Jim Marco, president, Consultant of Saratoga
Human Resources Solutions Inc.
BY JIM MARCO
The Fair Labor Standards Act (FLSA) is the
piece of federal legislation that established
minimum wage and overtime requirements, and
defined which employees are exempt from the
minimum wage and overtime provisions of the act,
and which employees need to receive overtime pay.
The FLSA provides definitions under which employee
can be exempt. These exemptions fall under
certain categories such as executive exemption,
administrative exemption, professional exemption,
outside sales exemption, and the computer
employee exemption. Exempt employees are often
referred to as salaried employees.
In order to qualify for exempt status, employees
must meet three critical criteria related to job duties,
a minimum level of weekly pay, and they must
be paid on a salaried basis, which is also defined
by the FLSA. Companies who pay all employees a
weekly salary, thinking they are avoiding overtime
payments, are taking a substantial risk. Both the
federal and state departments of labor enforce
these laws, although it is usually the state that you
will be dealing with during an audit.
This can result in back pay, for several years,
fines and other penalties. Your best defense is an
accurate and compliant job description, good job
analysis, and a thorough documented review of
the requirements.
In addition, federal law is the minimum standard,
there are also state laws that generally place
greater responsibilities on business than federal
law. For example, the federal minimum wage is
$7.25, while New York state, in most sectors, is
now at $9 per hour. Employers in New York must
pay the $9 rate, not the lower federal minimum.
New York has other wage and hour laws such as
the Wage Theft Prevention Act that also requires
certain actions from employers.
Time keeping is critical to being able to show
compliance with overtime laws, so make sure you
have an accurate timekeeping system.
Lastly, New York state requires employers to
provide at least a 30-minute lunch break to employees
who work more than six hours. This is
unpaid time where employees are allowed to use
the time for their own benefit.
They are not required to eat, they are required
to be relieved from duty. Eating at a desk while
answering e-mail or picking up the phone is not
compliant. To prove that you provide a lunch break,
make employees punch in and punch out.
Pay systems that automatically deduct 30 minutes
from a time card are suspect and often are
targets of Department of Labor audits.
These laws are complex, with many nuances, so
the tips above are necessarily brief. Seek out expert
guidance if these laws become confusing, because
a DOL audit is not a consulting visit.
Marco is president and principal consultant of
Saratoga Human Resources Solutions Inc.