Nolo’s Employment Law Blog

It turns out that taking time off work isn't just a luxury -- it improves our health, the quality and quantity of our sleep, and our reaction times. According to an article by Alina Tugend in the New York Times, "Vacations Are Good for You, Medically Speaking," a study has shown that women who took a vacation only once every six or more years were eight times more likely to develop coronary heart disease or have a heart attack than women who took at least two vacations a year. Another study showed that men who didn't take annual vacations had a 21% higher risk of death from all cases, and were 32% more likely to die of a heart attack.

The article also cites interesting research on how vacations affect our sleep. After a few days on vacation, participants were averaging an hour more of good quality sleep, and registered an 80% improvement in their reaction times as measured by vigilance testing. The benefits continued, though less markedly, after vacationers returned home.

The sleep survey involved vacationers who were flying from the West Coast of the United States to New Zealand for at least a week of vacation. But will more modest vacationing - occasioned by this year's flagging economy and high gas prices -- offer the same rewards? According to an AOL Travel/Zogby survey, more than half of the respondents felt that they had less money to spend on summer vacations this year than last year. Perhaps as a result, a third of respondents were planning to stay with family and friends rather than in a hotel. And, campgrounds around the country are reporting high numbers of reservations. It remains to be seen whether we'll get an extra hour of quality sleep on the ground or the hide-a-bed.

Lisa Guerin

With gas prices hovering around $4 per gallon, a survey by placement firm Challenger, Gray & Christmas reveals that 57% of polled employers are offering alternatives to help employees cope, according to CNN. Strategies include a compressed work week -- four 10-hour days (23%) -- employee carpools (20%), subsidizing the cost of public transportation (18%), and allowing employees to telecommute at least one day a week (14%).

Personally, I'm surprised telecommuting is so far down the list. All the other options are good ones, but telecommuting has some distinct advantages for employers as well as employees. (Full disclosure: I'm writing this from home, as a telecommuting employee.) Here are just a few of the benefits:

• Recruiting and retaining the best employees. According to the survey, 34% of employers have had a qualified candidate turn down a job because of a long commute, while 40% of jobs could be done telecommuting. Allowing employees to telecommute is an attractive job benefit that will help you attract the best candidates, even if far away. Another study shows telecommuting employees are more satisfied with their jobs, and less likely to leave.


• Decreased costs. Telecommuting may decrease your costs -- for example, if it allows employees to share work space and office equipment.


• Increased efficiency. Employees working at home are free of the distractions of a ringing phone, interruptions by co-workers, and the like. Particularly if working on focused projects, this allows employees to work more efficiently.


• Positive environmental impact. One 2005 study found Americans drive an average of 16 miles each way to work. In addition to reducing commuting times and costs, allowing telecommuting has a positive environmental impact as fewer workers drive to the office.

A California court recently awarded more than $100 million to current and former baristas at Starbucks, after they won a class action lawsuit claiming that the coffee chain forced them to share their tips with their supervisors. Apparently, once all the tip jars were emptied, the contents were shared among not only the baristas but also the supervisors on their shifts.

Tip pooling, or "tipping out," refers to the common practice of requiring tipped employees to share all or part of their tips with each other. Tip pooling arrangements can be legal, but only if they meet a number of requirements. The most important one: No employers are allowed in the pool. Tips belong to employees. Although they may sometimes be required to share tips with each other, they can't be required to share with the boss. And California law also prohibits any agent of the employer -- including anyone who has the right to hire, fire, supervise, direct, or control the work of employees -- from sharing in tips.

In case you were wondering how much the average Starbucks barista earns in tips, the answer is not much: $1.71 an hour, according to a story in the Los Angeles Times. But apparently, shift supervisors really work a lot of hours. The judge arrived at the damages portion of the award by multiplying that hourly tip rate by 50,694,694, the estimated hours worked by shift supervisors during the time period covered by the lawsuit.

One of the attorneys involved in the case said that some baristas could receive as much as $10,000 as a result of the decision. They shouldn't start spending that money any time soon, however: Starbucks has vowed not only to appeal the decision, but also to continue allowing supervisors to share in the tips.

Lisa Guerin

Last month, the Indiana Court of Appeals upheld an exotic dancer's claim for workers' compensation. The dancer, Angela Hobson, was "performing a pole trick" when she "felt a pull in her neck." For the next several weeks, she felt pain and numbness in her neck, shoulder, and arm. She was diagnosed with a herniated disc, for which she underwent surgery. She filed a workers' comp claim against her employer, the Shangri-La.

The Shangri-La argued that it didn't know of Hobson's injury. But the Court wasn't impressed by this claim, especially because the Shangri-La didn't have workers' comp insurance (and wasn't approved as a self-insured employer) and didn't even have procedures in place for keeping track of workplace injuries.

Because the Shangri-La had no insurance, it will have to pay higher damages. In addition to reimbursing Hobson's medical bills, paying her $548 per week for the time when she was totally disabled, and paying her $10,4000 for the permanent impairment caused by the injury, the Shangri-La will have to pay an additional 5% of the total award as a penalty for failing to have coverage. In fact, it could be required to pay twice the total award and all of Hobson's attorney fees as a further penalty.

The outcome of this case didn't really surprise me: If you look beyond the setting, this is a fairly straightforward claim involving an on-the-job injury. What did surprise me was the club's defense. The owner of the Shangri-La has said that it missed a payment on its insurance, and that's why the club had no coverage when Hobson was hurt. I expected the club to raise a different argument: that Hobson wasn't an employee at all, but an independent contractor who isn't entitled to workers' comp benefits. 

Many adult entertainment venues classify their dancers as contractors and require them to pay a fee to use the stage. This means the clubs don't have to pay the minimum wage, chip in for the employee's Social Security, provide employee benefits, or pay for unemployment or workers' comp insurance. A number of class actions and individual cases have been brought to challenge this practice, with mixed results. Often, the issue comes up in precisely this setting: A worker who was classified as a contractor files a claim for unemployment or workers' comp, and the state agency has to decide whether the classification was correct.

Of course, classifying workers as contractors is a two-edged sword, especially when it comes to workers' comp coverage. Although employers don't have to provide workers' comp for contractors, and therefore save money on premiums, they also stand to lose big if the worker files a lawsuit. Unlike employees, who are limited to workers' comp benefits, contractors can sue for personal injuries. If they can show the employer was at fault, contractors can collect damages for pain and suffering, all lost compensation, and even punitive damages. Sort of makes workers' comp premiums look like a small price to pay.

Lisa Guerin

In a recent article entitled "Wage Wars," BusinessWeek magazine highlighted something many employers already know -- failing to pay employees for every hour worked can be expensive. According to the article, lawyers estimate that over the past few years, companies including Starbucks, IBM, and Merrill Lynch have collectively paid more than $1 billion dollars to settle wage and hour claims. The suits are as varied as the employers: workers not being paid for time spent sending work-related emails from home, arriving to the worksite a few minutes early to boot up a computer, or working extra hours to perform the same day-to-day tasks as the employees they supervise.

While the danger of violating the FLSA and state wage and hour laws may seem obvious, the assumptions we make about who is nonexempt may not be. The article highlighted this important and more subtle point--not everyone who wears a white collar is exempt from being paid overtime. Plaintiffs in these cases have included mortgage brokers, pharmaceutical reps, and stockbrokers--people who may never have even considered making such claims because they see themselves as "white collar" professionals. But as Mark Thierman, a prominent attorney representing plaintiffs in these cases, points out, it's not a matter of job title, income, or academic degree, it's a matter of job function.

So don't let your assumptions guide you. Make sure the job description matches the job's actual functions. To determine whether an employee is exempt, always compare the job's functions to the applicable FLSA exemption or your state's exemption requirements. To limit off-the-clock working time or uncontrolled overtime expenses, make sure nonexempt employees--especially those working in office environments or closely with exempt employees--understand your company's rules for working remotely, on weekends or evenings, and the like.

(And, to learn more about job descriptions and hiring, check out The Job Description Handbook, by Margie Mader-Clark (Nolo).

A recent study by the Society for Human Resources Management (SHRM) reveals that what keeps employees satisfied with their jobs aren't the things HR professionals think keep employees satisfied. According to the survey, the top contributors to employee job satisfaction are "benefits" and "compensation/pay." HR professionals ranked "relationship with immediate supervisor" as number one, "compensation/pay" as number two, and "benefits" as number four.

That employees value compensation and pay isn't surprising, but the importance of benefits may be. In addition to the rising cost of health care, aging employees may be worrying about funding their retirement. At the other extreme, Gen Yers may be focused on balancing their work and personal lives. The SHRM survey found an increase in all types of benefits, including health care benefits (programs such as chiropractic insurance, prenatal programs, and smoking cessation programs), retirement benefits (including investment advice), flexible working benefits (like compressed workweeks, eldercare referral services, and company-supported childcare centers), and time off (for personal days, paid adoption leave, or a time bank of sick leave).

Addressing these concerns may seem like a headache, but there's another way to approach it: it's a chance to offer new and different benefits that are guaranteed to be appreciated by a diverse workforce. And many of these benefits are mutual--for example, allowing an employee to telecommute may increase productivity, while offering preventative health care programs can help reduce health care costs and lost work time. At the same time, you're satisfying talented employees who are expensive to replace.

To learn more about how to implement policies that keep your employees happy, read The Manager's Legal Handbook, by Attorneys Lisa Guerin & Amy DelPo (Nolo).

Alayna Schroeder

The controversy over CBS's new program, "Kid Nation," is only the latest installment in the continuing debate over what it means to be a star of reality TV. Ever since 1992, when "seven strangers" first agreed to "have their lives taped" on MTV's long-running hit, "The Real World," commentators have been arguing over whether those featured in these shows are workers -- and, therefore, entitled to be paid for every hour they spend in front of the cameras. In the case of "Kid Nation," the question is particularly important: If these children were working, then CBS was obligated to follow child labor laws in its production.

On "Kid Nation," 40 children, ages 8 to 15, spend 40 days in the high desert of New Mexico, trying to turn a ghost town (actually a movie set used for westerns) into a functioning town that's run by kids. An early sign of possible trouble for the show came in the form of a complaint from a parent, who said that her child was spattered with hot grease while cooking, and other children needed medical attention after accidentally drinking bleach. Soon after, some started wondering in print whether this show was such a good idea after all.

Whatever you think of the show from an entertainment standpoint, the child labor law issue is troubling. Our child labor laws reflect our beliefs that children of a certain age should generally go to school, be protected from hazardous conditions, and be protected from overlong work days. Although the rules are typically quite a bit less strict for child actors and entertainers, New Mexico didn't make this distinction until after the show wrapped. So how did these kids end up working 14+ hour days, during the school year, with no tutor on set, doing strenuous activities like hauling wagons and cleaning outhouses, in conditions that allowed them to drink bleach and get burned by hot oil?

Because they weren't employees, but simply lucky participants in a special adventure, compared to "summer camp" by the show's executive producer. According to Mark Andrejevic, a professor at University of Iowa, (and author of the excellent book, where people grow and learn about themselves." And this is exactly the way some involved with Kid Nation saw it: A parent of one of the children who drank bleach explained that the show was an opportunity for her son to meet kids from other backgrounds.

The obvious problem with this interpretation is that money does change hands: Not only were the children paid (each received a "gift" of $5,000, plus the opportunity to earn more cash), but also the people who created and produced the show earned salaries, and are ultimately working to make money for the television network. When people are paid for their labor, and the fruits of that labor generate profit for the company that signs the checks, that doesn't look like "camp": It looks like work.

The Writers Guild of America says that adults who worked on the show -- including producers and camera operators -- were also victims of wage and hour violations. And here's an interesting twist: Among the workers who were allegedly underpaid were writers. That's right: These purportedly unscripted programs, which we are told feature real people "keeping it real," have writers. Enough writers to file not one, but two class action lawsuits a couple of years ago against several companies and networks, including the production companies behind "My Big Fat Obnoxious Fiancé," "The Real Gilligan's Island" and the never-aired "Seriously, Dude, I'm Gay." Not necessarily the people I would choose to script my journey of self-discovery, but maybe that's just me.

For more on how to stay on the right side of  labor laws, pick up The Employer's Legal Handbook, by Attorney Fred S. Steingold (Nolo).

Lisa Guerin