Are You Properly Paying Your Employees?

October 19, 2020 at 9:39 am Leave a comment

Good morning, folks. Here are some things to consider as you start your credit union day.

Are you properly paying your employees?

That’s the question that I’ve decided to bring to your attention this morning. After reading a complaint (subscription required) against Investor’s Bank in New Jersey in which employees seek to bring a class-action against a lender for violating the Wage and Hour Provisions of the Fair Labor Standards Act and corresponding New Jersey state law. In the lawsuit, the non-exempt employees were responsible for opening up the bank’s branches. As a matter of policy and procedure, this included going through several security protocols before logging on to their computers and officially clocking in. The employees are seeking back pay for the unpaid labor, as well as liquidated damages for what they contend is a willful violation of the law. Now, don’t get me wrong – there is nothing particularly novel about this lawsuit or its claims. However, labor law experts are quick to point out that wage and hour violations are one of the more common and expensive mistakes that employers can make. For what it’s worth, I also see cases like this accelerating now that so many more of your employees are clocking in remotely. 

High Noon for a Stimulus Bill

House Speaker Nancy Pelosi has given Republicans a Tuesday deadline for agreeing to new stimulus legislation before the elections. The question is, will President Trump, who seems more than willing to compromise on a higher stimulus number, be able to convince enough Senate Republicans to give him this win? Stay tuned, and let’s remember that this political discussion has real-life consequences for your credit union and membership. 

Sherrod Brown Sounds the Alarm

Speaking of bad economic conditions, David Baumann’s blog this morning gave me a heads up about a letter Senator Sherrod Brown, ranking member of the Senate Banking Committee, sent to financial regulators. The NCUA, along with others, received this correspondence expressing concern about the fragile state of the US economy and asking the regulators what they are doing to prepare for a potential economic meltdown. According to Brown, “‘Watchful waiting’ and deregulation are insufficient regulatory responses to the myriad stressors in the financial system.” He ends the letter with a series of questions he wants answers to by October 28th, including:

1. What compliance, operational, and other risks does the public health crisis pose to your agencies’ ability to handle a potential financial crisis? What concrete steps have your agencies taken individually and on a coordinated basis to address these risks?

 2. How are your agencies monitoring and addressing concentration risks with respect to leveraged lending, household and consumer debt, credit card debt, and the mortgage and commercial real estate markets? What are your agencies doing to monitor and address exposure to fragility in the funding markets, particularly the overnight repurchase market? What other emerging risks have you identified?

 3. What preparations have your agencies made if it needs to resolve failed banks or credit unions, including in a widespread failure scenario involving G-SIBs, large regional institutions, and community banks? What specific table-top exercises have your agencies participated in to ensure you are operationally prepared to wind-down a failing bank or credit union?

NCUA Needs Vendor Oversight, but Not Right Now

In my last blog about NCUA’s most recent board meeting, I forgot to point out that Chairman Hood reiterated his support for legislation which would give NCUA direct oversight over credit union vendors, but, he also noted that he did not think the reform should come while the industry deals with the pandemic. Stay tuned.

Entry filed under: Compliance, COVID-19, Economy, Federal Legislation, Regulatory. Tags: , , , , .

Having “the Talk” … with your IT Team Has COVID-19 Killed CECL?

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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