Vision Payroll

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-4. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act. This Opinion Letter discusses whether a requirement to wear a certain type of shoe constitutes a uniform. It also discusses whether the employer is allowed to deduct a portion of the cost of the shoes from the employee’s pay, even if such deduction causes the employee’s pay rate to be below minimum wage. In this case, the employer “requires employees to wear ‘dark-colored’ shoes without prescribing any particular quality, brand, style, model, or type.” Optionally, an employee may purchase such shoes from a vendor through a program administered by the employer that allows the employee to elect to have the employer pay the cost of the shoes and deduct the cost from the employee’s paycheck. Since the employer’s only requirements were the color and that the shoes have non-slip soles and not be open-toed, they were not considered to be part of a uniform. Also, as the shoes were not part of a uniform and the employer did not deduct more than the actual cost of the shoes, the shoes can be considered “other facilities” furnished by the employer and therefore part of the wages paid the employee. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.

According to the US Department of Labor, in the week ending July 26, the advance figure for seasonally adjusted initial claims was 448,000, an increase of 44,000 from the previous week’s revised figure of 404,000. The 4-week moving average was 393,000, an increase of 11,000 from the previous week’s revised average of 382,000.

Do you have human resource questions and don’t know where to find the answers? Visit your one-stop resource for HR-related workplace information: the Vision Payroll Human Resources Support Center. Simply log in to find the answers, tools, and resources to address your Human Resources needs. If you don’t have a user ID and password or are not currently a client of Vision Payroll but would like to have access to this outstanding business management tool we would be happy to make it available – just call us!

States continued their crackdown on employers with overtime violations as New York announced a $1.23 million settlement with Finkelstein Morgan LLC and J. Siebold Construction Corporation (“Siebold”). The settlement represents all the unpaid overtime for the period from October 2002 through August 2006 plus damages. Siebold employed the workers to renovate several building owned or managed by Finkelstein Morgan. During that time period 284 employees who worked more than forty hours were paid straight time and not time-and-a-half as required by state and federal law.

A wage garnishment is when an employer, generally as a result of a court order, withholds an amount from an employee’s earnings in payment of a debt. Restrictions on wage garnishments are defined in Title III of the Consumer Credit Protection Act. §303 of Title III restricts the amount of most garnishments to the lesser of 25% of the employee’s “disposable earnings” or the amount by which the employee’s disposable earnings exceed 30 times the Federal minimum wage. Disposable earnings for this purpose generally means gross wages less deductions required by law. Voluntary deductions not required by law are not included in the calculation of disposable earnings. With the recent increase in the federal minimum wage, the calculation of the maximum garnishment amount has changed. For employees with disposable earnings greater than $262.00 ($6.55 X 40), a maximum of 25% can be garnished. For employees with disposable earnings less than $262.00 but more than $196.50 ($6.55 X 30), the garnishment equals the amount by which disposable earnings exceed $196.50. For employees with disposable earnings of $196.50 or less, no garnishment is allowed. There are exceptions for child support, alimony, certain bankruptcy court orders, and debts for federal and state taxes. A state law that allows a smaller garnishment takes precedence over the federal law. There are also different calculations for some other debts owed to the federal government and its agencies. Contact Vision Payroll if you have any questions on calculating the correct amount of garnishments on employee’s wages.

An employee required to launder his work aprons by Starbucks Corporation (“Starbucks”) was not entitled to compensation under California law (Douglas O’Connor v. Starbucks Corporation, ND Cal, C 06-3706 VRW, July 14, 2008). Under an explanation of the relevant regulations by the California Industrial Wage Commission, “[e]mployers must maintain or provide a maintenance allowance for uniforms requiring ironing or dry cleaning or uniforms requiring special laundering for heavy soil.” In granting summary judgment, the court ruled that “Starbucks owes plaintiff a duty to pay such compensation only if the aprons require laundering separate from plaintiff’s regular laundry.” Since O’Connor, a former Starbucks barista, was unable to establish that the aprons required either dry cleaning or laundering separate from other articles as he had maintained, Starbucks owed no duty to compensate him.

The US Department of Labor proposed a rule change that would require participants in 401(k) plans to receive “investment-related information in a comparative chart or similar format.” The chart could be based on a model chart designed by the Department of Labor or a plan fiduciary could design a different chart or use a comparative format to relay the information. On a regular basis, participants would receive “basic information about the plan and its investment options, such as what options are available under the plan, how to give investment instructions, investment returns and fees and expenses, and how to obtain more detailed information.” The proposed regulation would be effective for plan years beginning after December 31, 2008.

This week’s question comes from Kevin, HR Director: One of my employees is applying for a mortgage and needs several pay stubs. Unfortunately, he threw his away. What’s the best way to get them? Answer: Online Employer’s Employee Services is a self service, web-based product providing employers and their employees on-line access to personnel information, check stubs, time off accruals and more. Our web-based solution enables employees to access information 24 hours a day, 365 days a year. Give employees instant access to information they need, when they need it. Vital data is protected to ensure that employees can view information without compromising data. Information is shared between Employee Services and payroll so there’s no need to perform manual data entry of all employee information. Employees can view their information and update select fields. Supervisors have access to information about their direct reports. A complete library of reports exportable to Excel is also available. You won’t believe the time you save when employees get their information from Employee Services, not you.

The Online Employer portion of our website will be unavailable from 10:00pm on July 24 (EDT) until 6:00am (EDT) on July 25 to apply the latest upgrade. The release notes are now ready for your review.

According to the US Department of Labor, in the week ending July 19, the advance figure for seasonally adjusted initial claims was 406,000, an increase of 34,000 from the previous week’s revised figure of 372,000. The 4-week moving average was 382,500, an increase of 4,500 from the previous week’s revised average of 378,000.