IF PEOPLE WORK FOR YOU

YA GOTTA PAY ‘EMDindy Robinson

Director of Compensation & HRISTexas Christian University

d.robinson@tcu.edu

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Coverage

More than 130 million workers in more than 7 million workplaces are protected or “covered” by the Fair Labor Standards Act (FLSA), which is enforced by the Wage and Hour Division of the U.S. Department of Labor

Note: This means it is a FEDERAL LAW!

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The Bottom Line Almost every employee in the United States

is covered by the FLSA All of YOUR employees are covered.

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An EXEMPT employee is exempt from the overtime provisions of FLSA.

A non-exempt employee is NOT EXEMPT from the overtime provisions of FLSA.

Under FLSA, all employees are considered to be non-exempt unless determined to be exempt under FLSA guidelines.

Employees must spend more than 50% of their time in exempt activities to be considered to be exempt.

There is no magic bullet for an employee to be considered to be exempt.

Exempt and Non-Exempt

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Minimum Wage: Basics Covered, non-exempt employees must be

paid not less than the federal minimum wage for all hours worked

The minimum wage is $7.25 per hour effective July 24, 2009

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Hours Worked: Issues Suffered or Permitted Waiting Time On-Call Time Meal and Rest Periods Training Time Travel Time Sleep Time Cell phones, smart phones, emails

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Suffered or Permitted

Work not requested but suffered or permitted is work time– if your employee works overtime without getting prior approval… YOU STILL MUST PAY OVERTIME.

You can discipline employee for working OT without approval, but you HAVE to pay him or her.

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Waiting Time

Counted as hours worked when• Employee is unable to use the time effectively for his or her

own purposes; and • Time is controlled by the employer

Not counted as hours worked when• Employee is completely relieved from duty; and • Time is long enough to enable the employee to use it

effectively for his or her own purposes

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Employee works at Call Center with long periods in between calls. Employee is permitted to study, or do personal projects such as knitting in between calls. Is this hours worked?

Employee works split shifts. He works 4 hours in the morning and goes home for 6 hours, before returning for another 4 hours in the evening. Is the 6 hours counted as work time?

Waiting Time

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On-Call TimeOn-call time is hours worked when

• Employee has to stay on the employer’s premises • Employee has to stay so close to the employer’s

premises that the employee cannot use that time effectively for his or her own purposes

On-call time is not hours worked when• Employee is required to carry a pager• Employee is required to leave word at home or

with the employer where he or she can be reached

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Meal and Rest Periods

Meal periods are not hours worked when the employee is relieved of duties for the purpose of eating a meal

If employee eats lunch at desk and answers the phone or assists walk-ins, lunch time is considered hours worked– Employee is waiting to be engaged to work.

Rest periods of short duration (normally 5 to 20 minutes) are counted as hours worked and must be paid

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Training Time

Time employees spend in meetings, lectures, or training is considered hours worked and must be paid, unless• Attendance is outside regular working hours• Attendance is voluntary• The course, lecture, or meeting is not job related• The employee does not perform any productive

work during attendance

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Travel Time

Ordinary home to work travel is not work time

Travel between job sites during the normal work day is work time

Special rules apply to travel away from the employee’s home community

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Time normally considered as work time is considered work time during travel: If an employee normally works between 8 AM to 5 PM on weekdays, then travel time between 8 AM to 5 PM on weekends is considered to be work time UNLESS employee is a passenger and is not driving or working during travel.

Frodo drives Merry and Pippen to Mordor on the weekend. Merry and Pippen smoke their pipes, drink their ale, and snooze during the journey. Frodo’s time is compensable, Merry and Pippen’s is not.

Travel Time Away from Home Community

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Agents Dinozzio and David each drive their own cars to a crime scene in Georgia on a Saturday. Agent McGee is a passenger in Agent Dinozzio’s car. While Agent Dinozzio is driving, Agent McGee is working on his computer. Both employees are considered to be working.

Travel Time Away from Home Community

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Sleep Time

Less than 24 hour duty• Employee who is on duty for less than 24 hours is

considered to be working even if allowed to sleep or engage in other personal pursuits

Duty of 24 hours or more• Parties can agree to exclude bona fide sleep and

meal periods• Sleep must generally be uninterrupted– if

employee is chaperoning a group of kids at a weekend camp, the sleep time is probably not bona fide and must be counted as work time.

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Time spent outside of work responding to email, text messages and phone calls may be compensable.

15 minutes or more– record the time

Cell Phones, Smart Phones, Email

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Overtime Pay

Federal Law:Covered, non-exempt employees must receive one and one-half times the regular rate of pay for all hours worked over forty in a workweek

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Overtime Issues

Each workweek stands alone: You can’t work 38 hours one week and make it up by working 42 hours the next week

UNLESS YOU ARE A GOVERNMENT ORGANIZATION THAT PROVIDES COMP TIME!!!

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Regular Rate

Is determined by dividing total earnings in the workweek by the total number of hours worked in the workweek

May not be less than the applicable minimum wage

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How to Figure OT Premium

Step 1: Total Straight Time Earnings Divided By Total Hours Worked = Regular Rate

Step 2: Regular Rate x .5 = Half Time Premium

Step 3: Half Time Premium x Number of Overtime Hours = Total Overtime Premium Due

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Employee works at two or more different types of jobs for which different straight time rates have been established. The regular rate for that week is the weighted average of the rates. The OT rate is ½ of the regular rate.

Blended Overtime

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Example: Different Hourly Rates

Janitor Rate $8.50 Janitor Hours 21Cook Rate $9.00 Cook Hours 26

21 hours x $8.50 = $178.50 26 hours x $9.00 = $234.00

$412.50

$412.50 / 47 hours = $8.78 (Regular Rate) $8.78 x 0.5 = $4.39 $4.39 x 7 hours = $30.73(Overtime Premium)

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It is important to note things that are NOT covered under FLSA:

The FLSA Does Not Require

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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 - unless there is a change in the minimum wage rate.