Sec 2: Fed and State Wage-Hour Laws

Question 1

Fair Labor Standards Act of 1938 (FLSA)

The FLSA does the following: SR PM

Answer 1

• Sets the minimum wage and overtime rates employees must receive for their work
• Requires recordkeeping by employers
• Places restrictions on the types of work children can do and the hours they can work
• Mandates equal pay for equal work

Question 2

Five Areas Regulated by FLSA (MOCER)

Answer 2

• Min Wage
  -OT
  -Child Labor
  -Equal Pay
  -Recordkeeping

Question 3

The FLSA does not:

Answer 3

• Require employers to provide paid vacations, sick days, jury duty leave, holidays, lunch breaks, or coffee
  breaks
• Regulate how often employees must be paid, or when they must be paid after termination of employment
  (either voluntarily or involuntarily)
• Restrict the hours that employees over 16 years of age may be required to work

Question 4

DOL enforcement

Answer 4

The FLSA (except for the equal pay provisions) is administered and enforced by the Wage and Hour Division of the U.S. Department of Labor. The equal pay provisions are enforced by the Equal Employment Opportunity Commission

Question 5

Federal/State Relationship

Answer 5

All employers and payroll practitioners must be aware not only of the FLSA, but of the state wage‑hour laws in states where they operate. There are two reasons for this:
1. Areas left unregulated by the FLSA are most likely regulated by all states to one degree or another.
2. Even where the FLSA has an applicable provision, the employer must comply with a state law covering the same issue if the state law is more favorable to the employee. (However, there are several states that exempt employers and employees covered by the FLSA from state law coverage.)

Question 6

Employer and Employee Coverage (E and I)

Answer 6

The FLSA provides for broad coverage of employers and employees to meet its stated goal of eliminating “conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well‑being of workers.” Businesses with as few as one employee may be covered by the law if the tests for
coverage are met. Under the FLSA, there are two types of coverage—enterprise coverage and individual employee
coverage.

Question 7

Enterprise coverage

Answer 7

Under the enterprise coverage test, all the employees of a business are covered and protected by the FLSA if both of the following requirements are met:
1. At least two employees of the business are employed in jobs closely related and directly essential to interstate commerce or the production of goods for interstate commerce (including employees who handle, sell, or otherwise work on goods or materials that have been moved in or produced for interstate commerce).
2. The business has annual gross sales of at least $500,000

Question 8

Certain businesses (and all their employees) are specifically covered by the FLSA regardless of annual sales volume. They include:

Answer 8

• Hospitals
• Nursing homes
• Elementary and secondary schools and colleges (whether public or private)
• Public (government) agencies

Question 9

Individual employee coverage

Answer 9

Under the individual employee coverage test, an employee is covered by the FLSA if he or she is engaged in interstate commerce or in the production of goods for interstate commerce. It does not
matter if the business is not a covered enterprise, so long as the employee’s job is in interstate commerce (trade, transport or comm between one state and another or between a foreign country).

Question 10

Exempt and Nonexempt Employees (status under the FLSA)

Answer 10

Exempt employees - those who do not have to be paid the
required minimum wage or overtime payments, and the employer does not have to keep certain records detailing
their work. The most well‑known of these exemptions is the “white collar exemption” for executive, administrative,
professional, and outside sales employees, but there are also narrower exemptions that apply to retail and service
establishment employees, hotel and restaurant employees, and others.
Nonexempt employees - must be paid at least the minimum wage for all hours worked, and an overtime premium for hours worked over 40 in a workweek.

Question 11

White Collar Exemption (PACE)

Answer 11

administrative, executive, professional, and computer‑related professional employees, outside sales
employees, are exempt “white collar” employees under the FLSA. The tests for determining exempt status measure the actual duties and responsibilities of the employee, not the job title. The determination also depends on:
* The employee’s primary duty
* The employee’s level of discretionary authority
* Whether a minimum salary requirement is met

Question 12

Rules provide for salary and duties tests

Answer 12

Any employee earning less than $684 a week ($35,568 a year) is a
nonexempt employee entitled to overtime pay, whether he or she is paid on an hourly or salary basis. Employees paid a salary above that level have to meet a revamped and streamlined duties test in order to be classified as an exempt executive, administrative, or professional employee. Employees paid more than $107,432 a year have to meet only one prong of one of the revamped duties tests to qualify as exempt.

Question 13

Minimum Wage

Answer 13

7.25

Question 14

Lower “opportunity” wage for teenagers

Answer 14

The minimum wage for newly hired employees under the age of 20 (25 in Puerto Rico) is $4.25 per hour for the first 90 consecutive calendar days after they are hired, unless the employee is covered by a state law requiring a higher minimum wage

Question 15

Determinations based on workweek

Answer 15

In determining whether an employee has been paid the minimum wage, the Wage and Hour Division uses the workweek as the basic unit of time

Question 16

Tips and the Tip Credit

Answer 16

Under the FLSA, employers are required to pay “tipped employees” only $2.13 per hour in wages, so long as the
employee’s tips are enough to make up the remainder of the minimum hourly wage then in effect ($7.25 per
hour). This means that the employer can take a “tip credit” of up to $5.12 ($7.25 – $2.13). Tipped EE’s = receive more than $30 a month in tips

Question 17

Equal Pay for Equal Work

Answer 17

In 1963, the minimum wage provisions of the FLSA were amended by the Equal Pay Act to require equal pay for men and women doing equal work under similar working conditions. “Equal work” means jobs requiring equal kill, effort and responsibility. The law exempts earnings measured under a seniority system, merit system, system
using quantity or quality of production to determine wages, or factor other than sex.

Question 18

Overtime Pay Requirements

Answer 18

Regular earnings: 46 hours x $12 per hour = $552.00
Overtime hours: 46 hours – 40 hours = 6 hours
Overtime premium rate: $12.00 per hour x 0.5 = $6.00
Overtime premium pay: $6.00 per hour x 6 hours = $36.00
Total weekly earnings: $552.00 + $36.00 = $588.00

Question 19

The Workweek

Answer 19

The employer is responsible for establishing its
workweek— a regularly recurring period of 168 hours (7 consecutive 24- hour periods). The workweek does not have to be the same as a calendar week or begin at the start of a day.

Question 20

Belo Plan

Answer 20

A plan similar to the fluctuating workweek. Named of the company involved in the Supreme Court’s decision, and they guarantee a fixed salary for irregular hours that includes a set amount of overtime pay.

Question 21

Exemption for hospitals and nursing homes

Answer 21

The law allows such employers to use a 14- day period rather than the workweek for determining overtime compensation. And
the extended period can be used for different groups of employees as the employer sees fit. All of the following conditions must be met for the exemption to apply:
* There must be an agreement or understanding between the employer and the employees before work is performed that the 14- day period will be used.
* If the agreement or understanding is not in writing, the employer must keep some special record of it.
* The employer must pay employees covered by the agreement or understanding at least 1.5 times their regular rate of pay for all hours worked over 8 in a day or 80 in the 14- day period, whichever would result in higher pay for the employee

Question 22

When workweeks are changed

Answer 22

Several steps must be taken to ensure that the employee receives all overtime pay to which he or she is entitled:
1. Add the overlapping days to the old workweek.
2. Calculate the overtime hours and pay due for the old and new workweeks on this basis.
3. Add the overlapping days to the new workweek.
4. Calculate the overtime hours and pay due for the old and new workweeks on this basis.
5. Pay the employee the greater amount from step 2 or step 4.

Question 23

Regular Rate of Pay

Answer 23

In general, the regular rate of pay is an hourly pay rate determined by dividing the total regular pay actually earned for the workweek by
the total number of hours worked

Question 24

What is included in the regular rate?

Answer 24

Shift Diferentials, Nondiscretionary bonuses (contractual or agreed upon bonus or incentive related), retro pay, on call pay, supp disability pay, payments in the form other than cash, sick leave buy back, cash in lieu of benefits, per diem pay.

Question 25

What is not included in the regular rate of pay?

Answer 25

Gifts, PTO and expenses, discretionary bonuses (ER determines the amount), referral bonus, volunteer work, benefit plan contributions, GTL, stock options

Question 26

Special Problems in Regular Rate Determinations

Answer 26

Employee with two or more rates. This is done by adapting the general regular rate formula so that a “weighted average” or
“blended rate” is calculated: total regular pay from all jobs ÷ total hours worked = regular rate of pay.

Question 27

Compensable Time Issues

Answer 27

Under the FLSA, employees must be compensated for all hours worked. This does not mean all hours spent doing productive work. It means all hours during which the employee is under the employer’s control, even if the time is unproductive, so long as the time spent is for the employer’s benefit

Question 28

Meal and Rest Periods

Answer 28

Employers do not have to consider meal periods as working time if the employee is relieved of all duties and responsibilities. Generally, the meal period must be at least 30 minutes long to be considered nonwork time

Question 29

Travel Time

Answer 29

Portal- to- Portal Act of 1947

Question 30

Travel from home to work

Answer 30

In general, the time an employee spends going from home to work and from work to home is not worktime. Unless:
* If an employee who is already home from work is called out on an emergency call and must travel a substantial distance to get there.
* If an employee has a special assignment for one day in another city and travels outside the regular workday to get there and back (although time spent traveling from home to a railroad station or airport would not be compensable).

Question 31

Travel as part of job

Answer 31

Time spent traveling as part of an employee’s daily work activity is compensable worktime, including travel from one job site to another or travel from a designated meeting place to a job site

Question 32

Travel to and from home in a company vehicle

Answer 32

Use by an employee of an employer’s vehicle for commuting and
other incidental travel is not part of the employee’s principal activities and is not compensable time if the vehicle is used within the normal commuting area for the employer’s business or establishment and its use is subject to an agreement between the employer and the employee or the employee’s collective bargaining representative.

Question 33

Travel away from home

Answer 33

Travel by an employee who will be away from home overnight is worktime only during those periods that coincide with the employee’s regular working hours (e.g., 9 a.m.- 5 p.m.). Such time is counted as hours worked even if it occurs on a non- working day (e.g., Saturday or Sunday between 9 a.m. and 5 p.m.). Travel
outside regular working hours as a passenger in a plane, train, boat, bus, or automobile is not hours worked

Question 34

On‑Call Time

Answer 34

Employees who must be on- call on the employer’s premises or close enough to seriously curtail their use of the time for their own purposes must be paid for the time spent on- call. But
employees who merely have to leave word where they can be reached are not working while on call.

Question 35

Sleeping time

Answer 35

Employees who are on duty for shifts of less than 24 hours must be paid for all time on duty, even though they may sleep or engage in other personal activities when not busy. Where a shift is 24 hours or more, actual meal periods and sleeping periods of at least 8 hours may be excluded from worktime if the employer and employee agree beforehand. The employer must provide adequate sleeping facilities, and only 8 hours may be excluded, even if a longer sleeping period is agreed to. If the sleeping period is interrupted for work, time spent working is hours worked, and if the employee cannot get at least 5 hours of uninterrupted sleep, the entire sleeping
period is working time

Question 36

Truck Drivers

Answer 36

WHD said that the time drivers are relieved of all duties and permitted to sleep in a sleeper berth is presumptively nonworking travel time (i.e., the employee is not “on duty”) that is not compensable. Because the driver is not on duty during the time spent in the sleeper berth, the 8- hour limit on noncompensable sleeping time and the ban on excluding sleeping time during trips of less than 24 hours do not apply

Question 37

Domestic employees.

Answer 37

Employers can exclude sleep time from theseemployees’ work hours if the employer and employee have a “reasonable agreement” to exclude sleep time and theemployer provides the employee with “private quarters in a homelike environment.”

Question 38

Waiting Time

Answer 38

Time spent “engaged to be waiting” is compensable worktime - waiting for repairs or assigments

Time spent “waiting to be engaged” is not worktime because the employee is freed from all duties and responsibilities for a definite period of time even if the EE remains on the premises

Question 39

Child Labor Restrictions

Answer 39

The FLSA prohibits the employment of any “oppressive child labor”
Oppressive child labor is the employment of any child under age 18 inviolation of the child labor restrictions of the FLSA and regulations issued under it

Question 40

Minors under age 18

Answer 40

No minor under age 18 can work in a job that has been declared hazardous by the Wage and Hour Division

Question 41

Minors age 14 and 15

Answer 41

Minors age 14 and 15 can work in a limited number of nonhazardous jobs in retail, food service, and gasoline service establishments. They cannot work during school hours and are limited to working
3 hours a day and 18 hours a week when school is in session (8 hours a day and 40 a week when school is not in session). They also can work only between 7 a.m. and 7 p.m. (7 a.m. and 9 p.m. from June 1 through Labor Day) Under 14 is prohibited unless working for a parent

Question 42

Enforcement and Penalties

Answer 42

ER’s can be fined up to $15,629 for each violation of the child labor restrictions, up to $72,031 for each violation that causes death or serious injury, and up to $142,062 if it causes the death or injury of a minor are williful or repated.

Question 43

Time limit for filing an FLSA complaint with the Wage and Hour Division

Answer 43

The time limit is two years after the alleged violation or three years if the violation was willful

Question 44

Walsh‑ Healey Public Contracts Act

Answer 44

Governs the wages and hours of employees of manufacturers and dealers furnishing the federal government with materials, supplies, and equipment under contracts exceeding $10,000. The
Act requires covered employees to be paid 1.5 times their basic (regular) rate of pay for all hours physically worked over 40 in a workweek. They also must be paid the prevailing minimum wage for work in the same or similar industries in the locality where the goods are manufactured or furnished.

Question 45

Davis‑ Bacon and Related Acts

Answer 45

Under DBA, the Secretary of Labor sets prevailing minimum wage
standards for laborers and mechanics working on federally financed construction contracts of $2,000 or more. The “Related Acts” include provisions that require Davis- Bacon labor standards be applied to most federally aided construction. The prevailing wages (including fringe benefits) are based on wages for similar workers in the locality
where the project is to take place.