Dell Computers built its success on operating numerous call centers, where customers could phone in and buy their systems direct from the manufacturer. Now the way Dell runs those centers is under attack.
A recent class-action lawsuit in Oregon is charging Dell with serious violations of the Fair Labor Standards Act (FLSA). Among the charges: not paying phone reps for time spent in meetings and in prepping for the day’s calling, deducting a full hour’s pay for lunch when workers took less, and not permitting work breaks required by state law. Dell has declined to respond to the charges, invoking a policy against comment on pending litigation.
Attend BLR’s coming audio conference on FLSA. Click for information.
The workers were likely emboldened to sue by a wave of FLSA lawsuits sweeping the country, and entangling such giants as Wal-Mart and IBM. The trend is so pervasive that several leading attorneys have sought to educate the HR community on the most dangerous areas of FLSA compliance. Among those attorneys was Stuart W. Miller of the firm of Davis Wright Tremaine, LLP, who led a recent BLR audio conference on ways to avoid FLSA trouble. Miller’s tips referred to some of the alleged violations now troubling Dell. Here’s some of his advice:
–Audit FLSA compliance regularly. Watch especially for “off the clock” unpaid work or travel time by nonexempt employees.
–Avoid denying state-required meal or break periods, and set up a system to be sure those requirements are honored. (Miller noted increased litigation in California over this matter.)
–Watch for improper deductions from the pay of exempt employees. With few exceptions, exempts must be paid a full week’s wages, regardless of the hours worked.
–Double-check overtime calculations to be sure they relate correctly to the worker’s base rate.
—Audit job responsibilities to be sure the rules of exempt/nonexempt classification are correctly followed. “Don’t take supervisors’ word for what workers do and how much independent judgment they have,” warned Miller. “Managers tend to overstate, so ask probing questions, challenge generalizations and request specific examples.” He also suggested interviewing several managers with knowledge of a given job.
Finally, he recommended each employer assess the unfunded liability for any violations uncovered. Federal rules limit this to 2 years for nonwillful acts and 3 years for willful acts.
What About Trainees?
Additional bits of advice were added by Charles Jackson, partner at Morgan, Lewis and Bockius, LLP, in Chicago, in a recent conference address, as reported by Wolters Kluwer and CCH.
Finally … FLSA classification rules made understandable. Click for details.
In addition to the above, Jackson suggested that employers look closely at the classification of any trainees. “Do not treat them as exempt before they fully qualify under the applicable duties tests,” he said. He further advised employers to be careful with such matters as recordkeeping, posting requirements, and the calculation of final paychecks, making sure that all earnings, included vested vacation, are included.
Jackson concluded by stressing the clear communication of compensation policies to employees, and especially to managers. “Clear communication is invaluable,” Jackson said.
On April 4, BLR will conduct its next audio conference on FLSA. We recommend you attend or if not available, pre-order the CD of the conference. Click below for details.