Today, wage and hour class actions outnumber all other discrimination class actions combined. With the explosion in wage and hour claims over the past several years, most employers are finally starting to grasp the severity of this litigation nightmare.

“It’s been a perfect storm for wage and hour class and collective actions against employers,” says Shanti Atkins, Esq., President and CEO of ELT. “Employers are being hit from two sides. On one, there is a better funded, more fully staffed Department of Labor (DOL) that has made fighting ‘wage theft’ one of its key priorities. On the other side are aggressive plaintiff law firms that literally salivate at these easy-to-identify and easy-to-win, lucrative class actions.“

According to the DOL, more than 80% of employers are out of compliance with federal and state wage and hour laws. Vowing to fight back on non-compliance, President Obama increased the DOL’s budget back in 2010, which means even stricter enforcement of wage and hour laws and hundreds of additional field investigators. These investigators are tasked with closely examining the pay practices surrounding overtime, off-the-clock work, meal and rest breaks, and auto-deductions at hundreds of employers around the country.

Adding to the risk, wage and hour lawsuits have become a strong focus within law firms across the nation. Finding violations of antiquated wage and hour laws based on technicalities is relatively simple, and the burden of proof is on the employer who is presumed guilty until proven innocent. This type of litigation also lends itself to a “template” lawsuit where multiple employers can be simultaneously targeted.

The money on the table for wage and hour class action settlements is huge. The average federal level settlement is $23.5 million and $24.4 million at the state level. With the majority of employers already out of compliance, these are the kind of open and shut cases plaintiff’s law firms love to take on. Although these lawsuits are often presented as noble efforts towards protecting the working class, most of the money ends up in the hands of the attorneys. In most cases, class-action participants see as little as a few hundred dollars.

Employers can protect themselves from wage and hour claims by proactively training their workforce on wage and hour compliance. These employers are using training not only to help prevent wage and hour issues in the first place, but to arm their organization with powerful legal defenses in case of litigation. Wage and hour training can help to reduce damage awards by as much as 66%.

“Most plaintiff law firms won’t want to take on a wage and hour case if the employer has a robust compliance program that includes wage and hour training for employees and managers,” says Atkins. Evidence of a consistent and thorough program makes a class harder to certify, a case harder to win and plummets settlement values. “It’s like having a security system sign in your front yard during a neighborhood crime wave. It may not provide 100% protection against a robbery, but the burglar is likely to go to the less risky house down the street.“

Another measure being adopted by employers across the nation is the use of technology to help comply with the demands of the DOL. Record keeping is a huge part of compliance when it comes to time keeping and payroll related issues.

“We’ve seen DOL audits disappear almost over-night due to a quick and comprehensive response to providing time keeping related records.” says Erik Rowland, President of TimeMD.com. “Many employers panic when they receive a letter from the DOL announcing they will be arriving at their business. They don’t know what to present or how to put it together. Using a solution such as ours makes it very easy to respond.“

Some of the most critical items to have ready include payroll records and time cards/time sheets for at least the past two years. Systems like TimeMD prove absolutely critical in proving that information.

To learn more about TimeMD.com and how it can help your business with a DOL wage and hour audit, contact one of our representatives today.

The app will utilize the tablets integrated camera in order to take a photograph of the user as they record time punches. This picture will then be saved and uploaded to the TImeMD servers so that managers can at their leisure, compare the photograph with the personnel’s photo on file. This will allow managers to quickly identify those who might be abusing the time tracking process by “buddy punching”.

The process of “buddy punching” has created problems for management for years. The basic idea is that employee A receives a phone call from employee B asking if employee A will punch in for them. This typically occurs if employee A is running late and want’s to avoid disciplinary action or a deduction in wages. Employee B obliges by clocking in employee A by whatever means being used to track time.

In most cases the manager or supervisor is none-the-wiser. As a result hundreds of thousands of employees are taking advantage of this process each and every day. This results in millions of dollars of “stolen” time from employers. In order to address this problem, employers have sought technology by way of biometric verification as a possible solution.

Biometric verification, or a way of uniquely identifying an individual by some distinguishing biological trait, has been employed by companies for years as a possible solution to stop buddy punching. Some of the more common biometric devices are fingerprint readers, hand geometry, retina or iris pattern scanners.

However, most of these biometric solutions cost more then what most businesses can afford. Some even attempt to purchase cheap off-the-shelf solutions. They quickly discover these solutions are frustrating to use and suffer from a high failure rate when it comes to accurately identifying personnel. As the old saying goes, you get what you pay for. The more accurate the biometric process needs to be, the more you’ll need to spend.

TimeMD has solved these problems by taking the complexity out of traditional biometric verification processes. Gone are the days of relying on complex programming and proprietary hardware solutions. When it comes to recording a time punch, TimeMD has adopted the philosophy that verification can come at any point, as long as the managers and supervisors have the tools they need to verify the employee. That way employees are free to record their punches knowing that management can at any time, verify they are who they say they are. This is done by verifying the photograph taken at the time of the punch.

“Our web based time and labor system can work with any open time clock or biometric device, but we developed the PicTime app to fill a void in the market. We consistently hear clients complaining about the cost of existing biometric solutions so we developed PicTime.” Says Erik Rowland, President of TimeMD.com.

According to Mr. Rowland, to further expedite the identification process of personnel, an e-mail can be sent automatically to the payroll or HR manager that displays dozens of actual pictures in addition to the employees validated photograph. In a matter of seconds the manager can then easily validate that the person clocking in and out was who they were supposed to be.

TimeMD.com has been offering an innovative web based solutions for nearly a decade by giving both small and larger employers a simple intuitive interface combined with the robust features needed to accommodate the most demanding employer.

“Because our system is purely web based, managers deployed all over the country have access to critical data in real-time all in one place simply by accessing their account online. The technology has changed the landscape of how employers manage their labor cost.” says Rowland.

Clients that used to review labor cost at the end of the month. Now instead of reviewing cost, users of TimeMD can manage it. They us the system to make immediate adjustments in labor allocation based on daily market conditions.

“Since labor is by far the largest expense for the majority of companies, real-time data is critical for managing it. Now, with PicTime, even our smallest clients can get real-time, validated data on their employees.” says Rowland.

To learn more about PicTime and how it can help your business, contact a TimeMD.com representative today.

The study was completed by The Research Institute on Social and Economic Policy (known as RISEP) at Florida International University. Thiw was the second study on wage theft in Florida that uses data from the U.S. Department of Labor and several community organizations. (Read the full report below)

The RISEP considered employer “wage theft” as situations when workers are not paid their legally owed wages, and according to RISEP it includes “unpaid overtime, not being paid at least the minimum wage, working during meal breaks, misclassification of employees as independent contractors, forcing employees to work off the clock, altering time cards or pay stubs, illegally deducting money from employees’ pay checks, and paying employees late.”

Key findings from the study include:

• From September 2008 to January 2011 more than $28 million in unpaid wages has been recovered through the U.S. Department of Labor’s Wage and Hour Division, Miami-Dade’s anti-wage theft ordinance and community groups.
• Florida’s key industries — tourism, retail trade and construction — have the highest numbers of reported wage violations.
• An average of 3,036 wage violations per year are reported to the Wage and Hour Division in Florida.
• Despite ample evidence of widespread wage theft among low-income workers, as of December 2011, Florida’s attorneys general have not brought one single civil action to enforce the state’s minimum wage law, enacted in 2004.
• Since the full implementation of the Miami-Dade County anti-wage theft ordinance in September 2010, the county’s Small Business Development agency has recovered nearly $400,000 in unpaid wages for 313 workers who unlawfully had their wages withheld from them.
• The Department of Labor recovered just under $16 million in wages for more than 24,000 workers in Miami-Dade, Hillsborough, Broward, Pinellas, Palm Beach and Orange counties.

“We estimate that out of $28 million recovered, it’s two to three times that amount of unreported cases, because how many people really know about the wage theft ordinance in Miami-Dade, or about the Wage and Hour Division?” stated Cynthia Hernandez, one of the report authors.

“In the case of Tampa there’s a community group there that didn’t know about the Wage and Hour Division,” Hernandez says, “so you can imagine most people don’t know, or are afraid to go, or don’t follow up or oftentimes the Department of Labor can’t help them because they’re not covered by the Department of Labor jurisdiction.”

The report states what supporters of the local anti-wage theft ordinances have told news agencies before: Existing federal workplace laws do not protect millions of workers, including “hospital, school, or government workers or workers at small, local firms, including contractors for larger companies.” Florida’s minimum wage law also excludes millions of workers “from protections against employers who withhold their earnings.”

In the last six months, various agencies have reported on at least two cases of wage theft in the construction industry: in Fort Lauderdale and Miami-Dade. In both cases, workers were sent time and again from the general contractor to a sub-contractor, who had sub-contracted to a third company. In the Miami-Dade case workers were paid, but some have taken their case to the county’s Small Business Development office, which administers the local wage theft program.

The RISEP study indicates that in Florida there are six Wage and Hour Division investigators, one for every 1.2 million workers. The lack of Wage and Hour Division resources and jurisdiction has created a backlog of cases in the state, according to the report.

The study also states that, as of the year 2000, “Florida has no state equivalent to a Department of Labor to investigate wage and hour complaints and does not have staff to enforce its minimum wage law (currently set at the rate of $7.67 per hour).”

More than 9,100 cases of wage theft were reported to Florida’s Wage and Hour Division from September 2008 through January 2011. About 5,000 of those cases occurred in five industries: accommodation and food services, retail trade, construction, health care and social assistances, and administrative support and waste management and remediation services.

The business lobby that supports the current GOP bill that would stop local communities from enacting ordinances like Miami-Dade’s includes the Florida Retail Federation, which has a pending court challenge against Miami-Dade’s wage theft crackdown. Associated Builders and Contractors also supported the bill during the 2011 legislative session.

Samantha Hunter Padgett, deputy general counsel for the Florida Retail Federation, stated in December that her organization supports the Legislature’s bill because “existing state and federal laws address the issues raised in local wage theft ordinances.”

Hernandez calls her group’s report “timely.”

“Hopefully enough legislators see it and consider [wage theft] an issue,” she says. “And while their argument going around is that ‘We don’t want a patchwork of county ordinances,’ they’re not proposing any statewide mechanisms.”

“The current mechanisms are not sufficient, but they could at least help, and they’re not being funded,” Hernandez says.”For example the attorney general’s office has never pursued a wage theft case.”

“Because of studies like this is why we are so excited about our product.” says TimeMD.com owner Erik Rowland. “In most cases, business owners want to comply with state and federal guidelines when it comes to wage and hour issues, however they don’t know where to start or they feel it’s too complicated. Our product simplifies the entire process.”

For more information on how systems like TimeMD.com can help, please contact a representative today.

But what should you expect when the DOL comes calling for an investigation (either as part of a random audit or a complaint)? First thing you should know is that they typically don’t call asking when a good time might be. Instead, you’ll get a letter announcing that they will be coming to your office at a specified date and time and that they want to review some records.

The U.S. Department of Labor has released a Fact Sheet for Employers about visits to employers that the department may conduct. It’s a great starting point for any questions you might have as an employer.

But beyond that, the department may ask to review specific documents including:

• Payroll records (including payroll journals, time cards, and/or time sheets) for the last two years;
• Lists of all employees considered exempt from minimum wage or overtime rules (and the exemption claimed) and the job descriptions for those “exempt” employees;
• Lists of employees who hold more than one position within your company;
• List of your three major vendors or supplies;
• Records or documents that reflect your gross revenue of your business for last three years (typically, the first page of Rom 1120 of the U.S. Corporation Income Tax Return);
• Federal Tax ID number (“EIN”);
• Names, addresses and phone numbers of all employees (present and former) for you for the last two years;
• Dates of birth, dates of employment and job titles for all those persons under the age of 18 who have worked for you for the last two years.

Now, you might ask, what gives the government the right to ask for this? Can they really just show up at my business and demand for this information? Section 11(a) of the Fair Labor Standards Act spells it out:

“The Administrator or his designated representatives may investigate and gather data regarding the wages, hours, and other conditions and practices of employment in any industry subject to this chapter, and may enter and inspect such places and such records (and make such transcriptions thereof), question such employees, and investigate such facts, conditions, practices, or matters as he may deem necessary or appropriate to determine whether any person has violated any provision of this chapter, or which may aid in the enforcement of the provisions of this chapter.“

These types of investigations often given employers very little time to prepare but understand that what is said during those meetings can and will be held against you. So consider consulting with an attorney early in the process who can coordinate the investigation and serve as a conduit between the DOL and you.

And if you don’t already track the information above – especially time cards or time sheets, be sure to take steps in this new year to do so. Under DOL regulations, these types of records shall be made available “within 72 hours” notice. That won’t give you much time especially if you don’t have this information stored digitally. This is why so many of our clients find TimeMD invaluable. During audits such as these, all your time records are available at the click of a button. Contact a TimeMD representative today to learn more.

Here’s how to do it:

• Open Safari on your iPhone or iPad.
• Navigate to the login screen on TimeMD.
• Press the square with arrow icon at bottom of screen.
• Select ‘Add to Home Screen’.

When the shortcut has been added to your iPhone’s home screen, you can move it around as you can with app shortcuts.

Just press and hold the TimeMD icon and drag it to where you want it to appear. Tap the home key to set it in position.

Here is a screenshot showing where this feature can be activated within the preferences area within TimeMD:

Once activated, the system will automatically track the GPS coordinates during the clock in and clock out process from the Web Clock. Managers can then view exactly where the punch occurred. This is done from the “TimeTracker -> View All Entries” page. Here is a screenshot showing where the link can be found:

When the above link is clicked, the user is taken to a Google map showing the specific location of the punch. Again, here is a screenshot showing more:

Again, we are very excited to extend this new feature to all our clients. As far as cost is concerned, in an effort to remain as competitive as possible, there is no cost to use or activate this new feature for our enterprise users.

Please let us know if you have any questions about this new feature. Keep an eye out, we’ve got a number of new enhancements that we’ll be rolling out in the near future.

How Does This Effect Employers

• The DOL timesheet application, which is available in both English and Spanish, tracks regular work hours, break time, and overtime hours. Additionally, users can add comments on any information related to their work hours, view a summary of work hours in a daily, weekly, and monthly format, and email the summary of work hours and gross pay as an attachment.
• According to the DOL announcement, this information “could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”
• Employers using manual timekeeping methodologies are now faced with the burdensome task of reconciling their attendance records with those kept individually by employees. Inevitably, there will be discrepancies between the two sets of records which will need to be resolved.
• Organizations can help protect themselves from wage and hour claims by using modern time & labor management solutions that allow employees to view and sign off on their hourly information using a common web browser or a mobile phone. This creates an employee-acknowledged version of the employee’s attendance that can be used in defense of a wage and hour audit or employee lawsuit.
• Modern time tracking solutions provide the added benefit of helping employers comply with labor-related regulatory policies such as FMLA, FLSA, collective bargaining agreements, and state and local labor laws regarding meals and breaks, minor work rules, premium pay, minimum wage and more. Because these policies are complex and constantly changing, manually trying to comply with them is next to impossible.
• According to the DOL announcement, the free DOL timesheet application is currently compatible with the iPhone and iPod Touch. The DOL will explore updates that could enable similar versions for other smartphone platforms and other pay features not currently provided for, such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials, and pay for regular days of rest.

Supporting Quotes

Paul DeCamp, partner, Jackson Lewis LLP
“The Department of Labor timekeeping application is yet another example of why employers should be prepared to point to and defend the accuracy of their own records in the event of a dispute with an employee. Organizations who do not use an automated system to keep track of their employees’ hours are taking a big risk.”

John Hollon, vice president for editorial, TLNT.com and board member of The Workforce Institute
“The fact that the Department of Labor is offering a free app enabling employees to track their own time and providing them with guidance on how to file a wage and hour lawsuit should serve as a wake-up call to any organization that isn’t currently using an automated system to track employees’ time. This is about organizations making sure that they are doing what they should when it comes to labor management, and having the records to back that up if they need to.”

Rob Stalter, associate, Porter Wright Morris & Arthur, LLP (as stated at EmployerLawReport.com)
“This (DOL timekeeping application) should be a warning to employers of the need to have systems in place to accurately track your employees’ hours worked. Otherwise, employees equipped with this and similar apps might be in a better position to prove higher hours worked in wage and hour cases.”

Tong-Seng Luy, aka Jerry Luy, 44, has been indicted on 10 counts of concealment by trick, making false statements to the U.S. Department of Labor and willful failure to pay overtime to his employees, according to the U.S. Attorney’s Office, District of Arizona.

Part of the accusations include Luy promising to pay but then withholding over $27,000 in back wages to eight employees over a two-year period at Arizona Donut and Cafe in Yuma, Arizona.

During the summer of 2010, the Labor Department conducted a civil investigation and determined that Luy owed back wages to shift workers who perform combined duties as short-order cooks and cashiers as defined under the overtime provisions of the Fair Labor Standards Act.

According to the indictment, in September 2010, Luy agreed to pay over $27,000 in back wages to eight employees for a two-year period. The very next month, Luy falsely affirmed to the Department of Labor that all employees had been paid, and that he was in compliance with the FLSA. In reality, Luy allegedly continued to require his employees to work in excess of 40 hours per week without paying overtime wages.

In addition, rather than actually paying the back wages that he had agreed to pay, Luy prepared additional payroll checks, demanded that his employees endorse them, redeposited the checks back into his own account and then sent copies of the fronts of the checks to the Department of Labor as proof of payment.

A conviction for concealment by trick and making false statements carries a maximum penalty of five years imprisonment, a $250,000 fine or both. A conviction for willful failure to pay overtime carries a maximum penalty of six months imprisonment, a $10,000 fine, or both.

The investigation preceding the indictment was conducted by the Wage and Hour Division of the Department of Labor, and by the Federal Bureau of Investigation. The prosecution is being handled by Gary M. Restaino, assistant U.S. attorney, District of Arizona, Phoenix.

Expand/Contract
You can now expand and contract the different job tiers in order to simply the view. Simply click the small arrow found to the left of the job title for any job that has sub-jobs.

Move Jobs Between Tiers
If you need to move jobs into different job tiers, you can now do so. Either “click-n-drag” your job onto any other job in order to make that job a sub-job of the given tier. Or you can click the “move up” link found beneath each sub-job title. By clicking this link will move the job to the next job tier.

Copy Entire Job Structures
For those that have complicated job structures that might need to be replicated for different clients or projects, we now have a quick and easy way to do so. Simply click the “copy” button found on the job tier you wish to copy. The system will present you with a form that asks what you would like to call this copied job structure. Once you’ve provided the name, click submit and your entire job structure will be copied. This makes it very quick and easy to manage your jobs.

As always, we very enjoy listening to our clients. If you have an idea or suggestion for us, don’t hesitate to drop us a line. Our goal is to make TimeMD the most robust time and labor tracking system on the market and we can’t do that without you.