Stay Legal in the Evolving Labor Market

512px-Computerized_time_clockThe labor market today is becoming a richer and more varied tapestry of options than it has ever been. We still have the traditional salaried and hourly employees, but we have a whole new slate of self-employed or semi-self-employed (the Department of Labor is going to love that term!) workers, including virtual assistants, freelancers, peer-to-peer industry workers – think Uber drivers – temps and others I’m probably missing.

Further, digital communications have greatly increased the value of being able to respond immediately to customer requests and maintain a high level of workforce flexibility throughout many industry sectors.

Flintstone era labor laws?

However, most labor laws were written in a different age. They were developed when work schedules were far more simple and when unions were powerful in private industry. With few exceptions, businesses closed in the evenings…and on weekends…and certainly on Sundays and holidays.

Alas, those days are gone forever. Consumers demand much more and that can put employers in a bind. This is rearing its head right now with battles over unpredictable work schedules and positions that require “on-call work.” And the retail industry may be the hardest hit by the controversy.

In an effort to respond to customer demand and unexpected employee absences, some businesses will call in workers on virtually no notice. Often the call-ins today are digitally powered, coming via company message boards or text message alerts. When workers discover that they must report on short notice, it makes issues such as arranging child care especially difficult.

Employee-friendly scheduling

There are various dimensions of this to consider as a small business owner. First, the culture of your company and your ability to achieve the highest levels of customer satisfaction depend on employees who are happy with their work. If you are using a scheduling system that by its very nature causes dissatisfaction among your employees, you have a problem that needs fixing right now.

Second, the laws governing these situations vary by state. Eight states plus Washington, D.C. have “reporting time pay laws.” These regulations say that employers must pay for a minimum number of hours when they call someone into work. These states are California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, and Rhode Island. If you’re located in one of these states, be certain you understand what your requirements are.

It’s also important that your employees are being categorized properly, whether they are exempt or non-exempt. You have more flexibility with exempt, salaried, employees, but you can’t declare someone exempt unless they fit into they categories defined by the Fair Labor Standards Act. They must:

  • Meet a minimum salary threshold,
  • Perform duties regardless of the number of hours worked,
  • Hold an executive, administrative or professional position.

Don’t abuse good relations

Small business owners often develop close relationships with their employees and this can lead to an assumed “flexibility” with regards to labor law. Don’t make this mistake. Not only is it unfair to your employees, it can lead to significant legal problems when the inevitable dispute arises.

Although I said that some of our labor laws are out of date, they are still the law and must be adhered to. It will be interesting to see how they evolve in the upcoming years. Imagine trying to write a regulation covering a startup who is paying $4/hour to a coder in Bangladesh for the development of a mobile app.

We live in interesting times.

Sponsored by AT&T

Image: Computerized Time Clock, by Kevin Rutherford [CC BY-SA 4.0 ], via Wikimedia Commons.