1. Fair Labor Standards Act
September 23, 2016
Presented by:
Kim Swartwout, PHR
Shari Constantino, PHR

2. FAIR LABOR STANDARDS ACT
Also referred to as the Wage and Hour Law.
Regulates:
Employee status
Child labor
Minimum wage
Overtime pay
Record keeping – 6 years after termination

3. FAIR LABOR STANDARDS ACT
Distinguishes between: Importance: Employee and independent contractor Employer has no FLSA obligations to contractors. Exempt and nonexempt employees Exempt employees are excluded from minimum wage and overtime pay laws.
Definition of “Employ”
By statutory definition the term "employ" includes "to suffer or permit to work."
The workweek ordinarily includes all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed work place.
"Workday", in general, means the period between the time on any particular day when such employee commences his/her "principal activity" and the time on that day at which he/she ceases such principal activity or activities.
The workday may therefore be longer than the employee's scheduled shift, hours, tour of duty, or production line time.
Definition of independent contractor
Sets own schedule, location and tasks
Paid per project
Responsible for all expenses and can maximize all profits
Continuing relationship is not anticipated
Provider incurs all liability for non-delivery

4. FAIR LABOR STANDARDS ACT
FLSA Exemptions
An exempt employee must meet three requirements:
Minimum exempt salary
Paid on a salary basis without improper deductions
Perform exempt duties
Exemptions are collectively referred to as “white-collar exemptions.”

5. FAIR LABOR STANDARDS ACT
Exempt Employees
Guarantee overtime protection to employees who earn less than $23,600 per year, $455 per week. For New York State this is $35,100, $675 per week.
As of December 1, 2016 the new exempt minimum will increase to $47,476 per year, $913 a week.
There are no exceptions or pro-ration for part time exempt work. The threshold is $913 a week regardless of hours worked.
Automatic updates every 3 years – estimated to be $51,168 in 2020.

6. FAIR LABOR STANDARDS ACT
Primary Duty Issue
A primary duty is the most important duty and is considered in determining exempt status.
It includes the exercise of discretion and independent judgment in matters of significance.
Matters of significance refers to the level of importance or consequence of the work performed.

7. FAIR LABOR STANDARDS ACT
Executive Exemption
An employee must:
Manage an enterprise or a department or subdivision.
Direct the work of at least two or more full-time employees.
Have authority to hire and fire.
Affect promotion decisions.

8. FAIR LABOR STANDARDS ACT
Administrative Exemption
Employee must have a primary duty involving performance of office or non- manual work directly related to the management or general business operations of the employer or the employer’s customers.
The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

9. FAIR LABOR STANDARDS ACT
Professional Exemption
Learned professionals
Primary duty requires advanced knowledge that is in a field of science or learning and is acquired by prolonged instruction.
Work is intellectual in nature and requires exercise of discretion and judgment.
Creative professionals
Must meet minimum salary requirements.
Have a primary duty performing work that requires invention, imagination, originality, or talent.
Perform in a recognized field of creative or artistic development.

10. FAIR LABOR STANDARDS ACT
Computer Employees
Must meet the salary minimum with a salary of $455 per week or $27.63 per hour
Employee's primary duty must consist of:
Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
Design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
Design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

11. FAIR LABOR STANDARDS ACT
Computer Employees (cont.)
A combination of the aforementioned duties, the performance of which requires the same level of skills.
Computer employee exemption does not include
Employees engaged in the manufacture or repair of computer hardware and related equipment.
Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming
Other similarly skilled computer-related occupations identified in the primary duties test described above, are also not exempt under the computer employee exemption.

12. FAIR LABOR STANDARDS ACT
Improper Deductions
Employers who make improper deductions may lose the exemption if they did not intend to pay on a salary basis.
Example: An exempt employee is normally not subject to deductions for illness in less than full-day increments. (An FMLA exception may occur.)

13. FAIR LABOR STANDARDS ACT
Safe Harbor
A “safe harbor” exists if:
The employer has a clearly communicated policy prohibiting improper pay deductions.
An employee is reimbursed for any improper deductions.
The company makes a good-faith effort to comply in the future.

14. FAIR LABOR STANDARDS ACT
FLSA Minimum Wage Provisions
New York State current hourly minimum rate is $9.00
Location
12/31/16
12/31/17
12/31/18
12/31/19
12/31/20
Greater New York State
$9.70
$10.40
$11.10
$11.80
$12.50

15. FAIR LABOR STANDARDS ACT
FLSA Basic Overtime Provisions
Sets rate of overtime pay (1½ times regular pay).
Requires overtime on time worked, not time compensated.
Sets workweek as any fixed, recurring period of 168 hours (7 days x 24 hours).

16. FAIR LABOR STANDARDS ACT
Compensatory Time
Overtime usually must be paid in cash.
Public-sector employers may grant compensatory time off.
Public employees can accumulate “comp” time.

17. FAIR LABOR STANDARDS ACT
SCENARIO
Your department is going through a budget crisis. You specifically tell your staff no overtime. However, you learn despite your instructions, Lisa has been working through her lunch and her time card shows she has worked 45 hours this week. Do you have to pay her overtime?
ANSWER: You must pay the overtime. Although you gave instructions to refrain from working overtime you are legally obligated to pay it and then proceed with either informal counseling and formal disciplinary action (if necessary).

18. FAIR LABOR STANDARDS ACT
Volunteering Time
Employees may not volunteer services to for-profit private sector employers;
Individuals can volunteer services to public sector employers;
Public sector employers may not allow their employees to volunteer,
without compensation, additional time to do the same work for which
they are employed;
There is no prohibition on anyone employed in the private sector from
volunteering in any capacity or line of work in the public sector.

19. FAIR LABOR STANDARDS ACT
Hours Considered Worked Under the FLSA
Portal to Portal Act
Defines beginning and end of the work day and provides guidelines on:
Travel time
Waiting time
On-Call time
Rest and Meal Periods
Lectures, meetings and training programs
Typical Problems

20. FAIR LABOR STANDARDS ACT
Travel Time – Ordinary Work Day
Time spent by an employee in travel as part of his principal activity, such as travel from jobsite to jobsite during the workday, must be considered as hours worked. An employee who travels from home before the regular workday and returns home at the end of the workday is engaged in ordinary home-to-work travel. This is not considered hours worked. See Regulations 29 CFR
Travel Time – One Day/Business
Different rules apply when all of the travel/business occurs during one day. Time involved in one day travel, which is over and above ordinary commuting travel and that is performed for the employers benefit to meet a particular assignment count as hours worked.

21. FAIR LABOR STANDARDS ACT
Travel Away From Home Community Involving an Overnight Stay
Travel that keeps your employee away from home overnight is travel away from the home community. Travel away from home is clearly hours worked when it takes place during your employee's regularly scheduled hours of work. He or she is simply substituting travel for other duties.
If your employee is regularly scheduled to work 8 a.m. to 5 p.m., Monday through Friday, travel time on a train, bus, airplane or in an automobile during these hours is hours worked on Saturday and Sunday, as well as on the other days. Outside of those hours, time spent traveling as a driver is compensable work time, but time spent as a passenger on an airplane, bus , train , boat or car is not compensable.

22. FAIR LABOR STANDARDS ACT
Waiting Time
Counted as hours worked when (Engaged to be waiting):
Employee is unable to use the time effectively for his or her own purposes
Time is controlled by the employer
Not counted as hours worked when (Waiting to be engaged):
Employee is completely relieved from duty
Time is long enough to enable the employee to use it effectively for his or her own purposes
Example, a secretary who reads a book while waiting for dictation or a fireman who plays checkers while waiting for an alarm is working during such periods of inactivity. These employees have been "engaged to wait."

23. FAIR LABOR STANDARDS ACT
On Call
On-call time is hours worked when:
Employee has to stay on the premises
Employee has to stay so close to the 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 cell phone
Employee is required to leave word at home or with the employer where he or she can be reached
Additional constraints on the employee's freedom could require this time to be compensated. Each situation needs to be evaluated on its own set of facts. Consult with HR if you believe you have an on-call compensation matter.

24. FAIR LABOR STANDARDS ACT
Rest and Meal Periods
Rest periods of short duration, usually 20 minutes or less are customarily paid for as working time. These short periods must be counted as hours worked.
Unauthorized extensions of authorized work breaks need not be counted as hours worked when the employer has expressly and unambiguously communicated to the employee that the authorized break may only last for a specific length of time. Any extension of the break is contrary to the employer's rules, and any extension of the break will be punished.
Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. The employee must be completely relieved from duty for the purpose of eating regular meals. The employee is not relieved if he/she is required to perform any duties, whether active or inactive, while eating.

25. FAIR LABOR STANDARDS ACT
Training and Seminars
Attendance at lectures, meetings, training programs and similar activities are viewed as working time unless all of the following criteria are met:
Attendance is outside of the employee’s regular working hours;
Attendance is in fact voluntary;
The course, lecture, or meeting is not directly related to the employee’s job; and
The employee does not perform any productive work during such attendance.

26. FAIR LABOR STANDARDS ACT
Typical Problems
Problems arise when employers fail to recognize and count certain hours worked as compensable hours.
For example, an employee who remains at his/her desk while eating lunch and regularly answers the telephone and refers callers is working. This time must be counted and paid as compensable hours worked because the employee has not been completely relieved from duty.

27. FAIR LABOR STANDARDS ACT
Record Keeping
The FLSA requires that all employers subject to any provision of the Act make, keep, and preserve certain records for each non-exempt worker
An accurate record of the hours worked each day and total hours worked each week is critical to avoiding compliance problems
Records need not be kept in any particular form and time clocks are not required

28. FAIR LABOR STANDARDS ACT
Record Keeping
Each employer shall preserve for at least three years:
Payroll records
Collective bargaining agreements
Sales and purchase records.
Records on which wage computations are based should be retained for two years:
Time cards
Piece work tickets
Wage rate tables
Work and time schedules
Records of additions to or deductions from wages.