Fair Labor Standards Act

April 5 & 6, 2007

U.S. Dept. of Labor

In Fiscal Year 2006

The Wage and Hour Division collected $172 million in back wages for more than 264,000

employees.

Low-Wage Industries Statistics Cases Back Wages Employees

Agriculture 1,410 $1,688,599 2,968

Day Care 911 $1,302,282 4,459

Restaurants 4,342 $16,945,668 29,102

Garment Manufacturing 442 $2,914,067 2,882

Guard Services 664 $10,684,509 10,670

Health Care 1,615 $10,094,948 24,227

Hotels and Motels 864 $2,622,655 4,925

Janitorial Services 528 $3,253,038 4,349

Temporary Help 396 $1,060,895 3,198

Total Low-Wage Industries 11,172 $50,566,661 86,780

Disclaimer

Alpha Benefits Group provides a variety of business advisory consulting services for its clients. Alpha Benefits Group does

not, however, provide legal services and does not employ individuals licensed or competent to practice law in any

jurisdiction. Therefore, any services or information provided by Alpha Benefits Group are not legal opinions or legal advice. If legal advice, counsel, or representation is needed, the services

of a competent legal professional should be sought.

Agenda

• Exempt/Nonexempt• Overtime Pay• Hours Worked• Deduction from Wages• Child Labor• Recordkeeping

Exempt vs. Non-Exempt

Most employees must be paid the federal minimum wage and overtime pay at

time and one half the regular rate of pay for all hours worked in excess of 40 per

week.

Exemptions

• Employees can be exempt from minimum wage and overtime if the position meets certain tests.

• Exemptions are not based on job titles; they are determined on a case-by-case basis.

Exemptions

• Administrative

• Executive

• Professional

• Computer

• Outside Sales

ExemptionsExecutive

• Must be paid at least $455 per week• The employee’s primary duty must be managing the enterprise, or

managing a customarily recognized department or subdivision of the enterprise;

• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and

• The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

ExemptionsAdministrative

• Must be paid at least $455 per week• The employee’s primary duty must be the performance of office

or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

ExemptionsProfessional

• Must be paid at least $455 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.

ExemptionsComputer

• Must be paid at least $455 per week or hourly rate of $27.63.

• The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing specific duties

Exemptions

Outside Sales

• The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

• The employee must be customarily and regularly engaged away from the employer’s place or places of business.

Exemptions

• Employers must follow the law that benefits the employee• Pennsylvania Exemptions:

– Salary Test is $155 per week

– Executive, Administrative, and Professional

– PA law does not recognize a highly compensated limit

Overtime Pay

• A work week is a fixed, regularly recurring period of 168 hours, 7 consecutive 24 hour period.

• Averaging hours over a two week period is not permitted

• In most cases paid at 1.5 times the regular rate• Employees are not permitted to waive their rights

to overtime.

Overtime PayRegular Rate of Pay

• Includes regular wage and non-discretionary bonuses• Employee earns $6.00/hr. and $9.20 production

bonus. The employee worked 46 hours. What is the employee’s weekly wage?

• 46 * $6 = $276 + $9.20 = $285.20 • 285.20/46 =6.20• 6.20 * 46 =$285.20 + 3.10*6 hours = $18.60 • $285.20 + $18.60 = $303.80

Overtime Pay

Special Situations

• 8/80 system – health care facilities

• Workweek that is more than 40 hours

Hours Worked

• Does not include paid time off• Waiting Time• On-Call Time• Rest and Meal Periods• Sleeping Time• Training & Meetings• Travel Time

Deductions

• Employees’ wages may not drop below the minimum wage. (exceptions: taxes, garnishments, and benefits)

• Deductions for exempt employees are limited.• Each employer should have an improper pay

deduction policy.

Child Labor Laws

• Federal Laws are less restrictive than state• PA Law:

– Work Permits for teens under age 18– 14 & 15 year olds restricted work hours– 17 & under restricted jobs– Under 18 must have a 30 minute break every 5

hours

Recordkeeping

1. Employee's full name and social security number. 2. Address, including zip code. 3. Birth date, if younger than 19. 4. Sex and occupation. 5. Time and day of week when employee's workweek

begins. 6. Hours worked each day. 7. Total hours worked each workweek.

Recordkeeping8. Basis on which employee's wages are paid (e.g., "$6 an

hour", "$220 a week", "piecework") 9. Regular hourly pay rate. 10. Total daily or weekly straight-time earnings. 11. Total overtime earnings for the workweek. 12. All additions to or deductions from the employee's wages. 13. Total wages paid each pay period. 14. Date of payment and the pay period covered by the

payment.

Questions

• Business closes due to snow emergency, is the employer required to pay employees for the day off?

• Employee spends two days on jury duty, does the employer have to pay the employee?

• Can an employer provide exempt employees with compensatory time off?

• Employee goes home early due to illness, does the employer compensate for the whole day?