Is Your Business Affected by “Blackberry Overtime?”

With a glance around the office (or anywhere else, for that matter) one quickly realizes that it is easier to count the number of people without smart phones than it is to count those who use one. A PEW internet survey reported that more than 45% of all adults in the United States are smart phone owners. That number jumps to more than 66% among adults between the ages of 18 and 29. Smart phones are here to stay, and so, perhaps, are the problems that they pose for businesses.

No one could have predicted in 1992, when the first PDA functions were combined with cellular phones, that the rate of FLSA lawsuits would be heavily impacted by the new technological changes on the horizon. Since then, the release of the Blackberry, iPhone and other smartphones has cost employers thousands of dollars in overtime pay and legal fees under the Fair Labor Standards Act (FLSA); a law that has gone relatively unchanged over the past 75 years.

In 1993 there were 1,457 wage and hour lawsuits filed under the FLSA. Compare that to the record breaking 7,064 lawsuits filed in 2012. The vast majority of these lawsuits are the result of misclassification of employees and the failure to pay overtime.  One reason cited for the large increase is the use of smartphones to increase employee productivity, but that increase has come at a price for many employers. Employees complain that the lines between work and personal time have become blurred. They are now expected to work evenings, weekends and even while on vacation without being compensated for their time; a practice that has not gone unnoticed.

An employee of the Chicago Police Department’s (CPD) Bureau of Organized Crime, Jeffrey Allen, filed a FLSA complaint for unpaid overtime that was the direct result of “Blackberry overtime” while off duty. Allen alleges that he would receive e-mails and one to two calls per day while he was off duty. Due to the nature of his job, these calls and e-mails were not ones that could go unanswered yet the time he spent on them went uncompensated. While the suit was initially filed in 2010, the US District Court (Northern District of Illinois’ Eastern Division) recently allowed Allen to send notice to participate in a class action to other similarly situated employees (those with the rank of Lieutenant and below).

New technologies will continue to change how we work and operate businesses. There are those who debate whether or not the FLSA is an outdated law, but until it changes, the law stands. So what can employers do to protect themselves?

Exempt or Non-exempt Classification

The first course of action is to ensure that all employees are correctly classified as exempt or non-exempt. The FLSA has certain criteria that must be met in order to make these determinations. Each employee should be aware of their classification and understand what that status means in terms of hours worked and their compensation. For those employees who are non-exempt, employers must ensure time tracking processes are firmly in place.

Unauthorized Overtime Policies

Many employers have policies in place to deter employees from working overtime without prior authorization. While the FLSA is clear that all overtime, regardless of authorization, must be paid to any and all non-exempt employees, employers can use these policies to help curb overtime abuse. Organizations that adopt these policies are legally permitted to take disciplinary action including suspension and termination. As in any case of disciplinary action, it is important that the company  implement a consistent and progressive disciplinary process.

For more information regarding FLSA classification or overtime policies, contact C3 Advisors, LLC at kristenh@c3advisors.com.

What to Look for When Purchasing Business Software

 

Business management software is a significant investment for any business.  The right solution can help you run your business more efficiently and effectively, reduce staff frustration, and improve customer relationships.  But with the numerous software vendors and systems to choose from, how do you narrow the search and evaluate products?   Here are the areas to investigate in selecting a suitable solution from a reputable vendor.

Reason for Purchase—Before beginning a search for a solution, be sure you know what the software should accomplish.  You will not be able to assess the capability of any software system without a clear understanding of the problems you wish to eliminate or reduce.  Your company may be experiencing one or more of these typical operational challenges:

• Internal communications are poor.
• A lack of centralized information is creating a duplication of staff efforts.
• Too much time is being spent on preparing reports.
• Manual systems have been created to address processes.
• Customers cannot be serviced adequately due to the lack of timely information.

Your business may have problems not listed here.  The point is:  know what needs to be fixed.

Industry Knowledge—Make sure the vendor is familiar with your industry.  The vendor should understand the challenges that you face and your particular needs.  Ask if they have customers like you and how the software works for them.  Be sure they are experienced in writing, implementing and supporting software for businesses like yours.

Reputation of the Vendor—Don’t rely on the references provided by the vendor.  Ask for the names of customers who have used the system for a period of time, customers who have recently completed an implementation, and customers who are in the implementation stage.  Find out how long the vendor has been in business and the length of time customers typically stay with the vendor.  Inquire as to the vendor’s financial condition to ensure they have the resources to remain viable on a long term basis.  If the vendor goes out of business, the software will be useless without the services described below.

System Features—System functionality is critical to solving the problems that the software is intended to remedy.  Look at the major inefficiencies that can be solved with the right tools in place.  Consider what is needed now, what features can be added to benefit your business as it continues to grow, and whether it is scalable to accommodate growth.  Make a purchase based on business needs, not features that are nice add-ons but deliver little value.  Customizations are often necessary, but those which are major or numerous are a sign that perhaps you should continue shopping.

Services—Implementation, support and system updates are the services which make the difference in truly realizing the benefits of business management software.   If the system remedies the challenges it is intended to address, but the service from the vendor is inadequate, you’re replacing an old problem with a new one.

• Implementation-Ask the vendor about typical hurdles they encounter in installations and their recommendations for reducing such problems.  The team assigned to your installation should be experienced in implementations of the software at businesses similar to yours, with a project leader who will be accountable to a timeline for completion.  Remember that the installation costs are separate from the software purchase price and are typically billed at an hourly rate.  The longer the installation drags on, the higher the true cost of the software.

• Support-In addition to the purchase price of the software, you will purchase an annual support or maintenance package.  This is as important as the functionality of the software itself because system bugs, lack of user knowledge, etc. can seriously impede your business operations if the support function is slow or unresponsive.  Find out how quickly support requests are handled, whether communication is via phone or email, whether support personnel are dedicated to particular customers, hours of the day support services are available, and the process for escalating support problems which remain unresolved.  On-site services are normally not included in software support, but learn what the process is for scheduling such services and the hourly rates charged for the technicians who visit your location.

• Updates/Upgrades-Equally important as system support is the frequency and adequacy of software updates and upgrades.   Updates and upgrades are necessary to correct system flaws, improve system performance, and address regulatory and other requirements.  They should be made available on a regular schedule with sufficient advance notice to minimize disruptions to your operations.  Ask for the history of upgrades and updates and the date of the last major upgrade for the version you are purchasing.  The vendor should be able to show that minor updates have been made every month or so, and that major upgrades are done approximately once per year.

Guarantee—Despite your efforts in researching the best software and vendor, you may find that the system you purchased does not work as you expected.  Once the software company has installed the software and received payment, it can be very difficult to get a refund.  An additional complication may arise if custom modifications have been included in the purchase.  Carefully review the contract terms for the time period for a full or partial refund.  Remember that the implementation costs are separate from the software purchase and will likely not be refundable, if you decide that you want to return the software.  Carefully negotiate the contract to ensure you have a guarantee of satisfaction with reasonable time frames to make that determination.

Software for your business is a major investment which is costly to purchase and maintain.  Your software vendor will be a long time business partner.  Avoid making mistakes that you will have to live with for years by researching the product and vendor before you buy.