​The Small Business Blog

In July 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order ("Executive Order"), which "seeks to increase efficiency and cost savings in the work performed by parties who contract with the Federal Government by ensuring that they understand and comply with labor laws.  In particular, the  Executive Order applies to contracts in excess of $500,000 and requires contractors to disclose labor violations within the past three (3) years.  In addition, procuring agencies will need to take violations into consideration in determining whether to award a contract.

In our prior blog post titled Compensable Time:  Do Employers Have To Pay Employees For Time Spent Going Through Security, we reported that the United States Supreme Court had just heard oral arguments in the case of Busk v. Integrity Solutions, Inc., a Ninth Circuit case that presented the question of whether employers are required to compensate employees for the time spent going through security (in Busk, the security screenings were post-shift screenings that all employees were required to complete before leaving the premises). Yesterday, in a unanimous decision, the Supreme Court held that under the Fair Labor Standards Act (FLSA), time spent by employees waiting to undergo and undergoing security screenings is not compensable.

Of late, worker misclassification has been and will likely continue to be a "hot" topic of discussion.  Worker misclassification occurs primarily in one of two situations:  (1) an employer incorrectly classifies an employee as exempt/non-exempt; or (2) an employer incorrectly classifies an individual as an independent contractor.   Classifying a worker seems pretty straightforward - so what's the issue right?  The problem is that there a financial incentive for employers not to classify workers correctly.  In particular, worker misclassification essentially provides employers with the ability not to pay overtime, employment taxes, insurance and other costs associated with employee benefits, thereby transferring the tax burden and other risks to the employee. 

On October 8, 2014, the U.S. Supreme Court heard oral arguments in the case of Busk v. Integrity Staffing Solutions, Inc., 713 F.3d 525 (9th Cir. 2013), where they will decide whether employers will be required, in accordance with the Fair Labor Standards Act (FLSA), to compensate employees for the time employees spend going through security at the end of their shift.  On its face, the answer to the question of compensation for that time seems straightforward (either yes or no) - however, as with most things in law, nothing is ever straightforward.  We recently addressed a similar issue with one of our clients, a federal government contractor, so we thought it might be an issue that other government contractors would be interested in hearing about.