hybrid PACs (Carey Committees) – these nonprofit committee groups are not affiliated with a candidate and has the ability to contributing funds to a candidate’s committee and to make independent expenditures, as long as they have separate bank accounts for each purpose.
  • Political Action Committee (PAC)– these nonprofit committees raise and spend limited money contributions for the purpose of electing or defeating political candidates.

 

To know how to make the best company policy at a nonprofit, it is important to understand how the IRS determines these terms. The IRS uses what it calls “facts and circumstances” to determine whether nonprofit organizations are engaging in partisan political activity. This means certain activities not normally considered political in a non-election year could be considered political two months before or after an election.

When determining how your 501(c)(3) organization gets involved in political activities, it’s crucial to consider the nature and goals of the activity before deciding whether it is worth the potential risk.

Few organizations have policy.

Whether a Fortune 500 company or a local nonprofit, knowing exactly what your organization’s limits are in participating in politics helps employees understand expectations and act accordingly. These allowances and their boundaries also can help you determine how to handle these political conversations when they inevitably arise at work.

If you’re interested in learning more about how to manage these sensitive political topics, please subscribe to Paycom’s HR Break Room podcast and listen to our latest episode with special guest Robin Schooling.

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Posted in Blog, Compliance, Employment Law, Featured, Leadership, Nonprofits

Caleb Masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

Office Drama

5 TV Shows With Worse Office Drama Than Your Workplace

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Office drama can be a stressful part of any job. And human conflict is a tale as old as time. But when workplace theatrics start to look eerily like the latest episode of Game of Thrones or Mad Men it’s probably time to take closer look at what’s happening with your employees. Let’s take a look at five of the best television shows that have worse drama than your own office and what we can learn from them.

Need to minimize Workplace drama? Listen to the HR Break Room podcast episode It’s an Office, Not a Theater: Managing Workplace Drama with author, Cy Wakeman.

1. The Office

Nothing beats a classic, and we all know The Office’s Dunder Mifflin is nothing short of an HR disaster. This office is filled with the least productive staff on television. With all of the gags, quirks, and of course, video documenting, it’s a small miracle Dunder Mifflin kept any of these employees on staff for more than a week.

The drama in The Office is silly and usually lighthearted. But if we examine the show through the real-world HR lens, it’s easy to see how that drama negatively impacted productivity. Over the course of nine seasons, surely some work was done, but the leadership in the office – including Toby, the HR representative – could never keep Michael, Dwight, Pam or the rest of the team focused on the task at hand. The takeaway here is that drama – no matter how big or small – steals valuable time away from your people. Leaders should remember to check in with their people via one-on-ones to ensure that drama is not distracting employees from their work.

2. Mad Men

Don Draper’s swagger and charm may be irresistible, but we could do without the office dynamics of his ad agency, Sterling Cooper. Mad Men’s top-notch writing and 1960s aesthetic combine to tell a story about how one leader’s personal issues can spill into the office and destroy employee morale.

Mad Men is undeniably one of the most respected TV shows from the last decade, and you cannot deny its class, but Sterling Cooper is the posterchild for office drama and HR nightmares. Leadership always sets the tone. Don Draper’s toxic lifestyle influenced the unhealthy environment. Don’t be like Don Draper; lead with respect!

3. Halt and Catch Fire

If we jump forward a decade or two to the 1980s, a different type of office drama emerges in Cardiff Electric, a PC company. The show is set during the height of the personal computer race and stars Joe MacMillan – an engineering prodigy – who finds a fatal flaw in IBM’s computer. Joe’s ambitions are fierce and so is the “all work and no play” mentality he uses to lead his team. This leadership style led to burnout, sellout and even betrayal from members of his team.

Big ambitions are essential to driving a successful company, but if Halt and Catch Fire tells us anything, it is that your people’s happiness is important, too.

4. Silicon Valley

Let’s step away from the past to look at a show that’s a little more cutting-edge. Silicon Valley takes viewers into the insanity of a California tech start-up. Sure, there are fun ideas galore, but when the work of building and implementing a product begins, things get messy between Richard, Erlich and Nelson – and a comedy of errors ensues.

If there is anything to take from the absurd events that occur on Silicon Valley it is that HR is always essential in helping prevent disasters, even in start-ups.

5. Game of Thrones

Game of Thrones might seem like a real stretch, but hear me out! The dark and twisted Westeros adventures of Daenerys Targaryen, Jon Snow and Tyrion Lannister may seem as far away from your workplace as any TV show, but if you look closer, the power struggle for the iron throne may have more in common with your work than you imagined.

In Game of Thrones characters are always living in fear for their life. This high-stakes environment often leads to characters throwing each other under the proverbial bus, making secret alliances and plotting to usurp their superiors. The fear-driven culture of Westeros is not pleasant for anyone with aspirations for a happy life.

Creating a healthy culture built on wholesome core values is essential to making a successful organization filled with happy employees. When investigating and building your own culture, don’t let those Westerosi dynamics creep into your organization’s mission.

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Posted in Blog, Featured, Leadership, Talent Management

Caleb Masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

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