Return-to-Work Changes Pose Litigation Trap for Overtime Rules
Employers navigating the many risks associated with reopening workplaces must pay close attention to an under-the-radar litigation trap—changes to a worker’s pre-virus role that make them newly eligible for overtime pay, wage-hour attorneys said.
Businesses have long relied on statutory exemptions to overtime requirements to limit labor costs and the burdens of tracking employee hours. There are multiple forms, including an “outside sales” exemption for workers who routinely travel door-to-door, and an “executive” exemption for employees who direct the work of at least two others.
Most exemptions are based on a worker’s daily tasks and that creates a risk area for employers as job responsibilities evolve—sometimes by design, other times not—to meet the needs of a changing workplace.
In the pre-pandemic economy, ambiguities surrounding these exemptions were a common source of Fair Labor Standards Act class actions, regularly leading to multimillion-dollar settlements. But now, with businesses buffeted by recession and adjusting operational patterns under return-to-work plans, employers must proactively assess workers’ new routines to consider if the exemptions still apply, or face heightened risk of winding up in court, employment attorneys say.
At some companies, supervisors who previously qualified for the executive, administrative, or professional exemptions have been forced to take on non-managerial duties to fill in for laid-off colleagues, and at others, salespeople paid under the “outside sales” exemption have suspended in-person visits to customers as a safety precaution. These adaptations potentially strip employers of their legal basis for disqualifying workers from earning overtime for hours beyond 40 in ...
More on: news.bloomberglaw.com