Before I get started, I would like to thank all of our Veterans and active service members, and their family members, for their service to our country and the sacrifices they have made to make our country a better and safer place.
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FLSA Issues continue to plague employers. Over the years, I have written about the problems associated with employers not properly paying their employees. (October 18, 2011, May 10, 2011, August 17, 2010, July 2, 2010, June 3, 2010 and February 21, 2010). Recently, the Mobile Press Register ran a story pointing out that wage and hour litigation was up 18% in 2010, and the upward trend is expected to continue during 2011 and into 2012. The problems include misclassification of employees as exempt when they should be non-exempt, the misclassification of employees as independent contractors, and failure to pay overtime for any work performed in excess of 40 hours a week. As pointed out in the Mobile Press Register's article, "review your compensation practices", "verify your record keeping", make sure your records are accurate, and make sure overtime is paid properly.
Practice pointer. As we head towards the end of another year, now is the time to do an audit of your policies and procedures to verify compliance with the FLSA, and train all your employees on these issues.
E-VERIFY and unintended consequences. Recently, Bloomberg Businessweek ran an article entitled "A Verification System for New Hires Backfires". In this article, a number of examples are given where employers who have enrolled in the E-Verify system have had trouble finding enough workers to do the work. About 5% of the companies, around 300,000, use E-Verify. This number will go up as states around the country implement the mandatory use of E-Verify for all employers. In North Carolina, a local flower wholesaler implemented E-Verify, and the owner reports that he could not find enough workers: "Those who want to work fail to pass E-Verify, and those who pass fail to work." In Arizona, which made E-Verify mandatory in 2008, worker shortages have been reported in the construction industry and the food service industry. One way employers are trying to avoid the mandatory use of E-Verify is to misclassify workers as independent contractors. A Congressional Budget Office report from 2008 estimates that the mandatory use of E-Verify on a national basis would result in the loss of over $17 billion in federal tax revenue.
Practice pointer. Employers who attempt to avoid the mandatory use of E-Verify in Alabama are subjecting themselves to potential exposure under many different laws: Alabama's Immigration law, which may result in the loss of business licenses, claims for overtime under the FLSA, and tax liability under both state and federal laws.
Unusual excuses to take a sick day. CBS Moneywatch had an interesting article discussing the most unusual excuses to take a sick day. Some of them I have actually seen being used. The article refers to a CareerBuilder survey showing that 29% of employees admitted to calling in sick when they were fine. I expect the actual number to be higher. The study also showed that 15% of employers have fired an employee for calling in sick when they were not, and 28% of employers admitted to checking up on employees who they thought may not have been sick. Checking up included requiring a doctor's note (69%), calling the employee at home (52%), having another employee call (19%), and driving by the employee's house (16%). Some of the unusual excuses listed included a deer bite during hunting season, the kidnapping of a relative in Mexico, drinking anti-freeze by mistake and going to the hospital, and an employee's 12 year old daughter stealing a car so the employee could not get to work.
