Jan 19, 2022 | Overtime & Wages
Characteristics Of The Warehouse & Wholesale Industries
The warehouse industry includes central warehouses for a business enterprise, public warehouses, and storage establishments.
The wholesale industry is characterized by the sale of goods for resale, rather than sales to the ultimate consumer.
All employees of wholesale or warehouse employers whose gross annual dollar volume of sales made or business done is not less than $500,000 are covered by the FLSA.
Even if a wholesale or warehouse business is not a covered enterprise, most employees will be covered by the FLSA on an individual basis. Individual coverage applies to all employees who are engaged in interstate commerce or the production of goods for commerce. Such employees include persons who receive, ship, transport, or load goods that are moving in commerce or who prepare or transmit documents relating to such shipments. Other individuals, such as guards, janitors and maintenance employees who perform duties which are closely related and directly essential to such interstate activities, are also covered by the FLSA.
FLSA Pay Requirements
The FLSA sets basic minimum wage and overtime pay standards and regulates the employment of minors. Covered, nonexempt employees must be paid the federal minimum wage. Non-exempt employees must also be paid time and one-half their regular rates of pay for all hours worked over 40 per workweek, regardless of whether paid an hourly rate, salary, piece rate, commission or other basis. Each workweek stands alone and there can be no averaging of hours over two or more workweeks.
Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the youth minimum wage.
No one under the age of 16 may work in a warehouse. Warehouse employers may not employ anyone under 16 years of age. Wholesalers may have employees as young as 14 in certain jobs, but only during closely regulated hours and in very limited occupations. Employees under age 18 may not engage in occupations which have been declared hazardous, including operating most power-driven hoisting apparatus such as forklifts.
Federal regulations, 29 CFR Part 516, specify the records which are to be kept on each employee. Most of the required records are of the type generally maintained by employers in ordinary business practices (e.g., employee names, addresses, hours of work, rates of pay, wages, deductions). These must usually be maintained for a 3-year period.
There may be employees within a covered business who are exempt from the minimum wage and/or overtime provisions of the FLSA. Bona fide executive, administrative and outside sales persons are exempt from both minimum wage and overtime provisions, if all the tests of the exemptions are met. Interstate drivers, mechanics, and loaders may be exempt from the FLSA’s overtime provisions.
Some Typical Problems Of The Wholesale & Warehouse Industries
- Employment of underage minors, especially in the operation of fork lifts and paper balers.
- Misapplication of the executive or administrative exemptions to non-exempt individuals, such as clerical workers, working forepersons, dispatchers, and inside salespersons.
- The misconception that salaried employees need not be paid overtime.
- Failure to pay employees for all hours suffered or permitted to work, including, for example, time spent taking inventory, and completing paperwork, beyond the normal schedule.
- Failure to maintain time records on salaried or piece-rate employees.
- Giving compensatory time off in lieu of overtime pay.
- Considering certain employees to be “contract labor” and, thus, not covered by the FLSA’s provisions.
- Deductions made for reasons other than, for example, board and lodging, in overtime work weeks.
Source: U.S. Department of Labor (Fact Sheet #10, Revised July 2008)
Warehouse and Wholesale employees who believe they are victims of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
Jan 19, 2022 | Overtime & Wages
Nurses, The Fair Labor Standards Act & The Learned Professional Exemption
The Fair Labor Standards Act (“FLSA“) requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek.
Section 13(a)(1) of the FLSA, however, provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. To qualify for exemption, employees, including nurses, must meet certain tests regarding their job duties and be paid on a salary basis of not less than $684 per week.
To qualify for the learned professional employee exemption, all the following tests must be met:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
- The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment;
- The advanced knowledge must be in a field of science or learning; and
- The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
Registered nurses who are paid on an hourly basis should receive overtime pay. Registered nurses, however, who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption and, if paid on a salary basis of at least $684 per week, may be classified as exempt.
Licensed practical nurses and other similar health care employees, however, generally do not qualify as exempt learned professionals, regardless of work experience and training, and are entitled to overtime pay, because possession of a specialized advanced academic degree is not a standard prerequisite for entry into such occupations.
Source: U.S. Department of Labor
Nurses Who Have Been Misclassified As Exempt From Overtime
Merely because a nurse with “advanced knowledge” or a “specialized advanced academic degree” is paid a salary does not automatically mean that a nurse can properly be classified as exempt from overtime pay, particularly if a nurse who is deemed classified as exempt performs duties inconsistent with the learned professional employee exemption.
NURSES WHO BELIEVE THEY HAVE BEEN MISCLASSIFIED AS EXEMPT FROM OVERTIME PAY ARE ENCOURAGED TO COMPLETE THE FORM ABOVE ON THE RIGHT OR CONTACT KEHOE LAW FIRM, P.C., MICHAEL YARNOFF, ESQ., (215) 792-6676, EXT. 804, [email protected], [email protected], FOR A FREE, NO-OBLIGATION EVALUATION OF YOUR EMPLOYMENT CIRCUMSTANCES AND POTENTIAL LEGAL CLAIMS.
Jan 17, 2022 | Overtime & Wages
Important Information For Tipped Employees
Tipped employees are those who customarily and regularly receive more than $30 per month in tips. Tips are the property of the employee. The employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool. Only tips actually received by the employee may be counted in determining whether the employee is a tipped employee and in applying the tip credit.
Tip Credit: Section 3(m) of the Fair Labor Standards Act (“FLSA”) permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Thus, the maximum tip credit that an employer can currently claim under the FLSA section 3(m) is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations.
For specific minimum wage information by U.S. State for tipped employees, please click “Minimum Wages for Tipped Employees By State.”
Tip Pool: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors.
An employer must provide the following information to a tipped employee, before the employer may use the FLSA 3(m) tip credit:
1) the amount of cash wage the employer is paying a tipped employee, which must be at least $2.13 per hour; 2) the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25); 3) that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee; 4) that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and 5) that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.
The employer may provide oral or written notice to its tipped employees informing them of items 1-5 above. An employer who fails to provide the required information cannot use the section 3(m) tip credit and, therefore, must pay the tipped employee at least $7.25 per hour in wages and allow the tipped employee to keep all tips received.
Employers electing to use the tip credit provision must be able to show that tipped employees receive at least the minimum wage when direct (or cash) wages and the tip credit amount are combined. If an employee’s tips combined with the employer’s direct (or cash) wages of at least $2.13 per hour do not equal the minimum hourly wage of $7.25 per hour, the employer must make up the difference.
Retention Of Tips: A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.
Tip Pooling: As noted above, the requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips. The FLSA does not impose a maximum contribution amount or percentage on valid mandatory tip pools. The employer, however, must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for the amount of tips each tipped employee ultimately receives, and may not retain any of the employees’ tips for any other purpose.
Dual Jobs: When an employee is employed by one employer in both a tipped and a non-tipped occupation, such as an employee employed both as a maintenance person and a waitperson, the tip credit is available only for the hours spent by the employee in the tipped occupation. The FLSA permits an employer to take the tip credit for some time that the tipped employee spends in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips.
For example, a waitperson who spends some time cleaning and setting tables, making coffee, and occasionally washing dishes or glasses is considered to be engaged in a tipped occupation even though these duties are not tip producing. Where a tipped employee, however, spends a substantial amount of time (in excess of 20 percent in the workweek) performing related duties, no tip credit may be taken for the time spent in such duties.
Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not a tip. Such charges are part of the employer’s gross receipts. Sums distributed to employees from service charges cannot be counted as tips received, but may be used to satisfy the employer’s minimum wage and overtime obligations under the FLSA. If an employee receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tip credit.
Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA. However, this charge on the tip may not reduce the employee’s wage below the required minimum wage. The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.
Minimum Wage Problems
-Where an employee does not receive sufficient tips to make up the difference between the direct (or cash) wage payment (which must be at least $2.13 per hour) and the minimum wage, the employer must make up the difference.
-Where an employee receives tips only and is paid no cash wage, the full minimum wage is owed.
-Where deductions for walk-outs, breakage, or cash register shortages reduce the employee’s wages below the minimum wage, such deductions are illegal.
–When an employer claims an FLSA 3(m) tip credit, the tipped employee is considered to have been paid only the minimum wage for all non-overtime hours worked in a tipped occupation and the employer may not take deductions for walkouts, cash register shortages, breakage, cost of uniforms, etc., because any such deduction would reduce the tipped employee’s wages below the minimum wage.
-Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed the full $7.25 minimum wage and reimbursement of the amount of tips that were improperly utilized by the employer.
Overtime Problems
-Where the employer takes the tip credit, overtime is calculated on the full minimum wage, not the lower direct (or cash) wage payment. The employer may not take a larger FLSA 3(m) tip credit for an overtime hour than for a straight time hour. Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations.
-Where overtime is not paid based on the regular rate including all service charges, commissions, bonuses, and other remuneration.
NOTE: The aforementioned was obtained from the U.S. Department of Labor (“DOL”) and is provided as general information concerning the application of the FLSA to employees who receive tips. The current federal regulations related to tipped employees can be found at https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-531/subpart-D.
NOTE: In the Consolidated Appropriations Act, 2018 (“Act”), Congress vacated the DOL 2011 regulations that barred tip pooling when employers do not claim a tip credit under section 3(m) of the FLSA. Statements contained herein to the contrary are no longer policy of the DOL’s Wage and Hour Division (“WHD”). The Act did not impact WHD’s enforcement when an employer claims a tip credit.
NOTE: For current guidance on dual jobs and related duties under Section 3(m) of the FLSA, please see FAB 2019-2. (Revised April 2018).
NOTE: The DOL published a final rule, “Tip Regulations Under the Fair Labor Standards Act (FLSA)” (2020 Tip final rule), in the Federal Register on December 30, 2020. See 85 FR 86756. On April 28, 2021, before the 2020 Tip final rule became effective, the DOL announced a final rule delaying the effective date of three portions of the 2020 Tip final rule for eight months, until December 31, 2021. See 86 FR 22597. This delay allowed the DOL time to publish the final rule (“CMP final rule”) withdrawing and modifying the two portions of the 2020 Tip final rule related to the assessment of Civil Money Penalties (“CMP”), see 86 FR 52973, and to publish the final rule revising the portion of the 2020 Tip final rule addressing the application of the FLSA’s tip credit provision to tipped employees who perform both tipped and non-tipped duties (“Dual Jobs final rule”).
NOTE: The DOL announced publication of the CMP final rule on September 23, 2021 (see 86 FR 52973). The CMP final rule adopts language upholding the DOL’s statutorily-granted discretion with regard to section 3(m)(2)(B) CMPs and aligns the DOL’s regulations with the FLSA’s statutory text. The CMP final rule also revises other CMP regulations addressing when a violation of section 6 (minimum wage) or section 7 (overtime) of the FLSA is “willful” and thus subject to a CMP. This revision further aligns the DOL’s regulations with applicable precedent and how the DOL actually litigates willfulness and provides improved guidance on circumstances where employers’ conduct may be willful. The CMP final rule also modifies regulatory provisions adopted in the 2020 Tip final rule addressing managers and supervisors. This revision clarifies that while managers or supervisors may not receive tips from mandatory tip pools, managers and supervisors are not prohibited from contributing tips to eligible employees in such pools.
NOTE: On October 28, 2021, the DOL announced publication of the Dual Jobs final rule. (See FR 2021-23446) This final rule finalizes the DOL’s proposal to withdraw one portion of the Tip Regulations Under the Fair Labor Standards Act (2020 Tip final rule) (See 85 FR 86756) as well as finalize revisions related to the determination of when a tipped employee is employed in dual jobs under the FLSA. The rule was effective December 28, 2021.
NOTE: The remainder of the 2020 Tip final rule—consisting of those portions addressing the keeping of tips and tip pooling, recordkeeping, and minor technical changes made to update the regulations to reflect the new statutory language and citations added by the CAA amendments—became effective on April 30, 2021.
NOTE: Additional information for employees can be found at Dual Jobs Final Rule: Tip Regulations Under the Fair Labor Standards Act; Partial Withdrawal & Dual Jobs: Definitions and Examples; Tips Dual Jobs: Tip Regulations Under the Fair Labor Standards Act; Partial Withdrawal; CMP Final Rule:Tip Regulations under the Fair Labor Standards Act; Partial Withdrawal; 2020 Tip Final Rule: Tip Regulations under the FLSA.
Source: U.S. Department of Labor (accessed January 17, 2022).
Tipped employees who believe they have been a victim of wage and hour violations are encouraged to complete the form above on the right or e-mail [email protected] for a free, no-obligation evaluation of potential legal claims.
Jan 14, 2022 | Overtime & Wages
Wage & Hour Investigation On Behalf Of Warehouse Workers In Pennsylvania Who Have Not Been Paid For Spending Time In Security Screenings Before Or After A Work Shift
If you have been a Warehouse Worker employed in Pennsylvania who has been required to spend time going through security screenings before or after your work shift, you may have a claim for unpaid wages for “off-the-clock” time going through security screenings required by your employer.
In regards to warehouse workers, employees should be aware that Amazon was recently ordered by the Pennsylvania Supreme Court to pay its warehouse workers for time spent in security screenings.
Workers at Amazon Fulfillment Centers in Pennsylvania are required to go through security screenings after they clock out at the end of the workday. This is done as a precautionary measure by the company to minimize losses due to employee theft. Such security screenings are solely done for the benefit of the company. Despite the extensive amount of time spent in security screenings, Amazon never paid their employees for this time. But in 2013, two Amazon employees at the company’s Breinigsville, PA warehouse filed a class action lawsuit seeking compensation for the time they spent waiting in line to have their bags searched.
Eventually, the class action reached the Pennsylvania Supreme Court, which ruled that this practice violates the Pennsylvania Minimum Wage Act. Specifically, the Pennsylvania Supreme Court determined that under the Pennsylvania Minimum Wage Act, the phrase “hours worked” includes “any time when an employee is required by the employer to be on the premises of the employer.” Further, there is no exception for “de minimis” amounts of time under the Act.
The Court’s holding in the Amazon case that time spent in security checks is compensable is not only important for Amazon employees in Pennsylvania, it also is significant for any worker in Pennsylvania who has been required by his or her employer to spend time off-the-clock going through security screenings.
Warehouse Workers in Pennsylvania who have not been compensated for pre- and post-shift security screenings are encouraged to contact Kehoe Law Firm, P.C., Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to learn more about the wage and hour investigation and potential legal claims.
Dec 23, 2021 | Overtime & Wages
The FLSA establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.
- FLSA Minimum Wage: The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.
- FLSA Overtime: Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days. Some exceptions to the 40 hours per week standard apply under special circumstances to police officers and fire fighters employed by public agencies and to employees of hospitals and nursing homes.
- Hours Worked (PDF): Hours worked ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace.
- Recordkeeping (PDF): Employers must display an official poster outlining the requirements of the FLSA. Employers must also keep employee time and pay records.
- Child Labor: These provisions are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well-being.
Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners.
Many states, such as Pennsylvania, also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate. Where state law requires a higher minimum wage, the higher standard applies.
Some states have also enacted overtime laws. Where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay).
Wage and Hour Division, U.S. Department of Labor
The Wage and Hour Division of the U.S. Department of Labor enforces the FLSA’s federal minimum wage, overtime pay, record keeping, and child labor requirements. The following are links to FLSA-related investigations conducted by the Wage and Hour Division of the U.S. Department of Labor:
$125K in overtime, prevailing wages recovered for 34 plumbers employed by federal project’s subcontractor
$1.3M in back wages recovered for 500 farmworkers in Texas denied full wages, overtime
$137,838 in wages, damages for 71 home healthcare workers who were denied overtime
Home healthcare provider pays $120K in back wages, damages to 36 employees after DOL finds wage violations
$139K in overtime back wages recovered for 21 employees after federal court orders employer to comply
$79K in wages recovered for 39 healthcare workers serving individuals with disabilities in Louisiana
Federal investigators find Texas residential builder owed employees $163K in overtime
Federal court orders Weymouth, MA restaurant and owner to pay $345K in back wages and damages to 13 workers denied overtime pay and earned tips
New Hampshire Retailer Pays $50,000 In Punitive Damages To Worker Terminated After Asking For Owed Overtime Wages
Investigation Recovers $97K In Back Wages, Damages For 330 Workers After U.S. Department Of Labor Finds Violations At 11 Frozen Yogurt Franchise Locations
Honolulu company to pay more than $1 million to 171 security officers after investigation found that the employer illegally schemed to deny payment of overtime wages
North Charleston employer found to have kept workers tips, failed to pay overtime; investigation recovers $154K in back wages, damages
Court orders Long Island horse trainer, stable to pay $132K to 52 employees after US Department of Labor finds wage theft, falsified records
$72K in back wages and damages recovered, after an investigation finds California construction employer underpaid its workers – employees not paid for required off-the-clock work
Hawaii restaurants operator shortchanged cooks In Honolulu, Kailua, failed to pay overtime wages
Federal court orders Massachusetts contractor with history Of FLSA violations to pay $438K in unpaid overtime to 250 employees
Court orders Long Island pizzeria to pay $178K in back wages, damages, penalties for denying workers overtime wages
$105K recovered in back wages for 92 workers, after investigation finds overtime violations by Tampa healthcare services provider
Oklahoma City area nursing homes operators failed to pay workers for time spent in training, meetings
US Department of Labor finds violations at Mississippi fish farms, recovers more than $102K in back wages for 123 workers
Luxury apartment complex in San Jose’s historic Japantown denied maintenance workers overtime wages owed
Wage & Hour Lawsuits
Oct 13, 2021 | Overtime & Wages
Important Things Employees Should Know About The Minimum Wage, Overtime Pay, And The Fair Labor Standards Act
Kehoe Law Firm, P.C. is making employees aware that the Fair Labor Standards Act (“FLSA”) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments.
Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
The federal minimum wage provisions are contained in the FLSA. The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Some state laws provide greater employee protections; employers must comply with both.
The FLSA does not provide wage payment collection procedures for an employee’s usual or promised wages or commissions in excess of those required by the FLSA. However, some states do have laws under which such claims (sometimes including fringe benefits) may be filed.
Covered, nonexempt workers are entitled to a minimum wage of $7.25 per hour effective July 24, 2009. Special provisions apply to workers in American Samoa and the Commonwealth of the Northern Mariana Islands. Nonexempt workers must be paid overtime pay at a rate of not less than one and one-half times their regular rates of pay after 40 hours of work in a workweek.
Wages required by the FLSA are due on the regular payday for the pay period covered. Deductions made from wages for such items as cash or merchandise shortages, employer-required uniforms, and tools of the trade, are not legal to the extent that they reduce the wages of employees below the minimum rate required by the FLSA or reduce the amount of overtime pay due under the FLSA.
The FLSA contains some exemptions from these basic standards. Some apply to specific types of businesses; others apply to specific kinds of work.
While the FLSA does set basic minimum wage and overtime pay standards and regulates the employment of minors, there are a number of employment practices which the FLSA does not regulate.
For example, the FLSA does not require:
- vacation, holiday, severance, or sick pay;
- meal or rest periods, holidays off, or vacations;
- premium pay for weekend or holiday work;
- pay raises or fringe benefits; or
- a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.
The FLSA does not provide wage payment or collection procedures for an employee’s usual or promised wages or commissions in excess of those required by the FLSA. However, some States do have laws under which such claims (sometimes including fringe benefits) may be filed.
Also, the FLSA does not limit the number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old.
The above matters are for agreement between the employer and the employees or their authorized representatives.
All employees of certain enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person, are covered by the FLSA.
A covered enterprise is the related activities performed through unified operation or common control by any person or persons for a common business purpose and —
- whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated); or
- is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, or the mentally ill who reside on the premises; a school for mentally or physically disabled or gifted children; a preschool, an elementary or secondary school, or an institution of higher education (whether operated for profit or not for profit); or
- is an activity of a public agency.
Any enterprise that was covered by the FLSA on March 31, 1990, and that ceased to be covered because of the revised $500,000 test, continues to be subject to the overtime pay, child labor and recordkeeping provisions of the FLSA.
Employees of firms which are not covered enterprises under the FLSA still may be subject to its minimum wage, overtime pay, recordkeeping, and child labor provisions if they are individually engaged in interstate commerce or in the production of goods for interstate commerce, or in any closely-related process or occupation directly essential to such production.
Such employees include those who work in communications or transportation; regularly use the mails, telephones, or telegraph for interstate communication, or keep records of interstate transactions; handle, ship, or receive goods moving in interstate commerce; regularly cross State lines in the course of employment; or work for independent employers who contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce.
Domestic service workers such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters are covered if:
- their cash wages from one employer in calendar year 2010 are at least $1,700 (this calendar year threshold is adjusted by the Social Security Administration each year); or
- they work a total of more than 8 hours a week for one or more employers.
Tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.
The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the applicable minimum wage (see above) when direct wages and the tip credit allowance are combined. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.
The federal overtime provisions are contained in the FLSA. Unless exempt, employees covered by the FLSA must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the FLSA on the number of hours employees aged 16 and older may work in any workweek. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.
The FLSA applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.
On May 20, 2020, the Department of Labor announced a final rule that allows employers to pay bonuses or other incentive based pay to salaried, nonexempt employees whose hours vary from week to week. The final rule clarifies that payments in addition to the fixed salary are compatible with the use of the fluctuating workweek method under the FLSA. For more information, see www.dol.gov/agencies/whd/overtime/fww.
On May 18, 2020, the U.S. Department of Labor announced a final rule to withdraw the partial lists of establishments that lack or may have a “retail concept” under the FLSA. For more information, click www.dol.gov/agencies/whd/overtime/2020-7i.
On December 12, 2019, the U.S. Department of Labor announced a Final Rule that will allow employers to more easily offer perks and benefits to their employees. For more information, click www.dol.gov/agencies/whd/overtime/2019-regular-rate.
On September 24, 2019, the U.S. Department of Labor announced a final rule to make 1.3 million American workers eligible for overtime pay. For more information, click www.dol.gov/agencies/whd/overtime2019/index.
Overtime must be paid at a rate of at least one and one-half times the employee’s regular rate of pay for each hour worked in a workweek in excess of the maximum allowable in a given type of employment. Generally, the regular rate includes all payments made by the employer to or on behalf of the employee (except for certain statutory exclusions). The following examples are based on a maximum 40-hour workweek applicable to most covered nonexempt employees.
- Hourly rate (regular pay rate for an employee paid by the hour) – If more than 40 hours are worked, at least one and one-half times the regular rate for each hour over 40 is due. Example: An employee paid $8.00 an hour works 44 hours in a workweek. The employee is entitled to at least one and one-half times $8.00, or $12.00, for each hour over 40. Pay for the week would be $320 for the first 40 hours, plus $48.00 for the four hours of overtime – a total of $368.00.
- Piece rate – The regular rate of pay for an employee paid on a piecework basis is obtained by dividing the total weekly earnings by the total number of hours worked in that week. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the full piecework earnings. Example: An employee paid on a piecework basis works 45 hours in a week and earns $405. The regular rate of pay for that week is $405 divided by 45, or $9.00 an hour. In addition to the straight-time pay, the employee is also entitled to $4.50 (half the regular rate) for each hour over 40 – an additional $22.50 for the 5 overtime hours – for a total of $427.50.Another way to compensate pieceworkers for overtime, if agreed to before the work is performed, is to pay one and one-half times the piece rate for each piece produced during the overtime hours. The piece rate must be the one actually paid during nonovertime hours and must be enough to yield at least the minimum wage per hour.
- Salary – The regular rate for an employee paid a salary for a regular or specified number of hours a week is obtained by dividing the salary by the number of hours for which the salary is intended to compensate. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the salary.
If, under the employment agreement, a salary sufficient to meet the minimum wage requirement in every workweek is paid as straight time for whatever number of hours are worked in a workweek, the regular rate is obtained by dividing the salary by the number of hours worked each week.
To illustrate, suppose an employee’s hours of work vary each week and the agreement with the employer is that the employee will be paid $480 a week for whatever number of hours of work are required. Under this agreement, the regular rate will vary in overtime weeks. If the employee works 50 hours, the regular rate is $9.60 ($480 divided by 50 hours). In addition to the salary, half the regular rate, or $4.80, is due for each of the 10 overtime hours, for a total of $528 for the week. If the employee works 60 hours, the regular rate is $8.00 ($480 divided by 60 hours). In that case, an additional $4.00 is due for each of the 20 overtime hours for a total of $560 for the week.
In no case may the regular rate be less than the minimum wage required by the FLSA.
If a salary is paid on other than a weekly basis, the weekly pay must be determined in order to compute the regular rate and overtime pay. If the salary is for a half month, it must be multiplied by 24 and the product divided by 52 weeks to get the weekly equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.
Source: U.S. Department Of Labor, Wage and Hour Division (Last accessed 10.13.2021)
