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Michael Gebhart and Anthony L. Hall, Editors
Holland & Hart LLP
Vol. 13, No. 8
May 2008
SUZANNE'S SIDEBAR
It's all about getting paid
Jill Garcia and Suzanne Martin
There's been a lot of activity at the U.S. Department of Labor (DOL) recently. The department's Wage and Hour Division (WHD) announced record recovery rates for 2007, new wage and hour opinions were released, and increases in the state and federal
minimum wage will soon be taking effect.
Did you know?
The WHD had a great 2007. Statistics for fiscal year (FY) 2007 reflect $220,613,703 collected in back wages ―the most ever. That amount represents a 67 percent increase from FY 2001. The division attributed its success to its employees and "the
department's commitment to protecting workers." Also, the WHD has indicated its major focus is bringing large employers into compliance. A number of the FY 2007 collections were multimillion-dollar payments.
So what do you do when the DOL comes knocking at your door? First, call your labor and employment counsel to obtain assistance in preparing for the audit. You'll need to review payroll and business records before the audit and identify any
questionable wage and hour practices that may be discovered during the audit. Unfortunately, the DOL isn't authorized to disclose the reasons for the audit, so establishing a respectful and cooperative relationship with the DOL (or any investigative
agency) is critical to your credibility. In the end, it may result in the investigator providing you with more time to respond or giving you the benefit of the doubt. Remember: You get more flies with honey than you do with vinegar.
Breadcrumbs from the DOL
The DOL recently issued two new opinion letters. The first letter addressed whether the purchasing agents of a motor home manufacturer qualified as exempt administrative employees. The DOL considered the duties and salaries test, including whether:
- the employees were compensated on a salary or fee basis at a rate of not less than $455 per week;
- their primary duties consisted of office or nonmanual work directly related to the management or general business operations of the
employer or its customers; and
- their primary duties included the exercise of discretion and independent judgment with respect to matters of significance.
The DOL found that the agents were exempt. A key consideration was that they had the
ability to bind the company to significant purchases. That showed that they exercised discretion and independent judgment. The company advised them that they could place purchases for up to $25,000 without manager approval, while 99 percent of the
purchases required no approval.
The second letter provided guidance on overtime liability for a public employer. Specifically, it addressed shift substitutions by employees. Under a statutory exception to the Fair Labor Standards Act, public agency employees, under certain
circumstances, may switch shifts with each other without changing the employer's overtime wage payment obligations to either employee. In what the DOL termed "unusual situations," a substituting employee might want to work so many substitute shifts
that his hourly rate of pay would fall below the minimum wage.
The DOL deemed the shift exchange an exception to overtime but not to minimum wage obligations. A public employer must deny shift substitutions that could drop the employee's hourly wages below the minimum wage.
Tie a ribbon around your finger
Don't forget! Nevada's minimum wage increases take effect July 1, 2008. The labor commissioner has posted the new minimum wage rates and the wage rates to avoid daily overtime exposure online at www.laborcomissioner.com. For more information about increases to the state and federal minimum wage, see "Money, money, money: minimum wage increase dates" in our August 2007 issue.
Suzanne Martin is an associate with Lewis & Roca LLP in Las Vegas. She can be reached at (702) 949-8291 or smartin@lrlaw.com.
Jill Garcia is also an associate with Lewis & Roca LLP in Las Vegas. She can be reached at (702) 474-2620 or jgarcia@lrlaw.com.
Copyright 2008 M. Lee Smith Publishers LLC
The contents of NEVADA EMPLOYMENT LAW LETTER are intended for general information and should not be construed as legal advice or opinion. To request further information or to comment on an article, please contact Michael Gebhart at 775-327-3000 or
Anthony L. Hall at 702-669-4600.
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