FLSA MINIMUM WAGE OVERTIME WORKWEEK EXEMPT EMPLOYEES

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1 ALABAMA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS 2016 WINTER CONFERENCE SO, YOU THINK YOU KNOW THE FLSA PRESENTED BY Gregg L. Smith FAIR LABOR STANDARDS ACT GLOSSARY OF TERMS FLSA MINIMUM WAGE OVERTIME WORKWEEK EXEMPT EMPLOYEES FAIR LABOR STANDARDS ACT GLOSSARY OF TERMS NON-EXEMPT EMPLOYEES HOURS WORKED COMPENSABLE TIME COMPENSATORY TIME 1

2 FAIR LABOR STANDARDS ACT EXEMPTIONS EXECUTIVE ADMINISTRATIVE PROFESSIONAL 15 minute breaks Compensable or non-compensable? Under the FLSA, breaks of fifteen minutes or less are considered to be compensable or time worked for the benefit of the employer. Are employees entitled to 30 minute lunch breaks under the FLSA? The FLSA does not require an employer to provide employees with lunch breaks or any other types of breaks. 2

3 When is an employee compensated for being on call? Under the FLSA, an employee is considered to be on call and, therefore, compensated when the geographic restriction and time restraints for reporting significantly inhibits the employee from performing routine functions. Extra breaks for employees who smoke, unless the employer provides alternative means to stop. Are you insane? The FLSA does not require an employer to provide an employee any breaks for any reason. Accrued, but unused annual leave time. How is it handled under the FLSA? Leave time is not addressed by the FLSA. Employers can set their own policies regarding the payment of annual leave time for employees who terminate employment. 3

4 Interrupted lunch breaks taken by employees at their desks or in the office. How much is compensable? All of it. Any interruption of a noncompensable break to perform work makes the entire break compensable. Answering a telephone for one minute during a thirty minute lunch break makes the entire thirty minutes compensable. Changing into and out of uniforms at work. Is this time compensable? Yes. Requiring employees to change into or out of mandatory uniforms that cannot be taken home is compensable time. Mickey Mouse. Is compensable time considered hours worked for determining overtime? Yes, if there is an agreement to treat time spent in certain activities. However, if no such agreement is present, then even though an employee is paid for the time, these hours are not considered as hours worked for calculating overtime. This is similar to paid holidays. 4

5 Bad weather deductions of exempt employees when the office is open. What is allowed under the FLSA? The Department of Labor considers failure to come to work due to inclement weather to be absence due to personal reasons. Only full day deductions may be made from an exempt employee s salary due to absence for personal reasons. Former employee fails to comply with record keeping requirements. Does burden become employee s due to violation of policy? Under the FLSA, the requirement to keep accurate records is the employer s responsibility. An employee s failure to comply with a policy does not relieve the employer of this burden. Are 20 minute breaks compensable under the FLSA? No, they do not have to be. Any break from activities for the employer by a nonexempt employee that is 20 minutes or longer can be non-compensable. 5

6 Are deductions of less than one full day of an exempt employee s salary a violation of the FLSA? No. An employer can deduct increments of less than a full day for an employee s absence from work due to qualifying events under the Family and Medical Leave Act ( FMLA ). Volunteer employees Payment of a stipend Volunteer may receive a nominal fee Performs hours of service for public. agency without promise of compensation Services offered freely. Not otherwise employed to perform same services for same employer. Volunteer employees Payment of a stipend Payment cannot be more than 20% of what employee performing the position would be paid. Cannot be tied to performance. Cannot be tied to hours worked. Cannot be performed by employee performing same duties in regular job. 6

7 Volunteer or Employee Is total payment more or less than 20% of what employee performing the position would be paid? Is payment tied to performance or number of hours? Is work performed same duties employee performs in regular job? Exceptions? Compensatory time Public employers only. Paid time off in lieu of receiving overtime pay. Every hour of compensatory time equals 1.5 hours of paid leave. Employee can bank compensatory time with maximum of 240 hours. Compensatory time Employers must keep track of compensatory time. Agreement to provide compensatory time must be in place. Applies only to employees who work in excess of 40 hours in a workweek. 7

8 Do compensatory time rules apply to part-time employee? Does not apply to employees who work less than 40 hours in a workweek. Employer can set own rules about providing time off in lieu of overtime as long as employee is paid for time worked (with monetary payment or paid leave). How do you pay employee for accrued compensatory time? If employee is still employed, payment is at the regular rate earned by employee at time of payment. At termination, whichever is higher: Regular rate at time of termination, or, Average regular rate over last three years of employee s employment. Payment due at least by next payroll. Employee who accrues too much compensatory time what do you do? Pay the employee the appropriate overtime pay. Accruing too much compensatory time is a technical violation which is cured when the employee receives proper payment for the excess compensatory time. 8

9 Employee requests compensatory time leave when can employer deny the leave? Leave must be allowed within a reasonable period after request. Consider if the request is consistent with other requests of leave (i.e., vacation). Denial must be because leave would unduly disrupt operations. Mere inconvenience is not sufficient for denial. Record-Keeping Requirements NON EXEMPT EMPLOYEES WHAT IS REQUIRED BY LAW Employee s full name and social security number Employee s address, including zip Employee s Birth date, if younger than 19 Employee s sex Employee s occupation Non-exempts Record-keeping Time and day of week when employee s workweek begins. Actual hours worked each day. Total hours worked each week. Basis on which employee s wages are paid (hourly, salary). Regular hourly rate of pay. Total daily or weekly straight time earnings. 9

10 Recording Keeping Requirements 29 C.F.R. 516 All additions to or deductions from the employee s wages. Total wages for each pay period. Date of payment and the pay period the payment covered. 29 C.F.R. 516 Employers may use any timekeeping method they choose, but it MUST be accurate and complete for each nonexempt employee. Records must be kept at the place of employment or central records office and open for DOL inspection. Records must be kept for at least 3 years. Recordkeeping Issues Lack of records problematic. Rounding of hours up & down 7 minute rounding rule. Must benefit both employee and employer. 29 C.F.R

11 One employee Two jobs An employer can pay an employee two different rates for performing different jobs or for similar jobs (by agreement). Overtime rules do not apply if jobs are different and employment in one is occasional or sporadic. Employee cannot waive overtime rules. One employee Two jobs Overtime Overtime is defined as paying an employee who works in excess of 40 hours in a workweek one and one half times the employee s regular rate of pay. You must count all work at both jobs to determine if overtime is owed. How do you determine regular rate of pay when employee is paid two different rates? One employee Two jobs Determining overtime Weighted Average or Blended Rate are the terms used to determine the regular rate of pay for employee with two jobs. Take number of hours worked at both jobs to determine amount owed employee for straight time. The following is an example: 30 hours at $10.00 per hour, plus 20 hours at $8.00 per hour, equals $ ($ plus $160.00) 11

12 One employee Two jobs Determining overtime Take straight time compensation owed employee and divided by number of hours worked. $ divided by 50, equals $9.20 per hour as regular rate of pay. Take regular rate of pay and multiply by 1.5 (overtime rate). $9.20 per hour x 1.5 = $13.80 is overtime rate. One employee Two jobs Determining overtime Take overtime rate and multiply by number of overtime hours worked. Employee is owed $ in overtime pay ($13.80 x 10 = $138.00). Employee should be paid $ for regular pay (40 x $9.20 = $368.00). Employee s total compensation should be $ ($ $138.00). When is travel considered compensable time? Travel from home to work and work to home is not compensable. Travel during the workday for the benefit of the employer is always compensable. Travel from a work location (not the regular place of employment) directly to home is not compensable. 12

13 When is travel considered compensable time? Travel away from regular workplace to a different community is compensable when it cuts across the regular workday. Meal period during out of town travel is treated the same as when in the regular worksite. Time not during regular work hours when employee is performing duties for employer is compensable when out of town. When is training considered compensable time? Training is NOT compensable when: 1. Outside of regular work hours, and 2. Completely voluntary, and 3. Not directly related to job duties, and 4. Employee does not do productive work for employer during training. 13