Perspectives

If a non-exempt employee must travel for work, how much of that travel time is compensable?

Since states do not have laws regarding non-exempt employee travel, this blog covers the federal Fair Labor Standards Act (ACT) and the Department of Labor’s regulations.

When travel requires an overnight stay, any time spent traveling as a passenger that falls within the employee’s “normal work hours” is to be paid, regardless of what day of the week the travel takes place. Therefore, the time spent waiting at the terminal until departure, through the subsequent arrival at the destination, needs to be compensated, when it falls during those normal work hours. However, similar to when an employee is at home, the time spent traveling from home to an airport or train station is considered commute time and is not treated as hours worked, thus not compensable.

For example, if your employee normally works Monday through Friday, 8:00 a.m. to 5:00 p.m., and they are required to travel by plane on a Sunday for business in another state, their travel time on Sunday between 8:00 a.m. and 5:00 p.m., is compensable. Therefore, if the employee arrives at the airport on Sunday at 3:00 p.m. and at their destination at 8:00 p.m., the employer is required to pay only form 3:00 p.m. to 5:00 p.m., the hours that correspond with their normally scheduled work hours. Alternatively, if the employee drives themselves or other (at the direction of the employer) rather than traveling as a passenger, all the time spent driving is payable work time, regardless of the normal work hours.

However-one caveat to those “normal work hours” is that an employee must be paid for any time they are performing work. This includes time spent working during travel as a passenger that would otherwise fall outside normal hours. For instance, if that employee from the above example works on a presentation during their flight until 6:30 p.m., the employer would need to pay them from 3:00 p.m. (arrival at airport) to 6:30 p.m. (turning off computer for the remainder of the flight).

A good practice is to require any traveling hourly employee to record all hours worked and the corresponding times throughout the duration of their trip. The employee needs to be paid for all hours worked even if outside of the normal hours.

Another factor to consider are the costs your hourly employees will incur during business travel-such as food and beverages, hotels, transportation, or incidentals. If there is not a company issued credit card the employee can use, another option is providing a stipend to your employees. Stipends are commonly used to either pre-pay, or pre-approve, the employer designated costs per day during business travel. Pre-paying the employee in this way helps reduce the daily financial burden of a business trip up-front when the employee doesn’t have a company issued credit card. Or, requiring pre-approved costs/rates allows for budgeting control if the employee is booking their own hotels, etc. For example, here is a link to per diem rates in each state that apply to traveling government employees. Many private business follow these rates as well because they are standardized by the cost of each location. The website contains current rates in the continental United State for any reference you might need.

Generally, offering either the stipend or company credit card can remove the reimbursement waiting period for the travel expenses afterwards, which is a common procedure to benefit the employee. Companies are not required to pay travel stipends to employees like they are require to reimburse business travel expenses in general, so the reimbursement process may look different for the individual companies.

The Fair Labor Standards Act (FLSA) is a federal law in the United States that sets minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in both the private and public sectors. The FLSA also establishes exemptions from these standards for certain employees who meet specific criteria.

One of the most common exemptions under the FLSA is the “white-collar” exemption, which applies to certain executive, administrative, and professional employees who earn above a certain salary threshold. The salary level threshold for this exemption is currently set at $684 per week or $35,568 per year, meaning that employees who earn less than that amount are generally entitled to overtime pay under the FLSA.

In 2019, the Department of Labor (DOL) announced a new final rule that would have increased the salary level threshold for the white-collar exemption to $913 per week or $47,476 per year. This rule was set to take effect on January 1, 2020, but was later blocked by a federal court and subsequently withdrawn by the DOL.

Now, the House and Senate have both introduced the Restoring Overtime Pay Act which, if signed into law, would immediately increase the salary threshold to $865 per week or $45,000 per year.  After the initial bump, the salary threshold would automatically increase by $10,000 in each subsequent year until the threshold reaches $75,000 in 2026.  Starting in 2027, the salary threshold will increase to an annualized amount equal to the rate of the 55th percentile of weekly earnings of full-time salaried workers nationally, which will be determined by the Bureau of Labor Statistics using data from the second quarter of 2026.

The stated purpose of the act is to strengthen overtime protections by increasing the number of workers who would be eligible for overtime pay.  For companies that employ exempt workers, we recommend keeping your finger on the pulse of these laws as you may need to raise salary thresholds in order to continue classifying these employees as exempt.  Stay tuned. 

Minnesota lawmakers have advanced a bill that would create a new state-backed family and medical leave program, which guarantees paid time off for the roughly 75% of MN workers that currently don’t already have access to the benefit. This new law aims to take some of the cost and risk associated with employee leave off of employers, but what does that mean for your business?

What would the new policy entail?

The law proposes providing up to 12 weeks of partial wage replacement for medical leave (including pregnancy). The law also proposes providing up to 12 weeks partial wage replacement for family leave, including for a new baby or seriously ill relative.

What would the benefits be?

The law would replace wages on a progressive scale at 90%-55% of an employer’s salary (66% on average), while protecting job healthcare benefits.

Who would foot the bill?

The cost for providing leave would be handled by creating a large statewide risk pool to attempt to equally share costs between employers and employees, with both contributing 0.31% on employee earnings.

Who is going to do the paperwork?

The Minnesota Department of Employment and Economic Development would handle payments and administration on behalf of employers.

Who will be entitled to this benefit?

All working Minnesotans, including small business owners and those who are self-employed would be eligible for leave. The leave would be job-protected, including a right to be reinstated after the completion of leave, and retaliation is prohibited.

Key Components of MN’s proposed family leave policy:

This proposed policy has NOT been passed by Minnesota law makers yet, so there is no need to make any changes to your employee policies at this time. The information here is not legal advice, and you should not take, or refrain from taking action based on information here. If you have additional questions about this policy, or would like to work with the WFJ Employment Law and Human Resources team to develop your internal policy now-visit our Support Services page to request a consultation, or give us a call!

What is a home seller disclosure law?

A home seller disclosure las is a law that requires home sellers to disclose or reveal known defects regarding the property that is being sold. Every state has their own unique disclosure laws and timelines. Many states also require a specific disclosure form, which should be provided by your Realtor.

What defects should be disclosed?

Material defects, anything that has an impact on the home’s value or safety. Water or flood damage (basement), leaking roof or ceiling, foundation cracks or issues, structural issues, insect infestations, mice infestations, toxic conditions such as asbestos, mold, lead paint, mechanical issues with the HVAC system or otherwise, electrical issues, deaths that occurred on the property in the recent few years, zoning issues or proposed changes to zoning, property line disputes-and depending on the state, naturally hazardous conditions such as location in a flood zone or near an earthquake fault line, tree roots impeding the plumbing lines, etc. The seller has a duty to report all defects they are aware of. If you can, paying for a detailed home inspection may help spot latent defects (defects not visible and not always detected by a general home inspection) and help you provide a comprehensive disclosure.

Does an issue have to be disclosed even if it was fixed by the homeowner?

Yes-disclose it in case the issue reappears for the buyer. Avoid a misrepresentation, negligence or fraud claim. Sometimes home issues that are repaired/fixed are perpetual problems. When in doubt, disclose.

What are your legal options if a problem wasn’t disclosed before you bought the home?

The buyer may have a claim against a seller when it can be proven that the seller knew about the defect and intentionally failed to disclose it. Typically this must be something that existed prior to the buyer taking possession of the home, a defect that is not obvious or visible to the buyer, and there is monetary damage resulting from the defect (buyer has out of pocket costs to fix or repair the issue.) The value of the claim is typically the cost to repair the defect. In some cases, there may be an attorney’s fees provision in the purchase contract.

What can a buyer do to make sure they aren’t buying a home with issues?

Pay for a thorough home inspection by a qualified professional that comes recommended to spot/reveal any issues. Read the entire disclosure form provided regarding the property, follow up with questions to the seller if you have any. Buying a home is a large investment, and you should take the time to understand what you are buying, and the contract you are signing-it is worth hiring a competent realtor or attorney to review the documents regarding the sale. Homeowner disputes can be lengthy and costly, so if you notice any red flags regarding the property, purchase agreement or disclosure, ask your realtor to ask the seller additional questions, and ask for them in writing.

In times of economic stress, there is too much money on the line to not review your large projects for red flags. Failing to act quickly when a customer is in distress could cause you to lose some of the remedies available to you-and can leave large sums of money left behind.

In our latest webinar, our employment attorneys reviewed the most recent changes to employment law in each of the 50 states. Here are some of the trends we noticed for 2023-

Hair Discrimination – Illinois: Illinois amended the state Human Rights Act. The Act prohibits employers from engaging in discrimination based on numerous protected characteristics, including race. This amendment expands the definition of “race” to include traits associated with race, including but not limited to hair texture and protective hairstyles such as braids, locks, and twists.

Wage Transparency – New York: New York City amends the city wage transparency provisions to clarify the positions for which a pay range must be provided. In addition to employers, 134-A specifies that employment agencies, and employees or agents thereof, must also include a salary range or hourly wage range in each advertised position, promotion, or transfer opportunity. Job advertisements for “temporary employment at temporary help firms” are still exempted from the law.

The new law also establishes a private right of action for employees. (Effective date to November 1, 2022.)

Rhode Island: Rhode Island prohibits wage discrimination; prohibits an employer from requesting or relying on an applicant’s wage history; requires an employer to provide a wage range for a position.

Washington: Requires employers to disclose hourly or salary compensation and a general description of benefits of postings for job openings.

Noncompete Limitations – Washington 2023 Non-Compete Enforceability Thresholds

Increases the amount an employee must earn to meet the non-compete enforceability threshold to account for inflation using the consumer price index.

Reproductive Health Decision-Making – Beginning January 1, 2023, California employers will be prohibited from discriminating against an applicant or an employee based on their reproductive health decision making— defined as “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”

Employers will also be prohibited from requiring applicants or employees to disclose information relating to their reproductive health decision making.

Staying up to date on HR trends can help save your company headaches, hassle, and money in the long run. Follow Wagner, Falconer & Judd on LinkedIn to receive updates on ever-changing laws and regulations.

When does a school have a duty to do an initial evaluation to determine if a child is in need of special education services? Is your school district “dragging their feet” and not conducting an educational evaluation for your child?

All school districts have a child find duty under the Individuals with Disabilities Act (IDEA). The IDEA states that a state’s education agency, other state agencies, or local educational agency shall conduct a full and individual initial evaluation before providing special education and related services. This mandate applies to all children in a school district from birth through age 21.

Often we find that school districts will “discuss” with parents a child’s struggles, but there seems to be a lag in getting an evaluation done to determine a child’s potential need for services. If no evaluation is done, no services can be provided, so what is a parent to do to get the evaluation done? How can the school take so long to complete an evaluation when a child is struggling?

Minnesota Statute 3525.2550 states that a school must conduct an evaluation within a “reasonable time” not to exceed 30 school days from the date the district receives parental permission to conduct an initial evaluation. The IDEA section 1414 (c)(i) states that a district has 60 days, after receiving parental consent for an evaluation to determine if a child needs services.

How can these provisions work together? First, it is important to note the 60-day deadline under the IDEA is not limited to “school days”. Therefore, the school district has a duty to conduct evaluations even during the summer if the 60 days will end during the summer. Second, the Minnesota statutory 30 school days deadline applies when school is in session and shortens the 60-day federal rule. Collectively, the school has until the end of whichever deadline comes first to complete an initial evaluation after parental consent for an evaluation is provided.

So what is parental consent?

Parental consent can be as simple as a written letter to the school saying, “I think my child has need for services and I give you permission to evaluate my child.” If you simply call the school, chat with a teacher, etc. the school will argue that the deadline did not start because they don’t have written evaluation plan signed by a parent. yes, a written plan is better than blanket permission to evaluate a child, but it is not required under the law to start the clock running on the 60 and 30-day deadlines. You do not have to wait for the school district to develop a written plan, present it to you, and then get your approval. Send your approval right away! Some school districts seem to drag their feet and the time they have to evaluate a child by taking a long time to develop a plan for evaluation and failing to see parental consent on their plan. This is not acceptable.

In a recent Minnesota case (M.J.C. ex rel. Martin v. Special Sch. Dist. No.1, Minneapolis Pub. Sch., No. CIV. 10-4861 JRTTNL, 2012 WL1538339, at *8) the school district argued that it made a good faith effort to evaluate a child that was obstructed by the parent. However, the court held that the district failed to produce an evaluation plan in writing and that failure contributed to the child not being evaluated, thus causing the child find violation.