Just recently, the Department of Labor’s Wage and Hour Division
contacted a new client of ours after that office received a complaint
from a former employee of the client. The employee alleged that the
client refused to pay overtime wages to employees that worked over 40
hours in a one-week period of time. The client, along with a
representative from ELM Staffing, met with the Investigator to
determine if there was in fact a violation. After an extensive review,
the employer was found to have violated overtime regulations. As a
result, the employer must pay back wages to all employees (not just the
one filing the complaint) for the past two years. According to the
investigator, since this employer cooperated completely and showed a
true misunderstanding of the law they were spared a much harsher
penalty. Employers who willfully or repeatedly violate the minimum
wage or overtime requirements are subject to a civil money penalty of
up to $1,000.00 for each violation (each violation means every time an
employee was supposed to have been paid overtime x the number of
employees affected). In this particular situation, the employer did
not feel that he owed overtime since the employee elected to work over
the 40 hours. This is a retail establishment and often the employees
would swap shifts with each other. Even though the owner did not
schedule them for more than 40 hours in a week; they worked more than
40 hours and therefore were eligible. It is the employer’s
responsibility to make sure that no hourly employee works more than 40
hours in a one-week period of time.
The following is a list of regulations and areas of concern:
- Work
Week = a period of 168 hours during 7 consecutive 24-hour periods. It
may begin on any day of the week established by the employer.
- Bi-Weekly,
Semi-Monthly, & Monthly Payrolls - The 40-hour workweek rule still
applies. If an employee works more than 40 hours in any 1-week period,
that employee is eligible for overtime. For example: John Smith with
ABC company is paid every 2 weeks. He worked 80 hours during that 2
weeks. However, John worked 50 hours during week 1 and 30 hours during
week 2. John must be paid 70 hours at regular pay and 10 hours
overtime.
- Exemptions for salaried employees
- Must earn $23,660 year or $455 per week in salary
- The employee must have some type of managerial duty (must direct the work of 2 or more other full-time employees)
- The
employee must have the right to hire or fire other employees, or the
employee’s suggestions and recommendations as to the hiring, firing,
advancement, promotion or any other change of status must be given
particular weight
- Some professions may
be excluded from overtime: administrative (non-manual work that is
directly related to the management or business operations that require
the employee to use discretion and independent judgement), creative
(work requiring invention, imagination, originality or talent in a
recognized field of artistic or creative endeavor), computer (computer
systems analyst, computer programmer, software engineer, etc…) outside
sales (must be primarily engaged away from the employer’s place of
business)
- Who is covered – all
employees of businesses whose annual gross volume of sales made or
business done is not less than $500,000 (This is total for the business
not for each location of the business).
- Hours
Worked – includes all time that an employee must be on duty, or on the
employer’s premises or at any other prescribed place of work. Also
included is any additional time the employee is allowed to work.
- Meal
Periods, Break Periods, and On-Call Time – Employers are not required
to give employees meal or rest periods. However, the FLSA does
regulate when employees must be paid for these periods. The basic rule
is that a meal or break that is less than 20 minutes may not be
deducted when computing total work time. The meal or break period may
not be deducted if the employee has work duties during that time.
Otherwise, this time may be deducted from the hours worked by an
employee for federal minimum wage and overtime purposes. An employee
who is on call must be paid for these hours if restrictions are placed
on the personal freedom of the employee. If the employee is not
allowed to use the time as he/she chooses, the employee must be paid
for on-call time. An employee may be paid a different rate of pay for
hours spent on call, as long as the employee’s pay does not fall below
the minimum wage.
- Vacation Holiday
& Sick Pay – these are not included in the calculation of
employee’s regular rate of pay for purposes of calculating overtime.
For
anybody who is still awake out there, I hope this provides some helpful
information. I tried to summarize as much as possible. However, The
Department of Labor is not exactly known for its brevity. If you have
any questions or require any additional information please contact
either Joe Collins or Dea Allain at (251) 470-0700.
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