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Fair Labor Standards Act (FLSA)

Presented by the U.S. Department of Labor Wage &

Hour Division

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Major Provisions

Minimum Wage

Overtime Pay

Child Labor

Recordkeeping

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Coverage

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Coverage under the FLSA

Individual

Enterprise

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Enterprise Coverage

A firm with an annual dollar volume of sales or business done of at least $500,000

or Is engaged in the operation of:

– A hospital– A nursing home

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Enterprise Coverage

– A school for mentally or physically handicapped or gifted children

– A public or private elementary or secondary school or institution of higher education (profit or non-profit)

– A pre-school, or is

– A Federal, State, or local government agency

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Individual Coverage

Employees engaged in– Interstate Commerce

or– The production of goods for interstate

commerceor

– In a closely-related process or occupation directly essential (CRADE) to such production

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Minimum Wage

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Minimum Wage

Covered, non-exempt employees must be paid not less than the MW for all hours worked

Currently $6.55 per hour Cash or equivalent – free and clear Each week stands by itself, although

there is no requirement to pay weekly

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Minimum Wage

What counts as contributing to the MW:– Wages (salary, hourly pay, commissions,

piece rate earnings)– Reasonable cost of room, board and other

“facilities” provided by the employer for the employee’s benefit

– Tips (currently up to $4.42 per hour) received by eligible tipped employees

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DeductionsDeductions made primarily for the benefit or convenience of the employer for such items as:

• Cash or merchandise shortages• Employer required uniforms• Tools of the trade

Are illegal to the extent that they reduce the wages of employees below the MW or reduce the amount of OT pay due

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Overtime Pay

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Overtime Pay

Due to covered, non-exempt employees Calculated at time and one-half the

employee’s regular rate of pay Required for each hour worked in a

workweek in excess of the maximum allowable in the given type of employment (usually 40 hours per workweek)

Workweeks may not be averaged

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Overtime Pay Regular Rate (RR)

– It is a rate per hour – Is determined by dividing total earnings for

all hours worked in any work week by the total number of hours worked in the week

– It may not be less than the applicable MW– If RR is higher than the MW, OT must be

computed at the higher rate

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Overtime PayRegular Rate (continued)Includes all remuneration for employment except:

– Gifts, such as Christmas or Birthday money– Payments for time not worked, such as holiday or

vacation pay– Discretionary bonuses – Profit sharing plans– Talent fees– Premium payments– Stock options

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Compensatory Time Off Instead of Overtime Pay (“Comp Time”)

Private employers may not use comp time to meet FLSA OT requirements

Public Agencies may offer comp time if:– Provided at one and one half hours off with

pay for each hour of overtime worked– Done pursuant to a CBA or prior agreement– Accrued time does not exceed maximums

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Exemptions

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Child Labor

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Minimum Age Standards 18 and above

– No limitations– Minimum for occupations declared hazardous

by the Department of Labor 16 and 17 year-olds

– General minimum for employment– Limited to non hazardous occupations– No limitations on hours or time

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Minimum Age Standards(Continued)

14 and 15 year-olds– Minimum age for employment in specified

occupations– Limited to work outside school hours– Total work hours limited per day and per week– Only non-hazardous and non-manufacturing jobs

Under 14 years of age– Work only in jobs that are exempt from or are not

covered by the FLSA NOTE: Rules differ in agricultural employment

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Public Sector Volunteers

With Same Employer– May volunteer in any capacity other than to

do their normal job– May not volunteer to perform the services

which they are employed to perform With Different Employer

– May volunteer to perform the same services that they are employed to perform by another employer

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Private Sector Volunteers

Individuals who volunteer or donate their services:

for public service, religious, or humanitarian objectivesnot as employeeswithout contemplation of pay

are not considered as employees of the religious, charitable and similar nonprofit corporations which receive their services

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Hours Worked Under the FLSA Covered, non-exempt employees must be

paid for all hours worked in a workweek “Hours Worked,” generally include all the time

an employee is: Required to be on duty Required to be on the employer’s premises, or any other prescribed place of work Allowed (suffered or permitted) to work

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Hours Worked Under the FLSA

It is the duty of management to exercise its control to see that work is not performed if it does not want it to be performed

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Examples of FLSAHours WorkedAttendance at meetings, lectures, training programs and similar activities unless all of the following criteria are met: Attendance is outside the employee’s regular working hours Attendance is voluntary Activity is not related to the employee’s job No productive work is done during the activity

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Examples of FLSAHours Worked

Work done in the home if the employer knows or has reason to believe the work is being performed

Work done during lunch periods Work done before or after scheduled

hours Rest periods of 20 minutes or less

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Get ready work prior to the start of the shift Clean up work after the end of a shift The entire meal period, if the employee is not

completely relieved from all duties and responsibilities

Transporting or delivering materials or equipment to a job site prior to the start of the workday

Examples of FLSAHours Worked

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Examples of FLSAHours Worked Returning materials or equipment after

the end of the workday Transporting employees to worksites,

office, or to their homes, either before or after the paid workday, at management’s request or directive

Travel from job site to job site during the workday

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Examples of FLSA Hours Worked

“On call” time by an employee who must remain on the employer’s premises or so close thereto that he/she cannot use the time effectively for his/her own purposes

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Recordkeeping

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Recordkeeping

Maintaining good records is essential to proper compliance

Records need not be kept in any particular form and time clocks are not required

Payroll records must be kept for 3 years and the time cards and wage computation records must be kept for 2 years

An accurate record of the hours worked each day and total hours worked each week is critical to avoiding hours worked problems

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Required Records

Employee’s name, home address, occupation, sex, and birth date if under 19 years of age

Hour and day when workweek begins Total hours worked each workday and

each workweek Total daily or weekly straight time

earnings

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Required Records

Regular hourly pay rate for any week when overtime is worked

Total overtime pay for the workweek Deductions from or additions to wages Total wages paid each pay period Date of payment and period covered

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Common Errors to Avoid Assuming that paying a salary

automatically makes an employee “exempt”

Failing to pay for all hours an employee is “suffered or permitted” to work

Limiting employees to reporting 40 hours (or limited overtime) and directing them to “get the job done” and ignoring the time it takes to accomplish the task

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Common Errors to Avoid Failure to pay for pre or

post shift work activities Confusing federal and state law Improperly applying an exemption Failure to include all types of pay

received in calculating an employee’s regular rate for OT

Treating an employee as an independent contractor

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Common Errors to Avoid

Not totaling work done in separate employer establishments when calculating OT due

Making illegal deductions from wages -- shortages, drive-offs, damage, tools, uniforms, etc. -- that cut into the required MW or OT

Deducting rest breaks from work hours

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Common Errors to Avoid

Employee works during meal break and is not paid

Employee takes work home and the hours are not recorded or paid

Not paying for compensable travel time Not paying for employee meetings

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The FLSA Does Not Require

Vacation, holiday, severance or sick pay

Meal or rest periods, holidays off, or vacations Premium pay for weekend or holiday work A discharge notice, reason for discharge, or

immediate payment of final wages to terminated employees

Any limit on the number of hours in a day or days in a week an employee at least 16 years old may be required or scheduled to work

Pay raises or fringe benefits

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ADDITIONALINFORMATION

Visit the WHD homepage at: www.wagehour.dol.gov

Call the WHD toll-free information and help-line at 1-866-487-9243

Use the DOL interactive advisor system - ELAWS(Employment Laws Assistance for Workers and Small Businesses at: www.dol.gov/elaws

Call or visit the nearest Wage and Hour Division Office

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED

LAWSGovernment Contracts

Davis-Bacon and Related Acts (DBRA) Walsh-Healey Public Contracts Act (PCA) McNamara-O'Hara Service Contract Act

(SCA) Contract Work Hours and Safety Standards

Act (CWHSSA) Copeland “Anti-Kickback” Act

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED

LAWS- CONTINUEDAgricultural Employment

Migrant and Seasonal Agricultural Worker Protection Act (MSPA)

Field Sanitation Provisions of OSHAct H-2A, Agricultural Guest-Worker

Provisions, of Immigration and Nationality Act (INA)

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED

LAWS- CONTINUEDImmigration and Nationality Act

I-9 Provisions (Work eligibility verification)

and Contractual Obligations for D-1 (Alien Crewmembers Performing

Longshore Activities) H-1B (Specialty Occupations)

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OTHER MAJOR WAGE-HOUR DIVISION ADMINISTERED

LAWS- CONTINUEDMiscellaneous

Family and Medical Leave Act (FMLA) Wage Garnishment Provisions of

Consumer Credit Protection Act (CCPA) Employee Polygraph Protection Act

(EPPA) Wage Provisions of National Foundation

on the Arts and Humanities Act