Learning Objectives. Understand the basics of the Fair Labor Standards Act (FLSA).Realize the importance of the FLSA to employers and employees.Remain in compliance with the FLSA.Understand the importance of proper recordkeeping. Fair Labor Standards Act . Minimum Wage 7/24/08--$6.55/hr
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1. Complying with the Fair Labor Standards Act Including 207(k) for Law Enforcement and Other Exceptions Mary Ann Saenz, SPHR
Human Resource Specialist
2. Learning Objectives
Understand the basics of the Fair Labor Standards Act (FLSA).
Realize the importance of the FLSA to employers and employees.
Remain in compliance with the FLSA.
Understand the importance of proper recordkeeping
3. Fair Labor Standards Act
Minimum Wage 7/24/08--$6.55/hr
7/24/09 - $7.25/hr)
Overtime Pay – 1 ½ times the regular rate of pay for all hours actually worked over 40 hours in a work week (non-law enforcement)
Recordkeeping – Must be complete and accurate
Equal Pay Act – Amended FLSA – Can not discriminate on the basis of sex
Child Labor Restrictions – Regulates with strict guidelines children ages 14-16 and 16-18.
4. Fair Labor Standards Act: Not Required… Overtime Pay
Pay Raises/Fringe Benefits
Immediate Final Discharge Payment
Limited Work Hours (16 years & older)
5. Fair Labor Standards Act: Not Required… Vacation Pay or Holiday Pay
Sick Leave Pay
Weekend/Holiday Premium Pay
6. Employee Classifications
* Elected Officials are not defined as employees under the act
7. Non-Exempt Employees
8. The Employment Relationship – When Do I Pay and Record? “Mere Knowledge” of Work Performed:: You could owe overtime … record keeping is critical factor.
Both Exempt and Non-Exempt must have certain records kept.
Exclusion: Independent Contractors –
(control, profit or loss, investment, permanence, skill)
requirements--29 C.F.R. 553.101
9. Overtime for Non-Law Enforcement Any time worked over 40 hours in a workweek.
Workweek is 7 consecutive 24 hr. days (168 consecutive hours)
Must identify the 7-day workweek.
Paid leave time (vacation, sick leave) not counted in “work time”.
Each 7-day workweek stands alone.
Overtime “pay” is 1 ½ x regular rate per overtime hour worked (over 40).
10. Overtime for Non-Law Enforcement Under 29 C.F.R. 553.211(g), these positions are not eligible for 207(k) exemption and fall under the 40 hour work week:
Jail Maintenance Workers
Food Service Workers
11. Overtime for Law Enforcement – 207 (k) Exemption 29 C.F.R. 553.201
Provides partial overtime pay exemption for fire protection and law enforcement personnel (including security personnel in correctional institutions) who are employed by public agency on a “work period” basis of 7 to 28 days.
12. Overtime for Law Enforcement – 207 (k) Exemption Maximum hours standards C.F.R. 553.230
Work period (days) Law enforcement
13. Overtime for Law Enforcement – 207 (k) Exemption 29 C.F.R. 553.211(c)
29 C.F.R. 553.211(f)
Security Personnel in Correctional Institutions – responsible for controlling and maintaining custody of inmates and safeguarding them from other inmates or supervising such functions, working inside of jails or other such institutions.
14. Overtime/Hours Worked Considerations Pre-duty or post duty activities that are an integral part of the employees principal activity such as: roll-call, completing reports, washing car, taking care of police dogs. 29 C.F.R. 553.221.
On-Call Time (Freedom test – personal pursuits)
29 C.F.R. 553.221
Travel Time (During Work Hours) (Police Officer who is given a car to drive home is not working during the time to drive home even if the radio is on so that they may respond to emergency calls, if they respond to the call, time spent responding is compensable)--29 C.F.R. 553.221.
15. Overtime/Hours Worked Considerations Training, lectures, meetings-- 29 C.F.R. 553.226
(Voluntary, non-job related, outside regular work hours)
Meals and Rest Periods (<20 minutes)
29 C.F.R. 553.223
Sleep Time – (Up to 8 Hours – but must be able to sleep uninterrupted)
16. Compensatory Time (11/15/85 FLSA Amendment) In lieu of pay @ 1 ½ times the overtime worked. 29 C.F.R. 553.232.
Record-keeping requirement--29 C.F.R. 553.50.
Agreed to in advance—written policy.
Maximum accrual = 240 hrs; 480/hrs (law enforcement)--29 C.F.R. 553.24
Allow use in a reasonable period-- 29 C.F.R. 553.25.
17. Compensatory Overtime Calculation Example Workweek: Sun. 12:00 am - Sat. 11:59 pm
Employee works 50 hours in those 7 days.
50 hours – 40 hours = 10 overtime hours (10 hours x 1.5 = 15 hrs. comp time earned).
18. Compensatory Time Forced use of comp. time ok.
(Christensen v. Harris Co.)
Must be allowed to use with reasonable requests, as long as no employer “Hardship”. 29 C.F.R. 553.25.
Can not “erase” from the records.
29 C.F.R. 553.27
19. Compensatory Time Can buy-back in part or full.
Must pay at termination at current regular rate or average rate for past 3 years, whichever is greater. (include longevity pay) 29 C.F.R. 553.27.
Employees who become “Elected Officials”--pay out the comp time.
Not part of “FMLA” time of 12 weeks.
20. Exempt Employees Executive
Certain Computer Employees
21. Exempt Employees Salary Test – regularly receives a pre-determined amount of compensation each pay period.
$23,660 annual salary ($455/ week).
Compensation can not be reduced because of quantity or quality of work being performed.
If employee is ready to work, may not make any deductions.
22. Exempt Employees – Deductions Allowed… Only Full Day absences for personal reasons.
Only Full Day deduction of sick/disability leave based on a bona fide policy, providing wage replacement.
Deduction for major safety violations.
Deduction for entire workweek.
23. Exempt Employees – Deductions Allowed… Offset any amounts received as payment for Jury Duty, Witness Fees or Military Pay.
Unpaid leave taken pursuant to the Family and Medical Leave Act.
Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of workplace conduct rules.
24. Fair Labor Standards Act: Examples of Exempt
Some Department Heads – ensure exempt status—caution needed...
“Personal Staff”, Policy Makers, or Immediate Advisors of Office Holder
Caution advised--Dept. of Labor “Okay Letter” is highly recommended…
25. Payroll Practices that Do Not Violate the Salary Test…
Taking deductions from exempt employees accrued leave accounts.
Requiring exempt employees to keep track of and record their hours.
Requiring exempt employees to work a specified work schedule.
Implementing bona fide, across-the board schedule changes.
26. Exempt Employees (29 CFR, Part 541, section 13(a)(10); *8/23/04) PRIMARY DUTY:
The principal, main, major or most important duty that an employee performs is their primary duty.
My job is to _______________ .
27. Exempt Employees (29 CFR, Part 541, section 13(a)(10); *8/23/04) PRIMARY DUTY
Relative importance of the EXEMPT duties compared to other duties.
Amount of time spent on EXEMPT duties.
Freedom from direct supervision.
Relationship between EXEMPT employees salary and wages paid to other employees.
28. Executive Employees (29 CFR, Part 541, section 13(a)(10); *8/23/04)
Primary duty is management of a recognized department.
Regularly directs 2 or more employees
Authority to hire, fire, advance, promote employees; or, recommendations are given particular weight.
Exercises discretionary powers--$455.00/wk. salary minimum ($23,660/yr)*
“Primary duty test”---short and long tests eliminated*
29. …Executive Employees Interviewing, selecting and training.
Setting and adjusting pay and work hours.
Handling employee complaints and grievances; disciplining employees.
Planning and apportioning work among employees.
Determining techniques to be used, such as materials, supplies etc.
Planning and controlling budget.
Monitoring and implementing legal compliance measures.
30. Learned Professional Primary duty must be the performance of work requiring knowledge of an advanced type …,or;
Work that is original and creative in character.
In a field of science or learning…customarily acquired by a prolonged course of specialized intellectual instruction.
Exercises discretion and judgment.
$455/wk. salary minimum ($23,660/yr.)*
“Primary duty test”—short and long tests eliminated*.
31. Computer Exemption Primary duty must be performance with application of systems analysis techniques/procedures.
Designs, development, analysis, creation, etc. …user of system design specifications.
Designs, testing, creation, etc…of computer programs…
$455/wk. salary or $27.63+ hourly rate.
Employed as a computer systems analyst, programmer, software engineer, or other similar…
32. Highly Compensated Performs office/non-manual work
Annual Compensation $100,000+
Primarily and customarily performs at least one of the duties of executive, administrative, or professional employee.
33. Administrative Employees Primary duty is performance of office/non-manual work directly related to management policies or business operations.
Exercises discretion and independent judgment with respect to significant matters.
$455.00/wk. salary minimum ($23,660/yr)*
“Primary duty test”—short and long tests eliminated*
34. Administrative Employees Primary Duty: Management or General Business Operations
35. Special Provisions Volunteers 29 C.F.R. 553.101
Paid expenses, reasonable benefits; IRS
Different capacity from regular job
Occasional or Sporadic Employment
No overtime calculation
Infrequent, irregular, or in scattered instances.
36. 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
37. 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.
38. 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.
39. … 29 C.F.R. 516 Employers may use any timekeeping method they choose, but it MUST be accurate and complete for each non-exempt 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.
40. 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. 785.48
41. Time Sheets Complete and accurate record.
Falsification: TX Penal Code 37.10.
Absence of records = problems.
Signed record with signature.
42. Enforcement Department of Labor
Investigates and gathers data
Enters premises, inspects records, interviews employees
43. Enforcement DOL files suit=back wages & equal amount in wages.
Employee=files suit + attorney fees/court costs.
Criminal penalties = fines + imprisonment
2 yr. statute of limitations (3 yrs. willful)
44. Ideas… Review job duties and job descriptions.
Apply the standard test for exempt employees. Conduct a self audit – correct errors ASAP.
Review recordkeeping methods.
Make certain budget details the number of hours that salary covers and budget non-exempt in hourly amounts
45. An In-Depth Look at the FLSA Including 207(k) for Law Enforcement and Other Exceptions Mary Ann Saenz, SPHR
Human Resource Specialist