Transcript The Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA)
Basics for West Virginia Higher
Education Employers
2011 WVAHEFO Spring Conference
May 5, 2011
Presented by Office of Human Resources
Fairmont State University/ Pierpont Community & Technical College
Fair Labor Standards Act
What is the FLSA?
 Federal law passed in 1938, during the Depression
 Federal Department of Labor (DoL)
 Most recent major revisions in 2004
 Covers:
Minimum Wage
Overtime
Child Labor
Recordkeeping by Employers
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Exempt vs. Non-Exempt
--Non-exempt—overtime eligible and covered
by FLSA
--Exempt—not eligible for overtime nor
covered by FLSA
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Why is this important? Some recent
Northeastern Region recoveries by the DoL:
NY: $181,000 for 61 employees—pizzerias
NYC: $792,396 for 79 employees—construction company
OH: $18,000 for 96 employees –hotel
Boston: $219,390 for 44 employees—restaurants
RI: $42,274 for 9 employees—wholesale grocer
NY: $780,000 for 40 employees—pizzerias
NYC: $54,000 for 14 employees—parking garage
CT: $934,551 for 479 employees—health care
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Over $3 million in the Northeast Region alone
(there are 5 regions total) since just
February 7, 2011 (3 months)
Does not include any liquidated damages or
fines that may have also been assessed.
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Fair Labor Standards Act
Exempt Employees
Must pass:
• Salary Test
• Duties Test
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Fair Labor Standards Act
Exempt Employees
To be considered EXEMPT:
$455/week
$23,660/year
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Fair Labor Standards Act
Exempt Employees—5 Main Types Higher
Education is Concerned With:
 Highly Compensated
 Executive
Administrative
 Professional (Learned & Creative)
 Computer Professionals
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Exemption Test
Determination Factors
• Based on primary duties, not title (50% rule)
• Regularly exercises discretion and
independent judgment
• Paid on a salaried basis for the job, not the
number of hours worked; “works to get the
job done.”
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Highly Compensated Employees
Perform non-manual work
Perform at least one of the duties of an
executive, administrative or professional
employee
 Paid more than $100,000 per year
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Executive Test Criteria
 Must be compensated on a salary
basis of a minimum of $455 per week
 Primarily manages a department or
subdivision (non-manual work); and
 Directs the work of two or more fulltime employees ; and
 Is given the authority to hire, fire and
discipline, or to recommend changes
in employment or work
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Examples of
Executive Exempt Jobs
(Can be classified or non-classified)
 Payroll Manager
 HR Director
 Accounting Manager
 Director of Physical Plant
 Manager of Business Operations
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Administrative Test Criteria
 Compensated at a minimum of $455
per week paid as salary
 Primary duty must be office or nonmanual work; and
 Work must be directly related to
management policies or general
business operations; and
 Customarily and regularly requires
the exercise of discretion and
independent judgment
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Examples of
Administrative Exempt Jobs
(Can be classified or non-classified)
Accountant
Budget Analyst
Business Research Analyst
Food Service Manager
HR Representative
Office Administrator
 Operations Manager
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Professional Test Criteria
• Two types:
• Creative Professional
• Learned Professional
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Professional Test Criteria
Creative Professional:
2 Tests (both must be met):
• The employee must be compensated on a salary or
fee basis (as defined in the regulations) at a rate not
less than $455 per week;
• • The employee’s primary duty must be the
performance of work requiring invention, imagination,
originality or talent in a recognized field of artistic or
creative endeavor.
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Professional Test Criteria
Learned Professional
4 Tests (all 4 must be met):
Paid on a salary basis a minimum of $455 per week
Primary duty must be the performance of work requiring
advanced knowledge, i.e., work which is predominantly
intellectual in character and which includes the consistent exercise
of discretion and judgment
The advanced knowledge must be in a field of science or
learning
The advanced knowledge must customarily be acquired by a
prolonged course of specialized intellectual instruction
HR Office– FSU/ Pierpont C&TC
Examples of
Professional Exempt Jobs
Creative Exemptions:
 Writers
 Composers and Musicians
 Actors
 Painters
 Writers
 Graphic Designers/Multimedia Specialists
Learned Exemptions:
 Physicians (MD, DDS)
 Pharmacists (RPH)
 Certified Nurse Practitioners/Physician’s Assistants
 Architects
 Attorneys
 Teachers/Professors
 Psychologists/Clinical Social Workers
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Computer Professional
Test Criteria
 Paid a minimum of $455 per week on a salary
basis, or an hourly basis of at least $27.63
 Employed as a computer systems analyst,
programmer or software engineer or similar
skilled worker in the computer field
 Primary duties must consist of:
 Application of systems analysis techniques, including
consultation with users to determine needed specs; or
 Design, development, documentation, analysis,
creation, testing, or modification of computer systems
or programs; or
 Design, documentation, testing, creation,
or modification of computer programs
related to machine operating systems; or
 A combination of the duties noted above
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Fair Labor Standards Act
Non-Exempt Employees
Must compensate employees for
all hours worked!
(De minimis exclusions)
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Fair Labor Standards Act
Non-Exempt Employees
De minimis:
Of minimum importance; so small or brief
as to not have weight
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Fair Labor Standards Act
Non-Exempt Employees
•
•
•
•
Compensable Time:
Travel Time – from job site to job site
Breaks – less than 20 minutes
Waiting Time – “engaged to wait”
Training Programs – outside work hours,
required, and job related
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Non-Exempt Employees
“Suffering or permitting to work” means that, if you
know or have reason to know a N-E employee is
working, then even if you have not “officially”
required or approved the hours/schedule, you are
liable for any incurred OT compensation.
How to handle with employee–disciplinary action
possible
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Non-Exempt Employees
Penalties and Back Pay
• Non-willful: 2 years of back pay
• Liquidated damages – “double back pay” (if not)
• Willful : 3 years of back pay, liquidated damages, fines and
up to six months imprisonment for repeated willful
violations
• Plus costs and attorneys’ fees for successful plaintiff
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Fair Labor Standards Act
Personal Liability
Under the FLSA, employers must follow the act's requirements or
be liable for damages and possible criminal penalties for violating
its mandates. The FLSA defines "employer" to include "any
person acting directly or indirectly in the interest of an employer
in relation to an employee" (29 U.S.C. §203[d]). Federal courts
almost universally state that this definition is to be interpreted
"broadly" to achieve Congress's intent to provide a remedy to
employees for their employers' wage and hour violations. Taken
in the broadest literal sense, the FLSA's definition of employer
could extend liability to virtually any person who has
supervisory power over employees (see Donovan v. Agnew, 712
F.2d 1509 [1st Cir. 1983]).
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Fair Labor Standards Act
Non-Exempt Employees
Compensatory Time Off (CTO)
• Permitted by DoL for PUBLIC employees
only, as budget/financial consideration
• Cannot force employee to take STO/CTO, but
administration can offer it; employees may not
demand
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Non-Exempt Employees
Compensatory Time Off (CTO)
--Only for non-exempt employees
--Accrues like OT at time-and-one-half
--Calculated at straight rate for hours in workweek
between 37.5 and 40
--Use within 12 months or pay out at 12 months
--Maximum balance of 240 hrs. (480 for Public Safety)
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Non-Exempt Employees
Compensatory Time Off (CTO)
Consider budget implications and
staffing needs before offering CTO
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Breaks and Meal Periods
FLSA does not mandate breaks of any
kind
West Virginia employment law requires
offering a break of at least 20 minutes
after 6 hours of work—what this means
for supervisors
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Breaks and Meal Periods
• If breaks are offered (they are not required by the
DoL), the typical duration and number is two (2)
paid breaks of no more than 10 minutes per 7.5hour workday
• Breaks not to be stacked, accumulated or added to
the end of the work day so that the employee can
leave early
• Breaks not taken in the workday are forfeit and not
compensable
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Fair Labor Standards Act
Breaks and Meal Periods
The supervisor establishes the time of the
meal break, not the employee
Should be based on operational needs and
efficiencies
Supervisors should ensure that employees do
not work while eating, or the time could be
compensable
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Fair Labor Standards Act
Exempt and Non-Exempt employee travel
considerations
Hours to pay, E and N-E employees
Required duties vs. free time when
traveling
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Fair Labor Standards Act
Volunteering
For non-exempt employees, work done
volunteering may not be the same or
similar to regular duties, or the employee
must be paid.
HR Office– FSU/ Pierpont C&TC
Fair Labor Standards Act
Time Keeping Methods and
Systems
Beware “repeating 7.5’s” on
paper timesheets
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Fair Labor Standards Act
Questions
&
Comments?
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