Fall 2017 TAMCAR Institute Dealing with Overtime and On-Call Pay Issues Richard L. Stokes, PHR, SHRM CP, IPMA SCP Municipal HR Consultant University of TN MTAS Objectives for the Day Understand the general requirement of the FLSA Overtime provisions. Determine the different types of compensable time eligible for overtime compensation. Agenda Requirements of the FLSA Determining eligibility for overtime Determining hours worked Record keeping requirements Penalties FLSA Update: Things Have Changed 1
Requirements of the Act Who s Covered by the Act? Who s Not Covered? Elected officials and their personal staffs; Political appointees and legal advisors; Bona fide volunteers. Prisoners; Independent contractors; Trainees. Rob Ford (Toronto, Canada former mayor) FLSA Update: Things Have Changed 2
FLSA Exemptions Executive Administrative Professional Computer Programmer Recreational/Seasonal Public Safety What Hours Are Considered Work Time? Employment Unauthorized work Wait time On call time Show up, call in or reporting time Stand by time Break periods Training programs, lectures and meetings Travel time FLSA Update: Things Have Changed 3
Employment Suffer to work = times during which an employee is necessarily required to be on the employer s premises, on duty or at a prescribed work place. Unauthorized Work Employees, who, with/or without the knowledge or consent of their employer, continues to work after their shift is over, though voluntarily, are engaged in compensable working time. Wait Time FLSA Update: Things Have Changed 4
Wait Time Wait time by employees who have been relieved of duty need not be counted as hours worked, if the employee: is completely relieved from duty and allowed to leave the job; is relieved until a definite, specified time; relief period is long enough for the employee to use the time as he/she sees fit; can leave his or her workplace; is free to use the time for personal purposes; has sufficient time to take advantage of being relieved of all work duties. On call Time On call time is hours worked when Employee has to stay on the employer s premises Employee has to stay so close to the employer s premises that the employee cannot use that time effectively for his or her own purposes On call time is not hours worked when Employee is required to carry a cell phone Employee is required to leave word at home or with the employer where he or she can be reached On call Time On call time is hours worked when Employee has to stay on the employer s premises Employee has to stay so close to the employer s premises that the employee cannot use that time effectively for his or her own purposes On call time is not hours worked when Employee is required to carry a cell phone Employee is required to leave word at home or with the employer where he or she can be reached The employee is not restricted. FLSA Update: Things Have Changed 5
Breaks, Meals and Rest Periods Unless all three conditions are met meal periods must be counted as hours worked: Must be at least 30 minutes; Employee must be completely relieved of all duties Employee must be free to leave his/her duty station. Breaks, Meals and Rest Periods The FLSA does not require that employees are given rest periods, but if rest periods are provided they must be counted as hours worked if they last 20 minutes or less. Breaks, Meals and Rest Periods If an employee s tour of duty is less than 24 hours during which he/she is permitted to sleep, the time is compensable as long as he/she is on duty and must work when required FLSA Update: Things Have Changed 6
Breaks, Meals and Rest Periods If an employee s tour of duty is more than 24 hours, up to 8 hours of sleep time can be excluded from compensable work if: An expressed or implied agreement excluding sleep time exits; and Adequate sleeping facilities for an uninterrupted night s sleep are provided; and At least five hours of sleep are possible during the scheduled sleeping period; and Interruptions to perform duties are considered hours worked. Breaks, Meals and Rest Periods An employee residing on the employer s premises or working at home is not generally eligible for overtime compensation if the employee has sufficient time to engage in personal activities or leave the employer s premises for personal reasons. Training Programs, Lectures and Meetings Time cannot be counted as working time if the following 4 criteria are met: Attendance must occur outside the employee s regular working hours; and Attendance must in fact be voluntary; and The employee must do no productive work while attending; and The program, lecture, or meeting should not be directly related to the employee s job. FLSA Update: Things Have Changed 7
Travel/Commute Time Excluding normal commuting time, the general rule is that employees should be compensated for all travel unless it is: 1. overnight, 2. outside of regular working hours, or 3. on a common carrier where no work is done. Travel/Commute Time One workplace to another One city to another Travel away for more than one workday Travel on non work days What Constitutes Regular Pay? Regular pay includes all payment made by the employer to, or on behalf of, an employee FLSA Update: Things Have Changed 8
What Constitutes Regular Pay? Included in regular rate of pay: On call pay Bonuses Contest prizes Lunch/meal expenses Salaries Salary increases Shift differentials Hazardous duty pay Longevity pay What Constitutes Regular Pay? Excluded from regular rate of pay: Absence pay (vacation, illness, bereavement, disaster relief or jury duty) Holiday pay Severance pay Travel expenses Show up or reporting pay Weekly overtime pay Reasonable uniform allowances Discretionary bonuses Overtime premium payments Non exempt employees Name Home address Date of birth Sex and occupation Time of day and day of week the workweek begins Regular hourly rate of pay FLSA Update: Things Have Changed 9
Non exempt employees Hours worked each workday and total hours worked each work week Total daily or weekly straight time earnings due for hours worked during the workday or work week Total premium pay for overtime hours Date of payment and the pay period covered Comp time earnings. Exempt employees Almost identical records with the exception of some requirements relating to payment and hours worked; Must keep records reflecting the basis on which exempt employees are paid containing details sufficient to permit calculation, for each pay period of the employee s total compensation. Preservation of records Must be preserved at least 3 years Payroll records Certificates Individual contracts Sales and purchase records FLSA Update: Things Have Changed 10
Preservation of records Must be preserved at least 2 years Basic employment and earnings records Wage rate tables Order, shipping and billing records Records of additions to or deductions from wages paid The act requires that all required records be kept in a safe and accessible location at the place or places of employment Every employer employing workers subject to the FLSA must post, and keep posted a notice explaining the law. FLSA Update: Things Have Changed 11
Common Errors to Avoid Failing to pay for all hours an employee is suffered or permitted to work Limiting the number of hours employees are allowed to record Failing to include all pay required to be included in calculating the regular rate for overtime Common Errors to Avoid Failing to add all hours worked in separate establishments for the same employer when calculating overtime due Making improper deductions from wages that cut into the required minimum wage or overtime. Examples: shortages, drive offs, damage, tools, and uniforms Treating an employee as an independent contractor Penalties for Non compliance DOL investigates all complaints. Employee may sue the employer in federal or state court but not for record keeping violations. Violators of the minimum wage and overtime provisions are liable for the unpaid minimum wages and overtime. Employees may get back pay, liquidated damages, reasonable attorney fees and court cost. Willful violators are subject to a fine up to $11,000 or imprisonment for up to 6 months or both (after 2 violations) Civil monetary penalties up to $1,100 per violation may be assessed for repeat or willful violators. http://www.youtube.com/watch?v=ipy3oju2fa0 FLSA Update: Things Have Changed 12
For More Information Visit the WHD homepage at: http://www.wagehour.dol.gov Call the WHD toll-free information and helpline at 1-866-4US-WAGE (1-866-487-9243) Use the DOL interactive advisor system - ELAWS (Employment Laws Assistance for Workers and Small Businesses) at: http://www.dol.gov/elaws Call or visit the nearest Wage and Hour Division Office Objectives for the Day Understand the general requirement of the FLSA Overtime provisions. Determine the different types of compensable time eligible for overtime compensation. FLSA Update: Things Have Changed 13