WELCOME TO SCORE & THE GREATER LAWRENCE CHAMBER OF COMMERCE - PowerPoint PPT Presentation

WELCOME TO SCORE & THE GREATER LAWRENCE CHAMBER OF COMMERCE The Fair Labor Standards Act: What you don’t know can cost you $$$ Dennis Dunlap 1

Today’s Program 1. Understanding The Fair Labor Standards Act (FLSA) and how to ensure you are in compliance with the Act. 2. Your Employee Handbook and how it can help you or cost you. Sample Handouts in your packet Questions Anytime! A copy of this presentation is available at: indianpolis.score.org 2

The Fair Labor Standards Act • Overview • Independent Contractor or Employee • Child Labor • Pay and Recordkeeping • Minimum Wage • Overtime • Other Compensable Time • Non-Exempt and Exempt Status • Internships

Overview The Fair Labor Standards Act (FLSA) was passed in 1938. It sets the standards for:  Minimum wage  Overtime pay  Recordkeeping  Youth employment standards The goal today is to provide you with some basic knowledge of the FLSA to ensure full and correct compliance with this important labor law. 4

Overview • The FLSA is administered by the Wage & Hour Division of the Department of Labor. • They are available for consultation and advice. • Generally, they conduct investigations based on an employee complaint. • During an investigation, they will review all employee records for the past 2 years. • They will look at records for the past 3 years if it is a repeat violation or they determine it is a willful violation. 5

Overview • The FLSA affects both full time and part time employees in both the private and public sectors. • Employees ordinarily bear the burden of proof under the FLSA, but the employer may be obligated to give employees access to work records so that they can attempt to prove claims. 6

Overview • If the employer has not adequately maintained records, the court may accept the employee’s claim and give the employer the burden of disproving allegations. • Employers automatically bear the burden of proving any exemption under the act. 7

Independent Contractor Or Employee • IRS Definition Behavioral Control Financial Control Relationship of the Parties

Behavioral Control • Instructions – if the individual receives extensive instructions on how the work is to be done. Suggests an Employee. • How, when, or where to do the work. • What tools or equipment to use. • What assistants to hire to help with the work. • Where to purchase supplies and services.

Financial Control • Significant Investment. If the individual has a significant investment in their own work. Suggests an Independent Contractor. • Expenses. If the individual is not reimburse for business expenses. Suggests an Independent Contractor. • Profit or Loss. If the individual can realize a profit or incur a loss. Suggests an Independent Contractor.

Relationship Of The Parties • Employee Benefits. If the individual receives benefits such as insurance, pension or paid leave. Suggests Employee. • Written Contract. A written contract may show what the intent of the relationship is. Significant if it is difficult to determine the status based on the other points.

Youth Employment Standards • Youths ages 18 and older are not subject to hour or occupation restrictions. • Federal Regulations • http://www.wagehour.dol.gov • Series of Fact Sheets • State Regulations • www.ingov/dol • Applicable State Regulations, FAQ’s, Posters. 12

Employee Status Non-Exempt Or Exempt • Non-Exempt – Generally referred to as “Hourly” • Exempt - Generally referred to as “Salaried” 13

Non-Exempt Status • All employees are considered non-exempt unless the employer establishes that an employee’s position meets specific exemption criteria. • Accordingly, the definition of a non-exempt employee is an employee who does not meet any one of the FLSA’s exemption tests and is covered by wage and hour laws regarding minimum wage, overtime pay and hours worked. 14

Recordkeeping Requirements • Posting • Required Records • Records Retention • Timekeeping • Fixed Schedules 15

Time Worked Records The FLSA requires the following information regarding time worked by non-exempt employees: • The time and day of the week starting the168 hour time frame established as your workweek. Each workweek stands on its own. • Hours worked each day. • Total hours worked each workweek. • Basis on which wages are paid (e.g., per hour, piecework). 16

Overtime Pay Requirements • For covered, non-exempt employees, the FLSA requires overtime pay at a rate of not less than one and one- half times an employee’s regular rate of pay after 40 actual hours of work in the 168 hour workweek. • When an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay). • Indiana follows the federal guidelines. 17

Overtime Pay Requirements • Overtime pay is calculated on actual time worked. • Vacation, sick leave, holidays, other paid leave is the employers decision to include in the overtime calculation. • The FLSA does not automatically require overtime pay for working on Saturdays, Sundays or holidays. • Similarly, the FLSA does not require overtime pay for work on nights or weekends if those times fall within the normal 40-hour, seven-day workweek. 18

Overtime Pay Requirements • As an employer, you should require that overtime be authorized in advance by the employee’s supervisor. • If an employee works overtime without authorization, though, it still must be paid. • Unauthorized overtime is a disciplinary issue, not a compensation issue. 19

Fact Sheet #22 Hours Worked Under The Fair Labor Standards Act.

Suffered or Permitted “ Work not requested, but suffered or permitted is work time” Compensation is not required for de minimus work.

Hours Worked Under The Act • Waiting Time • On-Call Time • Rest and Meal Periods • Lectures, Meetings and Training • Travel Time • Pre-Shift and Post Shift Activities

Compensable Time Waiting Time • When an employee is already on duty, but waiting for work to do, for repairs to be made, etc. they are engaged to wait and the time is hours worked. • The time is hours worked even though they are allowed to leave the premises or the job site during such periods of inactivity. • If the employee is unable to use the time effectively for their own purposes. The time belongs to and is controlled by the employer. • For example: • A receptionist who reads a book while waiting for customers or telephone calls. • A messenger who works a crossword puzzle while awaiting assignments. • A factory worker who talks to fellow employees while waiting for machinery to be repaired. 23

Compensable Time On-Call Duty Whether on-call or waiting time is to be treated as working time depends on whether “ the time is spent predominantly for the employer’s benefit or for the employee’s benefit. ” • An employee who is required to remain on call on the employer's premises is working while on call, and the time is compensable. • An employee who is required to remain on call at home, or who is allowed to leave a message where he or she can be reached, is not working while on call, and the time is not compensable. • Additional constraints on the employee’s freedom could require this time to be compensated. • If the employee is unable to use the time effectively for their own purposes. 24

Compensable Time Rest And Meal Periods • The FLSA does not require rest or meal periods, but some states have specific provisions for rest and meal periods. • Indiana requires breaks, paid or unpaid, for employees under 18. (IC 10-3-1) • When employers offer short breaks (usually lasting about 5 to 20 minutes), they are paid time. • Bona fide meal periods (typically lasting at least 30 minutes) serve a different purpose than rest breaks and are not work time and are not compensable. 25

Compensable Time Lectures, Meetings And Training Time spent attending lectures, meetings and training programs is counted as hours worked unless all of the following conditions are met: • The meetings are held outside regular working hours. • Attendance is voluntary (attendance is not voluntary if the employee is led to believe that nonattendance would adversely affect his or her employment). • The course, lecture or meeting is not directly related to the employee's job. • The employee does no productive work during the meeting or training. 26

Compensable Time Travel • Home-to-work travel is not work time and is not compensable. • Time spent in travel as part of the employee’s principal activity, such as travel from one job site to another during the workday, is work time and must be paid. 27

Compensable Time Travel • When a non-exempt employee travels on a one-day assignment to another city, the time spent traveling is work time and must be paid. • Travel that keeps the employee away from home overnight is work time when it cuts across the employee’s normal work schedule. e.g. (7:30 am – 4:30 pm). • This includes travel on Saturday and Sunday. 28