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John W. Hargrove

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John Hargrove is chair of the Labor and Employment Practice Group and is a Fellow in the American College of Labor and Employment Lawyers. He regularly represents public and private companies in mining, construction, manufacturing, medical, communications and warehousing industries, among others. He also represents municipal and quasi-public organizations such as police and fire departments and school boards. John also has represented several nonprofit agencies, ranging from national sports organizations to small local charities. View articles by John

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When everyone’s phone issues that loooong beep indicating a hazardous weather warning or when you see Jim Cantore in your local airport, you know that weather is possibly going to affect your workplace. With Gordon making landfall and other storms on the horizon, we are re-posting this past group of tips on how to deal with extreme weather.  We hope everyone stays safe.

Hurricanes, Blizzards, and That Dreaded TORCON Index

Riding the Storm Out—A Reminder on Employer Issues During Bad WeatherMany “it was the worst day of my life” stories begin with a weather event. I will never forget sitting with a client in an early April morning mediation in 2011 when she received a call on her cell phone. She was told that she should not come to work that day. And that the company’s entire fleet of service trucks had just been wiped out. It was a very bad tornado day for her and all of Alabama. Now, in the middle of one of the worst hurricane seasons in recorded history, we have been receiving questions across our offices about how to handle pay for company closings, late openings, and “y’all go home” announcements. Here are some things to consider:

Hourly Employees

Pay for hourly employees during weather disasters is fairly simple. Hourly employees must be paid for all hours actually worked. If employees do not come in, are turned away at the door, or are sent home early, the rule is the same – pay hourly employees for hours actually worked.

In this age of remote login, PDAs, and perhaps just running business-related errands while the office is closed, however, employers must beware. Hourly employees must be paid for all time actually worked. This includes time working away from the company’s time clock or login procedure.

Employers are not required to pay “show-up” pay under most state laws. These include the southern states. Some northeastern and western states do have show-up pay requirements contained in their state laws. If your business is operating there, you should check state laws for those requirements and any exceptions to them, such as one that results from timely and effective notice of a closing by the company.

Salaried Employees

Salaried employees, to retain their overtime exemption, must be paid their full salary in any week in which they perform any work. Thus, a closure for that approaching storm front will not allow an employer to deduct any percentage of a salaried employee’s pay for the hours not worked.

There basically are three exceptions for inclement weather to this rule for salaried employees. First, if the employee has a paid-time-off (PTO) plan, the employer may require the employee to use some of his or her PTO time for a weather-related closure. In this instance, the salaried employee obviously continues to receive full pay (but some of it comes from the PTO bank). The second exception is that an employee need not be paid his or her salary in any work week in which no work is performed. This exception would apply to the more severe Katrina-like disasters. So, if the office is closed the entire week, you do not have to pay even your exempt employees who performed no work. Finally, employers may deduct for full-day absences, but only full-day absences, if the business is open and the employee is unable to get to work due to the weather (this would be like an unpaid personal day for something other than sickness or disability).

Contractual Pay

In addition to considering federal and state wage and hour laws, do not forget about contractual requirements that could impose greater obligations on the company than do these laws. Individual employment contracts could contain such provisions, as could collective bargaining agreements (CBAs) in union settings. CBAs, for example, often contain show-up pay provisions and have restrictions on mandatory use of PTO.

Working from Home

As mentioned above, all employees, hourly and salaried, must be paid for all time worked. This includes time worked from home or any other “offsite” location. Employees with PDAs (and old-fashioned toolboxes) must be monitored for actual work performed when the employer’s business otherwise is closed.

What to Do with the Superstar Who Came In Everyday

Bonuses are allowed but not required. Gift cards and spa treatments are great alternatives. Just remember, though, that for the purpose of calculating overtime pay in a given workweek, all remuneration must be included in the base rate before multiplying that rate by time and a half for hours worked over 40.

Take care.

This article was originally published on the Labor & Employment Insights blog on March 12, 2015.

Bright Future in Sales? The Outside Salesperson FLSA ExemptionWith minimum wage increasing at federal, state, and local levels and with wage and hour cases on the rise, we receive many questions about exemptions to overtime laws. One such exemption that does not get as much coverage as others is the “outside sales exemption.” If your company has an outside salesperson – selling goods or services – this may be an exemption for you.

The Federal Basics

The federal law governing wages and hours is called the Fair Labor Standards Act (FLSA). The FLSA requires minimum wage for all hours worked and wages at one and one half times the base rate of an employee for all hours worked over 40 in a work week. There are exemptions from the minimum wage and overtime requirements that fall into two basic categories. One is for supervisory employees who are paid a salary, and the other is for employees in “outside sales” positions. In general, to meet the exemption, an employee’s “primary duty” must be “making sales” or “obtaining orders” and he or she must be “customarily and regularly engaged” away from the employer’s place of business. Notably, there is no particular pay method required to meet this exemption as there is for other FLSA exemptions.

For clarity, the regulations define these important terms as follows:

  • Primary Duty: The primary duty is the principal, main, majority, or most important duty that the employee performs.
  • Sales: Sales include any sale, exchange, contract to sell, shipment for sale, or other disposition.
  • Away: Away can mean the customer’s place of business or home or some other selling location (a hotel is an example) but not the employer’s place of business whether by telephone or by internet or in person.

Check State Laws

Companies wishing to use the outside sales exemption must be careful of state laws regarding overtime as well. Many states have no law at all or else have a law but follow the federal requirements for the exemption exactly. Other states, however, have a unique test for the exemption or even have very specific limits on how much non-sales work an employee can perform without losing the exempt status. For example, an employee can spend no more than 20 percent of his time on non-sales activities in Pennsylvania or else the exemption is lost.

Some tips:

  1. Make sure your employee is selling something. Needless to say, this is fairly important. Job descriptions should have the word “sell” in them a lot.
  2. Limit administrative or clerical work.
  3. Emphasize that the work should be performed at the customer’s place of business or the customer’s home if applicable.
  4. Make sure that the compensation structure is commission based and distinguishable from the pay methodology for other employees.
  5. Minimize direct supervision of your exempt outside salesperson, especially over “tasks” or repetitive work. The supervisor’s focus should be on sales goals.
  6. If some sort of tracking is used, make sure the tracking is of sales goals and not hours worked.
  7. Minimize work “on the phone” from the office or a fixed location.
  8. Make sure that any promotional work is done for the employee’s own sales.

Trump’s Travel Ban Survives Latest Trip to the Supreme CourtNews organizations this week are reporting again on President Trump’s so-called travel ban. But what exactly does that mean? We receive a lot of questions about the travel ban in the context of President Trump’s overall stance on immigration issues and how the travel ban affects visas and possible future employment of citizens from other countries. We will discuss in this post a little bit of the ban’s history and who it affects. As for the legal developments on the ban this week, the administration did receive some good news (for a change), but it ain’t over ‘til it’s over.

What Is the Travel Ban?

You may recall that during his campaign President Trump promised restrictions on travel into the United States from certain countries. This was to be part of the new administration’s attempt to combat terrorism. After assuming office, President Trump issued a travel ban by executive order almost immediately. Opposition groups attacked that executive order legally on multiple constitutional and statutory grounds. Subsequently, the administration issued two more versions of the travel ban, assumably to give the executive order a better chance of surviving legal challenges. We are now on the third version of this executive order. Our team blogged about some of the immigration aspects of the original and subsequent executive orders, including here.

The third and latest ban was issued just this past September. The current ban includes restrictions on travel into this country from Chad, Iran, Libya, North Korea, Somalia, Syria, Yemen, and by certain government officials from Venezuela. The basis for the administration’s ban is to restrict travel from countries with a significant terrorist presence that do not have adequate identity management or information sharing.

Why Was the Travel Ban Challenged?

The travel ban, in all versions, has been challenged primarily on establishment of religious grounds. The challenges assert that the travel ban targets countries on the basis of the predominant religion in those countries. Specifically, the ban has been labeled a Muslim ban by some groups.

Actions by the Lower Federal Courts

The latest version of the travel ban was challenged by lawsuits in Hawaii and in Maryland. Federal district judges in both locations immediately enjoined the ban from taking effect until the lawsuits could be finally resolved, and of course the administration filed appeals. The appeal in Hawaii was to the federal Ninth Circuit Court of Appeals in San Francisco, and the Maryland appeal was to the federal Fourth Circuit Court of Appeals in Richmond.

Neither the Ninth nor the Fourth Circuit have yet ruled finally on the issues in the cases. However, relevant to what happened this week, the temporary injunctions that previously had been entered in both cases preventing the implementation of the ban until the courts finally ruled remained in effect during the appeals. In other words, the bottom line was that, rather than allowing the ban to take effect during the legal-challenge procedure, the ban was suspended during the challenge process.

Enter SCOTUS

This week, the Supreme Court of the United States, in a separate order for each case, ruled that the ban could not be halted during the legal-challenge process. So now, rather than the ban being on the sideline during the lawsuit and appeal process, it goes into effect immediately.

These events this week are important for at least a couple of reasons. First, the U.S. now has an actual travel ban, not just a possible one in the future. Second, the Supreme Court may be indicating how it might rule on the ultimate issue of whether the travel ban as currently written is legal. Certainly the Supreme Court will be ruling again soon “on the merits” after the Fourth and Ninth Circuits decide the legal issues before them. Again, the next time the Supreme Court speaks, it likely will be on the true legality of the travel ban and not just the temporary postponement of it. So, it ain’t over ‘til it’s over.

We will continue to post on President Trump’s executive orders and their impact on immigration compliance.