Protect Yourself From FLSA Lawsuits With Job Description Sign-Offs

Employers can protect themselves from wage and hour lawsuits by requiring that employees acknowledge and sign-off on their job descriptions every year. JDXpert by HRTMS streamlines this process.

The recent conviction of Belton, Texas-based High Performance Ropes of America on one felony count of making false statements and for repeat and willful violations of the Fair Labor Standards Act reminds us all of how crucial it is to assure FLSA compliance. 

According to a recent report by Littler Mendelson, the largest U.S.-based law firm specializing in employment and labor law, 4,204 wage and hour class action lawsuits were filed in 2012 in state and federal courts combined, up 11% from 2010. And civil settlements totaled $467 million in 2012 alone and approximately $2.7 billion from 2007 to 2012. The cost and disruption associated with such an incident raises the question of what can be done to help reduces the risk of losing a claim of violating FLSA.

To gain insight on how employers were responding to the threat of misclassification claims and audits by the U.S. Department of Labor, Littler Mendelson surveyed human resources professionals, C-suite executives and in-house counsel across the U.S. on their experiences with disputes involving employee classification and certain wage and hour laws. Among the respondents who have recently been involved in misclassification litigation or DOL audits, 57% have encountered employees who misrepresented their job duties. 

When asked which form of documentation does their organization currently have available to demonstrate the exempt nature of positions and defend against future exempt misclassification claims, the majority (82%) sighted up-to-date job descriptions. While current job descriptions are a great start, an employer needs to also review the description to ensure they are consistent and consistently support the claimed exemption; and that they have been acknowledged by the employee.

In an article, Beware 'Misclassification Creep' in Employee Exemption, Littler shareholder and co-chair of the firm’s wage-and-hour practice group, Lee Schreter states, “It’s easy enough for companies to ask their employees to sign off on their job descriptions during their periodic performance reviews, so there is both mutual understanding and, for the employer, well-documented proof that the employee knows where they stand. That kind of evidence, I believe even the courts will be hard-pressed to dismiss.”

JDXpert is a Job Description management application that replaces your out-dated Word documents with a secure web-based repository.  The Employee Acknowledgement module allows employees to view and sign-off on their validated Job Descriptions.  They can also indicate if their job description is inaccurate or outdated, allowing you to initiate a revision process with the appropriate stakeholders like the hiring manager and the compensation team.  All signed-off job descriptions are stored in the system and can be viewed by the manager or HR Teams. This simplifies and protects you if there is any legal challenge to an employee’s status. 

JDXpert also includes an interactive FLSA questionnaire to help determine the exemption status for each position. The standard Dept. of Labor FLSA questionnaires are automated and the results are stored with the Job Description along with any other supporting documentation.

You can also go to the Department of Labor’s website athttp://www.dol.gov/whd/flsa/#.UG9XH1Gz5vA or fill out SHRM’s FLSA: Exemption Test Questionnaire athttp://www.shrm.org/TemplatesTools/Samples/HRForms/Articles/Pages/1CMS_018238.aspxxfor more help on determining employee exempt status.

Resources
http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Southwest/20131017.xml 
http://shared.littler.com/tikit/2013/downloads/2013_Littler_Mendelson_Xmpt_Survey_Report_10-28-13.pdf 
http://www.law.com/corporatecounsel/PubArticleCC.jsp?id=1202625620590&Beware_Misclassification_Creep_in_Employee_Exemption&slreturn=20131007143504#ixzz2jgpXwbCj