Pay Day USA: Are You Unintentionally Violating FLSA?

bio_GregoryMcintoshBy Gregory W. McIntosh | In today’s fast-driven world where work time and personal time often blur into one, companies face a wealth of employment law standards that, in theory, they are committed to enacting and enforcing. Many employers unintentionally violate the federal Fair Labor Standards Act (“FLSA”), which prescribes the basic federal minimum wage and overtime standards, every day without knowing it. These employers use what they see as common-sense methods of paying their employees with no intent to harm or deprive their employees of earned wages. However, these seemingly innocuous, but incorrect approaches to paying employees could subject employers to substantial fines and judgments in civil lawsuits. Employers must be aware of the FLSA basics to stay out of harm’s way.

First, the fact that an employee is paid a “salary” rather than an hourly wage does not necessarily make that employee exempt from FLSA overtime requirements. In general, FLSA has two requirements for a “salaried” employee to be considered exempt: (i) the employee must be paid at least $455 per week; and (ii) the employee must be employed in either a “professional,” “administrative” or “executive” capacity as those terms are defined under FLSA. Any employee that does not meet these requirements should be classified as non-exempt and must be paid time-and-a-half for work that is over forty hours per week.

Second, typical employees must be paid for all work that is “suffered or permitted” by the employer, even if that work is not specifically requested. In other words, if the employer knows or has reason to know of time worked by an employee, and the employer benefits from that work, the employee must be compensated. For instance, if an employee voluntarily continues to work at the end of his or her shift to finish a project that the employer ultimately accepts, with few exceptions, the employee must be paid regardless of whether the employer authorized overtime for the work, and, if that time runs over forty hours, the employee must be paid time-and-a-half.

Third, FLSA standards apply to certain time worked outside of the office. Today, many employees have access to work email on their smart phones or tablets and are expected to respond to emails, regardless of the time of day. According to FLSA regulations, checking and responding to emails, even when at home and outside of work hours, is work time for which non-exempt employees must be compensated. As checking and responding to emails outside of the workplace often happens beyond an employee’s full workday at the office, that time that could run into overtime, which is payable at time-and-a-half.

In addition, many states have adopted more stringent requirements. Employers are well advised to establish policies that detail when employees are expected to work and when they are not permitted to work, as well as protocols for obtaining approval for any extra work performed. Most importantly, employers should keep detailed records of when their employees are claiming they worked; these records should be confirmed by the employees.

To contact the author of this post, email Greg at gmcintosh@duffysweeney.com. We welcome your comments, questions and suggestions.