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)