copyright© 2010 wecomply, inc. all rights reserved. 8/15/2015 fair labor standards act (fsla)

Copyright© 2010 WeComply, Inc. All rights reserved.

04/19/23

Fair Labor Standards Act (FSLA)

Copyright© 2010 WeComply, Inc. All rights reserved.8/11/2010 3

Overview

FLSA was passed in 1938

It requires employers to —

•Pay a minimum wage on regularly scheduled payday

•Pay overtime after 40 hours of work

•Provide equal pay for equal work

•Abide by special rules for workers under 18

•FLSA applies to employers (a) with annual business volume of at least $500,000 and (b) engaged in interstate commerce

Certain entities must comply regardless of business volume


Overview (cont’d)

FLSA was passed in 1938

It requires employers to —

•Pay a minimum wage on regularly scheduled payday

•Pay overtime after 40 hours of work

•Provide equal pay for equal work

•Abide by special rules for workers under 18

•FLSA applies to employers (a) with annual business volume of at least $500,000 and (b) engaged in interstate commerce

Certain entities must comply regardless of business volume


Pop Quiz!

Which of the following is not a purpose of the FLSA?

A.Mandating a federal minimum wage.

B.Requiring compensation for overtime.

C.Requiring paid sick leave.

D.Prohibiting child labor.


Minimum Wage

Federal minimum wage for most employees is $7.25 per hour

Minimum wage:•Employee's regular rate of pay must be at or above minimum wage•If payment is not hourly, employers must pay on piece-rate basis equivalent to minimum wage•Certain deductions must be taken into account

• Certain employees may be paid less than minimum wage, e.g., tipped employees, some students and some disabled workers

Where state minimum-wage law differs from federal law, higher rate applies


Minimum Wage (cont’d)

Federal minimum wage for most employees is $7.25 per hour

Minimum wage:•Employee's regular rate of pay must be at or above minimum wage•If payment is not hourly, employers must pay on piece-rate basis equivalent to minimum wage•Certain deductions must be taken into account

• Certain employees may be paid less than minimum wage, e.g., tipped employees, some students and some disabled workers

Where state minimum-wage law differs from federal law, higher rate applies


Overtime

Calculating overtime:

•Employees must be paid 1.5 times regular rate for hours worked in excess of 40 in workweek

•Employee's "regular rate" doesn't have to be calculated on hourly basis, but overtime compensation must be based on an average hourly rate

•For most private businesses, overtime must be paid in cash and not compensatory time

• Variety of activities may constitute "work" for purposes of overtime pay

• FLSA does not limit number of hours/days in a week that employee over 16 may be required to work


Overtime (cont’d)

Calculating overtime:

•Employees must be paid 1.5 times regular rate for hours worked in excess of 40 in workweek

•Employee's "regular rate" doesn't have to be calculated on hourly basis, but overtime compensation must be based on an average hourly rate

•For most private businesses, overtime must be paid in cash and not compensatory time

• Variety of activities may constitute "work" for purposes of overtime pay

• FLSA does not limit number of hours/days in a week that employee over 16 may be required to work


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Exempt Employees

Employers need not pay minimum wage or overtime to exempt employees, including —

Executives, highly compensated employees and owners of at least 20% of their business

•Learned or creative professionals

•Administrative employees

•Computer employees

•Outside salespeople

•Certain other employees


Exempt Employees (cont’d)

Executive —•Has primary duty of managing business or one of its departments or subdivisions•Regularly directs work of at least two full-time employees or their equivalent, and•Has hiring and/or firing authority

Highly compensated employee —•Is paid at least $100,000 per year•Performs office or other non-manual work as primary duty•Performs any exempt duties of executive, administrative or professional employee•Employees with at least 20% interest in company are exempt if they are actively engaged in company's management



Learned or creative professional is employee whose primary duty requires advanced knowledge in a field of science or learning that —•Customarily requires prolonged course of specialized intellectual instruction•Requires originality, talent in recognized field of artistic or creative endeavor

Administrative employee —•Has primary duty related to management or general business operations of employer•Can exercise discretion/independent judgment over matters of significance

Employee's title does not establish exempt status


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Other categories of exempt employees:

•Computer employees — programmers, software engineers, etc., who have certain primary duties and are compensated at or above certain minimum rate

•Outside salespeople — employees whose primary duty is making sales or obtaining orders and who do so away from employer's place of business

• Miscellaneous workers — employees of seasonal amusement or recreational businesses, newspaper-delivery people, and casual babysitters

FLSA regulations bar exempt status for certain "blue-collar" employees — e.g., police officers, firefighters, paramedics and some other public-safety personnel


Independent Contractors

FLSA does not apply to independent contractors

Independent contractors do not have "employment relationship" with businesses they work for

Classifying individuals as "employees" or "independent contractors" depends on these factors:

•Degree of control/supervision by employer

• Extent to which contractor's services are integral part of employer's business

• Degree of independent business organization and operation of contractor

• Whether employer is single source of income for contractor

• Permanency of relationship


Pop Quiz!

In order to be considered an "employee" under the FLSA, the individual must sign an employment contract with the employer.

A.True.

B.False.


Child Labor

Intent of child-labor provisions:

•Protect educational opportunities of 14 -to 18-year-olds

•Prohibit their employment in hazardous or dangerous jobs

Child-labor restrictions

•Children 14 and 15 can only work 18 hours in school week and 40 hours in non-school week in non-hazardous, non-manufacturing jobs

•Those 16 and 17 can work unlimited hours, but only in non-hazardous jobs

•Workers 18 or older are not limited in number of hours or types of jobs


Child Labor (cont’d)

Intent of child-labor provisions:

•Protect educational opportunities of 14 -to 18-year-olds

•Prohibit their employment in hazardous or dangerous jobs

Child-labor restrictions

•Children 14 and 15 can only work 18 hours in school week and 40 hours in non-school week in non-hazardous, non-manufacturing jobs

•Those 16 and 17 can work unlimited hours, but only in non-hazardous jobs

•Workers 18 or older are not limited in number of hours or types of jobs


Rest and Meal Breaks

FLSA does not require employers to offer rest or meal breaks

•If employer offers rest breaks of 5 to 20 minutes, breaks must be compensated as time worked

•Meal breaks need not be compensated

Many states have different minimum rest- and meal-break requirements

•FLSA requires employers to offer women breaks for breastfeeding and a private space for them to do so

•Breaks need not be compensated

Most states have laws that protect a mother's right to breastfeed, and many states require accommodation of breastfeeding in workplace


Rest and Meal Breaks (cont’d)

FLSA does not require employers to offer rest or meal breaks

•If employer offers rest breaks of 5 to 20 minutes, breaks must be compensated as time worked

•Meal breaks need not be compensated

Many states have different minimum rest- and meal-break requirements

•FLSA requires employers to offer women breaks for breastfeeding and a private space for them to do so

•Breaks need not be compensated

Most states have laws that protect a mother's right to breastfeed, and many states require accommodation of breastfeeding in workplace


Recordkeeping

Employers must —

•Maintain detailed records concerning the time worked and amount paid to non-exempt employees

•Retaining most records for at least three years

•Display poster explaining hour and wage requirements

Employers must audit records periodically to make sure they are complete and wage calculations are correct


Recordkeeping (cont’d)

Employers must —

•Maintain detailed records concerning the time worked and amount paid to non-exempt employees

•Retaining most records for at least three years

•Display poster explaining hour and wage requirements

Employers must audit records periodically to make sure they are complete and wage calculations are correct


Penalties

Penalties for noncompliance with FLSA:

•Civil penalties of up to $10,000 for wage/overtime violations

•Civil penalties of up to $100,000 for child-labor violations

•Criminal fines of up to $10,000 and/or imprisonment for up to six months

• Civil fines of up to $1,100 per violation

• Managers may be held individually liable

• Lawsuits for back pay with penalties of double wage amount that should've been paid


Penalties (cont’d)

Penalties for noncompliance with FLSA:

•Civil penalties of up to $10,000 for wage/overtime violations

•Civil penalties of up to $100,000 for child-labor violations

•Criminal fines of up to $10,000 and/or imprisonment for up to six months

• Civil fines of up to $1,100 per violation

• Managers may be held individually liable

• Lawsuits for back pay with penalties of double wage amount that should've been paid


In the news…


FLSA Hot Spots

Two FLSA requirements violated most:

•Improper exemption of employees from minimum-wage/overtime requirements

•Failure to keep adequate records of payments to non-exempt employees

Avoid FLSA disputes by —

•Using caution when considering an employee exempt from overtime or minimum-wage requirements

•Keeping careful records of all payments and time worked


04/19/23

Final Quiz


04/19/23

Questions?


04/19/23

Thank you for participating!

This course and the related materials were developed by WeComply, Inc. and the Association of Corporate Counsel.

copyright© 2010 wecomply, inc. all rights reserved. 8/15/2015 fair labor standards act (fsla)

Documents

hour minimum wage

state minimumwage law

employees regular rate

equal pay

tipped employees

overtime contd

account certain employees

overtime compensation