Workforce Bulletin

By Kara M. Maciel and Lindsay A. Smith

On April 30, 2014, the National Labor Relations Board (the “Board”) invited interested parties to submit amicus briefs addressing an employee’s right to use an employer’s electronic communications system for Section 7 activity in the case of Purple Communications Inc.  Based on a prior Board decision in Guard Publishing Co. d/b/a Register Guard (2007), employers are not currently required to allow employee use of their e-mail systems for protected, concerted activities because in that case the Board held, “employees have no ...

By:  Kara Maciel, Adam Solander and Lindsay Smith

As the Employer Mandate compliance deadline looms for employers under the Affordable Care Act (“ACA”) and employers are closely monitoring employee hours, it is critical that employers take appropriate and lawful steps to record all hours worked by an employee.  If employers try to play games and manipulate how time records are maintained, they could find themselves in hot water under both the ACA and the Fair Labor Standards Act (“FLSA”). 

In what appears to be one of the first lawsuits challenging how hours are recorded under the ACA, an employee filed a putative collective action against Sun Holdings, LLC, a fast food franchisee.  The employee, a busboy at a Golden Corral restaurant, alleged that his managers required him to work under his real name and an alter ego to avoid paying him for all hours worked.  This set-up allegedly was designed to avoid having to pay overtime compensation under the FLSA and to count him as a full-time employee eligible to receive health benefits under the ACA.   

Accurate calculation and recording of the total number of hours worked by an employee is essential to compliance with the provisions of both the FLSA and the ACA.  Under the FLSA, an employer must pay an employee at least the minimum wage for all hours worked.  An employer must also provide overtime compensation at one and a half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week, unless that employee is classified as exempt.  Therefore, if an employer attributes some amount of time worked by one employee to an alter ego through which the employee cannot claim his time, the employee may be deprived of the overtime compensation he has earned.

Additionally, the ACA only provides benefits to employees who reach a certain amount of hours and binds employers with a certain amount of employees meeting that hour threshold.  The ACA applies to employers with 50 or more employees working 30 or more hours per week.  Only those employees working 30 hours or more per week are entitled to the health care coverage required by the ACA.  Therefore, an employee may lose the benefits to which he would otherwise be entitled if a portion of his hours worked is attributed to someone else, causing him to fall below the 30-hour minimum.  Furthermore, an employer may avoid the obligations of the ACA if it records 30 hours or more of work time for less than 50 of its employees. Although the Employer Mandate, which puts the employer-provided coverage into effect, does not kick in for large employers until January 1, 2015, applicability of the ACA depends upon the size of the affected workforce during the prior calendar year.      

A claim of this kind could be very costly for an employer because, as is the case here, such claims are often brought as collective actions.  In this case, the employee filed his claim on behalf of himself and all others similarly situated.  Although the amount of unpaid wages and liquidated damages he seeks only amounts to approximately $15,000.00, the franchisee owns roughly 400 restaurants in Texas and Florida.  Thus, a court award, or even a settlement, could be quite significant.

These allegations demonstrate the importance of correctly tracking employee hours and ensuring that an employee receives compensation and benefits in accordance with the total amount of hours worked.  Often times, this may mean training your managers as to the correct protocol for recording and compensating hours worked and monitoring to ensure managers are following that protocol. 

Importantly, this case forecasts what could be an emerging and growing area of litigation under the ACA, so employers must be ever vigilant about putting into practice protocols that ensure they are complying with the ACA and not manipulating hours to avoid the Employer Mandate’s requirements.  Considering that an analysis under the Employer Mandate’s look-back methodologies should be done this year, any changes to employees’ hours should be closely reviewed with legal counsel.  Although overtime compensation and benefits coverage can create increased financial burdens on employers, the cost of not complying can be even greater. 

By Kara M. Maciel and Lindsay A. Smith

On March 12, 2014, the National Labor Relations Board (“the Board”) concluded that a beef processing company committed an unfair labor practice in violation of the National Labor Relations Act (“NLRA”) when it terminated three workers for striking in protest of their working conditions (“Greater Omaha Packing Co.”).  More significant, however, was the Board’s decision to reverse an Administrative Law Judge’s finding concerning the employer’s questioning of an employee.  Prior to the strike, one of the terminated ...

Our colleagues Kara Maciel, Adam Solander, and Lindsay Smith have co-authored a Bloomberg BNA article titled, "Future New Year's Resolutions: Will Your Wellness Program Still Be There to Help?"

Following is an excerpt:

With the New Year squarely in the rear view mirror, now is the time when many of our grandiose resolutions to get healthy may run out of steam. For individuals who are relying upon their employer's wellness initiative to provide them with the resources they need to succeed in their resolutions, recent regulatory and legislative changes could jeopardize their ...