(upbeat music) - You are listening to the "HR Mixtape," your podcast, with the perfect mix of practical advice, thought-provoking interviews and stories that just hit different so that work doesn't have to feel, well, like work. ♪ There's no one better ♪ - Now your host, Shari Simpson. - Joining me today is Kelly Bunting, labor and employment attorney at Greenberg Traurig, LLP. Kelly is the co-chair of the firm's Labor & Employment Practice's Workplace Compliance & Counseling Group.
She has considerable experience defending class and collective wage and hour litigation and misclassification claims. She's deeply experienced in virtually all aspects of employment litigation, including wage and hour, labor, Title VII, harassment, discrimination, wrongful termination, non-competition, and non-solicitation, trade secret socks, and the Dodd-Frank Whistleblower claims, as well as CEPA, ADEA, FMLA, and JLAD, and failure to accommodate issues.
(upbeat music) Kelly, thank you so much for jumping on the podcast with me today. - Of course, Shari. It's always a great to talk to you. - So you have an amazing background. You've been a lawyer forever in such a good way. You are helping to advocate for your clients. And I wanna spend a little bit time digging into some things that I feel like HR people need to have a really good perspective on.
So I'm gonna start with probably not an easy-cut question, but you know, as you think about wage and hour litigation, what are some proactive measures that employers can take to prevent those? - I actually have a couple of suggestions. The first thing for sure is an audit, conducting an audit. That to me is the clearest, maybe not the easiest, but the clearest way to try to prevent wage and hour litigation. You know, it may sound a little scary.
For larger employers, you could hire a law firm to do it if you want to maintain attorney-client privilege over the results, 'cause you think, "Uh-oh something may be wrong," gives you a chance to fix it. For smaller employers or employers that simply, you know, don't wanna fool with outside counsel, you can do it yourself. You really can do it yourself in addition to everything else HR has to do.
But it's really can be as simple as picking up the phone and talking to a couple of different employees in a job description. And just asking them, "What do you do? Tell me what you do. You clock in, you sit down, you're on your computer, or you log in, you're gonna go do whatever. Describe to me what you do on a day-to-day basis." And then listen and jot down the duties, 'cause that's really what they're telling you. They're telling you, "Here's the duties of my position."
And then double check with the supervisor in that group or in that division and just run by what this person has told you. And again, I would certainly interview more than a few people just to make sure that, you know, it's not pie in the sky, that what they're saying they do on a daily basis really is what they are doing on a daily basis.
Then from that, you create a job description, listing essential functions of the job, the duties that everyone is saying, "Yes, that's what this job requires." Then after you have the job description created, and these interviews, they don't have to take place in person. So many people are working from home, do it on the phone, do it over Zoom. You know, you don't necessarily have to do this in person.
Sometimes it helps if you're able to do one or two in person because you get a sense of is the person that you're speaking to really telling you the truth, or are they trying to make the job seem maybe more glamorous than what it is? So after you create the job description, figure out whether you have to create maybe levels of that job. Should it be a senior product manager that should get paid more?
Or could it be an associate or a junior whatever, product manager, and maybe that person would get paid on an hourly basis? And then as they progress and they get more duties and duties of a more difficult nature that would require additional education or additional training, then maybe that particular job title becomes exempt as opposed to non-exempt. Then I would figure out are the duties mostly managerial. Do they hire and fire? Do they do performance reviews?
Even if they don't actually do them, do they have sufficient input into, say, whether a person gets a bonus or not? That shows a managerial sense to that job. Do they actually supervise people? That one's pretty easy.
If they don't supervise anyone, let's say, I'm thinking HR or a bookkeeper, but what they do on a daily basis really affects the bottom line of the company, the ability of the company to make money, you could argue that that person should be exempt, especially if they are permitted, or expected really, to use their judgment as to how they carry out the duties of that position.
They're not running back to their boss every couple of minutes saying, "Hey, I wanna do this, can I?" They're just, they're making decisions, and they're moving forward and acting on those decisions on their own. That would be an exempt position. Whereas someone that has to constantly consult the supervisor, or maybe what they do is of a more routine nature, it's the same day-to-day, and it doesn't require a lot of skill or education, probably a non-exempt position.
And then finally, look at what you're paying these people. Is it commensurate with the duties that they just told you they're doing? And I would do this on a fairly regular basis as well, depending on whether you've ever done it in the past or not. Some people have never done it, companies have never done it.
And that's gonna take quite a bit of time, whereas a company that kind of keeps up with the compliance, you're not gonna have to spend really as much time as you may think on these audits - As you go through them, is there some common oversights or mistakes that employers find themselves in that lead to misclassification claims? - For sure. I would say not understanding that the employee has to meet both the duty and the salary test.
Like, under the Fair Labor Standards Act, which is the federal law that all these misclassification claims are brought under, you have to meet both. So they have to have exempt duties, and they have to earn enough money, which, as you know, now the Department of Wage & Hour has just, I think it was August 30th, they just came out with this guidance that they wanna raise the white collar overtime exemption to, I think it was 55,068 a year, which would be 1,059 a week.
So right now it's not that high. And I think that's really throwing employers into a tizzy because many mid-level managers that are classified as exempt make 35, 40, $45,000 a year. So the employer, if this rule passes, if this becomes law, and you know, the Obama Administration tried to do it, and then Trump kind of walked it back, and now the Biden Administration's trying to do it. So again, it's this merry-go-round of regulations.
But if this becomes law, you're gonna have to look at your salaries and decide, do I make my mid-level managers non-exempt now and just pay them per hour because you don't wanna raise the salary? If you have a lot of employees, that's gonna be a lot of money. Or do I simply raise their salary because their duties really are exempt? And just, hey, lucky for you, (chuckles) big payday coming. That's the biggest mistake is you have to meet everything.
You can't just meet the salary but, you know, not really the duties. And then the second biggest mistake I think employers make is they don't realize that there's state law as well. And not every state has their own overtime law, their own misclassification law, but there's a number of them that do. Most of them track the same exemptions that the federal law has, but not all of them.
And you have to figure out, especially if you have employees working remotely, what law they're subject to and whether that law, because you have to meet both, as an employer, you have to meet the salary and the duties test of both federal law and state law. - You know, you were talking about the possible change in the threshold. And I think for those of us in HR that existed in that space and had those responsibilities, there's a little trauma reaction-
- Oh, yeah. - As you talk about that, for sure. - Yeah. Yeah. I mean, if I were one of those mid-level managers, I'd be thrilled, are you kidding? (chuckles) 55,000? Yeah, I'll take it. But if you're in HR or you're the employer that's already, you know, maybe cutting it a little thin on the profit margin, that's a huge leap. It really is, I think right now, isn't it like 35 or 36? - Yeah, and I think Obama had only suggested 47-something. I don't remember the number off the top of my head.
- Right, exactly right. And you saw the reaction to that, you know, that people were like, "What are you saying? You know, this is terrible." So to go to 55, wow. - Yeah. How do HR professionals stay on top of, you know, kind of understanding and navigating this?
You know, when I was earlier in my career and I didn't have these responsibilities yet, I never quite knew where to go to get the best information, because like you said, there's federal, there's state, there's things that your business wants. You know, as you go through maybe an audit, you discover, well, "Hey, the president designated people this way because they had autonomy because they really liked that person, but maybe that role really shouldn't have that autonomy."
How do we stay on top of all of that? - Yeah, it's really hard. It is really hard. I mean, you and I have talked about this how many times? I would not wanna be an an HR manager today. I just wouldn't, the job is insane. Way too many things are asked of a single person or a single department. Training is everything, of course. You know, I'm a huge proponent of training. You can't spend your whole life training, of course. But that really does help.
SHRM, you know, you and I have been at SHRM how many times? SHRM has so many really good resources on their pages that I rely on, that I go to. There's a number, there's expert HR. Paylocity has info. There's a number of third parties out there that HR can turn to that offer a fair amount of free information that, take advantage of it, you know? The other thing is attend webinars. Law firms give free webinars. Third parties give free webinars.
You often can get documents, you know, after the webinar, people always say, "Can I get a copy of the PowerPoint? Can I get a copy of the new federal rules you were talking about?" And they're more than happy to send you that information. And, you know, you're probably sitting at home at night feeding the kids, but, you know, reading this on the side, trying to keep up with everything.
But I would take advantage of whatever is out there, and there's a lot that's online or through webinars or training. - I appreciate that. You know, as I think about HR navigating this, what's your advice when somebody internal starts to complain or starts to chatter about, you know, their wage or their hour or their job? You know, how should we handle that? And, you know, how do we reduce the likelihood of litigation? - Immediate investigation. And I mean immediate.
Again, you don't have to bring anybody in outside. You can do this yourself, as an HR manager. You have to investigate it. And I guess one of the biggest things that I see is people automatically don't believe the person. Oftentimes the employee that comes to complain is an employee that maybe is not the best performer, that maybe has had a couple of write-ups in the past. And so HR is kind of, the eye roll. And "Geez, this guy, again," you know? "He's just a complainer."
Every complaint has to be taken seriously on its face when it's made. And you have to follow the facts where they lead you. Now, you very well could be correct, and at the end of the investigation, this guy really does not have a claim. And then, in every investigation, you go back to the complainer and you say, "Hey, here's what we did, here's what we determined. So for this claim, we thought, you know, we did not find any evidence of it. Please let us know if anything else occurs.
For this claim, you know, there was some merit, and so we're going to change a policy, or we're going to." You know, you tell the person that their concerns have been taken seriously and that the company is moving to address any concern that actually was made on a good faith basis and did result in having some evidence that supported the merit of the claim. If none of the claims were supportable, because we see this a lot, "Oh, the time clock was always broken."
Well, who the heck uses time clocks anymore? If you don't have a second or third way to log in, most people log in on their computers. There's a lot of companies that have apps now. You log in on the app, which makes it super easy. It also makes it easy to track the claim and to see, "Well, I don't know, was it broken? You know, was the software down for some reason?" You know, is there? You investigate. And one of the things that you ask that person is, "Did this happen to anyone else?
Did anyone witness you having difficulty logging in? Did anyone witness you being yelled at or called names by your supervisor?" And then you go talk to that person as well. So wherever that investigation leads you, you follow. And then type up, you know, a little report. Doesn't have to be formal, but just a paragraph or two on the claims you investigated, your findings. And then the fact that you did go back to the person who brought the claim and explain to them what was going to happen.
And you will not be retaliated against. Please come to us if there's any other concern that you may have. - I appreciate you sharing about those employees that we know speak up and can cause a lot of chatter. 'Cause you're right, there is a gut reaction to that. And you're also right in that some things you just have to take very, very seriously and document the same way, follow the same process because it protects you, and actually it's, I mean, it's the right thing to do.
At the end of the day, it's the right thing to do. And you can handle performance stuff outside of these types of systems complaints. - Absolutely. - I appreciate you- - Liability attaches with knowledge. That's what I'm always telling my clients. As soon as you know about something, as long as you investigate, as long as you take steps, then you've protected yourself as an organization legally. You know, you're still gonna get sued. That's just the nature of the business.
You're still gonna get sued, but you've got that affirmative defense now. You've got defenses because when a company is held liable, when they know about an issue and they do nothing, they ignore it, they bury it, they put it under the carpet, they're gonna get to it next week. So it's super important that for any issue, if an employee comes to HR to complain, that HR reacts. - So I think we have time for one last question here.
And I don't know how complex your answer's gonna be, but I'm curious with the rise of gig workers and the freelance economy, you know, how can employers make sure that they are classifying external contractors correctly and not opening themselves up to that misclassification? - So that's another podcast. - Right. (both laugh) - You know, we had talked about this a little bit before the taping. The law's changing. The law is changing constantly. There's state law and there's federal law.
So you've got some states that follow certain parameters. Certain, you know, boxes have to be checked to make sure this person really is an independent contractor. And then you have other states that don't have any law on it. And then, of course, you've got the usual kind of national law that we all know and we all follow. Does the person use their own tools? Are they allowed to work for other people? Are they paid on, say, a monthly basis as opposed to actually on a salary or weekly basis?
Is what they're doing different enough from what your typical employees do? In other words, they're not sitting right next to the employee and doing the same thing but being called a contractor. Overseas, its really hard, the contracting law in other countries. It's really hard to classify someone as an independent contractor as opposed to an employee. So that's a whole different ballgame.
But in the US it not only comes down to, you know, nationally what is typically accepted by the courts as here's what an employee does, here's what an independent contractor does, but your state law is super important in the independent contractor classification. So you have to keep up with that. You have to keep up with the law on that. Pay attention to changes in legislation. There is a number of states, California always comes to mind.
There's a number of states that have put forward legislation on when employers can classify someone as a contractor as opposed to an employee. Doesn't mean that the legislation is passed, but it's out there. And you as an employer, if you've got something to say about that, can certainly speak up and make your voice heard on whether that legislation gets passed or not.
And I realized, again, it's a lot to ask of an HR person to keep up with the law as well as legislation that hasn't become law yet, as well as, you know, everything else that you do in a typical day. But this is so important, and there are so many lawsuits brought over gig workers, independent contractors and when they're employees and when they're not, that out of everything, I would say that is the one legislation, the one set of laws that HR should follow and keep up on.
- Well, Kelly, this has been such a great conversation. You always bring such valuable wisdom to our audience. So I thank you so much for taking a couple minutes of your day to chat with me. - Of course. And I keep coming back because you're always so nice to me. (both chuckle) - I'll continue to be nice to you. So I appreciate that, Kelly. (upbeat music) - I hope you enjoyed today's episode. You can find show notes and links at the hrmixtape.com.
Come back often and please subscribe, rate and review. (electricity buzzes and fades out)