It’s about time: Managing and Documenting Employee’s Work Hour

Volume 29 Number 3

If Sheree Swetin, executive director of the San Diego County Bar Association, needs some help or advice on a legal issue facing the organization, she calls on some of the bar’s 8,000-plus members for pro bono assistance.

There is one exception, however: employment and labor issues involving the bar’s 28 employees.

"We retain outside employment counsel, especially for anything involving employee time," Swetin says. "That gives you an indication of how important we think it is."

It was the bar’s outside counsel who recently reviewed plans to adopt a flex-time schedule for many bar employees, she says, as well as time-clock software that replaced the use of timesheets in the office.

"Time," as human resources consultant Judy Clark points out, "is a four-letter word" for many association executives. Managing employee time issues, from overtime to sick pay, can seem like a full-time job for organizations—particularly for executives at small associations with a handful of employees.

A new time wrinkle, changes in federal overtime and worker classification rules, has the potential to make employee management issues even more challenging for bar executives.

But with that challenge comes opportunity, say people in the labor and human resources field. Now might be the best time, they say, for executives to take a closer look at all their personnel policies and procedures. Whether it’s re-evaluating a lunch-hour policy or reclassifying a position, executives can benefit from a thorough review of just how an employee’s time is being spent.

Some big changes

The revisions to the Fair Labor Standards Act, known as the FairPay rules, were implemented by the U.S. Department of Labor this past August, generating a storm of controversy in the midst of a heated presidential election campaign. It was the first change to minimum pay levels in nearly 30 years and the first change to job duty requirements in 55 years.

The centerpiece of the changes was a provision making workers earning less than $23,660 a year automatically eligible for overtime pay, a nearly threefold increase over the previous threshold. Additionally, employees making more than $100,000 a year and who "regularly and customarily" perform at least one of the duties of an exempt executive, administrative, or professional employee are now ineligible for overtime.

Many observers say it is still too early to tell what kind of effect the rule changes will have on overtime compensation and job classifications. Election-year rhetoric clouded much of the discussion, says Clark, president of HR Answers of Tualatin, Ore., a human resources consulting firm that has done work for several state and local bar associations.

In fact, the House voted in the fall to order the Department of Labor not to enforce the rules. At press time, the issue was still being debated in the Senate, but President Bush had said he would veto any such attempt, and there weren’t enough votes to override.

One of the issues involved is whether the new regulations will help or hurt most of the workers they affect. Democrats and representatives of organized labor say the changes would cause upwards of six million workers to lose overtime eligibility, while Republicans, the White House, and the Department of Labor point out that 1.3 million workers earning less than $23,660 would gain more overtime, while about 100,000 white-collar workers making more than $100,000 would lose eligibility.

The best approach for bar leaders, Clark says, is to stay informed.

As the August 23 date for implementing the revamped regulations approached, labor and employment attorneys such as Ellen Hession found that questions from clients increased. And that was a good thing, Hession notes, since a regular review of a company’s job classifications and policies is virtually a must.

"People’s jobs change, and they evolve," says Hession, an associate at Sonnenschein Nath & Rosenthal in Chicago. "Employers often make the mistake that if a job wasn’t exempt 10 years ago, it’s not exempt now."

One of the biggest misconceptions among employers, she says, is the belief that making employees salaried makes them exempt from overtime. "Job titles alone are not going to work. Each exemption has a specific test."

Another popular misconception, she says, is that employers can offer compensatory time off, known as comp time, to nonexempt employees in lieu of paid overtime. It’s an all-too-common practice, she and others say. While it is possible to allow nonexempt employees to rearrange their weekly work schedule by, say, coming in a bit late on Monday because an event on Tuesday will keep them later than usual, what’s not acceptable is to offer them comp time that can be "banked" for later use.

That may change at some point, which would likely be a relief to many bar execs. The Family Time Flexibility Act, introduced last year and currently stalled in the House, would allow private-sector employees to enter into comp-time arrangements. Opponents say it would chip away at the protections of the 40-hour work week; proponents say it would give much-needed flexibility to those seeking work-life balance. But for now, experts say, bar associations must follow the rules as they are.

For nonexempt employees, "If you work more than 40 hours a week, you’re going to be eligible for overtime," says Bob Stevens, a labor attorney and partner at Troutman Sanders in Atlanta. "Comp time is not going to work."

Hession and Stevens say the FairPay rule changes are a good opportunity for employers to review their employee classifications and overtime policies, preferably with an outside consultant or counsel. "Getting outside help is the safest way to go," Stevens says.

The prime reasons for seeking expert opinions on job classifications and pay policies, they say, is stepped-up enforcement of labor rules by federal and state labor investigators, as well as employee lawsuits and complaints. "Smaller employers like local bar associations might not be affected by a lot of these rules," Hession says, "but one overtime lawsuit can hit a smaller organization hard."

A good time to review

While there might be apprehension about what the regulation changes will mean to an organization, "it couldn’t be a better time" for bar executives to review their pay and time policies, Clark agrees. But it is important, she adds, not to make the review seem like it is being forced on the association by the government.

Bar associations, like many professional organizations, can often be the most susceptible to employee labor complaints, Clark says. "The staff is externally focused on members and the members are focused on the profession," she explains. "[Members] don’t often look internally. They don’t sometimes recognize dissatisfied or disgruntled employees."

Among the most troublesome labor and time areas for associations, according to Clark:

--Misidentification of exempt employees.

--Improper use of comp time.

--Failure to include eligible employees for bonuses.

--Treating all salaried workers as exempt.

--Allowing off-the-clock work.

Ideally, Clark says, executives shouldn’t wait for federal or state mandates to make them take a look at employee handbooks, policies, and procedures. At the State Bar of Wisconsin, an internal review three years ago led to a complete reclassification of employees and their duties, says George Brown, the bar’s executive director. The bar employs 84 full-time equivalent people.

"We cleared up a lot of confusion and created better descriptions and job summaries," Brown says. The bar is now in the process of creating a working group to evaluate the current system. Additionally, Brown and the executive staff went to work soon after the federal overtime rules were implemented to make sure the bar was in compliance.

At the Cincinnati Bar Association, the release of the overtime rules was welcome, says Executive Director John Norwine. "We think the new regulations made it easier for us. There were employees who we thought were exempt but could have gone either way. They were exempt," he says. "We’re satisfied."

Document it

A key part of any office’s policies and procedures, attorneys and consultants say, is thorough documentation of an employee’s time. In most cases, Hession says, timekeeping records should be kept for at least three years. Does that mean a time clock is necessary? It depends on the situation, some say.

"I’m a huge fan of an appropriate record-keeping system. In the absence of records, the employee’s statements are always considered correct" in labor investigations, Clark says. "But I don’t think time clocks are the right thing for associations. They’re too industrial."

Norwine agrees with Clark, but his top managers and the bar’s accounting department persuaded him to adopt a timekeeping system about a year ago to make it easier to track the time of the bar’s 28 employees. Both exempt and nonexempt employees now swipe a card at the beginning and end of each work day.

"It’s eased the workload in the accounting department, but people have to take greater pains for work that is done outside the office," he says. "There were a few people who were upset at first, but it has been accepted [by employees]."

At the San Diego bar, an increasing problem with late arrivals, early departures, and extended lunch hours of some employees prompted Swetin to switch from timesheets to a software-based timekeeping system, TimeClock Plus by Data Management Inc.

"People were not offended by it. It has been very well received," Swetin says. "It’s significantly reduced the tardiness issue."

Small bar, big concern

While larger bar associations may have accounting and human resources professionals to help them with timekeeping and related employee issues, the same often cannot be said for smaller bar associations.

"[Time management] is probably one of the most difficult things for any local bar," says Karen France, executive director of the 800-member Clearwater (Fla.) Bar Association. "We do so many of the things that the larger bars do. We’re subject to the same rules and regulations that the megabars are subject to."

With just two full-time employees and three college students who combine to create one full-time equivalent, "there are not a lot of questions about whether you’re exempt or nonexempt," France says. Instead, issues such as vacation time and sick time take on a greater significance. "If I have one person out, that’s 25 percent of my workforce," she says.

A pervasive issue, she says, is how to staff bar events that occur outside the regular workday. "I try to avoid having staff at any of these functions," France says. "But we have so many functions at lunchtime that I have to require people to stay on and be paid for lunch."

The issue of how to staff for such events can be a tricky one, Clark agrees. Since comp time can’t be used, schedules need to be carefully planned in advance so that nonexempt employees who work outside their regular hours make adjustments to their schedules within the same workweek, Clark says. Otherwise, they will likely need to be paid overtime.

Executives also need to be careful when using nonexempt staff as "volunteers" for such events. "I can volunteer if there is a volunteer corps in the organization and it’s completely apart from the work I do," says Clark, using an example of an accounting clerk who helps prepare for a dinner event.

"But if I’m the bar exec and I say to my [nonexempt] staff, ‘It sure would be nice to have a few volunteers to help set up,’ then, bingo, that’s another issue," she says. "They would need to be paid overtime."

But how do you stop employees who want to help, who want to do things during their lunch hours to help out? "You can discipline them for working overtime, even if they’re helping the organization," Clark says. "But really, how do you prevent them from caring about their jobs? You can’t. Practically speaking, none of this gets you into trouble until you have a disgruntled employee."

More quality of life

Increasingly, Clark and others say, how an employee uses and is paid for his or her time are becoming more important factors in job satisfaction. As employees seek a better balance between their work and personal lives, they are turning to their employers to help them explore issues such as flex time, telecommuting, and extended leave.

 

To that end, the San Diego bar implemented a flex-time policy about a year ago that has employees work a few extra hours during the week in exchange for getting every other Friday off. It was an initiative Swetin pushed for, despite resistance from her senior staff, as well as the bar’s outside counsel.

But with their input, as well as some juggling and cross-training to make sure that key work was being done, the policy was implemented and has grown in popularity. "My nonexempt staff loves it," she says. "It’s such a quality-of-life benefit."

Flex time is available to virtually all employees at the Wisconsin bar, Brown says, after a thorough written policy was developed. As is the case in San Diego, permitting flex time is at the discretion of supervisors. "There are certain core hours you need to be here, and you can’t always grant it," he says. "It really helps to build employee loyalty, though."

Flex-time requests are growing in Cincinnati, Norwine says, and the issue of telecommuting is also likely to come up again. One unsuccessful attempt at telecommuting a few years ago prompted Norwine to shelve the idea, but the continued evolution of technology makes it probable that it will become part of the bar’s employment options, he says.

Clark advises employers to use the "Three P" approach to telecommuting: position, person, and performance. The position should lend itself to telecommuting, the person telecommuting must be able to work independently, and the employee’s performance should not suffer out of the office.

While flex time and telecommuting can pose a bigger challenge for small bar associations, there is also recognition that an employee’s time is valuable, France says, no matter how many coworkers he or she might have. "We try to be as generous as we can," she says.

One of the keys to employee time management, according to Clark, is a clear written policy that spells out the dos and don’ts and "creates respect in the workplace." While developing policies might be a difficult and complex task for executives and managers, when combined with a personal management approach, it will pay dividends, she says.

"Don’t wait until there’s a regulation to do these things," she advises.

[Side bar]

Staying on top of federal and state rules

Whether it’s looked at internally or through outside counsel, it’s important for bar associations to stay on top of the latest rules and regulations governing labor and employment issues, labor experts say.

And that doesn’t just mean federal rules like the FairPay regulations. No fewer than 17 states have different or more stringent labor regulations than the federal government’s, Ellen Hession says. State laws are often more favorable to employees, as in California, where overtime is required whenever a nonexempt employee works more than eight hours in one day.

It took Sheree Swetin several months to learn the intricacies of California labor law when she became executive director of the San Diego County Bar Association after working at the ABA headquarters in Chicago. While she relies on outside counsel for assistance, she also subscribes to a newsletter that focuses on California labor law.

John Norwine and Karen France, like other bar executives, call on bar members with labor and employment law backgrounds to lend a hand.

To help interpret the new FairPay regulations, France has also taken advantage of the U.S. Department of Labor’s Web site dedicated to the regulations. The site, www.dol.gov/fairpay, provides an overview of the changes, as well as interactive tools to help people determine whether or not someone might be eligible for overtime. "It’s very user-friendly," France says. "Every law and bar office really needs to be up on this."

Besides the FairPay site, the Department of Labor has an interactive site, www.dol.gov/elaws/overtime.htm, that provides guidance for employers and employees to determine who is and isn’t eligible for overtime pay under the new regulations.

The Society for Human Resource Management also offers some assistance. The organization is distributing a book by nationally known labor and employment attorneys that closely examines the regulations. What Every Manager Needs to Know about the FLSA and Its Updated Exempt Status Regulations can be purchased at www.shrmstore.shrm.org.

 

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