Top FLSA Trending Topics #FLSA #hottopics #wageandhourlaw

Transcription

1 Top FLSA Trending Topics #FLSA #hottopics #wageandhourlaw

2 Basic Requirements of the FLSA The FLSA has two primary requirements: (1) that employers compensate their hourly employees at no less than the prevailing federal minimum wage (currently $7.25/hr.); and (2) that employers pay a rate of one and onehalf times the employee s normal hourly rate for all hours worked in excess of forty (40) in a week for non-exempt employees.

3 What the FLSA does not require The FLSA does not require employers to establish a set work shift or work hours for employees. The FLSA does not limit the number of hours in a day or the number of days in a week that an employer may require an employee (who is at least 16 years of age) to work or the number of overtime hours that an employee may be scheduled.

4 What the FLSA does not require The FLSA does not require the payment of overtime for hours worked on weekends, holidays or regular days of rest (unless the hours worked cause a nonexempt employee to exceed forty (40) hours in a work week). The FLSA does not require the payment of premium overtime pay based on hours not worked. For example, paid time off is not counted towards hours worked The FLSA does not require compensatory time for salaried employees who work beyond the normal work week.

5 Exempt versus Non-Exempt Exempt Minimum wage and overtime requirements do not apply, provided that certain underlying conditions are met Employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Specific job duties and salary must meet all the requirements of the FLSA for the exemption to apply job titles do not determine exemption Non-Exempt Enjoy all of the protections provided by the FLSA Generally paid on an hourly basis and are entitled to receive overtime equal to time and one-half for all hours worked over 40 hours in a workweek.

6 Exempt classifications To qualify for an FLSA exemption, employees generally must meet certain tests regarding their job duties, and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee s specific job duties and salary must meet all the requirements of the DOL s regulations.

7 Exempt classifications There are several classifications of employees that fall under the FLSA exemptions, including executive, administrative, professional, computer employee, outside sales, and highly compensated employees. As a general matter, such exemptions are narrowly construed.

8 Primary duty test In order to claim an employee as exempt, the employee s primary duties must fit within the duties of one of the exempt classifications. Primary duty is defined as the principal, main, major or most important duty that the employee performs. This determination must be made on a case-bycase basis considering all of the facts in a particular case, and placing major emphasis on the character of the employee s job as a whole.

9 Primary duty test The regulations list a number of factors that a court may consider when determining the primary duties of a position, including, but not limited to: (1) the relative importance of the exempt duties as compared with other types of duties; (2) the amount of time spent performing exempt work; (3) the employee s relative freedom from direct supervision; and (4) the relationship between the employee s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

10 Primary duty test The amount of time spent performing exempt work versus nonexempt can be a useful guide in determining whether exempt work is the primary duty of an employee. Thus, employees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement.

11 Categories of Employees Non-Exempt Employees: Custodial/maintenance workers Bus drivers Food service workers Secretaries Instructional assistance Exempt Employees: Administrators Learned professionals (social worker, school psychologist) Computer employees Teachers

12 Exempt Status of Teachers as Professionals Teachers. The term employee employed in a bona fide professional capacity in section 13(a)(1) of the Act also means any employee with a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge and who is employed and engaged in this activity as a teacher in an educational establishment by which the employee is employed.

13 Teacher Exemption Cont. Exempt teachers include, but are not limited to: Regular academic teachers; teachers of kindergarten or nursery school pupils; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrumental music instructors. Those faculty members who are engaged as teachers but also spend a considerable amount of their time in extracurricular activities such as coaching athletic teams or acting as moderators or advisors in such areas as drama, speech, debate or journalism are engaged in teaching. Such activities are a recognized part of the schools' responsibility in contributing to the educational development of the student.

14 Teacher Exemption: Certification The possession of an elementary or secondary teacher's certificate provides a clear means of identifying the individuals contemplated as being within the scope of the exemption for teaching professionals. Teachers who possess a teaching certificate qualify for the exemption regardless of the terminology (e.g., permanent, conditional, standard, provisional, temporary, emergency, or unlimited) used by the State to refer to different kinds of certificates. However, private schools and public schools are not uniform in requiring a certificate for employment as an elementary or secondary school teacher, and a teacher's certificate is not generally necessary for employment in institutions of higher education or other educational establishments. Therefore, a teacher who is not certified may be considered for exemption, provided that such individual is employed as a teacher by the employing school or school system.

15 Teacher Exemption: Salary Teachers are even exempt from the FLSA s salary basis requirement of $455 per week, which is the threshold salary that generally must be paid to an employee in order to properly classify the employee as exempt from the statute s minimum wage and overtime requirements.

16 Administrative Exemption Educational establishments. (a) The term employee employed in a bona fide administrative capacity in section 13(a)(1) of the Act also includes employees: (1) Compensated for services on a salary or fee basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government) exclusive of board, lodging or other facilities, or on a salary basis which is at least equal to the entrance salary for teachers in the educational establishment by which employed; and (2) Whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment or department or subdivision thereof.

17 Administrative Exemption (c) The phrase performing administrative functions directly related to academic instruction or training means work related to the academic operations and functions in a school rather than to administration along the lines of general business operations. Such academic administrative functions include operations directly in the field of education. Jobs relating to areas outside the educational field are not within the definition of academic administration.

18 Administration Exemption--Scope The Administrative Exemption includes the following: (1) Employees engaged in academic administrative functions include: the superintendent or other head of an elementary or secondary school system, and any assistants, responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the learning potential and achievement of students, establishing and maintaining academic and grading standards, and other aspects of the teaching program; the principal and any vice-principals responsible for the operation of an elementary or secondary school; department heads in institutions of higher education responsible for the administration of the mathematics department, the English department, the foreign language department, etc.; academic counselors who perform work such as administering school testing programs, assisting students with academic problems and advising students concerning degree requirements; and other employees with similar responsibilities.

19 Administrative Exemption--Exclusions Exclusions to the administrative function exemption include: (2) Jobs relating to building management and maintenance, jobs relating to the health of the students, and academic staff such as social workers, psychologists, lunch room managers or dietitians do not perform academic administrative functions. Although such work is not considered academic administration, such employees may qualify for exemption under or under other sections of this part, provided the requirements for such exemptions are met.

20 Compensation for hours worked Non-exempt employees must be compensated for all hours worked. Hours worked is generally defined as those hours when the employee is within the employ of the employer. The FLSA defines the term employ to mean suffer or permit to work. To suffer or permit to work means that if an employer requires or allows an employee to work, an employee must be compensated for the work time as hours worked.

21 Hours Worked An employee is required to work when directed to do so by his or her employer. An employee is allowed to work when the employer does not direct the employee to work but knows or has reason to believe that the employee is working.

22 Allowed to Work Time spent doing work not requested by the employer, but still allowed, is counted toward an employee s hours worked and must be compensated, if the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. For example, an employee who voluntarily continues to work through a lunch break or at the end of regular work hours to finish an assigned task. Also, an employee who takes work home to complete in the evening or on weekends in order to meet a work deadline.

23 Allowed to Work An employer s knowledge is measured in accordance with its duty to inquire into the conditions prevailing in its business. Courts inquire into whether the employer had an opportunity through reasonable diligence to acquire knowledge. Important to notify employees of work schedules and ensure that employees work only the scheduled hours. The technology problem

24 Guidelines to avoid off the clock work Limit non-exempt employee access to technology Establish and enforce policies prohibiting employees from working outside of regular work schedule without prior approval. Monitor time records to ensure compliance with policies. Have employees sign time records verifying that the recorded information is correct.

25 Employees as volunteers Public sector employees may volunteer to do different kinds of work in the jurisdiction in which they are employed, or volunteer to do similar work in different jurisdictions. For example, police officers can volunteer to perform non-law enforcement related work in city parks and schools in the county by which they are employed, or can volunteer to perform law enforcement and other types of work for a different county than where they are employed. There must be no coercion or undue pressure on the employee to perform the volunteer services.

26 Employees as Volunteers Under the DOL s regulations, the same type of services are those services which are similar or identical to those which the employee is paid to perform. An employee who voluntarily stays after the end of a work shift to finish an assigned task or prepare a report is generally entitled to compensation for the hours worked.

27 Analysis of District Employees Are employees improperly classified as exempt when they should be non-exempt? Are non-exempt employees being compensated for all hours worked? Are non-exempt employees being paid the appropriate overtime rate for hours worked in excess of forty hours per week? Are individuals or employees who perform volunteer work appropriately categorized as volunteers under federal and state law?

28 DOL Investigations DOL has stepped up its investigation efforts by more than 23% since FY2009 In FY2013, the DOL recovered a record $280 million on behalf of 260,000 workers In FY2014, the recovery decreased slightly, yet still topped $240 million on behalf of 270,000 workers Equates to an average of more than $659,000 in back wages for workers each day. DOL is increasing enforcement efforts, even if it has not received a complaint 40% increase in investigations since 2008 DOL found FLSA violations in over 78% of the DOL s investigations in FY2014

29 Investigations, con t. Be prepared! Keep up-to-date policies Perform internal audits Training Establish a response team Ensure proper records are maintained

30 Penalties for Non-Compliance Costs of non-compliance are substantial District and individual supervisors may be held civilly or criminally liable for violations, and they may be sued by Department of Labor (DOL), or by employees when the DOL does not bring suit. Remedies include back pay, reinstatement, or even promotion Districts may be hit with liquidated damage penalties in an amount equal to the amount of back pay owed to an employee Penalties also include injunction from further violation, and if violations are found to be willful, punitive damages.

31 Penalties Under FLSA If violation is willful or in reckless disregard of the FLSA: Fines range up to $10,000 per violation; Imprisonment for up to six (6) months; Or both Repeated and willful violations may result in an additional fine of $1,100 per repeated or willful violation.

32 Penalties Under Wisconsin Wage & Hour Law Less severe than FLSA, but no less burdensome Department of Workforce Development may require a district to audit its own payroll practices or the DWD may conduct its own audit to vet wage violations Violation requires district to pay the wages due and owing to an employee: May be required to pay up to 100% in increased wages Criminal penalties of $500; Imprisonment of up to ninety (90) days; Or both May proceed as class action

33 Memorandum of Understanding DOL and DWD January 20, 2015, the DOL and DWD signed a Memorandum of Understanding with the goal of protecting employees Collaborative effort and commitment by the DOL and the DWD to work together to prevent violations of wage and hour law Provides that the agencies will: Conduct joint investigations Coordinate respective enforcement activities and assist each other with enforcement Make referrals of potential violations of each other s statutes Exchange information Agreement has a 3 year duration

34 Top FLSA Trending Topics Litigation tends to ebb and flow based on current hot button issues Once a topic begins trending, we see an influx in litigation in that particular area Trending

35 Trending Topic #1 Premium Overtime Pay Our District pays our school secretary a weekly salary with the expectation he will work 37.5 hours per week.

36 Trending Topic #1 A non-exempt employee may be paid a salary for hours worked in a workweek, so long as the employee receives at least the minimum wage for all hours worked up to 40 hours in the workweek All hours worked in excess of 40 in the workweek require premium overtime pay at the rate of time and one-half of the employee s regular rate of pay.

37 Trending Topic #1 Many school secretaries are scheduled to work 37.5 hours per week and are paid a weekly salary These same school secretaries may be expected to arrive early to arrange last minute substitute teachers, answer telephone calls, and perform other minor duties. That time must be included in the secretary s hours worked The school secretaries often stay late to ensure students have transportation home, provide assistance in emergencies, or perhaps monitor school activity prior to an event. All that time is considered hours worked and the secretary must be compensated accordingly.

38 Trending Topic #2 Off-the-Clock Hours Worked All employees are required to respond to s while off-theclock, but we don t include those brief minutes in the hours worked calculation

39 Trending Topic #2 You cannot permit (or require) nonexempt employees to work before or after regular work hours without compensation. Employers must pay for hours the employee is required to work as well as hours that the employee is allowed to work. Work which is allowed to be worked is performed outside of work hours which the employer knows or has reason to know the employee is performing.

40 Trending Topic #2 Employers may not accept hours worked by an employee performing their assigned duties as volunteer hours. A employee who is required or allowed to come into work prior to his or her shift, work through an unpaid lunch period or leave late after his or her shift must be paid for the hours worked before and after the shift and during lunch even if the employee agrees to work without compensation.

41 Trending Topic #2 District is required to pay employee when Employee comes in early or stays late to correct mistakes made by the employee during his or her regular work hours. Employee takes work home to complete in the evening or on weekends in order to meet a work deadline or for any other reason An employer cannot knowingly accept the benefits of the work performed but later deny an employee compensation for the work on the basis that it was unauthorized.

42 Trending Topic #2 The FLSA does allow employers to avoid paying for work which has not been authorized by an employer, i.e., work which the employer does not require and did not know an employee is performing. An employer that refuses to pay for unauthorized work, however, does so at its own peril. Other than in extenuating circumstances when an employee ignores repeated and express directives to refrain from performing unauthorized work, an employer generally must pay an employee for the hours worked under the FLSA, but may then impose other discipline on the employee.

43 Trending Topic #3 Exempt Status Our school secretaries/office staff are paid on a salary basis; of course they are exempt under the FLSA.

44 Trending Topic #3 Salaried employees are not necessarily exempt from premium overtime pay requirements. In order to be exempt, an employee must meet one of the exemption tests enumerated in the FLSA: Executive Administrative Learned Professional Computer Employee

45 Trending Topic #3 Simply designating an employee as a salaried employee does not mean the employee is exempt from the Act s minimum wage requirement or requirement that hourly employees receive time and one-half for all hours worked in excess of 40 in a work week. Before a salaried employee can be classified as exempt, the employee must satisfy two criteria.

46 Trending Topic #3 First, an employee must fall under one of the employment categories that are entitled to exempt status. Categories include executive, administrative, professional, computer and highly compensated. An employee must meet all of the criteria in a category order to be qualify as exempt under the category.

47 Trending Topic #3 Second, an employee must be paid a salary of not less than $455 per week in order to be exempt. An employee who meets the criteria to be exempt under one of the FLSA s exempt employee categories must be classified as non-exempt if the employee is not paid a salary of at least $455 per week. District employers who designate part-time employees as exempt must be particularly careful that the minimum salary requirement is met.

48 Trending Topic #4 Meal Periods Our aides supervise students during their lunch period, but we still don t count the lunch period toward our aides hours worked.

49 Trending Topic #4 Employee must be completely relieved of all duties and free to leave the duty post for at least 30 minutes in order for meal periods to be excluded from hours worked An aide who supervises students during lunch would not be considered relieved of duties. Employees who eat at their desk and answer phones or otherwise perform work would not be considered relieved of duties.

50 Trending Topic #5 Hours for Board Meeting The District Office Secretary attends all of our Board meetings, but we do not pay her for her attendance.

51 Trending Topic #5 All hours that non-exempt employees work must be included in the hours worked calculation Oftentimes, non-exempt employees are required to attend board meetings, which is especially true in the case of office secretarial staff providing assistance to the Board of Education Time spent at Board meetings must be included in the hours worked calculation If employee s attendance at the Board meeting pushes her hours to over 40 hours in the workweek, the employee must be paid premium overtime pay for those hours

52 Trending Topic #6 Dual Employment Our bus driver is also our custodian, but because these are two separate positions, we do not have to pay overtime because he never works more than 40 hours per week at either position.

53 Trending Topic #6 If an employee works two non-exempt positions for the district and their total hours exceed 40 per week, the employee must be paid overtime for all hours over 40 in the work week What is the overtime rate? 1. The overtime rate of pay could be a blended overtime rate, if the employee is paid a different pay rate for each position 2. The overtime rate of pay could be time and a half for the specific duties that cause the employee to work over 40 hours in the week.

54 Trending Topic #6 The following example illustrates how the blended overtime rate is computed. Employee normally works 60 percent of his or her time at a $20 per hour position and 40 percent of his or her time at a $10 per hour position The blended rate is $16 ((60% x $20) +( 40% x $10)). The blended overtime rate is $24 per hour ($16 x 1.5).

55 Trending Topic #7 Calculating the Regular Rate of Pay after Total Base Wage Increase Don t be silly! There is no need to recalculate premium overtime when an employee receives a retroactive wage increase.

56 Trending Topic #7 You must retroactively recalculate premium overtime payments when employees receive a retroactive pay increase. Where a retroactive pay increase is awarded to employees as a result of collective bargaining or otherwise, it operates to increase the regular rate of pay of the employees for the period of its retroactivity. Thus, if an employee is awarded a retroactive increase of 10 cents per hour, he is owed a retroactive increase of 15 cents for each overtime hour he has worked during the period, no matter what the agreement of the parties may be. A retroactive pay increase in the form of a lump sum for a particular period must be prorated back over the hours of the period to which it is allocable to determine the resultant increases in the regular rate.

57 Trending Topic #8 Coaches Our football coach is paid a stipend for all duties, including practices, weight lifting sessions, games, etc.

58 CAUTION! Trending Topic #8 Ensure the coach is a Bona-fide Volunteer A person who is not a school district employee may volunteer to coach an activity, provided that s/he has not received any promise, expectation, or receipt of compensation for services rendered. Volunteers may be paid expenses, reasonable benefits, a nominal fee, or any combination thereof, for services rendered without losing volunteer status

59 Bona Fide Volunteer Trending Topic #8 1. Performs service without promise, expectation or receipt of compensation for services rendered; 2. Offers services freely and without pressure or coercion, direct or implied; and 3. Is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer.

60 Trending Topic #8 Volunteers may also be paid a nominal fee. Can be in the form of a stipend but cannot be based on productivity or performance. A stipend is presumed nominal if it does not exceed 20% of what the district would pay for a full time person in that position. If a coach or advisor has a child who is participating in a sport or activity, the Department of Labor will treat the individual as a volunteer.

61 Trending Topic #8 Factors Considered in Determining Whether Employee is a Volunteer Is there some form of merit pay (bonuses for wins, playoff appearances, etc.)? is the fee or stipend is based on productivity (number of games, number of practices, length of season)? Is the 20% threshold is exceeded? Is there a contract with the coach? Language that may appear in an employee handbook or Board policy related to coaches

62 Trending Topic #9 Dual Employment Coach and Non-Exempt Employee Our District pays stipends to all of our coaches because they are all employed by the District as support staff, aides, etc.

63 Trending Topic #9 All hours worked for a single employer must be combined to determine overtime liability unless an exception applies. General Rule: Employees who perform coaching duties, but who are nonexempt must be paid not less than $7.25 per hour for all hours worked, and must be paid overtime for all hours worked in excess of 40 in a work week

64 Trending Topic #9 Caveat: Non-exempt employees may also volunteer for extracurricular assignments and the same criteria exist in determining whether they are volunteers or employees as are used for off-staff coaches and advisors with the addition that employees may not volunteer to perform work that is the same as or similar to the work they regularly perform. Example Special education aide volunteering to serve as the volleyball coach

65 Trending Topic #9 CAUTION! A nonexempt physical education aide hired by the District specifically to assist the physical education teacher with a unit on tennis could not volunteer to coach tennis because the paid and volunteer duties would be too similar. However, the aide could volunteer to coach track

66 Trending Topic #10 Dual Employment Coach and Exempt Employee Our District pays stipends to the coaches and advisors who are teachers of the District.

67 Trending Topic #10 Exempt employees, specifically teachers, have a primary duty of teaching, lecturing, or otherwise imparting knowledge 29 C.F.R (b) Because coaching is secondary to a teacher s primary duty, the teacher may continue to be exempt for purposes of the FLSA, and may be paid a nominal fee (stipend) for coaching activities

68 Trending Topic #10 A person employed solely as a coach might qualify for the executive exemption if he or she supervises 2 or more full-time assistant coaches Wage and Hour Opinion Letter, FLSA An assistant coach is less likely to qualify for an exemption. Athletic trainers may qualify as professional employees if they have undertaken a sufficient course of academic study 29 C.F.R (e)(8); Owsley v. San Antonio Indep. Sch. Dist., 187 F.3d 521 (5 th Cir. 1999)

69 Trending Topic #11 Recordkeeping for Exempt Employees Exempt employees do not need to keep records of hours worked!

70 Trending Topic #11 As of April 18, 2014, the legislature, through 2013 Wisconsin Act 286, eliminated the requirement that employers maintain records of hours worked for exempt employees However, best practices would be to continue to maintain records for exempt employees Risk of an incorrect classification as exempt is lower with respect to clear cases of exempt activities such as teaching and administration.

71 A Quick Note on the FMLA

72 FMLA Rights Now Extend to Eligible Workers in Same Sex Marriages On February 23, 2015, the DOL revised the definition of spouse under the federal FMLA and the military caregiver leave provisions. Spouse means a husband or wife as defined or recognized under state law for purposes of marriage in the State where the employee resides, including employees in same-sex marriages and common law marriages in states where it is recognized, regardless of the state in which the employee currently works or resides. Previously, the definition of spouse did not include samesex spouses if an employee resided in a state that did not recognize the employee s same-sex marriage. Policy Pointer Revise the definition of spouse in FMLA and military caregiver leave policies Ensure any leave and notice forms comply with the below definition.

73 For more information, contact Chrissy at: (262)