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Module 1.2 Fair Labor Standards
paytrain module 1.2
Terms in this set (66)
4 Enforcements of FLSA - "The FLSA DOES"
1.sets the minimum wage and overtime rates covered employees must receive for their work;
2. requires record keeping by all covered employers;
3.places restrictions on the types of work minors can do and the hours they can work; and
4.mandates equal pay for equal work.
3 Non Enforcements of FLSA - "THE FLSA DOES NOT"
1. require employers to provide paid vacations, sick days, jury duty leave, holidays, lunch breaks, or coffee breaks;
2. regulate how often employees must be paid, or when they must be paid after employment termination (voluntary or involuntary); or
3.restrict the hours that employees over 16 years of age may be required to work.
1. at least two employees of the business are employed in jobs closely related and directly essential to interstate commerce or the production of goods for interstate commerce; and
2. the business has annual gross sales of at least $500,000.
if they are engaged in interstate commerce or in the production of goods for interstate commerce.
Interstate commerce is any trade, transportation, or communication between one state and another state or a foreign country.
White Collar Exemption - Admin
performing nonmanual or office work directly related to the management or general business operations of the employer or the employer's customers; or
performing work that is directly related to academic instruction or training carried on in the administration of a school system or educational institution.
Exempt administrative employees' primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.
Exempt administrative employees must be paid at least $455 per week on a salary or fee basis.
White Collar Exemption - Management
Directly related to management or general business operations
FLSA White collar exemptions
1.Directly related to management or general business operation
2.work directly related to assisting with the running or servicing of the business, as distinguished from working on a production line in a manufacturing facility or selling products in a retail or service establishment.
Salary Requirements for Exempt Employees
$455 per week.
Highly compensated employees
with total annual compensation of $100,000 or more
and performing non-manual work
customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employ
does not apply to outside sales and computer employees under the regulations.
Salary Basis Test
The regulations contain a "salary basis" test under which exempt employees must be paid their full salary regardless of "variations in the quality or quantity of the work performed." The rules prohibit deductions from exempt employees' pay for partial day absences.
The regulations allow an exception to the no-pay-docking rule for deductions for disciplinary suspensions of one or more full days for "infractions of workplace conduct rules." For example, an employer may suspend an exempt employee without pay for reasons such as sexual harassment, workplace violence, drug or alcohol violations, or violations of state or federal laws as appropriate to respond to the misconduct
The regulations also create a safe harbor provision. If an employer has a clearly communicated policy prohibiting improper pay deductions that includes a complaint mechanism, reimburses employees for any improper deductions, and makes a good faith commitment to comply in the future, then the employer will not lose the exemption for any employee unless it willfully violates its policy by continuing to make improper deductions after receiving employee complaint
Family and Medical Leave Act (FMLA) Exception
Under FMLA regulations, exempt employees do not lose their exemptions merely because the employers provide unpaid FMLA leave of less than a day. The employers and the employees must be covered by the FMLA, and the leave must qualify as FMLA leave.
The federal minimum wage rate since July 24, 2009, is $7.25 per hour. All employees who are not exempt must be paid at least the minimum wage for all hours worked. Employees may be paid on a piecework, salary, or commission basis as long as their hourly wages equal or exceed the minimum wage.
a lower minimum wage for newly hired employees who are under the age of 20. This lower wage is $4.25 per hour. Teenagers may be paid this rate for the first 90 consecutive calendar days after they are hired.
A teenager hired on June 25 can be paid $4.25 an hour until September 23 (the 90th day after being hired). After that date, the pay rate must be increased to $7.25 per hour.
FLSA Wage Segregation
If, in a single workweek, an employee does some work that is covered by the FLSA and some that is not covered by the FLSA, the employee must be paid at least the minimum wage for all work done during that workweek
Minimum Wage Workweek
In determining whether an employee has been paid the minimum wage, the U.S. Department of Labor's Wage and Hour Division uses the workweek (discussed later in this module) as the basic unit of time.
Therefore, an employee's pay cannot be averaged over any period longer than one workweek to determine whether there has been compliance with the minimum wage requirement
State Minimum Wage
If the employer is covered by both state and federal law and the two are not the same, the employer is required to pay the higher minimum wage based on the state in which the employee works.
Uniforms - Minimum Wage Special Cases
When employees are required to wear uniforms that cannot be used as regular "street clothing" and the cost and maintenance of the uniforms would put the employee's pay below the minimum hourly wage, the employer must pay for the purchase, cleaning, and repair of the uniforms. If the uniform can be worn outside of work, the employer need not reimburse the employee, even if the employee's wages fall below the minimum.
Room and Board - Minimum Wage Special Cases
An employee's compensation may include room, board, or other facilities provided by the employer. These facilities may be used by employers to bring the employee's cash wages below the minimum wage rate, but only if all of the following conditions are met.
The employee must actually benefit from the facilities and accept them voluntarily.
The facilities must be supplied regularly to the employee or be regularly supplied by other employers in a similar business.
The facilities must primarily benefit the employee, not the employer.
The employer can deduct only the reasonable cost of the facilities from the employee's wages and cannot make a profit from providing the facilities.
Employees who regularly receive tips may be paid a lower rate of pay, when certain conditions are met, as long as their hourly rate of pay plus the tips received meets minimum wage requirements.
Tip Pay Requirements*
employers may pay tipped employees, who receive $30.00 in tips during a month, at least $2.13 per hour as long as the amount of the employee's tips is enough to raise the employee's regular rate of pay to the minimum wage for the workweek. If the tips are not enough to raise the regular rate of pay to the current federal minimum wage— $7.25 per hour effective July 24, 2009—for the workweek, the employer must pay the difference, ensuring the employee the minimum wage for the week.
Allowable Tip Credit*
When choosing between state law and the FLSA, employers must choose the law that is most favorable to employees. The employer must determine the minimum wage required under both federal and state law and then apply the one that provides the higher cash payment to the employee.
Regular Rate of Pay
The regular rate of pay is an hourly pay rate. It is figured by dividing the employee's total regular pay actually earned for the workweek by the total number of hours actually worked.
is an amount added to an hourly rate to compensate an employee for working an evening, a late night, or other undesirable shift
are contractual or agreed-upon bonuses or incentives related to production, efficiency, attendance, quality, or some other measure of performance.
If a bonus cannot be tied to specific work done, it must be allocated evenly to each workweek or to each hour worked during the period for which the bonus was paid, whichever method better fits the work situation.
An employer can avoid this recomputation of the overtime rate if, before the work is performed, a contract or bonus plan provides that the bonus will be paid as a "percentage of total earnings, which includes both regular pay and overtime premium."
are bonuses paid for services performed. Such bonuses are called discretionary because whether to pay the bonus and the amount of the bonus are at the employer's discretion. In order to be considered discretionary, the bonus cannot be paid because of an employer's promise made in advance, a contract, or another agreement.
paid for working more than eight hours in a single day or for hours worked in excess of the employee's normal working hours for the workweek need not be included in calculating the employee's regular rate of pay. In addition, paid hours for time not worked (e.g., vacation or sick time) do not need to be included. These types of overtime premiums can be more or less than 150% of the regular rate, and the employee's working hours do not have to be more than 40 hours to receive them.
Requirements for a Changing Workweek
Although the FLSA encourages employers to establish permanent workweeks, changes to the workweek may be necessary to meet changing business needs. To ensure that employees receive all overtime pay to which they are entitled when workweeks change, several steps must be taken.
Add overlapping days to the old workweek, then calculate overtime hours and pay for both the old and new workweeks.
Add overlapping days to the new workweek, then calculate overtime hours and pay for both the old and new workweeks.
Pay the employee the greater amount from Step 1 or Step 2.
Assume that an employer changes its workweek from Monday through Sunday to Sunday through Saturday. A nonexempt employee works the following hours during a two-week period.
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
0 8 8 8 8 8 8
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
8 8 8 8 8 0 0
The employee's overtime is calculated as follows.
Add overlapping day (Sunday) to the time worked during the old workweek (40 hours + 8 hours = 48 hours).
Add overlapping day (Sunday) to the time worked during the new workweek (8 hours + 32 hours = 40 hours).
Pay overtime based on the greater of the two amounts (48 hours).
Interns: 6 Exceptions
Primary beneficiary of the activity.
Employees are paid overtime for hours worked over 40 in a single week, and
The fixed weekly salary is high enough to ensure that even when employees work a large number of hours, their hourly pay rate does not fall below minimum wage
Compensatory Time Off in Lieu of Overtime Pay
One narrow exception allows private-sector employers to provide time off for employees who have worked overtime as long as the time off occurs within the same pay period. To keep their costs down, private-sector employers can give employees time off (at least 1½ hours off for each overtime hour worked) in the same pay period the overtime was worked.
Compensatory time off is compensation, or "pay" received as time off rather than monetary payment for overtime hours worked by the employee. When employees are paid either biweekly, semimonthly, or monthly, the employer can give compensatory time off, as long as the time off is given within the same pay period that the overtime is worked.
8/80 Rule (3 conditions)
The FLSA contains an exemption to the workweek standard for hospitals and nursing homes that is designed to give them more flexibility in scheduling. The law allows such employers to use a 14-day period, rather than a workweek, for determining overtime compensation. Additionally, this extended period can be used for different groups of employees as the employer sees fit. The following three conditions must be met for the exemption to apply.
1. There must be an agreement or understanding between the employer and the employees that the 14-day period will be used before work is performed, and there must be a record of the agreement.
2. If the agreement or understanding is not in writing, the employer must keep special record of it.
3.The employer must pay employees covered by the agreement or understanding at least 1½ times their regular rate of pay for all hours worked over eight in a day or 80 in the 14-day period, whichever would result in higher pay for the employee.
Public Sector Compensatory Time Off (5 conditions)
If certain conditions are met, public sector employers—state and local government employers—can give their non-exempt employees compensatory time off (comp time) rather than paying the FLSA's overtime premium.
1. There must be an agreement between the employer and the employees before any work is done. The employer may agree to different plans with different employees.
2. Employees must be allowed to take compensatory time off that is owed to them within a reasonable period of time.
3. Upon termination, employees must be paid for all compensatory time owed them at the higher of their current rate of pay or the average rate of pay paid to the employee over their last three years of employment. All compensatory time due an employee must be paid at the time of termination, even if the termination is voluntary.
4. Most public employees can accumulate up to 240 hours of compensatory time off (160 overtime hours worked). Any overtime hours worked beyond that point must be compensated for in cash.
5. The maximum number of compensatory overtime hours that can be accrued for employees engaged in public safety, emergency response, and seasonal activities is 480 hours (320 overtime hours worked). This exception includes law enforcement officers, firefighters, emergency medical personnel, and seasonal workers whose jobs are subject to regularly recurring periods of peak demand.
Public Sector Compensatory Time Off (Exceptions)
Not all work performed by public sector employees must be included when determining whether overtime pay or compensatory time off is due employees. The exceptions are listed below.
1. If employees work occasionally on a part-time basis for the same public agency in a different job, the hours in that job can be excluded from the overtime calculation. The part-time job cannot be regular or in the same field as the employee's regular job.
2. Employees that work for the same public agency in the same capacity may voluntarily "trade time" with another employee. If the "substitution" is voluntary, the hours worked by the substituting employee need not be included in any overtime calculations.
3. Time spent by a court reporter preparing a court transcript is not considered hours worked for the purpose of calculating overtime if:
the work is performed outside the employee's regular working hours; and
the employee is paid for preparing the transcript on a per page basis.
Public Sector Workweek (Firefighters and Police Officers Exception)
Public safety employees are also covered by another exception to the FLSA's overtime requirements. Where firefighters and police officers have a work period lasting from 7 to 28 consecutive days, no overtime pay or compensatory time off is due until the ratio of the number of hours worked to the number of days in the work period exceeds the ratio of 212 hours to 28 days (171 hours to 28 days for law enforcement officers
Overtime is defined as all time physically worked over 40 hours in a workweek. The FLSA requires that nonexempt employees be paid at least 150% of their regular rate of pay for all hours physically worked over 40 in a workweek.
The employee's overtime premium can be calculated based on the regular rate of pay or any rate that is greater than the regular rate of pay.
Overtime RATES of PAY
When calculating overtime and regular rates of pay, some payments to employees are excluded. Such payments include gifts, paid time off, reimbursed expenses, discretionary bonuses, and benefit plan contributions. These payments cannot be used to offset any overtime premiums due to the employee.
Acceptable Worktime Rounding Practices (Rounding Rules)
The Wage and Hour Division has accepted the practice of rounding off an employee's worktime, especially where time cards are used, to the nearest tenth (6 minutes) or quarter (15 minutes) of an hour. The practice must be used consistently, however, so that employees are compensated, over a period of time, for all time actually work
Calculate Hours Worked
A nonexempt employee's gross pay is based on the number of hours worked and the pay rates for the hours the employee works.
nonexempt employees must be compensated for all hours worked. If employers allow employees to work, the time spent working is compensable time, even if working the hours violates the company's policy for working overtime, and must be considered when calculating overtime pay due employees. No part of an employee's regular working hours can be disregarded for worktime, no matter how small the time may be.
if the employee is relieved of all responsibilities during the meal period
Generally, the meal period must be at least 30 minutes long to be considered nonwork time
Meal periods are not required under FLSA, but may be required by state law.
are generally shorter than meal periods (typically not longer than 20 minutes
Such breaks are not required by the FLSA, but may be required by state law.
On Call Time
Employees required to be on-call on the employer's premises must be paid for the time that they spend on-call, even though no productive work occur
Employees who merely have to leave word where they can be reached are not considered working while on-call. If employees are required to wear a pager or carry a cell phone and stay within a certain radius of the work site while on-call, but are not otherwise limited in conducting personal affairs, their on-call time is probably not compensable
Meeting and Training Time
...Attendance at lectures, meetings, seminars, and training sessions is worktime unless all the following conditions are met.
The event is held outside the employee's regular working hours.
Attendance is voluntary.
The event is not directly related to the employee's job.
The employee does not perform any productive work for the employer while attending.
Remedial Education Exemption
An employer may employ a worker for up to 10 hours over the 40-hour workweek without having to pay overtime if the extra hours are spent in a remedial education program.
Straight time pay (not overtime pay) must be provided for these extra hours.
employees who have not graduated from high school or attained an eighth grade level of education and must provide reading and other basic skills at an eighth grade level or below.
The program may not include any job-specific training. Employers must keep accurate records for these hours.
Travel time may be compensable worktime depending on the type of travel and its purpose. Most of the rules governing travel time are contained in the Portal-to-Portal Act and are applicable to employees covered by the FLSA (nonexempt employees).
Generally, the time an employee spends traveling from home to work and work to home is not worktime. A contract may require payment for home-to-work travel time, but the time is not considered hours worked for the purpose of calculating overtime unless it is specifically agreed to in the contract. The following are exceptions to the rule that travel between home and work is not considered worktime:
An employee who is already home from work is called out on an emergency call and must travel a substantial distance to get there.
An employee has a special assignment for one day in another city and travels outside the regular workday to get there and back; however, travel time from home to an airport or railroad station is not compensable time.
Time spent traveling as part of an employee's daily work activity is compensable worktime. This includes travel from one job site to another or travel from a designated meeting place to a job site. However, the DOL has ruled that nonexempt employees may be paid a lower rate (as low as the minimum wage) when traveling from one job site to the next.
An employee's use of an employer's vehicle for commuting and other incidental travel is not part of the employee's principal activities and is not compensable time.
Travel by an employee who will be away from home overnight is worktime only during those periods that the travel coincides with the employee's regular working hours (e.g., 9 a.m.-5 p.m.). This time is counted as hours worked even if it occurs on a non-working day (e.g., Saturday between 9 a.m. and 5 p.m.). Travel outside regular working hours in a plane, boat, bus, or automobile is not hours worked. If employees use their own car instead of public transportation for travel away from home, the employer can count as hours worked either the time spent driving or the time that would have been spent on public transportation during regular working hours.
Edgar's employer has a Sunday through Saturday workweek, and Edgar is regularly scheduled to work from 8 a.m. to 5 p.m. Monday through Friday, with one hour off for lunch. One week, Edgar must travel on Sunday from 10 a.m. to 4 p.m. (ET) to go from Atlanta to San Francisco for a Monday meeting and then work his regularly scheduled 40 hours from Monday through Friday. Edgar then returns home to Atlanta from San Francisco on Friday, leaving at 5 p.m. (PT) and arriving in Atlanta at 1 a.m. (ET) on Saturday. He is entitled to 5 hours of overtime compensation for the week because his travel time on Sunday (minus 1 hour for his regular lunch break) must be added to his regular work hours. His travel on Friday/Saturday is outside his regular work schedule, therefore he has a total of 45 hours worked for the week.
Preliminary and Postliminary Activities
Preliminary and Postliminary Activities
According to the Portal-to-Portal Act of 1947, activities that are "preliminary or postliminary" to an employee's principal work activity are not compensable worktime unless a contract or the employer's customs makes them compensable. Preliminary time is the time the employee spends getting ready for work. Postliminary time is the time the employee spends getting ready to leave work. This is not considered worktime unless the activities engaged in are essential to the employee's principal work activity.
If employees must change clothes for work on the employer's premises because of state law or company policy, the time spent changing clothes is hours worked. If the time spent changing is for the employees' benefit, it is not worktime. If employees are required by law or policy to shower or "clean up" after work, the time spent cleaning up is compensable worktime, unless the time spent is considered de minimis time.
Any time spent by an employee waiting for or receiving medical attention on the employer's premises or at the employer's direction during regular working hours is compensable worktime. Also, compulsory medical exams are compensable worktime whenever they occur.
De minimis time is time worked by an employee before or after regular working hours that is so insignificant it cannot be definitely measured. This time is not counted as worktime. To avoid employer abuses, the time period must be indefinite and last no longer than a few seconds or minutes.
Oppressive Child Labor
the employment of any child under age 18 in violation of the child labor restrictions of the FLSA and regulations issued under it.
Minors Under Age 18
No minor under age 18 can work in a job that has been declared hazardous by the Wage and Hour Division. Most of the jobs declared hazardous are in dangerous industries, such as mining, logging, woodworking, meat packing, and construction, or they involve dangerous machinery.
Minors age 14 and 15
1. cannot work during school hours
2.are limited to working 3 hours a day and 18 hours a week when school is in session
3.(8 hours a day and 40 hours per week when school is not in session).
4.They also can work only between 7 a.m. and 7 p.m. (expanded to between 7 a.m. and 9 p.m. from June 1 through Labor Day).
Child Labor Exemptions
-agricultural occupations, especially where the minor is employed by his or her parents.
-actors or performers in the movies, television, theater, or radio are exempt,
- homeworkers making Christmas wreaths
-batboy and batgirls
Employers can protect themselves from child labor violations by getting from the minor proof of age in the form of an age certificate approved or recognized by the Wage and Hour Division
Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act (FMLA) guarantees employees unpaid leave for the birth or adoption of children and for serious medical conditions of family members or themselves. Closely related to this act and the benefit it provides to employees are the sick and disability policies most mid-size and large employers provide.
FMLA EE Conditions
1. to care for a newborn or newly adopted or foster child,
3. to care for a child, spouse, or parent with a "serious health condition,"
3.o care for themselves if they have a serious health condition that makes it impossible for them to continue working, or
4.because of any qualifying exigency (situation) arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on active duty (or has been notified of an impending call or order to active duty), or
"eligible" employees of a covered employer may take unpaid leave, or substitute appropriate paid leave if the employee has earned or accrued it, for up to a total of 26 workweeks in a "single 12-month period" to care for a covered service member with a serious injury or illness
FMLA ER Conditions
applies to all private and public (government) employers with 50 or more employees, including part-timers and employees on leave or suspension, but not laid-off employees.
An employee at a facility with less than 50 employees may still be eligible for the leave benefits, if the employer has at least 50 employees working within a 75-mile radius of the facility.
FMLA EE Eligibility
To be eligible for leave benefits, employees must:
1.have been employed by the employer for at least 12 months (not necessarily consecutively), and
2.have worked at least 1,250 hours within the previous 12-month period
Serious Health Condition (FMLA)
"illness, injury, impairment, or physical or mental condition" involving inpatient care in a health care facility (including any period of incapacity or subsequent treatment related to the inpatient care) or continuing treatment by a health care provider.
The continuing treatment generally must involve a period of incapacity (for example, inability to work or attend school) of more than three consecutive calendar days and includes subsequent treatment by or under the supervision of a health care provider.
Intermittent Leave (FMLA)
An employee who needs to take leave because of an illness suffered by himself or herself, by a child, spouse, or parent on an intermittent or occasional basis may do so. This may be done by:
taking off a portion of a day, several days or weeks at a time, or
working reduced hours
Intermittent FMLA leave taken as reduced hours may be deducted from an exempt employee's salary without converting the employee into a nonexempt employee under the FLSA.
Use of Leave (FMLA)
Employers can require eligible employees to use any paid vacation, personal, sick, medical, or family leave as part of the 12-week guaranteed leave
The employer's notice to the employee that leave is being designated as FMLA leave may be oral or written. If the notice is oral, it must be confirmed in writing by the next payday (or by the following payday if the first payday is less than a week after the oral notice is given).
Benefits Continuing During Leave (FMLA)
Health insurance benefits the employee enjoyed before taking the leave must be continued during the FMLA leave on the same basis.
Employees who fail to pay can lose their coverage after 30 days, unless the employer's plan contains a longer grace period, but coverage must be restored when they return to work.
Job Guarantee Upon Return from Leave (FMLA)
An employee returning from leave is entitled to his/her previous job or one that is "equivalent", with no loss of pay or benefits accrued before the leave (with a limited exemption for highly paid employees)
Also, leave time, whether paid or unpaid, must be treated as continued service under pension and retirement plans for vesting and qualification purposes.
Record Keeping Requirements (FMLA)
In general, the FMLA requires employers to keep basic payroll records regarding hours worked, rate of pay, and deductions from wages, as well as records detailing the dates and amount of FMLA leave taken and copies of notices and documents related to FMLA leave. The records must be provided to U.S. Department of Labor officials on request, and must be kept by the employer for at least three years.
FMLA vs. other federal and state laws.
A number of states have laws requiring family and/or medical leave that are similar to the FMLA. Employers covered by both the FMLA and state law must comply with the law that provides the greatest benefits and protection to the employee requesting leave. T
Premiums During Leave (FMLA)
an employee making premium payments under a cafeteria plan who chooses to continue group health plan coverage while on FMLA leave is responsible for the share of group health premiums that the employee was paying while working, such as amounts paid under a salary reduction agreemenT
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