FLSA – Economic Thinking In Action

Sampling in Wage and Hour Cases

Often in wage and hour cases, attorneys are faced with the decision of analyzing the complete time and payroll records for a class population, or analyzing just a sample of the population’s records. While in an ideal world, analyzing the full population of data is the best approach, it may not always be feasible to do so.

For instance, some of the individuals within the class may be missing records due to poor data management, or perhaps both sides agree that the analysis of the full population may be too costly or time consuming. In these cases, the attorneys can elect to have an expert randomly select a random sample from the full population to perform a reliable and statistically significant random sample.

Below are some common terms related that attorney’s can expect to hear when discussing sampling in their wage and hour cases:

Random Sampling, n. sampling in which every individual has a known probability of being selected.

Sample, n. a set of individuals or items drawn from a parent population.

Sample Size, n. the number of individuals or items in a sample.

Simple Random Sampling, n. sampling in which every individual has an equal probability of being selected and each selection is independent of the others.

Discussion: This very common statistical routine is analogous to ‘pulling a name out of a hat’.

Stratified Sampling, n. a method of statistical sampling that draws sub-samples from different sections, or strata, of the overall data population.

Discussion: Stratified sampling routines are used in employment settings when there are important differences between different groups of employees being surveyed. For example, in a survey of off-the-clock work, workers at different locations, and with different supervisors, may have different work cultures that make them more (or less) likely than other workers to have worked during their lunch period. In this instance, a stratified sampling routine may be used to account for those differences.

Case Update: Travel Time Analyses

A common allegation in wage and hour lawsuits is off-the-clock work. In these types of cases, employees usually allege that they performed work, such as travel between job sites, that they were not paid for performing. Other common off-the-clock-work allegations typically involve activities such as spending time in security checkpoints, putting on a uniform, preparing for work, and logging onto computer systems.

Recently, the EmployStats Wage and Hour Consulting team completed work on a case where Plaintiffs alleged unpaid off-the-clock work for time spent driving from their homes to their job sites, as well as travel time between job sites. In this case, EmployStats was able to analyze and assess Plaintiffs’ allegations by combining and creating datasets of personnel and job location data, and using mapping programs to calculate the time Plaintiffs could have potentially spent traveling and performing off-the-clock work.

The following is an example of how the EmployStats Wage and Hour Consulting team typically handles a case involving travel time:

First, the Employstats team works to combine and merge multiple databases containing employee home locations, employee time and payroll records, and job site locations into a single analyzable database.
The EmployStats team then uses mapping platforms, such as Google Maps API or Mapquest API, to calculate the distance in miles and/or travel time in hours for each unique trip.
Finally, the EmployStats team uses the employee time and payroll records to assess any potential damages due to travel time off-the-clock work.

Check out the EmployStats website to see how we can help you with your wage and hour cases!

Case Update: Time Clock Rounding Analyses

The EmployStats Wage & Hour Consulting Team recently completed work on a case in the state of New York where the Plaintiff’s alleged unpaid straight time and overtime compensation due to the Defendant’s timekeeping policies.

In this case as well as others that EmployStats has worked in the past, the Plaintiff’s alleged that the Defendant’s had a timekeeping policy which systematically understated the employee’s time worked in a given pay period. In practice, some time clock rounding policies may be neutral in principle, but non-neutral in practice. For any number of reasons, the employee or the employer may benefit more often than not from a seemingly neutral rounding policy.

The analysis that we perform typically involves manipulating, matching and analyzing big data from inherently incompatible time and payroll databases. In addition to analyzing the alleged straight time and overtime compensation owed to employees, EmployStats also assists attorneys in the calculation of penalties.

In states such as California and New York, there are penalties for noncompliance with the labor codes. We work with attorneys to calculate the appropriate penalties and interest in the lawsuit or investigation. The EmployStats Wage & Hour Consulting Team is proficient at providing calculations and tabulations that are insightful and well documented.

Case Update: Employee Misclassification

The EmployStats consulting team, lead by Matt Rigling, MA, recently worked on a case involving employee misclassification. EmployStats assisted attorneys by calculating potential damages for employees who were classified as exempt but potentially should have been classified as non-exempt and therefore owed FLSA overtime wages for hours worked over 40 in a workweek.

Matt Rigling and the EmployStats team also worked to use the case data and information provided to confirm whether the employees in question passed both the salary and duties tests for exemption purposes. According to the FLSA, an employee can be classified as exempt under the Administrative, Executive, or Professional exemption if they meet all of the requirements for salary and job duties.

In this case, EmployStats compared the employee information to the salary and job duty requirements of the Administrative and Executive exemptions. Under both exemptions, the employee must be paid a salary of at least $455, as well as meet the job duties specific to an Administrative or Executive employee. According to U.S. Department of Labor, Administrative employee’s primary job duty must be office work that is “directly related to the management or general business operations of the employer or employer’s customers” and must include “the exercise of discretion and independent judgement” for matters of importance. Similarly, Executive employee’s primary job duty has to be managing the company, or a department of the company. Additionally, they must also regularly direct at least two other full-time employees and have the authority to at least recommend the company fire, hire, or promote other employees.

To see how EmployStats can assist you with an employee misclassification case or another labor and employment matter, please visit www.EmployStats.com or give us a call at 512-476-3711. Also make sure to follow our blog and find us on social media! @employstatsnews

Wage and Hour at EmployStats

In late 2016, the US Department of Labor announced a final ruling on overtime, which may go into effect later this year and increase the number of workers eligible for overtime payment. Here at EmployStats, our specialized team of Research Associates and Economists is fully capable and ready to handle all your wage & hour needs.

At EmployStats, we analyze FLSA and wage & hour violation claims, including time clock rounding, misclassification, off-the-clock work, and missed meal periods. Our analyses of wage & hour violations typically involve the statistical review of information such as employee time punch records, payroll data, and employee time diary information. Our goal at EmployStats is to communicate effectively with our clients and fully invest in the project at hand, in order to achieve the best outcomes and form long-lasting professional relationships.

Our wage & hour clients include plaintiff and defense attorneys, as well as individual employers across the country. Our wage & hour projects include expert witness trial testimony, expert reports, consultation, and compliance self-audits. Statistical sampling is used to investigate wage & hour violations in some cases as well.

For more information on how EmployStats can help you with your wage & hour needs, please visit our website at www.employstats.com/wage-and-hour.

Wage & Hour News: The New Overtime Rule

On Wednesday, May 18th, 2016, The Obama Administration announced a significant expansion of who qualifies for overtime pay under federal labor laws. The Department of Labor has issued the Final Rule, which centers primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt from overtime pay protections.

The Final Rule increases the salary threshold from $23,660 to $47,476, which is the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region of the United States. The Department of Labor projects the policy to extend overtime protections to an additional 4.2 million workers, as anyone earning less than the salary threshold is now eligible for overtime payments.

The Final Rule also sets the total annual compensation requirement for highly compensated employees at $134,004, which is the annual equivalent of the 90th percentile of full-time salaried workers in the United States. The Final Rule also amends the salary basis test to allow employers to utilize non-discretionary bonuses and incentive payments to account for up to 10% of the new standard salary level. Lastly, the ruling establishes a procedure for automatically updating the salary and compensation levels every three years to maintain the levels at the 40th and 90th percentiles of earnings.

The Final Rule will take effect on December 1, 2016, giving employers over six months to prepare and adjust their payment policies. In response, employers will have the options to pay time-and-a-half for overtime work, raise workers’ salaries above the new salary threshold, limit workers’ hours to 40 hours per week, or a combination of the above.

For more information on the new overtime ruling, please visit http://www.dol.gov/featured/overtime.

Video from the Department of Labor:

https://youtu.be/UFJaDm720FU

Employment and Wage & Hour Statistics Focus: Equal Employment Opportunity Census

The Equal Employment Opportunity (EEO) Census is a tabulation created every ten years for the purpose of serving as an external benchmark for comparing the composition of a company’s workforce to that of the external labor market within a specific geographic area and job category. The EEO Census provides worker counts based on race, ethnicity, gender, age, education level, industry, occupation, and geography. While the raw data is not readily available, 24 tables provide counts for varying cuts of the data.

The EEO Census is most often seen in Affirmative Action Plans and EEO Commission compliance reviews. It is also useful in the litigation setting companies when there are allegations of discrimination.

For more information, please refer to: www.census.gov/hhes/www/eeoindex/eeoindex.html

Employment and Wage & Hour Statistics Focus: Consumer Price Index

The Consumer Price Index (CPI) is monthly data released by the Bureau of Labor Statistics on the change in prices paid by urban consumers for a representative basket of goods and services. The CPI is available by region and consumer type. It is most often used to measure inflation, which is an important concern when present-valuing economic damages in the future. Future damages must be discounted by the rate of inflation, because one dollar today is worth more than one dollar tomorrow.

Note: Even though CPIs differ by city, it is not appropriate to use CPI data to compare the cost of living between cities. The CPI does not measure price differentials between cities, but rather only over time. The representative basket of goods and services varies with geographic location.

For information on the Consumer Price Index, please refer to www.bls.gov/cpi

Image source: http://theregister.co.nz/news/2015/08/new-zealands-consumer-price-index-it-accurate-enough

Employstats Employee Focus: Training in D.C.

This past week, Employstats associate Matt Rigling visited Washinton D.C. for a training course led by StataCorp experts. The course was titled Using Stata Effectively: Data Management, Analysis, and Graphics Fundamentals, and was taught by instructor Bill Rising at the MicroTek Training Solutions facility, just a few blocks away from the White House.

Here at Employstats, our analysts utilize the statistical software package Stata for data management, as well as data analysis in all types of wage & hour, economic, and employment analyses. With Stata, all analyses can be reproduced and documented for publication and review.

The training course covered topics ranging from Stata’s syntax to data validation and generation, and even topics such as estimation and post-estimation. “I took away a lot of useful techniques from the Stata course, and I learned about some new features of Stata 14, such as tab auto-complete and the command to turn Stata Markup files into reproducible do-files. Most importantly, I learned data manipulation skills that will help me work more efficiently and accurately.” said associate Matt Rigling.

Employment and Wage & Hour Statistics Focus: Census of Fatal Occupational Injuries

The Census of Fatal Occupational Injuries, conducted by the Bureau of Labor Statistics, provides data on the number of fatal on-the-job injuries by type, occupation, industry, or worker characteristics. This data is sometimes used to statistically value a life. Dangerous jobs tend to offer a wage premium in exchange for additional risk of death on the job. Some economists have attempted to quantify the value of life based on the additional wages that must be paid for a worker to accept an increased chance of a fatal accident.

For more information, visit www.bls.gov/iif/oshcfoi1.htm