Time Is Money - August 2007

• To Track Or Not To Track . . .
• The Ledbetter Fair Pay Act of 2007
• Employing Individuals With Disabilities Can Save Time And Money

We are frequently asked whether it is appropriate--or legal--for employers to keep track of the hours worked by salaried exempt workers. After all, if they are exempt from overtime and paid a salary for their work, what is the point of keeping track of their hours? If an employer tracks exempt workers' hours, could the workers be considered hourly employees and entitled to overtime?

There are many reasons why an employer may decide to track the hours worked by an employee, even if they are properly exempt. For example, some employees' wages are funded by grants or other charitable gifts that require certain worker hours be dedicated to certain tasks, thereby requiring the recording of hours for reporting purposes. Some employers track hours to assess worker productivity, and others keep up with hours worked in order to allocate company resources and needs.

No matter what the justification, in years past some courts have challenged this practice, finding that keeping track of exempt employee hours could create a question as to whether affected employees are properly exempt. Of course, if the employee is not properly exempt, they could be entitled to premium payment for overtime.

This is no longer a concern, however, in light of the recent amendments to the Fair Labor Standards Act. The rules now specifically recognize that employers may track exempt employee hours without threatening their exempt status. Indeed, employers may certainly require that exempt employees work a specified number of hours - including hours over 40 in a single work week - in order to meet their performance expectations.

Accordingly, if your company finds it useful to track or otherwise record the hours worked by your salaried exempt employees, you can do so with the confidence that it will not violate state or Federal wage payment laws and will not threaten the employee's exempt status.

On July 31, the House of Representatives passed the Ledbetter Fair Pay Act of 2007, a statute aimed at reversing the Supreme Court's recent ruling in Ledbetter v. Goodyear Tire & Rubber Co., in which the Court held that plaintiffs alleging pay discrimination under Title VII of the Civil Rights Act of 1964 must file a charge of discrimination within 180 days of the date a discriminatory pay decision is made. The Court rejected Plaintiff's claim that the statute of limitations period should instead run from the date of each paycheck received by the plaintiff that was impacted by the past discriminatory decision.

The Act passed by the House seeks to undo the Supreme Court's decision by declaring that an unlawful employment practice occurs not only when a discriminatory compensation decision or other practice is adopted, but also when an individual is affected by application of the decision or practice, including each time the individual is paid. If an employee establishes a discriminatory pay practice or decision, the aggrieved employee can recover back pay for the two years proceeding the date upon which she filed her charge, even if the discriminatory pay decision at issue occurred 20 years in the past.

Even more concerning to employers, however, is the Act's broad language, which goes beyond pay discrimination claims and leaves employers vulnerable to all types of claims that are currently considered untimely under Title VII's statute of limitations period. This concern stems from language in the Act that includes within the expanded statute of limitations period "other practice[s]" that affect a person's wages, benefits, or compensation.

Next up for the Act is consideration by the Senate upon return from Congress' summer recess. While the Senate version of the bill appears to have more bipartisan support than the House bill, which passed along party lines, the Act is not certain to become law even if the Senate passes it. President Bush indicated his intention to veto the Act in a recent Statement of Administration Policy (July 27, 2007). If the Act does become law, it is slated to have retroactive application to all cases pending on May 28, 2007.

The U.S. Secretary of Labor marked the 17th anniversary of the Americans with Disabilities Act on July 26, 2007 by announcing the release of a new video addressing how businesses can save time and money--and increase productivity--by recruiting, hiring and promoting employees with disabilities. The video was released by the Department of Labor's Office of Disability Employment Policy (ODEP).

The ODEP's mission is to address specific policies that impact the employment of people with disabilities. The ODEP does so by providing policy analysis, technical assistance and developing practices and strategies regarding the employment of individuals with disabilities. ODEP's services are available to employers, employees and those seeking employment.

The video released by the ODEP promotes the fact that recruiting workers with disabilities is a smart business strategy, and that the primary investment for any business, large or small, is the investment in human resources. The presentation includes a recent roundtable of small business owners discussing how their proactive efforts and innovative practices have created significant returns on their investments in human capital. The video spotlights the employment of individuals with disabilities in the transportation, hospitality and technology industries and is available at the ODEP's website at www.dol.gov/odep.

In addition to this video, the DOL also provides a number of other resources for employers who have employees with disabilities, including: Job Accommodation Network (JAN), which provides information regarding productivity, tools and strategies when hiring, accommodating and retaining employees; Employer Assistance and Recruiting Network (EARN), which provides information regarding recruiting and hiring individuals with disabilities from a business perspective; The Office of Disability Employment Policy, which provides information regarding publications, fact sheets, interview and hiring tips. In addition to wage and hour issues, Waller Lansden's attorneys are available to assist employers by providing innovative and progressive advice in a variety of areas, including the employment of individuals with disabilities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.