“We will not rest until the (FLSA) is followed by every employer, and each worker is treated and compensated fairly.”
– U.S. Labor Secretary Hilda Solis announcing a 33% staffing increase in investigators.
A BusinessWeek report says Fair Labor Standards Act (FLSA) lawsuits have “exploded nationwide,” and that “because wage-and-hour laws have been so widely violated, undetonated land mines remain buried in countless companies.”
Don’t make these pay-related mistakes!
- Wrongly classifying employees as exempt versus overtime,
- Paying hourly employees incorrectly for their travel time,
- Failing to retain payroll records for the right amount of time,
- Improperly paying staff when you closed the office during that last snow storm, or
- Violating the “rounding law”.
All it takes is one employee filing one complaint.
The HR Experts for Small Business
Many employers and business owners believe that because they pay someone on a salary basis they are exempt from receiving overtime. This is not always the case.
A good example is someone working as a receptionist. According to the Fair Labor Standards Act (FLSA), for a full time administrative employee to be exempt from receiving overtime, they must make more than $455 per week (or $11.37 per hour) and their primary duty includes exercising of discretion and independent judgment with respect to matters of significance. A receptionist making $440 per week ($11 per hour) would not be exempt from receiving overtime on two accounts:
- Their salary is below the $455 per week threshold, and,
- Their main duty is to answer the telephone and not using judgment with respect to matters of significance.
In this instance the receptionist should be paid overtime for all hours physically worked over 40 hours in a week (i.e. vacation, holiday, and personal time do not apply as being physically worked).
Refer to the FLSA on the Department of Labor’s website for specific details as they relate to each employee classification. OR, for any small business HR issues contact www.hrinsights.com.
The Small Business HR Resource