United States: Top Legal Issues Facing Automotive Suppliers In 2014 - Labor And Employment

Executive Summary

Manufacturers often employ thousands of workers. Many employment-related issues face suppliers in 2014. Some include finding qualified employees, properly classifying workers, and preventing retaliation claims. The risk in each area can be reduced through the creation and implementation of proper policies and procedures and ensuring that managers and employees are regularly trained and reminded of their employer's expectations.

1. FINDING QUALIFIED EMPLOYEES

Many suppliers are having difficulty finding qualified individuals to fill skilled manufacturing positions. It is a good problem to have, but a problem nonetheless. Part of the issue may stem from the fact that, because the resurgence of manufacturing was not widely predicted, the message to young people entering the workforce was to look elsewhere. Additionally, the high-skilled positions needed by next-generation manufacturers demand college degrees, sophisticated technical training, and/or apprenticeships. Educational institutions have not necessarily equipped potential employees with the skills to meet the needs of the evolving, and increasingly high-tech, manufacturing sector.

To combat this problem, employers must develop a long-term employee strategy that includes identifying future needs, developing a plan to meet them, and sticking with the strategy in spite of short-term pressures. Manufacturers must adapt their recruiting methods to today's environment, leveraging social media and recruiting talent overseas. New graduates need to be convinced that manufacturing offers a longterm career path. Creating a positive and high-energy work environment that encourages innovation and addresses generational changes will go a long way toward attracting and retaining key talent. Ensure that your hiring practices comply with the law.

Employers should also do their best to resist regular, demoralizing reductions in workforce to meet shortterm profit goals. And when reductions are necessary, they must be done carefully with an eye on preserving human capital needs. The culture should reward achievement through compensation and intangible recognition, and make quicker, but fair, decisions to end the employment of non-performers.

2. WAGE AND HOUR ISSUES

The Internal Revenue Service and U.S. Department of Labor — as well as plaintiff's attorneys — continue to focus on wage- and hour-related issues. For manufacturers, these issues can stem from a wide variety of areas. For example, employers may classify workers as independent contractors when they actually qualify as employees. Employers may be responsible for, among others, unpaid unemployment insurance premiums, workers' compensation premiums, and overtime if it is determined that such workers were improperly classified. There are many factors to evaluate when classifying workers, but, at its most basic, the more the employer controls about the relationship, the more likely it is that the worker should be classified as an employee. Audit your workforce regularly to ensure proper classification.

The second common wage and hour issue for manufacturers is off-the-clock work. Employers can be on the hook for additional wages, overtime, and applicable penalties should employees perform more than de minimus work during periods for which they receive no pay. These issues arise when non-exempt employees, for example, work during an unpaid lunch period or respond to emails after work hours. Often, such claims center around donning and doffing issues — the time spent putting on protective clothing before work and removing it after work. Enforcing strict policies and procedures regarding all such activities can lessen the risk.

3. RETALIATION CLAIMS

Employees who engage in protected activity — essentially complaining about conduct they reasonably believe is illegal — may perceive that they are treated worse or targeted after making such complaints. Retaliation claims from these employees continue to rise. Recent U.S. Supreme Court decisions have expanded the definition of protected activity, who is protected, and what constitutes retaliation.

Manufacturers must adopt no tolerance policies, making it clear that they prohibit retaliation in any form. Train managers about what constitutes retaliation and how to avoid it. Limit those who know about the protected activity to the extent possible. And remember, taking adverse action against a person who is not a whistleblower, but is close to a whistleblower, will likely still be considered unlawful retaliation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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