HR News Update

Workday Trends Blur Overtime Rules

What is overtime and who is entitled to get paid for it?

It's a heated question that has set off alarms for employers and spawned hundreds of lawsuits in courts nationwide. And it will only get more attention as employers squeeze productivity from workers and lawyers cash in on the most lucrative area of employment litigation.

Employees seeking work/life balance clearly want to be compensated for hours on the clock, especially those who are living without the high salaries that give executives an exemption from overtime. Those earning overtime get 1.5 times pay when working more than 40 hours a week.

But in an evolving, always-on workplace where employees routinely put in extra hours and shoot off e-mails late at night from mobile devices, where the workday begins and ends has become an issue for employers of all sizes.

"The whole definition of 'working' is being questioned," says Gary A. Costales, a Miami attorney who both sues employers and defends them.

In South Florida, two concrete-cutting truck drivers are suing their employer for overtime, claiming they should be paid for their commute. The drivers say that driving to the work sites in their trucks with all the equipment is part of their jobs and should be considered as on-the-clock time. They also assert they didn't get paid for working through lunch or attending mandatory safety meetings.

As the work week becomes a 24/7 affair for many industries, attorneys are advising companies to revise their employment agreements. Some employers could require employees to get permission before using their BlackBerrys or checking e-mail after work hours.

"Technology is a huge part of cases now because it creates a work record," said Michael Casey, an employment lawyer with Epstein Becker & Green in Miami.

Just last month, ABC News faced overtime requests from its employees who use their BlackBerrys for work purposes after hours. Management quickly drew up agreements with the Writers Union for employees to waive their right to overtime pay. Those who did not sign the waiver had their BlackBerrys taken away.

Then there's the issue of working off the clock. As the economy heads south, employees routinely find themselves in the same shoes as Dara Fresco, a longtime employee of Canadian Imperial Bank.

She contends the company piles so much work on its employees, they have no choice but to stay late to finish it all. And, she says she was told she couldn't file for overtime. Fresco has sued for $50,000 in overtime. She is hoping the institution's 10,000 former and current non-management employees come on board and is asking for $500 million in damages on their behalf. The bank denies the contentions.

Attorney Robert Turk says employers are looking more carefully at staff hours and work habits, even trying to stop hourly people from working through lunch. "It may be innocent but if a couple hundred employees are working through lunch that adds up to lot of money."

Of course, not everyone is owed overtime. About 115 million employees - 86 percent of the workforce are eligible to receive overtime under federal rules, according to the U.S. Labor Department. The rules apply to salaried and hourly workers with some exemptions such as those for various professionals, executives and highly compensated individuals.

Meanwhile judges are complaining that overtime suits are clogging the federal courts. Some of the momentum comes from the attorneys who find wage-and-hour violations are far more lucrative than harassment or discrimination lawsuits. Lawyers estimate that over the last few years firms have paid out more than $1 billion annually to resolve these claims.

This infuriates small-business owners like Geniveve Henriques, who operates a law office and real estate company in Miami. Henriques says after two employees resigned, they sued her for overtime, claiming she misclassified them as salaried professionals. They asked to be paid for working through lunch and breaks and taking cell phone calls after hours.

Henriques fought back and won. "It still cost me emotionally and financially," she said. Going forward, Henriques said any employees she hires will be hourly and will clock in and out.

Tom Roses, president of The Continental Group, a property management and services company which employs 6,500 mostly hourly workers throughout Florida, has made changes, too.

During orientation, the company now clarifies when work starts and ends, what will be accomplished in a work week, and whether the commute to the job site counts as work time. Roses says he eliminated comp time and went to 37-hour work weeks to allow extra hours without the need for overtime.

"We don't want a complaint against us because we haven't been clear," Roses says. "We have made sure that there is no wiggle room."

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