Virtual Hawaii Employment Lawyer

The Obama Administration has made clear in its proposed budget for the fiscal year 2011 that it will be targeting the misclassification of independent contractors. As part of the 2011 Budget, the Departments of Labor and Treasury are pursuing a joint proposal that eliminates incentives in law for employers to misclassify their employees; enhances the ability of both agencies to penalize employers who misclassify; and restores protections to employees who have been denied them because of their improper classification.

Employers should be aware that the Department of Labor will often find misclassification as an independent contractor where the following factors exists, singly or in combination with others:

- The independent contractor performs the same kind of work that employees also perform for the business;

- The independent contractor performs work that is essential to the business;

- The independent contractor is prohibited from selecting their own personnel;

- The independent contractor is not paid per project;
- The independent contractor may not/does not, perform similar services for other businesses;

- The independent contractor lacks the ability to control the manner in which services are performed;

- The independent contractor receives training from the business;

- The independent contractor does not provide their their own tools/suppies.

Employers should take extreme care to ensure independent contractors are properly classified. Failure to do so can lead to significant penalties.

Secretary of Labor Hilda L. Solis today, through a national online discussion with stakeholder groups, the general public and the news media, outlined the president’s fiscal year (FY) 2011 budget request for the U.S. Department of Labor, which is built around the vision of “good jobs for everyone.” The budget launches innovative ways to prepare workers for 21st century jobs, and makes new investments in programs that protect workers’ rights, safety and health in the new economy. It reaches out to diverse audiences to ensure that all people from all communities are included in the jobs of the future. See Secretary Hilda L. Solis’ Press Release here: DOL Press Release

The U.S. Department of Labor just announced it’s hiring 250 investigators to look into wage-and-hour violations by employers across the country. View the article here: 250 More Investigators for DOL.

As the State of Hawaii and other Hawaii employers face the potential of instituting work furloughs, the federal Department of Labor recently issued answers to frequenty asked questions on the issue.  Some of the more relevant FAQs include the following:

If an employer is having trouble meeting payroll, do they need to pay non-exempt employees on the regular payday?   In general, an employer must pay covered non-exempt employees the full minimum wage and any statutory overtime due on the regularly scheduled pay day for the workweek in question. Failure to do so constitutes a violation of the FLSA. When the correct amount of overtime compensation cannot be determined until sometime after the regular pay period, however, the requirements of the FLSA will be satisfied if the employer pays the excess overtime compensation as soon after the regular pay period as is practicable. Read more…

In a decision rendered on June 29, 2009, the 7th Circuit Court of Appeals held that the Fair Labor Standards Act does not protect employees who complain about perceived violations of the law by the employer from retaliation unless such complaint is in writing. Read more…

Hawaii employers may not deduct, withhold or otherwise require employees to pay any part of their compensation unless required by law, court process, or authorized in writing by the employees. An employee, however, cannot authorize or be required to bear the following:

1. Fines;

2. Cash shortages in a common till or register used by two or more persons or under the sole control of one employee who is not given an opportunity to account for all monies received at the start of a shift and all monies turned in at the end of a shift;

3. Fines or replacement costs for breakage;

4. Losses due to acceptance of bad checks if the employee is given discretion to accept or reject checks;

5. Losses due to defective or faulty workmanship lost, stolen or damaged property; default of customer credit; or nonpayment for goods and services unless such losses are attributable to the employee’s willful or intentional disregard of the employer’s interests; and/or

6. Cost of medical examinations or reports which are requested or required by the employer or by a government agency.

An employer may make adjustments in wages for advances or correction of computation errors from previous payrolls and such an action is not considered an unlawful deduction from an employee’s wages.

An April 2009 California appellate court decision demonstrates that “on-call” employees continue to pose a risk to employers under wage and hour laws. In Gomez v. Lincare Inc., the employees alleged the employer did not properly compensate them for on-call time in which they were tasked with responding by phone to customer inquiries. Read more…