The Fair Labor Standards Act...The Fair Labor Standards Act: A Public Sector Compliance Guide | ©2018 Liebert Cassidy Whitmore TABLE OF CONTENTS Section 2 WHO IS COVERED BY THE …

TheFair

LaborStandards

Act

A Public Sector Compliance Guide

The Fair Labor Standards Act: A Public Sector Compliance Guide | ©2018 Liebert Cassidy Whitmore

TABLE OF CONTENTS

Section 1

OVERVIEW OF THE FAIR LABOR STANDARDS ACT

A. INTRODUCTION AND SUMMARY OF REQUIREMENTS...........................................................................................1 1. Minimum Wage...............................................................................................................................................1 2. Overtime Compensation ..................................................................................................................................1 3. Recordkeeping and Posting .............................................................................................................................2 4. Child Labor .....................................................................................................................................................2 5. No Retaliation .................................................................................................................................................2 6. Equal Pay ........................................................................................................................................................2

B. THE PORTAL-TO-PORTAL ACT .............................................................................................................................2

C. A BRIEF HISTORY: HOW DID WE GET HERE? .....................................................................................................3

D. COMMON MISCONCEPTIONS ABOUT THE FLSA (OR WHAT THE FLSA DOES NOT COVER) ..........................3 1. State Wage and Hour Law ...............................................................................................................................4 2. Overtime for Hours Worked Over Eight in a Day ...........................................................................................4 3. Meal Times and Break Periods........................................................................................................................4 4. Standby or On-Call Pay ...................................................................................................................................5 5. Premium Pay ...................................................................................................................................................5 6. Severance Pay .................................................................................................................................................5 7. Notice of Discharge .........................................................................................................................................5 8. Limitations on Hours of Work ........................................................................................................................5

E. STRUCTURE AND ADMINISTRATION .....................................................................................................................5 1. The Act Itself ...................................................................................................................................................5 2. The Wage and Hour Division of the Department of Labor .............................................................................5

a. Congressional Delegation ........................................................................................................................5 b. Wage and Hour Offices ............................................................................................................................6 c. Regulations ...............................................................................................................................................8 d. Interpretive Bulletins and Letter Rulings .................................................................................................8

3. Court Decisions ...............................................................................................................................................8

F. REMEDIES AND ENFORCEMENT .............................................................................................................................9 1. Statute of Limitations ......................................................................................................................................9 2. Remedies .........................................................................................................................................................9

a. Backpay ....................................................................................................................................................9 b. Liquidated Damages .................................................................................................................................9 c. Emotional Distress Damages ...................................................................................................................9 d. Attorneys’ Fees and Costs ...................................................................................................................... 10

3. Criminal Penalties ......................................................................................................................................... 10


G. STATE AND ARMS OF THE STATE ARE IMMUNE FROM SUIT BY PRIVATE INDIVIDUALS ................................... 10 1. Which Agencies are “Arms of the State”? .................................................................................................... 10

a. Municipalities ......................................................................................................................................... 10 b. Community Colleges .............................................................................................................................. 10 c. School Districts ...................................................................................................................................... 11 d. Counties ................................................................................................................................................. 11 e. Other Agencies ....................................................................................................................................... 11

ENDNOTES ................................................................................................................................................................... 12


TABLE OF CONTENTS

Section 2

WHO IS COVERED BY THE FLSA? (Or More Importantly, Who Is Not Covered)

A. INTRODUCTION TO COVERAGE ISSUES .................................................................................................................1

B. LIMITED EXCLUSION FOR ELECTED OFFICIALS, THEIR STAFF AND CERTAIN EMPLOYEES OF LEGISLATIVE

BODIES....................................................................................................................................................................2 1. Statutory Exclusion .........................................................................................................................................2 2. Criteria for Each Excluded Class ....................................................................................................................2

a. Elected Officials .......................................................................................................................................2 b. Personal Staff of Elected Officials ...........................................................................................................2 c. Appointees at a Policymaking Level ........................................................................................................3 d. Immediate Advisor on Constitutional or Legal Issues .............................................................................3 e. Legislative Staff .......................................................................................................................................3

3. Case Studies for the Statutory Exclusions .......................................................................................................3

C. INDEPENDENT CONTRACTORS ..............................................................................................................................5

1. General Principles ...........................................................................................................................................5

2. Case Studies for Independent Contractors.......................................................................................................6

D. TRAINEES / UNPAID INTERNS ...............................................................................................................................7

1. General Principles ...........................................................................................................................................7 2. Multi-Factor Primary Benefit Test for Trainee / Unpaid Intern Status ...........................................................7 3. Case Study on Trainee/Unpaid Intern Status ...................................................................................................8

E. VOLUNTEERS ..........................................................................................................................................................8

1. Introduction to the Volunteer Exclusion .........................................................................................................8 2. Permissible Payments and Benefits .................................................................................................................8

a. Allowable Expenses .................................................................................................................................8 b. Reasonable Benefits .................................................................................................................................9 c. Nominal Fees ...........................................................................................................................................9

3. Volunteers Who Also are Current Employees .............................................................................................. 11 a. Definition of Same Agency .................................................................................................................... 11 b. Definition of Same Type of Services ..................................................................................................... 11 c. Special Rule for Public Safety Employees ............................................................................................. 12

4. Case Studies on Volunteer Status .................................................................................................................. 13

F. MISCELLANEOUS FLSA COVERAGE ISSUES ....................................................................................................... 14 1. Prison Inmates ............................................................................................................................................... 14 2. Employees Engaged in Interstate Commerce ................................................................................................ 14 3. Employees Who Travel Outside of the United States ................................................................................... 14

ENDNOTES ................................................................................................................................................................... 15


TABLE OF CONTENTS

Section 3

OVERTIME EXEMPTIONS

A. THE “WHITE COLLAR” EXEMPTIONS .............................................................................................................1 1. The Salary Tests .......................................................................................................................................1 2. The Duties Tests .......................................................................................................................................7

B. SPECIAL EXEMPTION FOR HIGHLY COMPENSATED EMPLOYEES ................................................................ 19

C. SPECIAL EXCLUSION FOR “FIRST RESPONDERS” ........................................................................................ 20

D. SPECIAL EXEMPTION FOR COMPUTER FIELD EMPLOYEES ........................................................................... 21

E. “RECREATIONAL ESTABLISHMENT” POSITIONS .......................................................................................... 22

F. HOME HEALTH CARE AND THE COMPANIONSHIP SERVICES EXEMPTION ................................................ 22

G. OUTSIDE SALES PERSONS ............................................................................................................................ 23

H. AGRICULTURAL IRRIGATION POSITIONS FOR WATER AGENCIES .............................................................. 23

APPENDIX 3-A .................................................................................................................................................... 25

Summary Checklists for “White Collar” Exemptions ................................................................................... 25

APPENDIX 3-B ..................................................................................................................................................... 29 White Collar Exemptions .............................................................................................................................. 29

APPENDIX 3-C ..................................................................................................................................................... 31 Sample Position Survey for Overtime Exemptions ....................................................................................... 31

ENDNOTES ............................................................................................................................................................ 38


TABLE OF CONTENTS

Section 4

HOURS WORKED

A. INTRODUCTION TO THE HOURS WORKED CONCEPT ...........................................................................................1

B. DISTINCTIONS BETWEEN WORKING TIME AND PAID TIME ..................................................................................1

C. “SUFFERED OR PERMITTED” WORK .....................................................................................................................2

D. ROUNDING AND DE MINIMIS RULES ......................................................................................................................4 1. The Key Criteria for Determining When Work Time is De Minimis ..............................................................4 2. Case Studies on Rounding and the De Minimis Rule ......................................................................................5

E. SUBSTITUTE WORK FOR ANOTHER EMPLOYEE ....................................................................................................5

F. EMPLOYEES WORKING IN TWO OR MORE AGENCY JOBS ..................................................................................6 1. Introduction .....................................................................................................................................................6 2. The Exception for Occasional or Sporadic Employment ................................................................................7

a. Definition of “Occasional or Sporadic” ...................................................................................................7 b. Definition of Work “In a Different Capacity” ..........................................................................................7 c. Special Rule for Law Enforcement ..........................................................................................................7 d. Special Rule for Teaching Activities........................................................................................................8

G. COURT REPORTERS EMPLOYED BY PUBLIC ENTITY ............................................................................ 8

H. WAITING TIME – IS THE EMPLOYEE ENGAGED TO WAIT OR WAITING TO BE ENGAGED? ................................8 1. Introduction .....................................................................................................................................................8 2. The Test ...........................................................................................................................................................9 3. Case Study on Waiting Time ...........................................................................................................................9

I. ON-CALL OR STANDBY TIME ................................................................................................................................9 1. Introduction .....................................................................................................................................................9 2. The Test ......................................................................................................................................................... 10 3. Factors Courts Will Consider ........................................................................................................................ 10 4. Case Studies on On-Call and Standby Time ................................................................................................. 11

J. REST PERIODS ...................................................................................................................................................... 12

K. MEAL PERIODS..................................................................................................................................................... 13 1. Meal Periods for Police and Fire Personnel .................................................................................................. 13 2. 7(k) Law Enforcement Personnel Meal Time ............................................................................................... 14 3. 7(k) Firefighter Meal Time ............................................................................................................................ 14 4. Case Studies on Meal Periods ....................................................................................................................... 14

L. MEDICAL APPOINTMENTS ................................................................................................................................... 15


M. SLEEP TIME ........................................................................................................................................................... 16 1. Duty of Less Than 24 Hours ......................................................................................................................... 16 2. Duty of 24 Hours or More ............................................................................................................................. 16

a. Maximum of 8 Hours Credit .................................................................................................................. 16 b. Express or Implied Agreement ............................................................................................................... 16 c. Interruptions ........................................................................................................................................... 16

3. Sleep Time Periods for Police and Fire Personnel ........................................................................................ 17 4. Case Study on Sleep Time ............................................................................................................................. 17

N. PRE AND POST SHIFT ACTIVITIES........................................................................................................................ 17 1. Case Studies on Pre and Post Shift Activities ............................................................................................... 18 2. Compensation for Time Spent Donning and Doffing .................................................................................... 18

O. TRAVEL TIME ........................................................................................................................................................ 21 1. Travel Time Laws for Employers Other Than Counties and Charter Cities ................................................. 22

a. Travel To and From Work ..................................................................................................................... 22 b. Travel During the Workday ................................................................................................................... 22 c. Special One Day Assignment Out of Town or Overnight Travel .......................................................... 22

2. Travel To and From Work ............................................................................................................................. 23 3. Travel During the Workday .......................................................................................................................... 23 4. Overnight Travel ........................................................................................................................................... 24

P. TRAINING TIME .................................................................................................................................................... 25 1. General Rule .................................................................................................................................................. 25 2. Definition of Voluntary Attendance .............................................................................................................. 25 3. Definition of Training Directly Related to Employee’s Job .......................................................................... 25 4. Training Required for Certification by a Higher Agency .............................................................................. 26 5. Independent Training .................................................................................................................................... 26 6. Employer Sponsored Training and Education Programs ............................................................................... 26 7. Apprenticeship Training Programs ................................................................................................................ 26 8. Case Studies on Training Time ..................................................................................................................... 27

Q. WORK AT HOME .................................................................................................................................................. 28 1. Rule When Employees Reside on Employer Premises or Work at Home .................................................... 28 2. K 9 Cases ....................................................................................................................................................... 29

a. Off Duty Care Time ............................................................................................................................... 29 b. Commute Time....................................................................................................................................... 30

3. Case Studies on Work at Home ..................................................................................................................... 31 4. Cleaning and Maintenance of Motorcycles and Trucks ................................................................................ 32

R. GRIEVANCE PROCESSING TIME ........................................................................................................................... 32

S. SPECIAL DETAIL WORK ....................................................................................................................................... 33

APPENDIX 4-A Sample Policy Prohibiting Volunteered Overtime ...................................................................................................... 35

APPENDIX 4-B Hours Worked Checklist ............................................................................................................................................. 36

APPENDIX 4-C Overnight Travel Time ................................................................................................................................................ 38


APPENDIX 4-D Training Time .............................................................................................................................................................. 39

ENDNOTES ................................................................................................................................................................... 39


TABLE OF CONTENTS

Section 5

THE WORK PERIOD

A. INTRODUCTION TO THE WORK PERIOD CONCEPT ...............................................................................................1

B. BASIC WORKWEEK PRINCIPLES .............................................................................................................................1

1. Definition of Workweek ..................................................................................................................................1 2. Requirement to Designate ...............................................................................................................................2 3. Requirements Regarding Change of Workweeks ............................................................................................2 4. Illustrations of Workweek Principles ..............................................................................................................2

a. Working 10 Days in a Row ......................................................................................................................2 b. The 9/80 Schedule ....................................................................................................................................2 c. Other Workweek Schedules .....................................................................................................................4

C. THE 7(B) WORK PERIOD (1040/2080) .............................................................................................................6

1. The 26 Week / 1040 Hours Work Period ........................................................................................................7 2. The 52 Week / 2080 Hours Work Period ........................................................................................................7

D. THE 7(J) HOSPITAL WORK PERIOD ......................................................................................................................8

1. Introduction to the 7(j) Work Period ...............................................................................................................8 2. Requirements for a 7(j) Work Period ..............................................................................................................9

E. PUBLIC SAFETY 7(K) WORK PERIODS ..................................................................................................................9

1. Introduction .....................................................................................................................................................9 2. Fire Protection Activities............................................................................................................................... 10

a. Definition of 7(k) “Fire Protection Activities” ....................................................................................... 10 b. Specific Exclusions from the Definition of Fire Protection Activities ................................................... 12

3. Definition of “Law Enforcement Activities” ................................................................................................. 12 6. Establishing the 7(k) Partial Exemption Generally ....................................................................................... 14 7. 7(k) Work Periods for Fire Protection ........................................................................................................... 16 8. 7(k) Work Periods for Law Enforcement ...................................................................................................... 17 9. Gap Time ....................................................................................................................................................... 18 10. Twenty Percent Limitation on Non-Exempt Work ....................................................................................... 18

F. TOTAL EXEMPTION FOR SMALL EMPLOYERS...................................................................................................... 19

APPENDIX 5-A ........................................................................................................................................................... 20 Work Period Checklist ......................................................................................................................................... 20

APPENDIX 5-B ............................................................................................................................................................ 21 Yearly FLSA Overtime Liability by 7(k) Work Period ........................................................................................ 21

ENDNOTES ................................................................................................................................................................... 22


TABLE OF CONTENTS

Section 6

COMPENSATORY TIME OFF UNDER THE FLSA

A. CTO COMPENSATION UNDER THE FLSA ....................................................................................................1 1. The Distinction Between FLSA CTO and Non-FLSA CTO ...........................................................................1 2. Employer and Employee Must Agree .............................................................................................................2

a. Represented Employees ...........................................................................................................................2 b. Unrepresented Employees ........................................................................................................................2

3. FLSA CTO Must Be Credited at Time and One-Half .....................................................................................3 4. FLSA CTO May Be Accumulated Only Up to Specified Maximums ............................................................3

a. Public Safety Activities ............................................................................................................................3 b. Emergency Response Activities ...............................................................................................................3 c. Seasonal Activities ...................................................................................................................................4 d. Transfer from 480 Hour to 240 Hour “Cap” Positions .............................................................................4

5. Use of Accumulated FLSA CTO ....................................................................................................................4 a. “Reasonable Period” ................................................................................................................................4 b. “Unduly Disrupt” .....................................................................................................................................5 c. Forced Use of CTO ..................................................................................................................................6 d. There Are No Standards for Use of Non-FLSA CTO ..............................................................................6 e. Case Studies on the Use of CTO ..............................................................................................................6

6. Payment for Accumulated FLSA CTO ...........................................................................................................8 a. Termination of Employment ....................................................................................................................8 b. Prior to Termination of Employment .......................................................................................................8 c. Non-FLSA CTO .......................................................................................................................................9

7. Commingling of FLSA and Non-FLSA CTO .................................................................................................9 8. Penalties for Violation of the FLSA CTO Provisions .....................................................................................9

a. No Agreement to Provide CTO ................................................................................................................9 b. Exceeding CTO “Caps” ...........................................................................................................................9 c. Improper Denial of Requests to Use CTO ...............................................................................................9

9. Limited Compensatory Time Off System Available Even if Employee at “Cap” - “Time-Off Plan” ........... 10

ENDNOTES ................................................................................................................................................................... 11


TABLE OF CONTENTS

Section 7

THE REGULAR RATE OF PAY

A. OVERVIEW ..............................................................................................................................................................1

B. CALCULATION OF THE REGULAR RATE – GENERALLY ........................................................................................2

C. CALCULATION OF THE REGULAR RATE – ADDITIONAL EXAMPLES ....................................................................3

1. Salaried Non-Exempt Employee / 7-day Non-Safety Work Period / Bi-Weekly Pay Period..........................3 2. Salaried Firefighter / 24-Day 7(k) Work Period / Semi-Monthly Pay Period .................................................4 3. Special Problem for Fire Departments Adopting a 28-Day 7(k) Workweek ...................................................5 4. Special Note Regarding the Effect of Firefighters’ Overtime on Pension Contributions ................................6

D. FIXED WAGES FOR FLUCTUATING HOURS ...........................................................................................................7

E. EMPLOYEES WORKING AT TWO OR MORE RATES ..............................................................................................8

1. The Weighted Average Method ......................................................................................................................8 2. The Rate for the Position in Which Overtime Work is Performed ..................................................................9 3. Canine Officers ............................................................................................................................................. 10

F. PAYMENTS THAT MAY BE EXCLUDED FROM THE REGULAR RATE..................................................................... 10

1. Special Problems with Cafeteria Plans and Cash-in-Lieu of Benefits ........................................................... 11

G. EXAMPLES OF PAYMENTS WHICH ARE INCLUDED IN THE REGULAR RATE ....................................................... 12

1. Sick Leave Buy-Back Payments ................................................................................................................... 13 2. Personal Expenses of an Employee ............................................................................................................... 15 3. Holiday Pay ................................................................................................................................................... 15

a. Holiday Pay for Being Off from Work Because of a Holiday ............................................................... 15 b. Holiday Pay When an Employee Works on a Holiday .......................................................................... 15 c. Payments in Lieu of Holiday Time Off .................................................................................................. 15

H. TIMELY PAYMENTS OF WAGES ........................................................................................................................... 17

APPENDIX 7-A

Regular Rate of Pay Checklist .............................................................................................................................. 19

ENDNOTES ................................................................................................................................................................... 21


TABLE OF CONTENTS

Section 8

RECORD KEEPING

A. GENERALLY .....................................................................................................................................................1

B. INFORMATION REQUIRED FOR NON-EXEMPT EMPLOYEES ..........................................................................2

C. INFORMATION REQUIRED FOR 7(K) FIRE PROTECTION/LAW ENFORCEMENT EMPLOYEES .......................2

D. INFORMATION REQUIRED FOR HOSPITAL EMPLOYEES WITH A 7(J) WORK PERIOD ..................................2

E. INFORMATION REQUIRED FOR EMPLOYEES WITH A 7(B) (1040/2080) WORK PERIOD .........................3

F. INFORMATION REQUIRED FOR EXECUTIVE, ADMINISTRATIVE AND PROFESSIONAL EMPLOYEES .............3

G. POSTING REQUIREMENTS ...............................................................................................................................4

H. PRESERVATION OF RECORDS .........................................................................................................................4 1. The Following Documents Must Be Preserved for Three (3) Years ...............................................................4 2. The Following Documents Must Be Preserved for Two (2) Years .................................................................5

ENDNOTES .....................................................................................................................................................................6


TABLE OF CONTENTS

Section 9

MINIMUM WAGE

A. NEWLY HIRED EMPLOYEES UNDER 20 YEARS OLD .....................................................................................1

B. CERTIFICATES AUTHORIZING EMPLOYMENT AT SUBMINIMUM WAGES ......................................................1 1. Apprentices .....................................................................................................................................................2 2. Learners ...........................................................................................................................................................2 3. Students ...........................................................................................................................................................3

a. Student Learners.......................................................................................................................................3 b. Full-Time College Students .....................................................................................................................3 c. Full-Time Students Employed in Agriculture ..........................................................................................3

4. Workers with Disabilities ................................................................................................................................4 5. Applying for a Certificate to Employ at Subminimum Wage Rates ...............................................................4

ENDNOTES .....................................................................................................................................................................5


TABLE OF CONTENTS

Section 10 – FLSA NEGOTIATIONS CHECKLIST

Section 11 – GLOSSARY OF TERMS

DOL PUBLICATIONS

Federal Regulations: Part 553

Application of the FLSA to Employees of the State and Local Governments

WH Publication # 1391, revised 7/12.

Federal Regulations: Part 541

Defining and Delimiting the Exemptions for Executive, Administrative, Professional,

Computer and Outside Sales Employees

(7-1-12 edition).

Interpretative Bulletin, Part 785

Hours Worked


Interpretative Bulletin, Part 778

Overtime Compensation


Federal Regulations, Part 516

Records to Be Kept by Employers


Federal Regulations, Part 790

General Statement as to the Effect of the Portal-to-Portal Act of 1947 on the Fair Labor

Standards Act of 1938

WH Publication # 1056