Not So Fast: 3 Common Employer Misconceptions

Some employment advice is pretty intuitive (even if not always easy to execute). You should look into complaints of harassment and act on what you find. If you give people glowing performance evaluations, don’t expect a jury to believe that person was not a good employee if things go south a year from now. Keep track of employees’ hours worked so you pay them for their time worked.

Other issues are less intuitive. Here are three common examples where many employers’ intuition is not in sync with the actual legal requirements.

“Oh, she’s salaried. She doesn’t get overtime.”

This statement may or may not be correct for a given employee. The federal Fair Labor Standards Act provides, among other things, that employees are entitled to “time and a half” for hours worked over 40 in a workweek unless they are exempt. There are many exemptions, but the great majority of employees who are exempt are exempt under what are known as the white collar exemptions, which include many supervisors, managers, and other decisionmakers.  

To be exempt from overtime requirements under one of the white collar exemptions, there are two requirements. One, the employee in fact must be paid a salary of at least $35,568 per year. Two, the employee must perform exempt type duties as defined in Department of Labor regulations. What duties are exempt is a classic gray area as I mentioned here just last month. Very generally speaking, the regulations set forth a degree of authority and ability to independently make decisions that makes somebody exempt.

But the point here is that because exempt employees almost always are paid a salary, some employers incorrectly flip that equation and think that simply paying an employee a salary makes her exempt. Employers might pay an employee without exempt type duties a salary, and neglect to track and properly compensate overtime, resulting in significant back pay and even penalties. If you have not checked with your lawyer to make sure your salaried employees really are exempt, you should.

“Our employees are not allowed to discuss how much they make with each other.”

This is not one of those employment law gray areas: Employees are allowed to talk about how much they make to each other, though many employers wish they weren’t, and have policies that say they can’t.  

This rule comes from the National Labor Relations Act (“NLRA”), which for the most part governs the relationship between private sector employers and unions. Don’t have a union? Keep reading. The NLRA also permits employees to communicate with each other about the terms and conditions of employment, otherwise known under that law as “concerted protected activity.”  

Employees discussing wages amongst themselves is textbook concerted protected activity, even though the instinct to wish they would not is sometimes understandable. If you have this policy, you should delete it, and you certainly shouldn’t take any action against an employee for “violating” it.

“Employee cannot bad mouth us on social media.”

You give somebody a job and a decent wage, and they go on Facebook and complain about you. “We don’t have to put up with that. Let’s get rid of him and hire somebody who is more loyal.”  An understandable reaction to a frustrating situation, but again incorrect.

It’s that darned NLRA again. If there is a component of discussing terms and conditions of employment with colleagues in that Facebook post, it is probably protected and therefore it is probably illegal to take action against the poster. This is likely true even if the post is unartful, emotional, or even profane, decades of court and agency decisions tell us. This is a tricky area where small differences in the communication can change the answer, so employers should not take action against such employees without talking to counsel.

There are two pieces of good news here. One is that employers can prohibit on social media what they can prohibit in the workplace generally, such as threats, harassment, defamation, and disclosure of confidential information. Two is that most of us have short attention spans, and many of those posts fade pretty quickly and do not have much impact on the employer. That is not always true, of course, but I do encourage employers to at least consider the possibility that the post may not be that big a deal.

If you got one or more of those “wrong,” don’t feel bad. These are common mistakes and the right answers are not as intuitive as those examples I started this post with. Being on track with these rules can save you a lot of headaches and money.

This article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

Barnes & Thornburg LLP is a large, full-service law firm that seeks to take a more entrepreneurial and cost-effective approach both to client service and its own business.