Fair Labor Standards Act (FLSA)

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Fair Labor Standards Act (FLSA)

• Presented by the
• U.S. Department of Labor Wage Hour Division

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Major Provisions

• Minimum Wage
• Overtime Pay
• Child Labor
• Recordkeeping

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Coverage
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Coverage under the FLSA

• Individual
• Enterprise

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Enterprise Coverage

• A firm with an annual dollar volume of sales or
  business done of at least 500,000
• or
• Is engaged in the operation of
• A hospital
• A nursing home

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Enterprise Coverage

• A school for mentally or physically handicapped
  or gifted children
• A public or private elementary or secondary
  school or institution of higher education (profit
  or non-profit)
• A pre-school,
• or is
• A Federal, State, or local government agency

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Individual Coverage

• Employees engaged in
• Interstate Commerce
• or
• The production of goods for interstate commerce
• or
• In a closely-related process or occupation
  directly essential (CRADE) to such production

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Minimum Wage
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Minimum Wage

• Covered, non-exempt employees must be paid not
  less than the MW for all hours worked
• Currently 6.55 per hour
• Cash or equivalent free and clear
• Each week stands by itself, although there is no
  requirement to pay weekly

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Minimum Wage

• What counts as contributing to the MW
• Wages (salary, hourly pay, commissions, piece
  rate earnings)
• Reasonable cost of room, board and other
  facilities provided by the employer for the
  employees benefit
• Tips (currently up to 4.42 per hour) received by
  eligible tipped employees

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Deductions

• Deductions made primarily for the benefit or
  convenience of the employer for such items as
• Cash or merchandise shortages
• Employer required uniforms
• Tools of the trade
• Are illegal to the extent that they reduce the
  wages of employees below the MW or reduce the
  amount of OT pay due

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Overtime Pay
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Overtime Pay

• Due to covered, non-exempt employees
• Calculated at time and one-half the employees
  regular rate of pay
• Required for each hour worked in a workweek in
  excess of the maximum allowable in the given type
  of employment (usually 40 hours per workweek)
• Workweeks may not be averaged

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Overtime Pay

• Regular Rate (RR)
• It is a rate per hour
• Is determined by dividing total earnings for all
  hours worked in any work week by the total number
  of hours worked in the week
• It may not be less than the applicable MW
• If RR is higher than the MW, OT must be computed
  at the higher rate

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Overtime Pay

• Regular Rate (continued)
• Includes all remuneration for employment except
• Gifts, such as Christmas or Birthday money
• Payments for time not worked, such as holiday or
  vacation pay
• Discretionary bonuses
• Profit sharing plans
• Talent fees
• Premium payments
• Stock options

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Compensatory Time Off Instead of Overtime Pay
(Comp Time)

• Private employers may not use comp time to meet
  FLSA OT requirements
• Public Agencies may offer comp time if
• Provided at one and one half hours off with pay
  for each hour of overtime worked
• Done pursuant to a CBA or prior agreement
• Accrued time does not exceed maximums

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Exemptions
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Child Labor
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Minimum Age Standards

• 18 and above
• No limitations
• Minimum for occupations declared hazardous by the
  Department of Labor
• 16 and 17 year-olds
• General minimum for employment
• Limited to non hazardous occupations
• No limitations on hours or time

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Minimum Age Standards(Continued)

• 14 and 15 year-olds
• Minimum age for employment in specified
  occupations
• Limited to work outside school hours
• Total work hours limited per day and per week
• Only non-hazardous and non-manufacturing jobs
• Under 14 years of age
• Work only in jobs that are exempt from or are not
  covered by the FLSA
• NOTE Rules differ in agricultural employment

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Public Sector Volunteers

• With Same Employer
• May volunteer in any capacity other than to do
  their normal job
• May not volunteer to perform the services which
  they are employed to perform
• With Different Employer
• May volunteer to perform the same services that
  they are employed to perform by another employer

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Private Sector Volunteers

• Individuals who volunteer or donate their
  services
• ?for public service, religious, or humanitarian
  objectives
• ?not as employees
• ?without contemplation of pay
• are not considered as employees of the religious,
  charitable and similar nonprofit corporations
  which receive their services

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Hours Worked Under the FLSA

• Covered, non-exempt employees must be paid for
  all hours worked in a workweek
• Hours Worked, generally include all the time an
  employee is
• ? Required to be on duty
• ? Required to be on the employers premises, or
  any other prescribed place of work
• ? Allowed (suffered or permitted) to work

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Hours Worked Under the FLSA

• It is the duty of management to exercise its
  control to see that work is not performed if it
  does not want it to be performed

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Examples of FLSAHours Worked

• Attendance at meetings, lectures, training
  programs and similar activities unless all of the
  following criteria are met
• ? Attendance is outside the employees regular
  working hours
• ? Attendance is voluntary
• ? Activity is not related to the employees job
• ? No productive work is done during the activity

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Examples of FLSAHours Worked

• Work done in the home if the employer knows or
  has reason to believe the work is being performed
• Work done during lunch periods
• Work done before or after scheduled hours
• Rest periods of 20 minutes or less

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Examples of FLSAHours Worked

• Get ready work prior to the start of the shift
• Clean up work after the end of a shift
• The entire meal period, if the employee is not
  completely relieved from all duties and
  responsibilities
• Transporting or delivering materials or equipment
  to a job site prior to the start of the workday

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Examples of FLSAHours Worked

• Returning materials or equipment after the end of
  the workday
• Transporting employees to worksites, office, or
  to their homes, either before or after the paid
  workday, at managements request or directive
• Travel from job site to job site during the
  workday

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Examples of FLSA Hours Worked

• On call time by an employee who must remain on
  the employers premises or so close thereto that
  he/she cannot use the time effectively for
  his/her own purposes

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Recordkeeping
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Recordkeeping

• Maintaining good records is essential to proper
  compliance
• Records need not be kept in any particular form
  and time clocks are not required
• Payroll records must be kept for 3 years and the
  time cards and wage computation records must be
  kept for 2 years
• An accurate record of the hours worked each day
  and total hours worked each week is critical to
  avoiding hours worked problems

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Required Records

• Employees name, home address, occupation, sex,
  and birth date if under 19 years of age
• Hour and day when workweek begins
• Total hours worked each workday and each workweek
• Total daily or weekly straight time earnings

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Required Records

• Regular hourly pay rate for any week when
  overtime is worked
• Total overtime pay for the workweek
• Deductions from or additions to wages
• Total wages paid each pay period
• Date of payment and period covered

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Common Errors to Avoid

• Assuming that paying a salary automatically makes
  an employee exempt
• Failing to pay for all hours an employee is
  suffered or permitted to work
• Limiting employees to reporting 40 hours (or
  limited overtime) and directing them to get the
  job done and ignoring the time it takes to
  accomplish the task

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Common Errors to Avoid

• Failure to pay for pre or
  post shift work activities
• Confusing federal and state law
• Improperly applying an exemption
• Failure to include all types of pay received in
  calculating an employees regular rate for OT
• Treating an employee as an independent contractor

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Common Errors to Avoid

• Not totaling work done in separate employer
  establishments when calculating OT due
• Making illegal deductions from wages --
  shortages, drive-offs, damage, tools, uniforms,
  etc. -- that cut into the required MW or OT
• Deducting rest breaks from work hours

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Common Errors to Avoid

• Employee works during meal break and is not paid
• Employee takes work home and the hours are not
  recorded or paid
• Not paying for compensable travel time
• Not paying for employee meetings

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The FLSA Does Not Require

• Vacation, holiday, severance
  or sick pay
• Meal or rest periods, holidays off, or vacations
• Premium pay for weekend or holiday work
• A discharge notice, reason for discharge, or
  immediate payment of final wages to terminated
  employees
• Any limit on the number of hours in a day or days
  in a week an employee at least 16 years old may
  be required or scheduled to work
• Pay raises or fringe benefits

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ADDITIONALINFORMATION

• Visit the WHD homepage at www.wagehour.dol.gov
• Call the WHD toll-free information and help-line
  at 1-866-487-9243
• Use the DOL interactive advisor system -
  ELAWS(Employment Laws Assistance for Workers and
  Small Businesses at www.dol.gov/elaws
• Call or visit the nearest Wage and Hour Division
  Office

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED LAWS

• Government Contracts
• Davis-Bacon and Related Acts (DBRA)
• Walsh-Healey Public Contracts Act (PCA)
• McNamara-O'Hara Service Contract Act (SCA)
• Contract Work Hours and Safety Standards Act
  (CWHSSA)
• Copeland Anti-Kickback Act

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED LAWS-
CONTINUED

• Agricultural Employment
• Migrant and Seasonal Agricultural Worker
  Protection Act (MSPA)
• Field Sanitation Provisions of OSHAct
• H-2A, Agricultural Guest-Worker Provisions, of
  Immigration and Nationality Act (INA)

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED LAWS-
CONTINUED

• Immigration and Nationality Act
• I-9 Provisions (Work eligibility verification)
• and Contractual Obligations for
• D-1 (Alien Crewmembers Performing Longshore
  Activities)
• H-1B (Specialty Occupations)

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED LAWS-
CONTINUED

• Miscellaneous
• Family and Medical Leave Act (FMLA)
• Wage Garnishment Provisions of Consumer Credit
  Protection Act (CCPA)
• Employee Polygraph Protection Act (EPPA)
• Wage Provisions of National Foundation on the
  Arts and Humanities Act