Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Announcements

You can always check out my website for upcoming speaking engagements that are guaranteed to be of value to business owners or for a list of topics that I can speak on at Chambers, Clubs, Business Associations, etc. More details about the events, topics and Human Resources 4U, in general, can be found on my website.

 

Upcoming Talks

April 8, Culver City "The Big 7 Employment Trouble Spots" Click here for more information.

 

July 17, West Covina "Critical Human Resources Issues for Business Owners" Click here for more information.

 

Supreme Court Clarifies Supervisor Definition: A Win for Employers

The United States Supreme Court issued a decision in Vance v. Ball State University that makes it easier for employers to defend against harassment suits.  When an employee is harassed by a co-worker on the basis of a protected status, such as race or sex, the company is liable only if it knew or had reason to know about the harassment and failed to address it.  However; if the harasser is the employee’s “supervisor,” a stricter standard applies.  Generally, the employer is “vicariously liable” for the actions of the supervisor, even if nobody else knew about the harassment. 

 

This decision resolves the question of who is a supervisor, defining it as someone who has the ability to take “tangible employment actions,” rather than someone who merely oversees the employee’s work. A “tangible employment action” is anything that has a significant impact on the employee’s employment status, such as hiring, firing, failing to promote, reassigning the employee to significantly different responsibilities, or significantly altering benefits. 

 

If a supervisor has the ability to take tangible employment actions against the employee, the employer is liable unless it can show both the employer exercised reasonable care to prevent and correct the harassment and the employee unreasonably failed to take advantage of opportunities to prevent or correct the harassment. If the supervisor actually takes a tangible employment action against the employee, the company is strictly liable for the harassment. 

 

In all cases, it is important to have a well-written anti-harassment policy.  Make sure the policy allows harassment to be reported to more than one person in management.  Also create job descriptions that show the supervisory status or lack of such status.  It is probably best to call “low level” supervisors “lead persons” to make it clearer that they do not have the ability to take “tangible Employment actions.”

 

Piece Rate Compensation Can Be Troublesome
Some companies pay employees by the piece rate, that is, based on certain tasks completed rather than based on the number of hours worked. Piece rate compensation is particularly common in the automotive repair industry. In Gonzalez v. Downtown LA Motors (DTLA), the California Court of Appeal decided that auto technicians paid a piece rate for work performed must be paid by the hour for all time spent on tasks not specifically included in the piece rate (referred to by the court as “waiting time”).

 

DTLA compensated its service technicians on a piece rate basis for each repair they completed. Under DTLA’s system, technicians were paid a flat hourly rate ranging from $17 to $32 depending on the technician’s experience for each “flag hour” worked. DTLA assigned “flag hours” to every task a technician performed on a vehicle. The “flag hours” were intended to correspond to the actual amount of time a technician would take to complete the task. If the technician completed the task in less time than DTLA determined it should take, the technician still earned the full “flag hour” for that activity. Employees only earned “flag hours” when working on a vehicle repair and not for any other work.

 

DTLA scheduled technicians to work 8-hour shifts. During their shifts, technicians performed tasks on vehicles, and completed non-repair tasks while waiting for repair work to come in. During these “waiting” periods, technicians could not leave the premises, and they did not earn any “flag time.”

 

DTLA recorded each technician’s actual working time, including “waiting” time. Then, based on the technician’s actual hours worked, DTLA calculated how much each technician would have earned at the end of each pay period if the technician had been paid the state’s minimum wage for each hour worked (the “minimum wage floor”). If a technician’s total piece rate compensation for the pay period fell below the applicable minimum wage floor for all hours worked, DTLA paid the difference to the technician.

 

California’s minimum wage requirements are set forth in the Industrial Welfare Commission’s (“IWC”) Wage Orders. Wage Order No. 4 states: “Every employer shall pay to each employee, on the established pay day for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.” “Hours worked” is defined as “the time during which an employee is subject to the control of an employer and includes all the time employee is suffered or permitted work, whether or not required to do so.”

 

The Court of Appeal agreed with the technicians’ arguments, relying on a 2002 opinion letter from California’s Division of Labor Standards Enforcement (“DLSE”). In that letter, the DLSE ruled that California law requires payment of the minimum wage to “for all hours worked.” Therefore, the Court concluded that DTLA violated California law because the technicians were each owed minimum wage for all “waiting time,” in addition to the piece rate pay.

 

Employers should keep some things in mind when evaluating whether to pay employees on a piece rate basis. First, non-exempt employees must record all hours worked, even if they are paid a piece rate. In addition, non-exempt employees must be paid at least minimum wage (currently $8.00/hour, going to $9.00 on July 1) for all work not related to the piece rate. This includes periods during which piece rate work in not available, or when performing tasks ancillary to the piece rate, such a stocking, cleaning equipment, completing paperwork, and the like.  

 

Factoids

• Workers who put in 11 hours a day have a 67% higher risk of getting heart disease than workers who work 8 hours
• Workers who work 50+ hours a week have a 3 times greater likelihood of developing an alcohol abuse problem 

 

Four Creativity Boosters (Baba Shiv, Stanford Graduate School)

• Schedule morning meetings
• Eat a protein rich breakfast
• Walk before or during meetings
• Reduce workplace stress

 

Quotes

“Most overnight successes come from repeated attempts and failures. You’ve got to keep at it.”

~Nathan Myhrvold~