Are You Violating the Fair Labor Standards Act? You probably are and don’t know it! Be brave; take the “FLSA Challenge!”
The Fair Labor Standards Act of 1938 (FLSA) establishes federal standards for overtime pay, the minimum wage, child labor, and related record keeping requirements. The Act is complex, antiquated, and difficult to apply in today’s workplace. Consequently, employer violations of the FLSA are common and many organizations violate the law without knowing it. Failure to comply with the FLSA can be very costly, as it may affect a large number of your employees and penalties may extend over a lengthy time period.
The FLSA can be challenging for even experienced HR professionals to apply. Most managers have little, if any, understanding of the Act. The following materials are intended as a review of some key FLSA issues and to identify some of the pitfalls, quicksand, and traps along the way.
Paying employees is not as simple as it appears. Complex federal and state laws and regulations govern compensation practices. Making even one of the following mistakes can cost you a lot in money, time and bad publicity. Go to www.dol.gov for good information regarding federal Fair Labor Standards Act (FLSA) requirements.
- What Do You Mean I Have To Pass A Test? Or, Tales From Exempt Employees Who Aren’t. Many organizations have some employees misclassified as exempt who are really nonexempt and must be paid overtime. Remember, the Department of Labor has very specific tests that must be met before an employee may be classified as exempt.
- We’ll Just Pay Her A Salary, That Way There’s No Overtime. Or, Return Of Exempt Employees Who Aren’t. The FLSA exemption tests include specific job duties and requirements. Simply paying someone on a salary basis vs. an hourly wage doesn’t make her exempt from overtime.
- That’s Not Really Work Time. Failing To Pay Nonexempt Employees For “Hours Worked.” Starting early, working late, working through lunch, or doing work at home would all be “hours worked” and considered paid time. Employees can’t “volunteer” to work a little extra or to work “off the clock.” Don’t forget about travel time and training which can also be compensable under certain circumstances.
- Oh, It’s Close Enough. Not Correctly Tracking Overtime. Do you have an accurate system in place? Is it reliable? Consistent? Do you “round” appropriately?
- Take Next Friday Off. Using “Comp Time” Improperly. Private sector employers need to be especially careful regarding “comp time.” Basically, in those settings, compensatory time only exists within the workweek. Comp time can’t be given instead of overtime. The public sector works under some different rules. (more…)
State and federal wage and hour law is difficult for even the best HR people to correctly administer. All of us are faced with ensuring that rest and meal break rules are understood and adhered to. While the rules aren’t terribly complex they can be tricky. They certainly can be sensitive as they involve two things highly valued by employees- breaks and pay. Therefore they deserve periodic attention. Serious and costly consequences can result if something as seemingly simple as the law surrounding rest breaks isn’t followed.
Remember the Minimum Wage Increase. Don’t forget that the 2007 amendments to the Fair Labor Standards Act require that the federal minimum wage must be increased from $6.55/hour to $7.25/hour on Friday, July 24. Your state law may require an even greater rate.
The current economic downturn has forced many employers to be creative about cutting labor costs. Various approaches including implementing reduced workweeks, furloughs, requiring that vacations be taken, etc., have been employed to avoid layoffs and retain skilled workforces. That’s all painful enough, but beyond the administrative costs, morale issues, and headaches associated with such plans are there other things to worry about? Given that you are a savvy HR professional or manager, you are well aware that there are always other things to worry about when dealing with human resource issues.
Ensuring compliance with the Fair Labor Standards Act (FLSA) by carefully maintaining exempt employees’ status can be tricky. But then again just everything about the FLSA is tricky. A few things to ponder are found below. (more…)
In another example that no organization is immune from Fair Labor Standards Act complaints, several “exotic dancers” at the Spearmint Rhino and other Los Angeles area clubs have alleged that they have not been paid minimum wage and have been misclassified as independent contractors. The dancers’ made their allegations under the name of the “California Coalition of Undressed Performers.” That didn’t sit well with the court that found that for the dancers to pursue their case they’d have to provide their real names- no pseudonyms. No word on how that will turn out. [Exotic Dancers v. Spearmint Rhino, C.D. Cal.]
Who knew that there would be HR lessons to be found in the world of porta potties? Apparently wage and hour law knows no bounds. According to the New York Daily News, a portable potty company, Call-A-Head, has found itself in the middle of a class action lawsuit. Employees claim that they were required to clean 100 toilets each day, which often took 15 hours to complete although they were paid for 10 hours daily. It’s alleged that the company had used hiring ads offering to pay $1000 weekly for 4 ten hour days of work. It is also claimed that employees were required to clock in but couldn’t clock out. The employees are seeking back overtime which could be over $1 million. The company denies the charges.
What can be learned from this case so that you can avoid flushing your profits along with your reputation in a Fair Labor Standards Act (FLSA) lawsuit?