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How to avoid suits alleging wage-and-hour violations

How to avoid suits alleging wage-and-hour violations

Employers should keep good records, periodically audit their employee classification and record-keeping, and practice diligent supervisor training to avoid wage-and-hour lawsuits, observers say.

A recent U.S. Supreme Court decision on arbitration should prove helpful as well.

Employers should keep good records of employees' wages, when they started work, hours they worked and break time, said Daniel L. Kuperstein, an associate with law firm Fox Rothschild L.L.P. in Roseland, N.J.

To avoid misclassification cases, employers should bear in mind that “jobs don't stay static, companies don't stay static,” said Gerald L. Maatman Jr., a partner with Seyfarth Shaw L.L.P. in Chicago.

“Consider having a policy that requires employees to notify their supervisors or other members of management when time cards don't accurately reflect whatever records they're keeping,” said Brian T. McMillan, a shareholder at Littler Mendelson P.C. in San Jose, Calif.

When employees are working off the clock, employers should be aware that federal and state laws may differ when it come to meal or rest breaks and stay up to date on regulations, Mr. Maatman said.

Companies also should have a complaint or grievance procedure for workers who feel they are not being paid appropriately, he said.

Martha J. Zackin, of counsel at Boston-based Mintz, Levin, Cohn, Ferris, Glovsky & Popeo P.C., said employers should have policies clearly stating that employees' “work-sponsored BlackBerry should be left in the office. They shouldn't check their email” at home and should carefully track the time worked when they are out of the office.

Firms should educate managers about how to keep good time records, said Lawrence S. McGoldrick, of counsel at Fisher & Phillips L.L.P. in Atlanta.

Employers should make sure employees are not being required by supervisors to work off the clock, said Phillip Schreiber, a partner with law firm Holland & Knight L.L.P. in Chicago.

“It's one thing when you tell your employees you don't want them to perform work after hours,” but quite another if a manager or supervisor sends workers emails late at night and expects a response, said Michael C. Schmidt, a member of law firm Cozen O'Connor P.C. in New York. “So what you say needs to comport with what you're doing and vice versa.”

Sometimes “employers will start paying overtime to somebody just because it's a gray area and they want to be on the safe side of the gray area,” said Mr. McGoldrick.

Mr. Kuperstein said employers also should examine independent workers' contracts to determine if they establish an employee relationship. In addition, employers must be aware that contracted firms that provide workers in their locations—such as security guards—could be held liable in wage-and-hour suits depending on state law, he said.

Meanwhile, observers say the U.S. Supreme Court's decision last month in AT&T Mobility L.L.C. vs. Vincent and Liza Concepcion, in which it upheld class action waivers in arbitration agreements, is positive for employers.

That was a “game-changing decision” that will “significantly impact the ability of plaintiffs to be able to bring class actions,” said Marc E. Bernstein, of counsel with law firm Paul, Hastings, Janofsky & Walker L.L.P. in New York.

Employers would be “well-advised” to have their arbitration agreements include specific wage-and-hour language in light of the decision, said Enzo Der Boghossian, a partner with Proskauer Rose L.L.P. in Los Angeles. “So long as the employer is comfortable” with paying arbitration costs, it can have peace of mind knowing it is insulated from class action lawsuits, he said.