1. Federal and State Wage-Hour Laws

2. Federal Wage-Hour Law Fair Labor Standards Act of 1938 (FLSA)
Sets minimum wage + overtime rates employees must receive
Requires recordkeeping by employers
Places restrictions on child labor, what jobs and availability to work hours
Mandates equal pay for equal work
Does not include regulations on:
Required paid vacation, sick days, jury duty leave, holidays, lunch breaks or coffee breaks
How often employees are paid
When employees are paid upon termination – voluntary or involuntary
Hour restriction of employees over 16 years of age

3. Federal / State Relationship
Employers and Payroll are regulated by:
FLSA for federal rules
State covers areas not regulated by FLSA
State law overrides FLSA where the State law is more favorable to the employee (e.g. minimum wage in Colorado)
Federal minimum wage $7.25
Colorado minimum wage $10.20
California minimum wage $11.00
Texas minimum wage $7.25

4. Enterprise Coverage
All employees of a business are covered and protected by the FLSA when the following requirements are met:
At least 2 employees are employed in jobs closely related and directly essential to interstate commerce
Business is engaged in the production of goods for interstate commerce
Business has annual gross sales of at least $500,000
Individuals are covered by the FLSA if he/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.

5. Exempt / Nonexempt Employees
Do not have to be paid the required minimum wage
Not eligible for overtime payments
Not required to keep certain records detailing their work
Nonexempt Employees
Paid at least minimum wage for all hours worked
Paid an overtime premium for hours worked over 40 in a workweek
Forget your company practice!!!!

6. White Collar Exemption
Tests for determining exempt status
measure the actual duties
Responsibilities of the employee, not the job title
Employee’s primary duty
Employee’s level of discretionary authority
Whether a minimum salary requirements is met
Exempt classifications include:
Administrative, Executive, Professional, and Computer-related professionals, and Outside Sales

7. Administrative – General Rule
To qualify as exempt, each of the following conditions must be met:
Primary duty must be the performance of the office or nonmanual work directly related to the management or general business operations of the employer or employer’s customers.
Primary duty must include the exercise of discretion and independent judgment regarding matters of significance.
Must be paid at least $455 a week on a salary or fee basis.
Does not include board, lodging, or other facilities
Separate administrative exemption for academic administrative employees

8. Executive – General Rule
To qualify as exempt, each of the following conditions must be met:
Primary duty must be management of the enterprise in which the employee is employed or a customarily recognized department or subdivision of the enterprise
Customarily and regularly direct the work of 2 or more other employees
Authority to hire or fire other employees, or particular weight must be given to the employee’s recommendations as to the hiring, firing, advancement, promotion, or other change of the employment status of other employees
Must be paid at least $455 a week on a salary or fee basis.
Does not include board, lodging, or other facilities

9. Professionals – General Rule
To qualify as exempt, each of the following conditions must be met:
Primary duty must be the performance of work
Learned professional exemption: requires advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction
Creative professional exemption: requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor
Must be paid at least $455 a week on a salary or fee basis.
Does not include board, lodging, or other facilities

10. Professionals – General Rule
Following occupations are never exempt regardless of rank or pay level
Police Officers, Detectives, Deputy Sheriffs, State Troopers
Highway Patrol Officers, Investigators, Inspectors, Correctional Officers
Probation Officers, Park Rangers
Firefighters, Paramedics, EMTs, Ambulance Personnel, Rescue Workers
Hazardous Material Workers

11. Computer Related – General Rule
To qualify as exempt, one or more the primary duties must be met:
Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functionality 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
Creation, design, documentation, testing, or modification of computer programs related to machine operating systems
Combination of these duties, the performance of which requires the same level of skills

12. Computer Related – General Rule
Highly skilled computer professionals
Paid a salary at least $455 per week
Hourly paid computer professionals
Paid at least $27.63 an hour

13. Outside Sales – General Rule
To qualify as exempt, each of the following conditions must be met:
Primary duty must be the performance of work
Making sales of tangible or intangible items such as goods, insurance, stocks, bonds or real estate
Obtaining orders or contracts for services or the use of facilities
Customarily and regularly work away from the employer’s place or places of business performing the employee’s primary duty

14. Retail / Service Industry
Exempt from overtime pay requirements of the FLSA if both of the following requirements are met:
Regular rate of pay on weekly basis is at least 1 ½ time the federal minimum wage in effect
Hourly rate plus commissions
More than half of their pay for at least one month comes from commissions
Hotels and Restaurants
Service charges added to the customer bill are considered commissions and can qualify for overtime exemption
Tips / Gratuities are optional for customer and not considered commissions and employees must be paid overtime

15. Minimum Wage Effective July 24, 2009: $7.25
Opportunity wage for teenagers: $4.25
Under the age of 20
Valid for first 90 consecutive calendar days regardless of breaks in service
Once 20th birthday or 90 consecutive calendar days reached, employee is to be paid at least minimum wage
State laws requiring higher rates are to be followed

16. Minimum Wage Calculation
Components to be considered:
Cash
Room and Board or other facilities provided by employer
Employee must actually benefit from facilities and accept voluntarily
Facilities supplied regularly to the employee or regularly supplied by other employers in a similar business
Facilities must primarily benefit the employee, not the employer
Employer can deduct only the reasonable cost of the facilities from the employee’s wages and cannot make a profit from providing the facilities

17. Tips and the Tip Credit
Conditions to be met for consideration to be a tipped employee:
Actually receive at least as much in tips as the credit taken by the employer
Employee is informed about the tip credit provisions before the credit is taken including:
Direct cash wage the employer is paying the employee
Additional amount the employer is using as a tip credit, up to the difference between the minimum wage and the direct cash wage
The tip credit cannot exceed the actual amount of tips received by the employee
The tip credit does not apply to tipped employees unless the employee has been informed about the FLSA’s tip credit provision
All tips received by tipped employees must be retained by the employees except under legitimate tip pooling arrangements

18. Tips and the Tip Credit
Conditions to be met for consideration to be a tipped employee:
All tips received by the employee must be kept by the employee, although valid tip pooling may be required amount employees who are customarily and regularly tipped
Credit card tips must be given to the employee by the next payday, although the credit card company’s percentage charge for the use of the card may be deducted from the tip
The tip credit may not be increased for overtime hours worked that are paid at a premium rate

19. Tips and the Tip Credit
Federal hourly rate for tipped employees: $2.13
Federal Tip Credit: $ ($ $2.13)
Hourly wage of $2.13 plus tips received, must be equal or greater than $7.25 per hour.
Employer is required to make up the difference to equal $7.25 per hour.
Tipped employees must regularly receive more than $30 a month in tips.
Service Charges are not tips
Watch out for State Laws regarding tipped employees

20. Equal Pay for Equal Work
Requires equal pay for men and women doing equal work under similar work conditions
Equal Work: jobs requiring equal skill, effort and responsibility
Enforced by the Equal Employment Opportunity Commission (EEOC)

21. Overtime Pay Requirements
General Rule
Covered employees must be paid at least 1 ½ time their “regular rate of pay” for all hours physically worked over 40 in a workweek
Tipped employees calculate cash wage using tipped employee wage and tip credit
($7.25 x 1.5) = $10.875
$ $5.12 = $5.76
$5.76 is cash wage for overtime hours

22. Workweek
Regularly recurring period of 168 hours (7 consecutive 24-hour periods)
Does not have to be the same as calendar week
Does not have to begin at the start of the day
Employers may have multiple work weeks for different employees as long as the work week remains fixed once established
Workweek can be changed only if the change is permanent and employees are notified
All overtime must be paid to employee on overlapping workweeks
FLSA contains an exemption for hospitals and nursing home to allow them more flexibility in scheduling

23. Hours Worked
FLSA requires overtime to be paid on for hours physically worked
Hours worked are not included in overtime calculation
Vacation, Holiday Pay, Jury Duty, Sick Leave
Hours not worked cannot be offset against any overtime pay due
No limit on hours of overtime worked, must all be paid

24. Regular Rate of Pay
Total hours worked x Hourly Rate of Pay + Non-Discretionary Bonus = Regular Pay
Regular Pay / Total Hours Worked = Regular Rate of Pay
Employee worked 48 hours in the workweek. Hourly rate is $11.25 per hours. Employee earned and is to be paid a non-discretionary bonus of $ Regular Rate of Pay?
48 x $11.25 = $ $25.00 = $565.00
$ / 48 = $ Regular Rate of Pay is $11.77

25. Included in Regular Rate of Pay
Shift differential
Non-discretionary bonuses
Payments in a form other than cash
Goods / services at reasonable cost or fair market value (FMV)
Retro-active pay
On-call pay
Supplemental disability payments
Sick leave buyback payments
Per diem pay

26. Not Included in Regular Rate of Pay
Gifts
Cannot be tied to hours worked, production, or efficiency
Amount can be based on a percentage of salary or length of service
Paid time off and reimbursed expenses
Discretionary bonuses
Benefit plan contributions
Stock options
Overtime compensation
Premium pay for extra days worked
Premium pay under a union contract for extra hours

27. Overtime Pay Calculation
Employee worked 48 hours in the workweek. Hourly rate is $11.25 per hours. Employee earned and is to be paid a non-discretionary bonus of $25.00.
48 x $11.25 = $ $25.00 = $565.00
$ / 48 = $ Regular Rate of Pay is $11.77
48 – 40 = 8 hours overtime
$11.77 x .5 = $5.885
$5.89 x 8 = $ Overtime Pay is $47.12

28. Special Considerations
Employees working at more than one rate
Salaried nonexempt employees
Workweeks of less than 40 hours
Pieceworkers
Tipped employees
Fluctuating workweeks
Belo-type constant wage plans
Overtime prepayment plan
Daylight saving time issues

29. Compensatory Time Off
Employers cannot “pay” overtime earned in one workweek by giving the employee time off work in another workweek, even if 1 ½ hours off are given for each overtime hour worked.
Employers cannot average the hours worked in consecutive workweeks to avoid paying overtime
Public sector employers can provide comp time instead of cash
Agreement in place before work
Reasonable period of time to take time off
Employees can be required to use comp time
Payment on termination
Maximum compensatory time accrual of 240 hours

30. Unauthorized Overtime
Definition of employ is to suffer or permit to work
All time over 40 hours must be paid overtime
Working during lunch hours
Working prior to start or stop time
Working at home – off the clock
Rules against unauthorized overtime must be consistently enforced
Abuse is a disciplinary issues not a pay issue.
If worked, must be paid

31. Meal and Rest Periods Must be relieved of all duties
Generally 30 minutes long – can be shorter
Must be free to pursue personal interests
Break time for nursing mothers must be provided
1 year after child’s birth
Not in a bathroom
Shielded from view and free from intrusion from coworkers and public
Employers with fewer than 50 employees may be exempt
Check state laws

32. Travel Time Non Compensable Compensable Travel home to work
Travel to and from home in a company vehicle
Compensable
Travel as part of the job
Travel away from home

33. On-Call Time Non Compensable Compensable
Employees leave word where they can be reached, but not working
Within a certain radius but not limited in conducting personal affairs
Employees living on the employer’s premises
Compensable
Required to be on employers premises
Personal time seriously curtailed
Restrictions on response time, geography, frequency of calls and personal activities
Sleeping time

34. Waiting Time Non Compensable Compensable Waiting to be engaged
Employee freed of all duties
Enough time to pursue personal business
Compensable
Engaged to be waiting
Usually short, spent on employers premises
Insufficient time for employee to use for his/her own purposes
Waiting on assignments, customers to arrive, minor repairs on machines

35. Meetings / Training Sessions
Non Compensable
If outside of normal working hours and voluntary
Compensable
Related to job
Held during business hours
Remedial education exemption
Partial overtime exemption for employees receiving remedial education.
Employer may employ a worker for up to 10 hours over the 40-hour workweek without having to pay overtime, if extra hours are spent in a remedial education program.

36. Preliminary / Postliminary Activities
Compensable
Changing clothes
Rounding differences
Non Compensable
Security procedures
Cleaning up
De minimis time
Time clock difference

37. Receiving Medical Attention
Compensable
Any time waiting for medical attention on the employer’s premise or at the employer’s direction during regular working hours
Compulsory medical exams
Mandatory drug and alcohol testing
Non Compensable
Attending alcohol treatment and counseling sessions outside of work hours

38. Child Labor Restrictions
Prohibited employment of oppressive child labor in connection with interstate commerce
Oppressive child labor is employment of any child under age 18 in violation of the child labor restrictions of the FLSA
Non Hazardous jobs
Minors under age 18
Minors age 14 and 15
Minors under age 14
Exceptions
Age Certificates
Watch state laws

39. Enforcement and Penalties
Portal to Portal Act
Protects employers if they have relied in good faith on a written interpretation of the FLSA by the Division or an administrative practice or enforcement policy of the Division
Affordable Care Act
Prohibits employers from discharging or otherwise discriminating against an employee because of ACA programs
Statute of Limitations
Complaints can be filed for minimum wage and overtime due up to 2 years earlier years if the violation was willful.

40. Public Contracts Laws Walsh-Healey Public Contracts Act
Wage rates for manufacturers and dealers
Davis-Bacon and Related Acts
Wage rates for public buildings and works
Contract Work Hours and Safety Standards Act
Overtime rates for Walsh-Healey Public Contracts Act
McNamara O-Hara Service Contract Act
Wage rates and benefits to federal government contractors
Copeland ‘Anti-Kickback’ Act

41. State Wage Hour State minimum wage rates State tip credits
State overtime pay requirements
State meal and rest period requirements
Directory of state wage and hour agencies
Please remember you will be tested on Federal not State laws

42. DO YOU KNOW??? 5 areas regulated by the FLSA?
Basic difference between exempt and nonexempt employees?
What conditions must be met for an employer to take advantage of the tip credit?
What is regular rate of pay?
What is the time limit for filing an FLSA complaint with the Wage and Hour Division?
What is the meaning of the term compensable time?