5 EE Lawsuits People Processes

Today, we're gonna be taking a deep dive into Five Wage and Hour lawsuits that we're seeing from actions employers took related to COVID-19. We just want to go through these, hit the highlights, see if there's a place you can fix this now before people start contacting lawyers. Before we go too deep, I want to ask you please subscribe to our podcast. You can find us on iTunes, Google podcast, Spotify, Stitcher, pretty much any podcatcher of your choice. You can also subscribe at peopleprocesses.com which will give you exclusive subscriber-only content. I look forward to seeing you there. 
Now, let's dive in. Employers are forced to make tough decisions often at really fast speeds as they operate during the pandemic and resulting economic shutdown that we've had by making tough decisions without consulting legal counsel. Well, people can get involved in very expensive lawsuits specifically Wage and hour suits. Particularly, class actions are the most common and expensive for employers. There was a great webinar by Seyfarth Shaw LLP, called Litigation Trends in the Post COVID-19 World. Lynn A. Kappelman is a partner with the firm in their Boston office. She discussed these Wage and Hour issues that arise as employers look to control payroll costs while maintaining operations. And also, as they look ahead to reopening as the crisis is, Kappelman followed up with labor and employment law daily about common Wage and Hour traps that can befall employers during this unprecedented crisis and I'm stealing a lot of info from her. Not stealing but she had a great webinar. So I'm trying to make sure we plug her but man, some good stuff. 
So Kappelman just basically put out there over and over, that plaintiffs attorneys are already focused on these issues. They're already publishing on their website, FAQs, guidelines for potential plaintiffs, marketing for potential claim plaintiffs who may have experienced any of these traps. So it's out there and we'll talk about which states are most at risk, but it's the ones you think about when you think about this stuff. So we'll go over those at the end. But basically, it's up and running and they are looking. 
The most common wage-hour risk. 
This is Number 1. It's going to be with respect to exempt employees who are losing that exempt classification. This can have a long-term consequence for your liability, including having to pay overtime going forward, pretty much forever to these formally exempt salaried employees. Many companies have reduced employees’ pay across the board to spread the pain of a forced bell typing. Cool. An employer that imposes a salary cut, though, must be careful not to reduce exempt employees’ pay below the minimum salary level. Now, the Federal FLSA salary threshold is $35,568 per year, but many states have a higher floor, you got to check that. So if you've cut your salaries across the board, and you've cut below that exempt level, you now have non-exempt employees. You got to track their hours. Make sure you're paying overtime. Make sure you're paying minimum wage out. 
Most employers, maybe they've imposed a 20% pay cut. A lot of them want to also reduce work hours. So maybe you've said, "All right, we're going to take Fridays off". Monday through Friday cut everybody's pay 20%. However, to do so for exempt employees runs afoul of the FLSA salary basis test. It's okay to reduce someone's pay by 20%, but you can't reduce their duties by a commensurate level because...