Tuesday, September 9, 2008, 12:33 PM

Another Construction Nightmare

Employees in the construction industry tend to be nonexempt, except for professionals (some but not all engineers, for example), administrators, and supervisors/managers. The "executive" classification depends heavily upon both the nature of the duties performed and the payment of a salary which does not vary with the amount of time spent on the job or away from it. With these exceptions, there is a strong presumption that all others engaged in the construction trades are paid on an hourly basis and are eligible for overtime compensation.

However, that's not the end of the wage-hour analysis. Recording time worked is usually an informal process, a combination of the honor system and the oversight of management. Potential pitfalls in this arrangement include those claimed to exist in a West Texas assembly-line operation which is the subject of a new federal court complaint. In Arosemena v. Toyota Motor Engineering & Mfg. North America, the plaintiffs claim they were forced to work "off the clock" before and after their scheduled shifts, and the queue at the group leaders' stations was long and slow, with time in and out being logged as the same whether the employee was at the front or rear of the line. Although Arosemena isn't a construction industry case, the issues presented are typical of those which are being alleged in the ever-growing list of newly-filed FLSA complaints against contractors and subcontractors engaged in construction. (One possible defense for the employer is that waiting time to "check in or out" is generally not counted in hours worked; see 29 CFR 790(7)(g).)

Another hot topic in construction is the extent to which getting ready for work and winding up the day constitute compensable time. The Department of Labor takes the position that meal periods which involve no duties and last at least 30 minutes aren't "time worked," but the converse is true for shorter breaks from duties, including waiting for a task to begin or resume; if the time is not the employee's own to spend as he or she pleases, it's likely to be counted as compensable. If critical equipment breaks down and causes work to stop, the lost time must be paid unless employees are free to leave. Travel time is usually unpaid unless the employee is traveling from one jobsite to another during the working day. Required meetings for safety or planning are compensable. All these generalities yield to specific facts, and careful planning can reduce, if not eliminate, the potential for wage claims.

The real concentration of new construction-industry filings comes in two specific areas, which frequently merge: Smaller employers with informal timekeeping systems are often targeted, and the problems increase exponentially where there are communications and cultural issues. cases brought by Hispanic plaintiffs, acting either through private counsel or through organizations, make up a significant percentage of the FLSA litigation explosion in the industry.

The final area of concern for the industry is the most straightforward: The minimum hourly wage is now $6.55 and will increase to $7.25 on July 24. 2009. Attention to all these details may serve to remove one headache from the construction employer's concerns.

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