WAGE & HOUR BASICS. What You Don t Know Can Hurt You

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1 WAGE & HOUR BASICS What You Don t Know Can Hurt You

2 FAIR LABOR STANDARDS ACT (FLSA) The Fair Labor Standards Act (FLSA) is administered by the Wage and Hour Division (WHD). The Act establishes standards for minimum wages, overtime pay, recordkeeping, and child labor. Many states have wage and hour laws that may have more requirements than the FLSA. Employers must make sure they abide by both federal and state wage and hour laws to avoid legal trouble.

3 EXEMPT VS. NON-EXEMPT EMPLOYEES Exempt employees Certain employees who are not paid minimum wage and overtime To be classified as exempt the employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. (Being salaried does not make an employee exempt.) Some examples of employees exempt from both minimum wage and overtime pay requirements: Executive, administrative, and professional employees (including teachers and academic

4 CONT. administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals Exempt employees do not receive overtime pay.

5 CONT. Non-Exempt employees Those employees who do not meet the requirements of exemption The Act requires employers of covered employees who are not otherwise exempt to pay these employees a minimum wage of not less than $7.25 per hour effective July 24, The Act requires employers to pay covered employees not less than one and one-half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt.

6 CONT. Employees cannot volunteer their time in their position or a similar position. Employees cannot take work home or work off the clock.

7 MEALS & BREAKS The FLSA does not require an employer to provide meal periods or rest breaks for their employees. Many employers, however, do provide breaks and/or meal periods. Breaks of short duration, from 5 to 20 minutes, are common. As a general rule, rest breaks are considered hours worked and bona fide meal breaks are not considered hours worked. Arkansas does not require employers to provide meals or breaks (except to children under the age of 16 employed in the entertainment industry).

8 CONT. However, if an employer chooses to provide a break period of 20 minutes or less, it must be paid. Additionally, if an employer chooses to provide a meal period (typically 30 minutes or longer), it may be unpaid so long as the employee is completely relieved of all work duties during the meal period.

9 RECORDING TIME The FLSA requires employers to keep accurate records on wages and hours worked Time clocks are not required under the FLSA. If timesheets are used, the timesheets should list the specific times of arrival, departure, and breaks. Do not use generic or pre-populated timesheets. Flex time The FLSA does not address flexible work schedules. Alternative work arrangements such as flexible work schedules are a matter of agreement between the employer and the employee (or the employee's representative).

10 FINAL THOUGHTS Wage and hour law is not simple. Misclassification of an employee as exempt when he or she is nonexempt can be costly. Determination of how an employee should be classified may require detailed study of job duties, not job title. An employer s failure to keep accurate time records can lead to thousands of dollars in back pay and/or penalties. An employer s failure to develop a flex-time policy can result in inconsistent flex-time application and legal woes. Don t guess about wage and hour issues because what you don t know can hurt you.

11 SOURCES OF INFORMATION Sources of Information: U.S. Department of Labor Arkansas Wage and Hour Law

12 CONTACT INFORMATION: Marie-Bernarde Miller Williams & Anderson PLC 111 Center Street, 22nd Floor Little Rock, Arkansas