FLSA PROVISIONS & PITFALLS. Joe Gorfida, Jr. Main Office: (214) Direct Dial: (214)

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1 FLSA PROVISIONS & PITFALLS Joe Gorfida, Jr. Main Office: (214) Direct Dial: (214)

2 THE FAIR LABOR STANDARDS ACT ( FLSA ) Passed in 1938 Established minimum wage for non-exempt ($7.25) Overtime Regulates child labor Guarantees equal pay Imposes recordkeeping standards

3 EMPLOYEES NOT COVERED UNDER THE ACT (OUTSIDE FLSA AUTHORITY) Individual contractors Volunteers Trainees

4 EXEMPT VS. NON-EXEMPT Job title alone is insufficient to establish the exempt status of an employee (29 CFR 541.2)

5 EXEMPT EMPLOYEES Executives Administrators Professionals The above are subject to the Standard Salary Test. Employee who earns less than $455 per week ($23,660 per year) is automatically entitled to overtime pay regardless of his/her position.

6 EXECUTIVE EXEMPTION Primary duty of managing the enterprise Customarily and regularly directs the work of two or more Authority to hire or fire other employees

7 ADMINISTRATIVE EXEMPTION Primary duty that includes the performance of office or non-manual work directly related to the management or general business operations Has a primary duty that includes the exercise of discretion and independent judgment as to matters of significance

8 PROFESSIONAL EXEMPTION Primary duty is performance of work requiring knowledge of an advanced type Consistent exercise of discretion and judgment In a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction

9 HIGHLY COMPENSATED EMPLOYEE EXEMPTION Employees earning $100,000 who also perform one or more duties of an executive, administrator or professional

10 SEASONAL EXEMPTION Workers employed by amusement or recreation operations, if the establishment does not operate for more than 7 months in a calendar year Must meet certain annual earning requirements

11 HOURS WORKED

12 OVERTIME Overtime is based on time actually worked over 40 hours in an FLSA work week (Example: John worked 32 regular hours, took 8 hours of vacation and reported 4 hours worked overtime. John is not eligible to be paid time-and-one-half for the overtime hours, since John worked fewer than 40 hours in an FLSA work week.) FLSA work week consists of 7 consecutive 24 hour periods (168 hours) Each work week stands alone

13 OVERTIME SECTION 207(K): Partial Exemption for Overtime LAW ENFORCEMENT 28 days 171 hours (43 Hours in a 7-day work period) FIRE PROTECTION 28 days 212 hours (53 Hours in a 7-day work period)

14 REGULAR RATE OF PAY Is determined by dividing total earnings in the work week by the total number of hours worked in the work week

15 HOURS WORKED: ISSUES Suffered or Permitted Waiting Time On-Call Time Meal and Rest Periods Training Time Travel Time

16 SUFFERED OR PERMITTED Work time not requested but suffered or permitted then it is work time

17 WAITING TIME Counted as Hours Worked When: Employee is unable to use the time effectively for his or her own purpose; and Time is controlled by the employer. Not Counted as Hours Worked When: Employee is completely relieved from duty; and Time is long enough to enable the employee to use it effectively for his or her own purpose.

18 ON-CALL TIME On-Call Time is Hours Worked When: Employee has to stay on the employer s premises; and Employee has to stay so close to the employer s premises that employee cannot use that time effectively for his or her own purpose. On-Call Time is Not Hours Worked When: Employee is required to carry a pager; and Employee is required to leave word at home or with the employer where he or she can be reached.

19 MEAL & REST PERIODS Meal periods are not hours worked when the employee is relieved of duties for the purpose of eating a meal Rest periods of short duration (normally 5 to 20 minutes) are counted as hours worked and must be paid

20 TRAINING TIME Time employees spend in meetings, lectures or training is considered hours worked and must be paid, unless: Attendance is outside regular working hours Attendance is voluntary The course, lecture or meeting is not jobrelated The employee does not perform any productive work during attendance

21 TRAVEL TIME Ordinary home to work travel is not work time Travel time between job sites during the normal work day is work time

22 HOURS WORKED Are employees entitled to be paid for lunch time if they eat at their desks? Must employees who come in early for work be paid for that time? Is on-call time considered working? If the City pays the dues for an employee to be part of a certain organization and employee attends that organization s meetings, is the time attending meetings compensable?

23 HOURS WORKED An employee elects to attend a City Council meeting, is the time attending the meeting compensable? Employee is injured on the job, is the time waiting for treatment considered hours worked? Are paid sick days, vacation days, holidays, etc. considered compensable working time? The City is open despite bad weather, a nonexempt employee cannot make it to work, is the employee required to be paid?

24 NURSING MOTHERS Employers are required to provide reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child s birth Employer must provide a space, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public Can a temporary space be converted for this purpose?

25 INDEPENDENT CONTRACTOR (3 TESTS) 1. Economic Realities Test (FLSA) (Looks at worker s degree of economic independence) 2. Common Law Agency Test (NLRA) 3. Updated Right to Control Test (IRS) (Focus is on how much control the employer has over a worker)

26 VOLUNTEER STATUS To qualify as a volunteer under the FLSA, an individual most satisfy 3 conditions: 1. Must perform hours of service for civic, charitable, or humanitarian reasons without promise, expectation, or receipt of compensation for rendered services; 2. Services most be offered freely and without pressure or coercion, direct or implied, from an employer; and 3. Cannot be employed by the city to perform the same type of services for which he proposes to volunteer. *An individual who meets these criteria is considered a volunteer and not an employee who is subject to the FLSA minimum and overtime pay provisions.

27 CAN A VOLUNTEER BE COMPENSATED? City is allowed to pay expenses, reasonable benefits, and a nominal fee to bona-fide volunteers without jeopardizing their volunteer status

28 NOMINAL FEE Must not be a substitute for compensation or tied to productivity

29 TRAINEES Trainees are not employees under the Act if all 6 of the following are met: 1. the training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school; 2. the training is for the benefit of the trainees; 3. the trainees do not displace regular employees, but work under close supervision;

30 TRAINEES (cont d) 4. the employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion, his operations may actually be impeded; 5. the trainees are not necessarily entitled to a job at the completion of the training period; and 6. the employer and trainees understand that the trainees are not entitled to wages for the time spent in training.

31 INTERNS As a rule, the DOL will not consider students to be employees when they are involved in education or training programs that are designed to provide students with professional experience in the furtherance of their education and training; and, are academically oriented for their benefit.

32 FLSA PROHIBITIONS ON RETALIATION Any employee who is discharged or, in any manner discriminated against because the employee filed a complaint or cooperated in an investigation, may file a retaliation complaint with the DOL or may file a private cause of action (Reinstatement, lost wages, liquidated damages)

33 RECORDKEEPING An accurate record of the hours worked each day and total hours worked each week is critical to avoiding compliance problems (Example: Signed time sheets) FLSA requires that all employers make, keep and preserve records

34 ENFORCEMENT FLSA enforcement is carried out by Wage & Hour staff of DOL When violations are found, Wage & Hour advises employers of the steps needed to correct violations, secures an agreement to comply in the future and supervises voluntary payment of back wages as applicable A 2-year statute of limitations generally applies to the recovery of back pay. In the case of willful violations, a 3-year statute of limitations may apply

35 ENFORCEMENT DOL may bring suit to obtain an injunction to restrain the employer from violating the FLSA Suit for back wages and liquidated damages

36 QUESTIONS???????