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Category: Unemployment Law

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Retaliation Frustration?

Shavitz Law Group

Did you ever feel that your employer treated you differently after you questioned your pay or overtime? After making such an inquiry, maybe your hours got cut or perhaps it’s something more significant like an undeserved reprimand. The Fair Labor Standards Act (FLSA) provides essential protections for workers, including the right to not be retaliated against for asserting a good faith belief that you’re being underpaid.

The anti-retaliation provisions of the FLSA cover variety of adverse employment actions. This basically means that an employer cannot “punish” employees for asserting their legal right to be lawfully paid for all of their hours worked. Employees can assert their legal rights in a variety of ways, including raising a pay issue informally, contacting the Department of Labor, filing a claim or lawsuit, or even participating in an investigation about an employer’s wage and hour practices. “Adverse employment action” includes a variety of negative consequences, including firing, demotion/failure to promote, pay cuts, or even more subtle changes like reducing an employee’s hours or responsibilities.

The FLSA ensures that employees can seek fair treatment without putting their job in jeopardy. Retaliation is a separate claim that employees can bring along with their original wage dispute and provides additional damages.

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AI May Make More Employees Eligible for Overtime

Shavitz Law Group

With the recent implementation of artificial intelligence (AI) in the workplace, the line between who is performing those duties — people or AI — can become less clear. While AI is undoubtedly a useful tool, it also can create shifts in workers’ duties which may raise issues concerning employees’ classification. Specifically, when AI replaces certain duties of employee classified as exempt, some of those employees may not maintain their exempt status and therefore would be entitled to overtime.

By way of example, if AI assumes managerial tasks such as decision-making, scheduling, supervision, or planning, previously exempt classified employees may be eligible for overtime compensation. One of the hallmarks of a managerially-exempt employee is the authority to hire or fire other employees. Similarly, one of the criteria for administratively-exempt employees is the ability to exercise discretion over matters of significance. However, when AI is utilized to determine employees’ productivity through tools like tracking keystrokes, mouse clicks, presence in front of webcam, and website browsing, previously managerially/administratively exempt employees may find themselves simply implementing AI suggestions rather than exercising discretion over those decisions, including hiring and firing, as well as others.

If you are an exempt employee who has had some duties assumed by AI, your exempt status may be in question and you may be entitled to overtime. Should you have any concerns about how AI has affected your eligibility for overtime, please contact Shavitz Law Group.

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Artificial Intelligence and OT

Shavitz Law Group

Artificial Intelligence (AI) and Your Overtime Rights

As more employers start to use AI to keep track of time, tasks, and other work data, it is important to keep in mind that AI logs can be inaccurate, causing employees to miss out on overtime hours worked. The Department of Labor (DOL) recently issued a Field Assistance Bulletin (FAB) which outlines possible issues that may arise in the workplace with the rising use of AI and technology.

Tracking Work Time:

Employers can utilize AI to track whether an employee is “active” or “idle.” This can be done through tracking keystrokes, mouse clicks, presence in front of a web camera, and website browsing. However, the FAB cautions that without proper human supervision, AI tracking of work time can cause issues in determining the true amount of time an employee has worked because these tracking methods are not determinative of hours worked under the FLSA.

Monitoring Break Time:

AI can be used to create time slots for breaks based on previous data entries, such as prior time entries, usual shift times and break times, business rules, and other data. Again, however, this data may not always be accurate given an employee’s workload. It is imperative that human oversight is involved.

Work Performed at Multiple Geographic Locations:

Some employers use location-based monitoring to determine if an employee is working. However, complications may arise if the system fails to account for work done in different locations (i.e. employer asking employee to pick up supplies before heading to designated workspace).

AI and Prohibited Retaliation:

AI should not be used to “bust” employees engaging in protected activities, such as web searches regarding overtime rights, and taking adverse actions against said employees. In addition, AI should not be used to track employees who have filed a complaint with DOL investigators.

In sum, if an employer uses AI then employees must ensure that they are being properly credited for all of their hours worked. If employees are unsure, they can ask their employer if it is using AI and if it is, for what purpose. It should be noted such inquiries are themselves protected activity that an employer cannot retaliate against.

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].

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When High Earners are Eligible for Overtime

Shavitz Law Group

Highly Compensated Managers, Administrators, and Other Employees May Be Entitled to Overtime

While many believe highly compensated managers, administrators, and other employees are not entitled to overtime under the federal law known as the Fair Labor Standards Act (FLSA), that notion is incorrect. In the recent case of Helix Energy Solutions v. Hewitt, the Supreme Court held that if highly compensated employees do not satisfy the “salary basis test” – one of the essential elements for key exemptions to the FLSA – then the employees may be entitled to overtime notwithstanding their high salary. In Hewitt, the plaintiff earned over $200,000 per year. Nonetheless, the high Court held that because he was compensated on a day rate (per diem) basis instead of a salary basis, he was entitled to overtime.

Pursuant to the FLSA, in order for managers and administrators, as well as some other “white-collar” workers to be considered exempt from overtime they must (1) be paid on a salary basis; (2) earn above the minimum salary threshold which is, as of July 1, 2024, $844 per week (or $43,888 per year); and (3) have management or administration as their primary duty.

The issue in Helix Energy related to the first requirement. Specifically, the Court considered whether Hewitt’s day rate passed the salary basis test. The salary basis test requires employees to be paid a predetermined amount of money that is not subject to reduction based upon the quality or quantity of work done. Because Hewitt’s day rate varied depending on the number of days he worked each week, his compensation was not “predetermined” as required and therefore he was entitled to overtime for the hours he worked over 40 in a work week.

Helix Energy makes clear that the amount of money an employee makes is not dispositive of certain FLSA exemptions. Indeed, based upon his compensation and hours worked, Hewitt could be entitled to upwards of $11,500 per week in overtime. Thus, even employees making significant annual compensation can be overtime-eligible if their employer does not guarantee them an unvarying salary. This means that many engineers, banking and finance workers, and other high-income earners and professionals, may be entitled to overtime if they are not paid a salary.

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].

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Non-Competes No Longer Valid

Shavitz Law Group

Understanding the FTC’s New Rule on Non-Compete Agreements

The Federal Trade Commission (FTC) has introduced a new rule that significant changes the landscape for non-compete agreements in the workplace. Effective September 4, 2024, most non-compete agreements with employees will no longer be enforceable.

Here’s a breakdown of what the new rule means for both employers and employees:

What is a Non-Compete Agreement?

A non-compete agreement is a contract between an employee and employer that restricts the employee from working for competitors or starting a competing business for a certain period after leaving the company. Non-competes typically are contained in employment contracts or agreements. While non-compete agreements aim to protect the employer’s business interests, but they can also limit employees’ job opportunities and mobility.

What’s Changing?

Pursuant to the new rule, employers can no longer enter into new non-compete agreements with employees. This includes senior executives—employees earning more than $151,164 per year who hold policy-making positions. However, existing non-compete agreements with these senior executives will remain valid. For all other employees, any existing non-compete agreements will become void. So the new rule is retroactive, except for C-suite, upper-level management employees.

Notice Requirements

Employers must inform both current and past employees that their non-compete agreements will not be enforced. This ensures that employees can seek or accept new job opportunities without fear of legal repercussions.

Exceptions

There are a few exceptions to the new rule:

1. Existing non-compete agreements with senior executives remain valid.

2. Non-compete agreements related to the sale of a business are still enforceable.

3. Any legal actions that arise before September 4, 2024, will not be affected by the new rule.

What the New Rule Means for Workers

Workers who previously remained with companies because of a non-compete would deprive them of other employment opportunities will no longer be restricted by the non-compete agreement. This gives employees more employment opportunities and mobility. As a consequence, employees should be in a better position to negotiate more favorable terms from their present employers.

If you or someone you know has been subject to a non-compete and you have questions about the new rule or any other aspect of your employment, please contact Shavitz Law Group at [email protected]

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California Employee Expense Reimbursements

Shavitz Law Group

The federal statute known as the Fair Labor Standards Act (FLSA) requires employers to pay overtime and minimum wage for non-exempt employees.  As a federal law, the FLSA applies nationwide. However, some states offer more protection than the FLSA. For example, in California, employers are required to reimburse employees for necessary expenses incurred while performing their jobs.

This requirement comes from Section 2802 of the California Labor Code, which ensures that employees are not forced to pay out-of-pocket for work-related expenses. Section 2802 specifically states: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties . . .” The protections of § 2802 are broad and apply to all employees.

Here are a few examples of how § 2802 operates:

Personal Vehicles

When employees use their personal vehicles for work purposes, employers must reimburse them for the associated costs. Reimbursement should cover all expenses related to the vehicle’s use, including maintenance, insurance, and wear and tear. The most common method for calculating this reimbursement is by using the IRS standard mileage rate, which provides a per-mile rate that factors in all these costs.

For example, if the IRS mileage rate is 67 cents per mile and an employee drives 100 miles for work, the employer would reimburse $67.

Use of Personal Cell Phones

Similarly, if employees use their personal cell phones for work, employers must cover a fair share of the costs. This includes voice calls, text messages, and data usage necessary to perform their job.

One approach is for employers to reimburse a reasonable percentage of the employee’s phone bill. For example, if it’s determined that 30% of the phone usage is work-related, then 30% of the monthly bill should be reimbursed. If you work in California and believe you have not been properly reimbursed for expenses you incurred as a direct result of your job duties, please contact Shavitz Law Group at [email protected].

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After-Hours Communications

Shavitz Law Group

The Fair Labor Standards Act mandates that employers compensate non-exempt employees for all overtime hours worked. What many employers fail to appreciate is that “work” encompasses not only to traditional tasks performed at a worksite. In this age of technology where communication can occur 24/7, various work-related activities conducted outside regular working hours are considered “work” for which employees are entitled to be paid, including off-site and after-hours communications, such as emails, texts, messages, and phone calls.

For instance, when non-exempt employees respond to work emails/texts/messages during evenings or weekends when they are otherwise off-shift, the time spent engaging in these communications is considered compensable work and should be factored into the calculation of overtime pay. Similarly, if employees are required to participate in work-related phone conferences outside of their standard work hours, the additional time dedicated to these activities qualifies as overtime.

Employers now take it as a given that they can communicate with their employees after hours, via email/text/messaging/phone. While such communication may be considered the “new normal,” employers are required to accurately track and pay for all compensable time, irrespective of the method or medium of communication. If non-exempt employees engage in work-related communications through emails, texts, messages, or phone calls after hours, when they are off the clock, they are entitled to overtime for those additional hours worked.

 

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Time In Training

Shavitz Law Group

Employers are required to pay employees for study time when they mandate that employees to engage in certain learning activities for the employer’s benefit. Here are several examples of scenarios where studying would likely be considered compensable: 

 

 

1.      Mandatory Training Programs: 

·         If an employer mandates attendance at training programs, workshops, or seminars outside regular working hours, the time spent in these activities is generally considered compensable. 

·         Scenario: A business introduces a new software system for tax preparation. All non-exempt employees are required to attend a weekend training program to learn the ins and outs of the new system. The time spent in this mandatory training program is compensable. 

2.      Online Courses or Webinars: 

·         When an employer requires employees to complete online courses or attend webinars as part of their job responsibilities, the time spent on these activities is likely compensable. 

·         Scenario: A marketing company requires its staff to enroll in online courses on digital marketing trends. The time spent attending these courses during evenings or weekends, as mandated by the employer, is likely compensable. 

3.      Job-Specific Certifications: 

·         Some jobs may require employees to obtain specific certifications or licenses following their hire. Time spent studying for and taking exams related to these certifications, especially if mandated by the employer, may be considered compensable. 

·         Scenario: A healthcare institution mandates that staff obtain a specialized certification for handling new medical equipment. The time spent studying for the certification, including attending preparation courses, is compensable. 

5.      Product or Service Training: 

·         For employees involved in sales or customer service, studying product or service materials to enhance their knowledge and performance may be compensable, especially if the employer requires it. 

·         Scenario: A salesperson at a technology company is required to attend a training session on the features and benefits of a new product. The time spent in this training session, even if it occurs outside regular working hours, is compensable. 

7.      Orientation or Onboarding Programs: 

·         The time spent by new hires in orientation or onboarding programs, including reviewing company policies and procedures, can be compensable if it occurs outside regular working hours. 

·         Scenario: A new employee is required to attend an extensive onboarding program that includes learning about company values, policies, and procedures. The time spent in this onboarding program, whether during or after regular working hours, is compensable. 

 

In all these scenarios, the key factor is that the employer mandates or requires the employee to engage in these activities for the benefit of the company. If it’s a voluntary initiative by the employee for personal development, it may not be considered compensable time. 

 

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].

 

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The Two Full-Time Employee Requirement for the Managerial Exemption

Shavitz Law Group


Did you know that managers may be non-exempt and entitled to overtime even if they are salaried and even if they are actually performing managerial duties? One common misconception about the FLSA is that any employee in a managerial role is automatically exempt from receiving overtime pay if they are salaried and performing managerial duties. However, this is not always the case, especially when it comes to supervising a limited number of employees.

When a manager carries out essential managerial duties but only supervises a small team, they may not meet the criteria for exemption from overtime pay. The determination of exempt status hinges on factors beyond job titles including the number of employees supervised.  A manager must supervise two full-time employees or the equivalent  to be exempt. That means two full-time employees each working 40 hours per week. It can also mean four part-time employees each working 20 hours per week. The determining factor is whether the manager is supervising 80 hours of labor per week. Thus, if a store is lightly staffed, then the manager may be misclassified as exempt – again, even if the manager is salaried and performing managerial duties..

For example:

Consider a boutique named “Chic Haven,” specializing in unique and handcrafted fashion accessories. This small store operates with a manager and a single sales associate.

The manager, Alex, is responsible for overseeing the day-to-day operations of the boutique. The duties encompass various managerial tasks such as inventory management, hiring and firing, scheduling , and financial reporting.

The “Chic Haven” manager and sales associate exemplify a scenario where the store operates with a small team, consisting of only one manager and one employee. In this case, while Alex is certainly carrying out managerial duties and exercising decision-making authority, the limited number of employees being supervised—only one—means that Alex is actually a non-exempt employee entitled to overtime.


In conclusion, being called a manager does not automatically equate to being exempt from overtime pay. When a manager’s scope of responsibility involves limited employee supervision such that the manager is not supervising two or more full-time employees or the equivalent (that is, 80 hours of labor) per week, they may be entitled to overtime compensation.

If you have questions regarding overtime, please contact Shavitz Law Group at [email protected].

Under the Fair Labor Standards Act (FLSA), the exemption for managerial positions depends on various factors, including the salary test, duties test, and the requirement that the alleged manager must supervise two or more full-time employees “customarily” and “regularly.” This blog will focus on the importance of meeting the “customarily and regularly” criterion and its implications for employees classified at exempt managers.

The “customarily and regularly” requirement means that the supervisory duties must be a regular and frequent part of the job, not just occasional or temporary. If, for example, an alleged manager only supervises two or more full-time employees on rare occasions or for brief periods, they might not meet this criterion and thus not qualify for the manager exemption. Importantly, in instances where an employee does not meet the “customarily and regularly” requirement, the employee likely is entitled to overtime for the hours worked over 40 in a work week.

What exactly is ”customary and regular”? Courts have held that if an alleged manager supervises two or more full-time employees 67% of the time, or even as high as 76% of the time, then that is not sufficient frequent for it to be “customary and regular” and the exemption may not apply. Rather, the law indicates that the percentage of time the alleged manager is supervising must be much higher.

Let’s compare two examples to better understand the significance of meeting this requirement:

1. Assistant Manager Smith is classified as an exempt manager; however, Smith only supervises two or more full-time employees twice a year, specifically when the Store Manager goes on vacation. Smith likely would be found to be non-exempt and entitled to overtime because two weeks of supervising two or more full-time employees is not “customary and regular.” 

2. Assistant Manager Jones is classified as an exempt manager and supervises two or more full-time employees every week, except when Jones is attending company training out of town. Jones would likely be found exempt (assuming all of the other criteria are met) and not be entitled to overtime because supervising two or more full-time employees all but two weeks out of the year is customary and regular.

The distinction between these examples is critical. Assistant Manager Jones qualifies for the manager exemption because Jones consistently perform supervisory duties regularly (every week), meeting the “customarily and regularly” requirement. On the other hand, Assistant Manager Smith’s supervisory responsibilities are infrequent and limited to a few specific occasions, making Smith likely ineligible for the exemption and therefore entitled to overtime.

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].

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Understanding the “Customarily and Regularly” Requirement for the Managerial Exemption under FLSA

Shavitz Law Group

Under the Fair Labor Standards Act (FLSA), the exemption for managerial positions depends on various factors, including the salary test, duties test, and the requirement that the alleged manager must supervise two or more full-time employees “customarily” and “regularly.” This blog will focus on the importance of meeting the “customarily and regularly” criterion and its implications for employees classified at exempt managers.

The “customarily and regularly” requirement means that the supervisory duties must be a regular and frequent part of the job, not just occasional or temporary. If, for example, an alleged manager only supervises two or more full-time employees on rare occasions or for brief periods, they might not meet this criterion and thus not qualify for the manager exemption. Importantly, in instances where an employee does not meet the “customarily and regularly” requirement, the employee likely is entitled to overtime for the hours worked over 40 in a work week.

What exactly is ”customary and regular”? Courts have held that if an alleged manager supervises two or more full-time employees 67% of the time, or even as high as 76% of the time, then that is not sufficient frequent for it to be “customary and regular” and the exemption may not apply. Rather, the law indicates that the percentage of time the alleged manager is supervising must be much higher.

Let’s compare two examples to better understand the significance of meeting this requirement:

1. Assistant Manager Smith is classified as an exempt manager; however, Smith only supervises two or more full-time employees twice a year, specifically when the Store Manager goes on vacation. Smith likely would be found to be non-exempt and entitled to overtime because two weeks of supervising two or more full-time employees is not “customary and regular.” 

2. Assistant Manager Jones is classified as an exempt manager and supervises two or more full-time employees every week, except when Jones is attending company training out of town. Jones would likely be found exempt (assuming all of the other criteria are met) and not be entitled to overtime because supervising two or more full-time employees all but two weeks out of the year is customary and regular.

The distinction between these examples is critical. Assistant Manager Jones qualifies for the manager exemption because Jones consistently perform supervisory duties regularly (every week), meeting the “customarily and regularly” requirement. On the other hand, Assistant Manager Smith’s supervisory responsibilities are infrequent and limited to a few specific occasions, making Smith likely ineligible for the exemption and therefore entitled to overtime.

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].