Employees Can’t Be Called Exempt if Pay Is Docked

Q.I’m one of 30 employees in a health-care organization. Everyone--from the receptionist to the president--is treated as an exempt salaried employee.

The employees are required to punch a time clock, and are docked if they don’t work a full 40-hour week. Even though every employee usually works more than 40 hours, there is no comp time. Is there an anonymous way to notify the proper organization about this? I don’t want to jeopardize my job.

--C.R., Costa Mesa

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A.Employers often make mistakes in classifying employees as exempt or nonexempt.

Exempt status may be appropriate for a president, manager or important administrative employees, but inappropriate for others such as receptionists and secretaries.

Even employees who could be considered exempt lose that status if the employer does not pay them a salary--paying them the same amount every pay period, regardless of how much they work. By docking employees if they don’t work a 40-hour week, the employer has lost the opportunity to classify them as exempt.

There are various ways to anonymously notify the employer about this problem. You could send a typed letter. However, if you have already complained, the company might be able to determine that you were the author.

The California labor commissioner’s office accepts anonymous complaints. However, it is more likely to pursue a claim if it can use your name.

It might be to your advantage to let your employer know you have made the complaint. If they retaliate against you, you would have legal rights as a whistle-blower.

--Don D. Sessions

Employee-rights lawyer

Mission Viejo

Responsibility for Boss’ Fraud

Q.For the last few years I have worked for a small division of a large company. Over the years, our boss was involved in misrepresentations and deceptive practices in selling our products.

This was reported recently to our parent corporation, and our boss has been removed.

I would like to know if I or any co-workers can be held responsible for the fraud and misrepresentation even though we were told by the former boss that we could lose our jobs if we did not “just make it up” or “get the numbers no matter what it takes.”

--M.T., Los Angeles

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A.If you participated in the fraudulent practices, you too could be held responsible. It is not a defense that you believed you had to do it to keep your job. What you should have done was to complain to your boss’ boss rather than comply with his instructions.

There are laws to protect you from termination for refusing to engage in illegal activity or for reporting it to others.

--Michael A. Hood

Employment-law lawyer

Paul, Hastings, Janofsky & Walker

Chapter 7 a Lawful Reason to Deny Job

Q.I applied for part-time employment as a grocery store cashier, and, as part of the application, I was required to fill out the Fair Credit Reporting Act form. I filed for Chapter 7 in July. Can I be denied employment, as stated in the form, because of my credit history?

--C.H., Los Angeles

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A.Yes. Although federal bankruptcy law prohibits employers from firing employees who file for bankruptcy, it does not address employers who don’t hire applicants who have filed bankruptcy.

On Sept. 30, new requirements for using credit information in employment went into effect as part of the amended federal Fair Credit Reporting Act. Under the new rules, an employer must provide applicants with written notice in advance that a consumer report check will be obtained as part of the screening process. The applicant must give his or her written authorization for the employer to obtain a consumer report, which includes credit checks. It appears that the employer in your situation did this.

If the credit check reveals adverse information that the employer might take into account in denying employment or some employment benefit, the applicant must be provided with a copy of the consumer report and a notice of rights. The applicant must be given a “reasonable period” (the length is not specified) to challenge the accuracy of the adverse information.

If the employer decides not to offer employment or an employment benefit as a result of adverse credit information, the employer must again provide the applicant with written notice.

If these steps are followed, it would be lawful for the employer to deny an applicant a job because of a prior bankruptcy. There may be jobs in which a requirement of good credit might be challenged as not relevant, particularly if such a requirement has an impact on a minority or other protected group. But for any job involving handling money--such as a cashier’s job--a good credit rating is clearly relevant.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor-law instructor, UC Irvine