Complying with the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) establishes requirements for minimum wage, equal pay, overtime pay, child labor and recordkeeping standards for employers. Most employers know that nonexempt employees get paid overtime and exempt employees do not, however, there is more to the FLSA than that, as illustrated in the following errors employers frequently make.

• Misclassifying exempt and nonexempt jobs. Typically, almost anyone paid on an hourly basis and having to record time in, time out, and meal breaks, is nonexempt. "Executive", "administrative", and "professional" employees, typically paid a set amount regardless of amount of time worked, are exempt. You can't arbitrarily assign jobs to exempt and nonexempt categories without comparing your job descriptions to the FLSA definitions, which are based on compensation level and job duties.
• Not paying minimum wage. Deductions, fines or other penalties deducted from an employee's paycheck cannot reduce the amount paid to less than the minimum wage of $5.15 per hour. (Remember: the Florida minimum wage is $6.40 per hour as of January 1, 2006.)
• Failure to calculate and pay OT correctly. OT must be paid at the rate of 1.5 times the employee's regular rate of pay for all hours worked over 40 in a single workweek. Hours worked cannot be averaged over two workweeks. Bonuses may affect the rate of pay at which you calculate OT.
• Granting "comp time" instead of paying OT. With some exceptions in the public sector, even if nonexempts prefer comp time to OT, the FLSA has no provision for employees to waive their OT rights. However, it's up to you whether or not to give comp time to exempts who work long hours.
• Failing to pay nonexempt employees for meetings held outside of regular work hours, coursework and seminars, travel time, prep time. Work related meetings held before or after regular work hours are considered hours worked. Travel time to the primary place of work is not necessarily part of hours worked, but travel from the primary place of work to other work sites may be. Time required to change from street clothes to work clothes or to set up for work is considered time worked. Coursework or seminars that you require a nonexempt employee to attend as part of the job may be compensable as time worked.
• Incorrectly tracking breaks and meal periods. Nonexempt employees do not have to clock out for "rest periods", or breaks of no longer than 20 minutes. They should clock out for "meal breaks" of 30 to 60 minutes or be paid for the time. If nonexempts eat at their work places, they are "on the clock" for purposes of calculating hours worked.
• Allowing or requiring employees to work "off the clock.” Nonexempt employees cannot "volunteer". If you require or allow nonexempts to perform job duties, the time worked is compensable.
• Requiring exempt employees to keep track of hours worked and docking their paychecks for time away from work. There is no FLSA expectation that employers track the time worked by exempt employees, and, under most circumstances, they cannot dock their paychecks in less than one-day increments.

Some exceptions apply to specific occupations and certain industries. To be sure you are in compliance, get a copy of the FLSA and compare job descriptions (not job titles, but the entire job description) and your payroll practices with the provisions of the law. U.S. Department of Labor (U.S.DOL) investigators don't need a complaint from an employee to come in and inspect your records. They can target employers or certain industries suspected of or known for wage and hour abuses.

FLSA information is available from a number of sources, including:

Other Resources: Human resources consultants, the Employers Association of Florida, employment attorneys.