HR Management & Compliance, Learning & Development, Recruiting

Key Wage-and-hour Language to Have in Your Employee Handbook

To prevent the consequences from imprecise employee handbook language,  employers should regularly review their handbooks and written policies. Since wage and hour lawsuits make up a significant part of  litigation, W&H provisions can make a difference as you draft or review your employee handbook.

Wage-and-hour related provisions should include pay details, safe harbor and state law

Employees often sue employers for various FLSA violations, and the U.S. Department of Labor actively investigates employers for noncompliance. Therefore, employers should consider including the following provisions in their handbook, at a minimum.

  • Pay and hours. Pay and hour provisions indicating work hours, rest and meal periods, overtime, paychecks and deductions (including garnishments) are recommended. Employers should delineate differences between exempt and nonexempt employees.
  • FLSA safe harbor. To protect against having the accidental improper docking of pay of exempt salaried employees jeopardize their FLSA-exempt status, or be the basis of a back wages claim, an employer should include an anti-docking provision that complies with DOL’s safe harbor provisions in 29 C.F.R. §541.603(d). The provision should: (1) state the employer’s policy against the improper docking of pay; (2) require employees to promptly report any improper docking; and (3) provide for the prompt reimbursement of improperly docked employees.
  • Overtime notices. The criteria for earning overtime should be specifically stated (for example, 1.5 times the employee’s regular rate after 40 hours in a work week). In addition, employees should be warned that they must obtain supervisor approval for overtime, or otherwise face possible disciplinary action. (Note: Employees must be paid for all overtime work, even if it was unauthorized.)
  • Federal and state law. Employers should remember that they have wage and hour obligations under both the FLSA and state law (which may be stricter than the FLSA).

Employee handbooks are frequently reviewed in litigation — be sure your language is proper

Employee handbooks frequently play a role in litigation, and should cover as many areas of the employment relationship as possible. Employers should consider adding provisions related to other federal laws, such as the Americans with Disabilities Act, the National Labor Relations Act and the Family Medical Leave Act.

  • Use clear and concise language. Handbook provisions should clearly and accurately describe the employer’s practices and policies and avoid interpretations the employer does not intend. For example, any provisions that do not apply to a certain class of employees otherwise covered by the handbook should clearly indicate which employees are covered, or make other differentiations. For example, many employers do not grant vacation time or other benefits to part-time employees. In such a case, the handbook should state that clearly.
  • Include provisions related to major federal laws. In selecting handbook provisions, employers must evaluate whether the provision is needed and desirable given the work environment. For example, all employers should include an anti-harassment policy because it is required by law and supports an employer in defending against discrimination claims. Unionized employers may need provisions addressing which issues are negotiable. Some other provisions to consider:
  • An equal employment opportunity policy, stating that you don’t discriminate on the basis of race, class, sex, age, national origin, and other protected categories and that retaliation against employees exercising rights under this provision will not be tolerated. In addition, a growing number of companies are including gay, bisexual and transgender employees in their nondiscrimination policies, even though it is not required by federal law or in most jurisdictions.
  • No harassment policy, covering sexual harassment and other discriminatory harassment. The policy should define harassment and unacceptable conduct, and establish procedures for reporting, investigating and addressing claims.
  • Family and Medical Leave Act policy, if the employer is covered under the FMLA.

For more information, see the Guide to Employment Law Compliance 8th Edition.

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