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I’m sure you’ve seen the news … it’s hard to miss if you’ve turned on a TV in the last two days.   The New Yorker magazine has featured Barack Obama and his wife Michelle on the cover of its latest issue with a "satirical" cartoon. And it's no ordinary cover (check it out for yourself).

Obama is dressed like Osama bin Laden.  And his wife is dressed in military gear with an exaggerated Afro – toting an assault rifle to boot.  The two are congratulating each other with a “fist bump” in the Oval Office.  And let’s not forget the American flag burning in the fireplace, or the portrait of Osama himself hanging on the wall.

The New Yorker’s position is that the cover is intended to expose the “politics of fear,” and how it’s being used to undermine Obama’s campaign.

So what exactly is the cover trying to expose and satirize? The lingering rumors that Obama is a Muslim, which links him to terrorism (or terrorist “sympathies”), and which paints him with the new dirtiest word in politics – unpatriotic.  Add this all up, and he’s just not fit for the White House.

There’s a lot of information out there to debunk all these rumors and myths…. I’ll leave it up to you to do some digging.

Employees as "Unpatriotic"?

The New Yorker cover exposes a growing (and in my mind unnerving) trend in America -- that the population can readily be divided into those of us who are patriotic, and those of us who are unpatriotic.  That division gets based on where we're from, what religion we practice and even who we vote for.  And if you think those conclusions aren't being drawn in the workplace, think again.   

My prediction? That some of your employees and managers readily make assumptions about a co-worker's patriotism, even if they need to rely on stereotypes tied to race, religion, and national origin.  Now add that implicit bias into a manager's decision making, or the way an employee communicates with co-workers, and you have a recipe for serious unlawful discrimination.
And rest assured that the media buzz about the cover is going to have employees talking openly about (and debating) volatile issues that cross a whole whack of protected categories.

 So What’s An Employer To Do?

As an employer, you have an obligation to ensure that stereotypes and assumptions like the ones featured by The New Yorker don’t impact your workplace.

So what do your employees need to understand? For starters, that:

• Stereotypes and assumptions based on protected categories have no place at work.

• Managers cannot make decisions based on race, religion, or national origin.

• Patriotism (when linked to a protected category) is not an appropriate criteria for making important employment decisions.

• Harassing people for being "unpatriotic" is never appropriate – even if it’s not linked to a protected category, it's bound to be toxic.

• There's no such thing as "absolute free speech" at work.  Employers can and will limit volatile conversations about race, religion and politics to prevent potential environmental harassment.

As always, achieving these goals consists of two key components -- (1) Well written and distributed policies, and (2) Companion training programs that explain the policies and bring them to life.  These components are never a one-time event.  Policy distribution and mandatory discrimination training needs to take place periodically.

And if you see that New Yorker cover posted to a cubical wall -- or lying around the breakroom -- I'd highly recommend removing it.  While in our personal lives we can argue about whether the cartoon is an effective use of satire, or bottom line inappropriate, your workplace is not the place to have that debate.  It's a sure fire recipe for risk.

The Government Accountability Office (the investigative arm of Congress) just completed a study of the Department of Labor (DOL). And let’s just say the DOL did not pass with flying colors. In fact, according to the GAO, things are pretty dismal when it comes to wage and hour enforcement.

Huh?

Now’s probably a good time to pick yourself up off the floor. I know I did when I read the report.  Aren’t we at record levels of Fair Labor Standards Act (FLSA) claims, with the average settlement award weighing in at $23.5M?  

Just when you thought the wage and hour war couldn’t get any worse, it actually does.

So What’s the Problem?

Apparently the DOL isn’t doing a good enough job enforcing wage and hour laws. The GAO report claims that in the past 10 years, enforcement efforts have dropped by one third.  They also mention some horribly mismanaged DOL enforcement efforts.

The report actually got airtime – the House Education and Labor Committee spent more than 2 hours this month reviewing it.  And there’s been some high profile press (SHRM, WorkForce Week Management). Some committee members are looking to fix the problem -- which they’re coining “wage theft” – by finding ways to ensure that federal wage and hour laws are more rigorously enforced.

What Does this Mean for Employers?

I’ve said it before, and I’ll say it again- We’re going to see a steady increase in claims in this area. Hard to believe, but we’ve only hit the tip of the iceberg when it comes to wage and hour litigation.  Just look at the numbers.  Federal wage and hour class actions more than doubled from 2001 to 2006.   And check out the pace of FLSA litigation in the past five years:

• 2003 - 2,751 claims
• 2004 - 3,617 claims
• 2005 - 4,039 claims
• 2006 - 4,207 claims
• 2007 - 7,310 claims
  

And the pace isn’t slowing. The national employment law firm Littler Mendelson recently conducted a study of employment law class actions, and found that from October 1, 2007 through March 28, 2008 (a short 6-month period!):

• More than 1,655 class actions were filed.  (This number is a minimum- most states don’t have the online tools needed to gather information.)

• Of these filings, 75% (or 1,257) were wage and hour related.

• Employers in California and Florida are extremely vulnerable. Each state accounts for about 1/3 of these filings.

Now Add What’s Happening Politically into the Mix:

• Wages are being stretched thin due to inflation – food, gas and energy prices are skyrocketing.

• Helping low-wage workers get every penny they’re owed can earn you some serious political cred. in this climate- we’ve got an election just around the corner.

• If the Democrats take control of the White House, we’re going to see changes – both legislative and funding related – when it comes to FLSA enforcement.

• The DOL is going to feel some serious pressure to improve its efforts—which likely means strengthening enforcement tools and using civil penalties more frequently.

So What’s An Employer To Do?

If the old saying “an ounce of prevention is worth a pound of cure” ever had relevance in the employment law arena, it’s in the midst of this wage and hour war.

Sure, if you get sued, get yourself some great defense counsel.  But the tragic thing about wage and hour liability, is that there’s so much employers can and should be doing in terms of compliance efforts and preventative measures— and they’re just not getting their acts together.

A good wage and hour compliance program boils down to some very basic components:

• Review, assess and update wage and hour policies.  For example, do you have clear rules about working OT?  Policy review and updating is such a simple thing to do – and it goes a long way to set proper expectations and police behavior.

• Make sure key wage and hour policies are periodically distributed to all employees, and that your workforce individually acknowledges receipt.  This is another simple step that goes a long way in protecting your organization.

• Ensure that you have a clear reporting channel for wage and hour concerns (i.e. a hotline and/or designated e-mail address), and that complaints are promptly reviewed and followed up on.  Again – another easy step.  Employers typically have their act together on this front when it comes to harassment and discrimination complaints.  Just make sure that your employees understand the same kind of procedure for reporting potential wage and hour violations.

• Consider an audit of wage and hour practices.  I know that audit can be a dirty word in our world, but if you know you’ve got potential problems, it’s better to discover them proactively, and get a fix in place ASAP.  Remember that most wage and hour errors result in continuing violations (for example, a misclassification error keeps occurring every day an employee is working), so the statute of limitations just keeps running – which means your potential liability keeps living on, and on.

• Train your employees and managers on core wage and hour rules.  The bulk of mistakes that are being made in this area are inadvertent, and due to a basic lack of knowledge by both employees and supervisors.  (For example, how many of your hourly employees understand they are not allowed to volunteer their time no matter how good their intentions?  How many of your managers understand how serious a problem it is to even suggest that an employee work off the clock, or to interrupt a meal break?)  Now here’s the really good news. Education programs not only help prevent problems from occurring, you can actually establish good faith defenses to FLSA claims through proof of training.  Now there’s some ROI you should be paying attention to …

So this post has given you a lot of stats – and a lot of “to do’s,” which I know can be daunting-- but not as daunting as the prospect of even more aggressive wage and hour enforcement.  So face the battle head on, and start building your defense.  If the GAO report sparks the kind of action that’s intended, the DOL may just come knocking at your door …

I don’t get to blog very often on positive developments in the world of wage and hour. It seems like it’s always down, down, down with no bottom in sight. But today, I’m actually passing on a bit of good news, at least for California employers.

The Fourth District Court of Appeals in San Diego issued its ruling in Brinker Restaurant Corporation v. Superior Court, No. D049331 (July 22, 2008), and put to rest (pun intended) a vexing meal and rest break issue.

For years, California employers have been struggling to figure out exactly what they need to do to comply with state meal and rest period obligations. We’ve all wondered, “Are we actually required to force employees out the door to ensure that they take their scheduled breaks?”  This interpretation has seemed a bit extreme and heavy-handed, but it’s certainly one way to make sure that employees actually take their breaks. And the California Division of Labor Standards Enforcement has fully supported this very conservative approach.

Provide vs. Ensure—One Word Makes a World of Difference

So what exactly has the Brinker decision resolved? For a great overview of all the details, Littler Mendelson has put together a nice summary on the decision and the key holdings: A Ray of Hope: California Court of Appeals Decides Compliance with Meal Period Obligations Requires an Opportunity, Not A Guarantee. It’s worth a read so you can get a full picture of the decision.

From my perspective, the most important take-aways are that:

• Employers only need to provide employees with an opportunity to take meal periods (this same rule applies to rest periods), not to ensure that employees actually take them.

• Employers cannot impede, discourage or dissuade workers from taking their breaks.

• If an employee chooses not to take the break under the above circumstances, there is no violation.

If Brinker is upheld, California employers can let employees be responsible adults who are mature enough to take their own breaks.

But The Issue Isn’t Completely Put to Rest … Yet

Alright, so now I’ll burst the bubble – just a little bit.

Brinker will almost certainly be appealed, and the CA Supreme Court will likely accept it for review. Who knows what will ultimately happen- but for the time being, the CA Division of Labor Standards Enforcement has directed its staff to follow the Brinker holding (DLSA Memo to Staff regarding Brinker decision), which they will also apply to pending cases.

What Should Employers Do Now?

While we’re in this holding pattern, it’d be good to consult with an attorney, check out your current practices, make sure things are in order, and that you’re managers are not discouraging employees from taking their breaks.

And I’d also seriously consider training your employees and managers on expectations regarding meal and rest periods, as well as off-the-clock work (another key part of the Brinker decision). If lawyers and experts have been debating this stuff and struggling with the language for years, just imagine how hard it is for your managers to sort out the practical implications in the workplace.  A little education and communication will go a long way.

The Ongoing Wage and Hour War

Getting meal and rest break compliance wrong has meant big dollars for California employers. Multi-million dollar verdicts have been commonplace, with average state settlements currently weighing in at $24.4 million – a mind boggling number.  Needless to say, these types of cases continue to be extremely attractive and very lucrative for plaintiffs’ attorneys. Just this month, a class of more than 5,000 employees was certified in a high profile meal and rest break case against Polo Ralph Lauren – see Otsuka v. Polo Ralph Lauren Corp., ___ F.Supp.2d ___ (N.D.Cal. July 8, 2008) [Slip Opn., at 1-2].   

The litigation won’t disappear, but hopefully clearer guidelines will help proactive employers stay out of harm’s way.

And just when you thought the pressure was potentially easing off state wage and hour issues, it looks like House Democrats will be pushing for stricter enforcement of federal wage and hour laws.  A scathing GAO report of DOL enforcement efforts has the employment law community buzzing about even greater wage and hour exposure in 2009– especially with major political change just around the corner.

The wage and hour war isn’t ending any time soon – it’s just evolving with each series of painful battles.