Fair Labor Standards Act - What Employers Need to Know

The Fair Labor Standards Act (FLSA) of 1938 is key piece of compensation legislation. Although FLSA has been around for a long time, it is the most frequently violated employment law. Employers misclassify employees as exempt or fail to calculate working time accurately. Misclassifications can result in severe back pay issues. Calculating overtime incorrectly can often result in overpayments or underpayments.

Violations can not only hurt companies financially, but damage reputations as well.

FLSA cases have hit a new record high and continue to rise. A record breaking 8,126 FLSA suits were filed in federal courts in the last year. All in all, there has been an increase of over 400% since the year 2000. Employers have to be conversant with the intricacies of the law to avoid lawsuits.

What is Fair Labor Standards Act (FLSA)?

Fair Labor Standards Act (FLSA) is a federal law which establishes minimum wage, overtime pay, record keeping, and youth employment standards. FLSA is administered and enforced by Wage and Hour division of U.S. Dept. of Labor. FLSA has three major objectives. These are:

· To fix a minimum wage below which employees pay cannot fall.

· To encourage full employment by establishing a maximum number of hours employees can work before an employer must pay an overtime premium.

· To safeguard child workers.

There are a number of employment practices which the FLSA does not regulate. These include:

· vacation, holiday, severance, or sick pay

· meal or rest periods, holidays off, or vacations

· premium pay for weekend or holiday work

· pay raises or fringe benefits

· a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees

Scope of FLSA

FLSA provides two different types of coverage:

Enterprise Coverage

If an enterprise is covered, all employees of the enterprise are entitled to FLSA protections. Generally, enterprises with at least two employees or those that generate business of at least $500,000 a year are covered. Hospitals, businesses providing medical or nursing care for residents, schools, preschools and all kinds of government agencies are also covered under the Act.

Individual Coverage

Even if the enterprise is not covered, individual employees may be covered and are entitled to FLSA protections. In case of individual coverage, FLSA covers workers who are engaged in:

· Interstate commerce

· Production of goods for commerce

· Closely related process or occupation directly essential to such production (CRADE)

· Domestic service

Individuals working for small construction companies and independently owned retail or service businesses are usually not covered by FLSA.

FLSA Requirements

The FLSA is a basic regulation that focuses on many areas - from minimum wage to overtime to rules about exempt and non-exempt classifications to child labor and recordkeeping. The basic requirements under FLSA include:

· Minimum wage

· Overtime pay

· Record keeping

· Child labor restrictions/youth employment

Minimum Wage Requirements

FLSA requires that covered, non-exempt employees must be paid not less than federal minimum wage for all hours worked. Under FLSA the federal minimum wage is $7.25 per hour effective July 24, 2009. Minimum wage includes the following payments/allowances:

· Wages

· Commissions

· Certain bonuses

· Tips received by eligible employees

· Reasonable cost of room, board and other "facilities" provided by the employer for the employee's benefit

Overtime Pay Requirements

FLSA defines overtime as time worked beyond prescribed hours. Covered, non-exempt employees must receive one and a half times the regular rate of pay for all hours worked over forty in a workweek.

Hours Worked and its Components

Hours worked include all the time during which an employee is required to be on the employer's premises, on duty, or at a prescribed workplace. The main components of hours worked include:

· Suffer or permit to work

· Waiting time

· Travel time

· On-call time

· Training time

· Sleep time

Record Keeping Requirements

Every employer covered by FLSA must maintain certain records for each covered, nonexempt worker. Here is a list of basic records that an employer must maintain:

· Employee's full name and social security number.

· Address, including zip code.

· Birth date, if younger than 19.

· Sex and occupation.

· Time and day of week when employee's workweek begins.

· Hours worked each day.

· Total hours worked each workweek.

· Basis on which employee's wages are paid.

· Regular hourly pay rate.

· Total daily or weekly straight-time earnings.

· Total overtime earnings for the workweek.

· All additions to or deductions from the employee's wages.

· Total wages paid each pay period.

· Date of payment and the pay period covered by the payment.

Each employer must retain payroll records, collective bargaining agreements, sales and purchase records for at least three years. Wage computation records should be retained for two years. This includes time cards and piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.

Child Labor Rules

Child labor provisions under FLSA are designed to protect the educational opportunities of minors. These provisions:

• Prohibit youth employment in jobs that are detrimental to their health and safety

• Restrict hours that those under 16 years of age can work

• List hazardous occupations too dangerous for young workers to perform

FLSA Minimum Wage and Overtime Exemptions

The most common FLSA minimum wage and overtime exemptions, often called "white collar" exemptions, applies to certain:

· Executive Employees

· Administrative Employees

· Professional Employees

· Outside Sales Employees

· Computer Employees

Avoiding FLSA Pitfalls

Wage and hour claims are increasing rapidly. Misclassification of employees is one major area that U.S. Dept. of Labor is clamping down on. The second area that is being investigated is improper payment of overtime. Mistakes in classification and overtime pay can result in major settlements including back pay, payment of fines, and reclassification. So employers should remain compliant with FLSA guidelines and avoid following pitfalls in wage and overtime calculations:

· Improperly applying an exemption.

· Failing to pay for all the hours an employee is suffered or permitted to work.

· Limiting the number of hours employees are allowed to record.

· Failing to include all pay required to be included in calculating the regular rate for overtime.

· Making improper deductions from wages that cut into required minimum wage or overtime.

· Failing to add all hours worked in separate establishments for the same employer when calculating overtime due.

· Treating an employee as an independent contractor.

This article is written by a regulatory expert at ComplianceOnline. ComplianceOnline is a Palo Alto-based leading provider of trainings, consulting and advisory services in the Governance, Risk and Compliance space. We also offer customized training courses developed in conjunction with organizations that wish to train large groups of their employees. For more information, please visit www.complianceonline.com

Discrimination and Employment Law

Many people with Epilepsy complete a good education and go on to have a productive career. This can be in many areas. This depends on the person, their condition, circumstance's and of course their motivation. People with Epilepsy can work in many different occupations, but this is sometimes limited due to safety or the ability to drive.

Employers may give reasons for not hiring a person with Epilepsy. These may be the likes of your safety and the safety of others, the company's liabilities, concerns you won't perform and your ability to deal with the public. Producing an income is important for many reasons, such as self-esteem and supporting yourself and a family. Many people with Epilepsy work and positions are initially open to people with the condition.

Overall, there is no difference in job performance and productivity between workers with Epilepsy and others. Studies have shown that behavior, productivity of employees with Epilepsy is as good as or better than others. Accident rates are lower!! This comes from a motivation to work hard and prove that they are worthy of the workplace.

Should they tell their employer?

That's a difficult decision, really up to the person seeking employment. Will your Epilepsy have an effect on your employment? If your employer and work mates know about your Epilepsy, it is easily understood. If they do not want to hire you because of your Epilepsy, maybe they wouldn't have been the best person to work for. Does your employment require a driver's license, or is it just about getting to work each day.

There is always public transport, friends and work mates. So much with Epilepsy comes back to fear of the word EPILEPSY, or a general misunderstanding. 95% of the time things may be just fine. That depends on how severe your Epilepsy is and what type you have. But, if you have found an employer that can see past that small part of you, you're on your way to employment. If you have the qualifications, skills, and experience your on your way. If you're a hard worker with a good attitude, you are headed in the right direction.

An employer will generally ask about your health, so that is a good time to mention Epilepsy. Everyone is a health risk in some ways. Anyone could have a heart attack at any time. There is no warning of that, just like there is sometimes no warning of a seizure. But, everyone you are working with can know you have Epilepsy.

Epilepsy - Let's talk About It!! Be Positive!!

What Is A Class Action Lawsuit?

At some point in your life, you have probably received in the mail a notice from the courts stating that you are a member of a class action lawsuit and now you want to know what that all means. What should you do? What are the pros and cons to taking action? Where can you learn more about the process to make a better decision? If you are like most people, if you don't know what to do you simply file the notice in the trash can and forget about it. This may not be the best solution however. In this article, I will share with you the various options that you have and the things that you should consider.

The whole idea behind class action lawsuits is to provide a pathway for the normal person to be able to stand up to the largest corporate or private businesses who have legal associates galore, so that you can have an opportunity to correct the wrongs that have been done to you by the big conglomerates. It is important to remember that even though the actual damage or cost to you specifically is small, the illegitimate increase to the corporate entity can be enormous if done to hundreds or even hundreds of thousands of people or class members. With this in mind, you should think twice before tossing that notice the next time, while it probably won't make you rich, it may make a difference in how corporations treat people in general.

How A Class Action Suit Works (Thanks to Diamond McCarthy LLP for their input)

You come home from a long day at work and check your bills, investments, property, etc and discover that something isn't quite right. You pickup the phone and call the business where the error was made and inquire about when they can correct the matter. You get nothing but flack. They refuse to take ownership of the problem. After hours on the phone you get nowhere. You're not only frustrated, but angry, and you share your plight with friends, at the office, everywhere you go and it doesn't take you long to discover that you aren't the first person to face this problem and most likely, won't be the last.

You decide to hire an attorney, take legal action to get the company to correct the problem. But there is no response. Your attorney does a little research of his own, he finds more people who have been wronged, and files suit for everyone with the court. Your attorney now starts taking depositions, recording grievances, and asks that the court certify the case as a class action so that everyone in the same predicament can resolve their issue. The court agrees and certifies the case. And low and behold, you now have a class action lawsuit.

The court then states that each person involved needs to be sent a letter or notified that they have a right to file action at the same time as everyone else. Each person needs to be notified so that they can have their say and receive the same resolution as everyone else involved in the case. This is the place where everyone, rich and poor alike, including the person or persons who bring the claim, are treated equally. What this means, is that everyone, all class members, are supposed to have equal input, rights to any money or resolution ordered by the court, and so forth.

Mailed Notices

In most cases, there are several notices mailed to class members over the course of the case. The first notice is to inform you of what is going on as well as providing you with an option to opt-out or choose not to be a participant in the case and not be represented by the party who established this case and is sending you the notice.

If you choose to opt out, then you have no further rights in the case. You have two choices before you then, either let the matter go entirely or bring your own case before the court. However, neither of those choices will give you claim to any money that is garnered from the original case.

If you do not opt out, you are considered part of the case, are stuck with the settlement that is allotted, and prohibited in taking any further action on the matter. If for some reason you don't receive a notice, you have no idea what is going on, well, it sucks to be you, because the court just has to make "the best notice practical under the circumstances', if the opt-out date passes, you are considered in and bound by the courts decision. The case proceeds, sometimes for years. If you never received notice, you will probably never know about any money or other resolutions that you could have received.

At some point in time, all parties will either reach a settlement, which is presented to the court for its approval as to fairness, etc..., or the case is tried and the judge makes the decision.

In most circumstances, cases are resolved or settled by agreement by the parties and approved as being fair and equitable by the court. Both sides do a little give-and-take before resolving.

If the judge decision is in favor of the business or corporation, then, it's over and you and all of the class members are stopped from pursuing any further action on the same complaint.

However, if you win and the class members win, then the judge decides the damages, orders the company to make restitution, and orders notice is given where claim to the "pot" can be made. The "pot" can also be split according to a formula, which the court decides.

In either event, it's over and justice is done. Either the company is proven blameless, the wrong is corrected, restitution made, and errors on the part of the company are never committed again.

Brenda Segna