Who knew that there would be HR lessons to be found in the world of porta potties? Apparently wage and hour law knows no bounds. According to the New York Daily News, a portable potty company, Call-A-Head, has found itself in the middle of a class action lawsuit. Employees claim that they were required to clean 100 toilets each day, which often took 15 hours to complete although they were paid for 10 hours daily. It’s alleged that the company had used hiring ads offering to pay $1000 weekly for 4 ten hour days of work. It is also claimed that employees were required to clock in but couldn’t clock out. The employees are seeking back overtime which could be over $1 million. The company denies the charges.
What can be learned from this case so that you can avoid flushing your profits along with your reputation in a Fair Labor Standards Act (FLSA) lawsuit?
Paying employees on a salary basis does not automatically make them exempt employees and not entitled to overtime. It must also be shown that an employee’s position meets very specific job duties tests under the FLSA.
You’d need to be able to show that a position meets the established Executive, Administrative, Professional, Computer or Outside Sales tests. Additionally, job title is not determinative. Even someone with the title of “Vice President of Potty Maintenance,” whose job was to clean toilets, is not exempt. Most employees are non-exempt.
Non-exempt employees must still track hours even though they are paid on a salary. Paying non-exempts on a non-hourly basis can complicate wage and hour issues. Although the FLSA does not require non-exempts to be paid on an hourly basis, (earnings can be paid on a piece-rate, salary, commission, etc. basis), a regular, hourly rate must be determined. An employee’s compensation must be converted to an hourly rate to determine overtime pay.
Not only must there be an accurate way to track hours (clocking in and out would be a good start!), employers must also understand the concept of “hours worked.” Certain preliminary and postliminary duties, travel, training, and other activities can be considered “hours worked,” and must be compensated and included in overtime calculations.
It’s just plain silly not to keep accurate records. Obvious noncompliance with key recordkeeping requirements is a big neon sign for the Department of Labor that flashes: “If I’m Not Doing This Right There Are Probably Other Things Wrong Too.” Or perhaps “Kick Me, Sue Me, Fine Me.”
If a company whose slogan is: “We’re No. 1 at Picking Up No. 2” can be sued for wage and hour violations, you can be too. Audit your pay practices and ensure that supervisors understand the basics of the FLSA.
The Department of Labor has produced many good fact sheets and other resources for employers to help them avoid the FLSA minefields. Go to www.dol.gov for more information.
