Sum Karus Law Firm A Team of Professionals Dedicated to Labor and Employment Law Thu, 16 Aug 2018 05:43:05 +0000 en-US hourly 1 Sum Karus Law Firm 32 32 Federal Overtime Law in the United States: The FLSA Explained Thu, 16 Aug 2018 05:38:19 +0000 Most wageworkers in the United States are entitled to compensation at or above the minimum federal wage for up to 40 hours of work per week, but at least 1.5 times their wages for anything worked over 40 hours a week. This is not an option or a perk that an employer can choose to [&hellip

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Most wageworkers in the United States are entitled to compensation at or above the minimum federal wage for up to 40 hours of work per week, but at least 1.5 times their wages for anything worked over 40 hours a week. This is not an option or a perk that an employer can choose to offer or not offer. Federal law mandates overtime compensation. Workers who have been wrongfully denied overtime pay can seek compensation for the overtime they worked.

What is “overtime” work and pay?

Overtime is any amount of time worked over a 40-hour workweek. A workweek is any consecutive 168 hours, or 24 hours over 7 days. A workweek can begin on any day and end seven days later. For example, a person who starts work on Monday has a workweek from Monday to Sunday, but someone who works on Sunday would have a workweek that ends on Saturday. During that 168-hour stretch, a wage-earning employee may work 40 hours per week, and anything over that is considered overtime.

These working hours may not include breaks for lunch, travel to and from work, sleep time, or other time not necessarily deemed to be working time, so long as the worker isn’t required to do any work or be ready to work during these times. For example, a worker forced to work through what should be their lunch break should be compensated for that time.

However, if an employer provides a rest break during working hours of less than 20 minutes, this is considered working time, since the break is considered a benefit to the employer. The labor laws of many states, however, may make rest breaks mandatory.

Why overtime pay?

In the early 20th century, many blue-collar workers were subject to very long workdays for low pay and in dangerous conditions. The federal government passed laws to protect workers from exploitation. Almost all forms of child labor were made illegal or were severely restricted. Workers could not be forced to work in hazardous conditions without compensation for their injuries, and they could receive retirement income through the newly created Social Security system. During this time, new federal labor laws also set the federal minimum wage and a mandatory set workweek of 40 hours. Understanding that some people may still need to work more than 50 hours a week, the overtime pay law was passed. This was to discourage exploiting workers by compelling them work long days as part of their regular employment, to compensate workers forced to spend extra time at work, and to encourage employers to hire more workers instead of overworking the ones they had.

What federal laws mandate overtime pay?

The Fair Labor Standards Act of 1938 mandates overtime pay for all wageworkers in the United States. However, many states and counties have their own overtime pay laws as well, offering more than the minimum protection set out by the federal laws.

California’s overtime laws, for example, require employers to pay their workers overtime if they work more than eight hours in a day. More conservative states, on the other hand, (like Kansas, where I practice) only give employees a right to overtime if they work more than 46 hours in a week.

Who is entitled to overtime pay?

Most wageworkers and some salaried workers that earn money per hour worked and are subject to the federal minimum wage law are entitled to overtime pay. These employees would normally receive a W-2 at the end of the year for tax purposes. However, there are many workers that are exempt from overtime pay.

Who is exempt from overtime pay?

Overtime pay was created specifically to protect blue-collar workers, but as the working world evolved, the law evolved to protect many types of workers who may be at risk of being exploited in the workplace. However, there are still some workers, due to the nature of their jobs, the type of work they do, and when they work that make them exempt from receiving overtime pay as a matter of law. These workers include:

“White Collar” Employees

Those who receive a minimum salary of more than $23,600 are often exempt from federal overtime requirements, as long as they primarily perform white collar duties. This includes administrative, professional, and executive workers.

To meet this exemption, the worker must be paid a salary. This means that their pay cannot depend on the number of hours or minutes they work. Rather, these workers receive set amounts of payment at regular intervals regardless of when they come into work. They don’t punch a clock, they don’t work a shift, and they don’t have to sign in or out for breaks or meals.

Certain Seasonal Workers and Farm Workers

These workers tend to not be employed or stay in the same job all year round, though the work may demand temporary long hours.

Seamen and Fishing Boat Operators

Like seasonal and farm workers, seamen and fishing boat operators may be required to work long hours during a particular season but not on an ongoing basis, and may not work at all during some part of the year.

Independent Contractors

Independent contractors are not employees.

State employees

State employees are subject to the state employment laws of the states they work in because the labor laws governing state employees are rights reserved to the states through the 10th amendment.

Workers Who Don’t Usually Get Overtime

  • Pharmaceutical sales persons.
  • Some small newspaper employees.
  • Criminal investigators.
  • Babysitters and caregivers for older adults.
  • Ministerial workers.
  • Domestic workers.
  • Computer professionals and outside sales employees who make more than $57,470 a year.

Some of these workers may eligible for overtime pay by state law or by contract with their employer. In that case, they can seek compensation if overtime pay is earned but not paid.

When does overtime pay apply (and when does it not apply)?

As soon as 40 hours are worked in one consecutive, 168-hour week, overtime pay kicks in. However, under federal law, overtime pay doesn’t apply to weekends, holidays, or nights if those hours worked are not over the 40-hour workweek minimum. Some states may allow overtime or double-time for holidays, which is above the federal minimum overtime pay.

If a state has its own overtime laws, which law applies?

Both state and federal laws apply. The federal overtime law is the minimum protection offered to all non-exempt employees in the United States. The reason for this is because federal law is supreme, and no state may break federal law by allowing its citizens less than the protections under federal law. However, many states have overtime laws that grant more than the federal minimum. In that case, employers must follow the state law. By following a valid overtime pay state law, they are automatically following the federal law.

Overtime Violations

No employer may deny a non-exempt employee overtime pay. However, if an employer fails to pay overtime to a deserving employee, the employee has a legal right to seek compensation.

Common Questions

My employer says I can only be paid for the first 40 hours I work, and that I can’t claim any more work hours, even if I have to work those hours. Is that legal?

This is unlawful. You are entitled to overtime pay for any hours worked over 40 hours a week. If your employer forces or compels you to work more than 40 hours a week, you’re entitled to compensation. You may also be entitled to compensation if your employer doesn’t outright demand or insist that you work more than 40 hours, but in order to keep your job or avoid retaliation, you must work overtime. In this case, you can still seek compensation for that time.

I have an employment agreement that reads “no overtime.” Is this enforceable?

This depends on the nature of your employment. If you are an employee who is not exempt, then you are still entitled to overtime pay, because no employment agreement may interfere with rights that are protected by federal law. However, if you’re an exempt employee, then you are not entitled to seek overtime pay.

My employer says that instead of taking overtime pay, I can take extra time off. Is this fair?

In most cases, no. It’s legal to offer paid time off in lieu of overtime to federal employees who work more than 40 hours a week. For federal employees, the time off much equal one and one half hours for each hour of overtime. Otherwise, under federal law, your employer doesn’t get to choose not to pay you overtime in exchange for something else.

There have been efforts to change the FLSA to allow time off in lieu of overtime pay. The House of Representatives passed a bill proposing an amendment to the FLSA of 1938 to provide paid time off up to 160 accrued compensatory hours in lieu of overtime pay for employees in the private sector. The bill was passed by the House of Representatives on May 5, 2017, but has not been passed by the Senate or the President, so it is not currently law.

I normally punch a clock, but I do work before and after that. Should I be paid for it?

Yes, if the amount of time spent on these tasks is significant. Any action a worker does to further their employer’s interests is likely work, and is definitely work if the employer instructs the worker to do something related to the job. Wage workers who do off-the-clock work, like open the store or shop before they punch in and close up the store before they punch out, must be compensated for their time because they’re still working, and what they do benefits their employer. Specific acts that happen before or after normal working hours, like opening up, closing, making deposits, and taking or making deliveries is work, and if it done in excess of a 40-hour workweek, the employee must be compensated.

How do I receive back overtime pay?

You are entitled to receive back overtime pay for any overtime pay you should have rightfully received. Some states allow you to recover both the lost overtime and interest on the back overtime pay.

There are a few methods for doing this:

Method #1: Report the employer to the Wage and Hour Division of the Department of Labor.

You can report your employer by calling the Department of Labor or in person by visiting a Department of Labor Wage & Hour Division in your state. There are Wage & Hour Division offices in major cities in every state.

Method #2: The Secretary of Labor may bring its own lawsuit against the employer or seek an injunction to keep an employer from violating the FSLA.

Sometimes, if an employer has refused to pay overtime to many employees over many years, the Secretary of Labor may seek an injunction against the employer to keep them from refusing to pay overtime. An injunction is a legal remedy that a civil court grants to a party who is continuously hurt by another party’s ongoing actions. The judge orders an injunction that forbids the harmful behavior. If the behavior continues, the party responsible will be held in contempt of court, which could result in fines or in some case, incarceration.

The Secretary of Labor may bring seek an injunction against an employer that is currently violating the FLSA to stop the harm immediately while it investigates. It may then bring a lawsuit against the employer for the back overtime pay. This, however, is more likely to happen if the employer is fairly large, or if there’s many employees who have been wronged.

Method #3: Sue the employer for violation of the FSLA.

You have the right to sue your employer in in federal court in state court for overtime pay withheld in violation of the FSLA. To do so, you would file your own lawsuit.

Is there a limit to the back overtime pay I can ask for?

There’s no limit on the dollar amount so long as it’s what you should have been paid. However, there are time limits for asking for back overtime pay:

  • Two-year limit for accidental or unintentional violations of the law. In this case, only about two years of back overtime pay may be recovered. This is the case if an employer accidentally or by mistake withheld overtime pay. For example, accounting errors or timesheet mix-ups would be considered unintentional violations of law.
  • Three-year limit for willful violations of the law. However, in cases where an employer knows that an employee has worked overtime and is entitled to overtime pay but refuses to pay it, the employer is committing a willful violation of the law.

These limitations mean that you can only seek back overtime pay within the two- or three-year limit. So, if your employer has been intentionally withholding overtime pay for four years in violation of the law, you can’t seek overtime from the first year. You can only seek it going back three years from the date you file suit or report your employer. If the employer withheld overtime pay accidentally, you may only seek overtime pay for the last two years.

Can my employer fire or punish me if I seek back overtime pay?

Your employer may not retaliate against you if you seek back overtime pay. In fact, your employer may not fire or otherwise punish you for asserting any of your rights in the workplace. With that being said, unless you have reason to believe your employer will retaliate if you ask for the overtime pay that was wrongly withheld, it’s wise to ask your employer about the overtime you worked but for which you were not compensated.

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Disability Discrimination Law and the Americans with Disabilities Act Wed, 23 May 2018 04:44:39 +0000 The Americans with Disabilities Act (“ADA”) prohibits discrimination against people on the basis of disability in employment, government, public accommodation, commercial facilities, transportation, and telecommunications. The legislation is one of the more broadly powerful laws, covering private employers with 15 or more employees, state and local governments, employment agencies, and labor unions. The ADA was [&hellip

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The Americans with Disabilities Act (“ADA”) prohibits discrimination against people on the basis of disability in employment, government, public accommodation, commercial facilities, transportation, and telecommunications. The legislation is one of the more broadly powerful laws, covering private employers with 15 or more employees, state and local governments, employment agencies, and labor unions.

The ADA was introduced as a bill to the House and Senate in 1988 upon recommendation by the National Council on Disability in 1986 in order to combat discrimination against people with disabilities in a range of contexts including the workplace. On July 26, 1990, President George H. W. Bush signed into law the ADA, remarking:

“Every man, woman, and child with a disability can now pass through once-closed doors into a bright new era of equality, independence, and freedom.”

Despite this, employment rates and opportunities for people with disabilities remains an issue. In June 2017, the Department of Labor released statistics that show that employment participation for people with disabilities is just 20%, while people without disabilities enjoy labor participation rates of 68.9%. In the same year, there were 26,838 claims made to the Equal Employment Opportunity Commission (“EEOC”) regarding discrimination on the basis of disability.

As the major protective legislation for people with disabilities, understanding the ADA is crucial towards understanding your rights if you have suffered discrimination in the workplace.

Are you protected by the ADA?

To establish a case of employment discrimination under the ADA, a person will need to prove three elements.

  1. That your impairment meets the legal definition of a disability under the ADA.
  2. You are qualified and able to perform the functions essential to the job with or without reasonable accommodations.
  3. You have suffered an adverse employment action by the employer’s actions or inactions.

What is a “disability” under the ADA?

What is considered a disability is not simply anyone who suffers a medical condition. Disability follows the legal definition from the ADA and means one of three things.

  1. You are a person that has a condition that substantially limits a major life activity. A life activity here means an activity such as walking, talking, seeing, hearing, thinking and so on.
  2. You are a person that has a history of a disability, such as cancer which is in remission a recovery from some mental diseases.
  3. You are believed to have or treated as if you have a physical or mental impairment that is not transitory or minor in nature. Transitory means a lasting condition of more than 6 months.

If you have established that a disability meets the legal definition in the ADA, it is then important to show that the disability is to the degree required by the ADA. There are two factors to consider.

Firstly, a disability must be one that makes a person unable to work in a broad range of jobs, not only a specific role. It is not sufficient that the particular disability does not enable you to work in one particular job. For example, a person who is short-sighted who is disqualified from operating precise machinery is not necessarily disabled as being nearsighted does not disqualify them from a broad range of roles.

Secondly, if you have a disability that is covered by the ADA and its impact on your work can be reduced or eliminated by corrective device (such as special equipment) then the disability will not meet the standard required by the ADA.

However, whether or not an employee is considered disabled under the ADA is decided on a case-by-case basis. In a large majority of cases, disabilities such as paraplegia, blindness, deafness and learning disabilities will be sufficient for the law to apply.

Are drug addiction and alcoholism protected by the ADA?

Both substance and alcohol abuse are covered under the ADA, however protection is only provided in certain circumstances.

Generally, alcoholism is considered a disability for the purpose of the law and will be given the same opportunity for protection as other disabilities provided that you can show that the alcoholism substantially limits a life activity In addition, the law offers protection against discrimination for recovered alcoholics and substance abusers when they are able to continue to perform their job duties.

However for current illegal substance abuse the ADA specifically does not provide protection for these users It is not illegal for your employer to request drug tests and terminate employees for illegal drug use or alcohol dependency that interferes with the performance of the job.

Other people covered by the ADA

It is also important to note that the ADA protects people under the association provision from discrimination based on their relationship with a person who has a disability, even when they do not have a disability themselves. For instance, it is not legal to discriminate against a person because their family member is a person who is unable to walk. This provision can even apply where the related person is not a family member.

Are you qualified to perform the essential job functions?

The second element of establishing a case of employment discrimination under the ADA is whether you are qualified to perform the essential job functions of a role. Essential job functions here means the fundamental duties of a role that a person absolutely must be able to do. The EEOC will consider:

  • The employer’s judgement as to whether a particular job function is essential, including showing a written prepared job description. This is one of the most significant aspects, as an employer is not obliged to change a job into another for an applicant
  • Whether the position exists for the purpose of a person performing that particular function.
  • The number of other employees who could perform that function or whether the function could be distributed elsewhere.
  • The level of skill and expertise required to perform the job function.

If you are able to perform an essential job function with a reasonable accommodation, your employer is required to make the accommodation on your behalf. A reasonable accommodation is a change by your employer in the way the work can done in order to help a person with a disability to apply for or perform a job. Examples of reasonable accommodations include:

  • Providing specialized equipment so that the job can be performed by a person with a disability.
  • Changing a job or its duties.
  • Providing a flexible work schedule or additional unpaid leave for medical appointments.

If you are not able to perform an essential job function, even with a reasonable accommodation, you will not be protected under the ADA.

Exceptions to the requirement of providing reasonable accommodations

There are two notable exceptions apply to the requirement that employers provide reasonable accommodations.

Firstly, the an employer will not have to provide a reasonable accommodation if the providing for the person with a disability will cause undue hardship. Undue hardship in the context of the ADA means a change that would be significantly difficult or expensive.

It is not enough that the accommodation has some cost in order to be classified as undue hardship. Your employer can choose from a range of available accommodations and they do not necessarily have to choose the most expensive. However, an employer will need to show that the accommodation is too expensive or difficult to provide in the context of the organization’s size, finances and nature of business in order to establish undue hardship.

The second exception to this requirement is that an employer needs only to accommodate disabilities of which they are aware. The law generally holds that it is your responsibility to inform your employer unless your employer is aware of your disability and it is obvious that a reasonable accommodation is needed to avoid workplace problems This means that in most circumstances, you must request the reasonable accommodation before they will be obligated to provide an accommodation.

What is an adverse action by an employer under the ADA?

The final element in founding an action under the ADA is that you have suffered an adverse employment action by an employer’s actions or inactions.

For the purposes of the ADA, an adverse employment action is an action that causes a material change in the conditions of employment The range of employment aspects covered is broad, including hiring and firing, promotions, training, benefits or any other term of employment.

Examples of treatment that would be prohibited as discrimination under the ADA included:

  • Failure to provide reasonable accomodations.
  • Setting workplace standards that make it harder for employees with disabilities to compete.
  • Classifying jobs for people with disabilities so that they are more limited in opportunities than roles for people without disabilities.

To establish this element, you must show a specific link between the disability and your employer’s adverse action.

If an employer retaliates against you for asserting your rights

The ADA also prohibits an employer from retaliating against you for asserting your rights under the ADA. In order to prove retaliation, you must show three things:

  1. You participated in protected activity. Protected activity means an activity such as asserting your rights, opposing unlawful discrimination and being active in discrimination proceedings.
  2. You have suffered an adverse employment action, which includes actions or inactions such as being fired, receiving poor evaluations, being denied a promotion, or anything that would deter someone from reporting a violation under ADA.
  3. You can show a causal link between the adverse employment action and your participation in that protected activity. In some cases it is sufficient to show that you suffered the adverse action very closely after you engaged in a protected activity. It is important to note here that the reason for your employer’s actions must be your participation in a protected activity and not actions your employer would have undertaken anyway.

If you have suffered discrimination in the workplace

If you believe you may have been the victim of discrimination, seek the advice of an attorney and file a charge with the EEOC at any of the Commission’s offices located in your city or state. There are time limits on applications, so generally you must lodge your charge within 180 days of the discrimination experienced.

The Commission will then conduct an investigation into the charge and attempt to resolve the issue through conciliation. If the Commission agrees that discrimination occured, you will be entitled to a remedy to compensate for the discriminatory act. This may include:

  • Reasonable accommodations
  • Being hired or reinstated into a role
  • Promotions
  • Any lost wages or benefits to the time of the trial or into the future
  • Compensatory or punitive damages
  • Attorney’s fees

Because these situations often involve a power and resource imbalance between the employee and employer, consider consulting a specialist employment attorney before filing your charge.

Read more:

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The Minimum Salary for Exempt Employees Under Federal Law Mon, 21 May 2018 18:27:31 +0000 The federal Fair Labor Standards Act (FLSA) is the name for the series of laws and regulations designed and passed to protect workers throughout the United States when it comes to fair treatment in the workplace. The FLSA requires that most employees in the United States meet minimum wage requirements for all hours worked and [&hellip

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The federal Fair Labor Standards Act (FLSA) is the name for the series of laws and regulations designed and passed to protect workers throughout the United States when it comes to fair treatment in the workplace.

The FLSA requires that most employees in the United States meet minimum wage requirements for all hours worked and that they get paid overtime, which is time and one-half their normal rate of pay, for all hours worked over 40 in a week. There is a solid legal basis for the FLSA, and the Supreme Court has upheld its validity quite often.

In one such case, Barrentine v Arkansas-Best Freight System, Inc., 450 US 728 (1981), the Court recognized that the FLSA was a natural outgrowth of laws such as the National Labor Relations Act and the Labor Management Relations Act, which acknowledged that the average employee has little or no bargaining power on their own and that Congress has every right to “improve the economic well-being of workers” in the furtherance of what they called “industrial peace.”

Prior to that, in Vaca v. Sipes, 386 US 171, 182 (1967), which was a challenge to the Taft-Hartley Act, the Court ruled that all rights established through labor laws like the Fair Labor Standards Act were valid because they served to minimize “industrial strife.”

In Barrentine, the Court noted that the primary purpose for establishing the FLSA was to protect as many workers as possible from “substandard wages and oppressive working conditions,” and to establish working conditions that were better for everyone and contributed to the improve the “general well-being of workers.”

By creating a framework for workers to receive a “fair day’s pay for a fair day’s work,” they would be protected from the evils of overwork and underpay through the FLSA.

Are Some Employees Exempt from FLSA Protections?

While virtually every hourly employee in the United States is covered by the provisions of the FLSA, many employees are exempt from coverage. In part, this is based on the assumption that many, especially professionals and executives, don’t need protection.

However, in some cases, employees have protection in some other part of the U.S. Code. In some cases, specific jobs are excluded from coverage, like those who work in movie theaters or many of those who work in agriculture.

Those specific professions are not subject to FLSA overtime rules, although they are still subject to minimum wage laws. Also excluded from FLSA coverage are jobs that are governed by some other specific federal labor law.

As a general rule, if a job is covered by some other law, the FLSA won’t apply. For example, since most railroad workers are governed by the Railway Labor Act and most truck drivers are governed by the Motor Carriers Act, they are not covered under the FLSA.

In addition, there are many exemptions from the law contained within the FLSA itself. Those provisions provides for an exception from both minimum wage and overtime requirements, primarily for specific types of jobs.

There seems to be an increasing level of both confusion and controversy over this provision, in part because some employers have tried to find ways to work employees as much as possible, without having to pay overtime for every hour they work. Many others have tried to stretch the definitions of exempt jobs to get around the minimum wage, as well.

Section 13 of the FLSA provides for an exemption for those employees who hold bona fide executive, administrative, professional and outside sales positions, as well as certain types of computer employees.

However, whereas many employers believe they can avoid paying overtime or the minimum wage by assigning certain job titles to an employee, the reality is, job titles d0n’t determine whether an employee is exempt from FLSA provisions. To qualify as an exempt employee, it is necessary for them to meet certain tests regarding their job duties regardless of title.

In other words, rather than examining a job title and accepting that as a determination of their exempt status, the agencies who enforce the FLSA will look at the employee’s specific job duties and see to it that they can pass certain tests.

The Base Salary Exemption Provision

In addition to looking at their job duties and making sure they meet certain criteria; the employee must also be paid on a salary basis at a rate not less than $455 per week. That level of salary became effective in 2004 and, while an attempt to increase that was made in 2016, that effort failed in the courts and Congress has thus far refused to consider further modifications.

For some computer jobs, employees may be paid either on a salary basis at $455 per week or more, or they can be paid hourly, at a rate of not less than $27.63 per hour.

For the purposes of the FLSA, “salary basis” refers to any employee who receives a predetermined amount of compensation each and every pay period, whether they are paid on a weekly, bi-weekly, semi-monthly or monthly basis.

The employee must be able to count on that level of pay every payday. It cannot be reduced for most reasons, and certainly not based on variations in either the quantity or quality of the employee’s work.

Under the FLSA, employers must not reduce that pay through deductions based on the operating requirements of the business. Paying an employee on a “salary basis” means that employee is essentially “guaranteed” a certain amount of pay every week, regardless of how many hours or days that employee works.

It is important to keep in mind that the $455 salary level to qualify for an exemption is a minimum and it doesn’t have to constitute the totality of the compensation received. However, to qualify as a salary, the employee must be able to count on at least $455 per week or $23,600 per year if an employer is to be allowed to call that employee exempt.

There are several common ways to indicate that an employee is being paid on a “salary basis,” as required under the FLSA. For example, if the employee’s pay is computed from an annual amount (at least $23,600 for FLSA purposes) and divided by the number of pay periods in a year, that qualifies as a salary.

On the other hand, if an employee is paid less in pay periods where they work less and more when they work longer hours, that is not considered payment on a “salary basis,” for FLSA purposes. Again, a salary means the employee should rightfully expect that amount every pay period, regardless of the number of hours the employee works.

Permissible and Impermissible Salary Deductions

One thing to keep in mind; the salary basis test in the FLSA applies only to reductions in monetary amounts. Requiring an employee to charge absences from work to leave accruals does not constitute a “reduction in pay,” since the size of the employee’s paycheck remains the same.

Likewise, paying an employee more than the guaranteed salary amount does not affect the “salary basis” test, if there is no reduction in the employee’s base pay. For example, if commissions or bonuses are paid to the employee, they will have no effect on their salary, so they will have no effect on the salary basis test.

When employers are deciding if an employee is properly exempt from the FLSA, there are permissible reductions in salary basis pay. If an employee runs out of sick days under an accrued sick leave plan, the employer may dock said salaried employees without affecting their exempt status.

Permissible reductions have no effect on the employees exempt status. On the other hand, if the effect of a reduction is to essentially take them off a salary basis, even for a short time, they can become non-exempt. If that happens, all is not lost. Employers have several avenues they can take to “cure” any impermissible reductions in salary basis pay.

It is permissible for employers to deduct pay when an exempt employee is absent from work for one or more full days due to personal reasons other than sickness or disability. However, such a deduction must be made according to a bona fide plan, policy or practice of providing compensation for such absences.

These can include compensation for military or jury pay, or to offset an amount the employee received for other sanctioned reasons for a day off work. Also, the employer is not required to pay the full salary in either the initial week of work or the week including the employee’s termination. This is also true of weeks in which the exempt employee takes unpaid leave under the Family and Medical Leave Act.

Put simply, as long as the employer has a valid reason for deducting pay from an exempt worker’s salary, they will likely be on solid ground with regard to FLSA regulations. The key consideration will be to make sure any reduction in pay is part of the regular course of things.

How Can an Employer Lose an Exemption?

The employer will usually only lose an employee’s exemption of they make improper or irregular deductions from salary as an “actual practice.” Factors to be considered when determining whether an employer has an actual practice of improper deductions will include an examination of:

  • The number of deductions they take and the time period during which the improper deductions were taken;
  • The number and geographic location of the employees who were hit with improper deductions and the managers responsible; and
  • Whether the employer has a clearly communicated policy either for or against improper deductions.

If they find an “actual practice” exists, the employer will likely lose the exemption during the time period in which the deductions were made for all employees in the same job classification working for the same managers.

Put simply, accidents happen. If an improper deduction is seen by regulators as an isolated incident or an inadvertent mistake, the employer won’t lose any exemptions and recovery will be limited to that particular incident and that particular employee. It also means the employer can simply reimburse the employee to make it all go away.

There is a safe harbor available to employers when it comes to the salary base exemption If an employer:

  • Has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism;
  • Reimburses employees for any improper deductions, and;
  • Makes a good faith commitment to comply in the future when a problem is found.

The employer will not lose their exemption for employees who qualify. The exception to that rule would some if the employer willfully violates the policy by continuing to make improper deductions, especially after federal officials receive several employee complaints.

Reliance on the Salary Base Exemption May be Unwise

One thing employers should keep in mind; as a practical matter, given today’s pay scales in many areas, it is unlikely a truly exempt employee would become non-exempt due to salary basis pay problems.

If so, restoring the day or two “docked” from that employee’s pay, that pushed them below the level would be an easy way to remedy that. The base salary exemption is rarely a factor in determining whether an employee is exempt.

Another thing employers should keep in mind is that the salary basis pay requirement for exempt employees doesn’t even apply to many professionals.

Doctors, lawyers and schoolteachers, for example, are always exempt, even if they are paid hourly. Also, exempt employees do not have to be paid for any workweek in which they perform no work.

Once again, it is important to note that the “salary basis” test is a relatively minor consideration when determining whether an employee is exempt from FLSA overtime and minimum wage provisions.

For example, the Court of Appeals for the Fourth Circuit, in In re Family Dollar FLSA Litigation, 637 F.3d 508 (2011), considered a case in which a Family Dollar store manager tried to make the case that she was entitled to overtime pay. The court determined that she was not actually entitled to such pay because she was treated “as an executive” with the parent company.

The court ruled that the plaintiff’s job as store manager met the criteria under the FLSA and Department of Labor guidelines for establishing that she was an executive employee. The fact that she also performed some non-executive tasks did not negate her primary duties, which were managerial in nature and qualified her as exempt.

For our purposes, the fact that she was paid $655 per week in her last year as manager and was also paid bonuses based on store performance meant that she qualified as exempt under the FLSA base salary requirement, in any case.

The bottom line in all this is, most employees are covered under the Fair Labor Standards Act. Exempt employees are the exception, not the rule.

Whereas the Family Dollar employee in the above case was a manager and qualified for an exemption, it is quite possible no one else in the same store qualified.

Too often, employers will slap a title on an employee and brand them as a “manager” to avoid paying overtime, but unless they have a significant amount of autonomy and their duties are mostly executive or managerial in nature, they will not be considered exempt.

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Federal Employment Discrimination Laws in the United States Mon, 21 May 2018 18:08:46 +0000 Employment discrimination laws in the United States have become part of the fabric of our society and present a series of both opportunities and challenges for employees and employers alike. There is an extensive body of federal law that applies to issues of employment discrimination. In addition, there are also many state and local laws [&hellip

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Employment discrimination laws in the United States have become part of the fabric of our society and present a series of both opportunities and challenges for employees and employers alike.

There is an extensive body of federal law that applies to issues of employment discrimination. In addition, there are also many state and local laws that apply to issues of employment discrimination.

In general, it is unlawful for an employer to base an employment decision on someone’s race, color, creed, national origin, religion, age, gender, pregnancy, or disability. Many state and local laws also prohibit discrimination based upon an individual’s sexual orientation or gender identity.

The complexities of analyzing employment-based decisions pursuant to this extensive body of law can present challenges to employer’s in today’s work environment as issues of employment discrimination are very often subtle.

The purpose of this article is to provide a basic overview of the application of employment discrimination laws in the United States.

Federal Discrimination Laws

Federal law protecting employees and applicants from employment discrimination largely originated with a law known as Title VII of the Civil Rights Act of 1964. This law generally applies to and covers employers who have at least fifteen (15) or more employees for each working day of twenty (20) or more work weeks in the current or preceding calendar year.

In general, Title VII prohibits employment discrimination against employees and applicants based upon the employee or applicant’s race, color, religion, sex or national origin. Thus, some very small employers may not be subject to Title VII. However, most state laws cover smaller employers and thus most employees in the United States are protected from unlawful discrimination in the workplace.

In addition to the above protections, the Pregnancy Discrimination Act of 1978, the Age Discrimination in Employment Act, and the Americans with Disabilities Act of 1990 have added additional protections to prohibit discrimination against employees and applicants based upon pregnancy, age and disability.

In essence, it is unlawful for an employer to base employment decisions, whether that involves, hiring, firing, discipline, promotions or other job-related decisions based on an employee or applicant’s status in a legally protected category, which would include an employee’s race, color, national origin, religion, gender, age, pregnancy or disability.

  • Equal Pay Act: The Equal Pay Act of 1963 prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions.
  • Age Discrimination in Employment Act: The Age Discrimination in Employment Act of 1967 prohibits employment discrimination against persons who are age forty (40) or older.
  • The Americans with Disabilities Act: The Americans with Disabilities Act of 1990 prohibits discrimination against employees based upon disability and also requires employers to provide individuals with disabilities reasonable accommodations under certain circumstances.
  • Pregnancy Discrimination Act: The Pregnancy Discrimination Act requires that women affected by pregnancy, childbirth or related medical conditions must be treated the same for all employment related purposes as other persons not so affected but similar in their ability or inability to work.

State and Local Anti-Discrimination Laws

In addition to the federal statutes mentioned above, most states and many localities including cities and counties have also enacted their own anti-discrimination laws. In many states, there are additional protected categories which might include most notably sexual orientation and gender identity.

Legal Process for Addressing Issues of Employment Discrimination

The Equal Employment Opportunity Commission is responsible for preventing unlawful employment practices as outlined above by employers, unions and employment agencies. Thus, the EEOC accepts and investigates charges of discrimination filed by individuals who believe that they have been subjected to unlawful employment practices.

The EEOC enforces Title VII, the Age Discrimination in Employment Act, the Equal Pay Act, and certain portions of the Americans with Disabilities Act.

When an employee or applicant believes that he or she has been the victim of unlawful discrimination in employment, there are several avenues available to address such claims. In general, a complaint alleging discrimination must first be filed with either the EEOC or a similar state agency.

This is what is known as the requirement to exhaust administrative remedies. What this means is that it is a requirement that an administrative complaint first be filed before a lawsuit could be filed in order to seek redress for issues of discrimination.

The exhaustion requirement prevents claimants from directly filing a lawsuit without first going through the administrative process. Once a claim has been on file with an administrative agency for at least sixty (60) days, claimants generally are free to request what is known as a right to sue letter which allows them to take their claims to district court.

As an alternative, claimants are also allowed to have the EEOC or equivalent state agency investigate their claims.

Legal Standards Applicable to Claims of Discrimination

In general, in order for an employee to be successful in bringing a claim for discrimination pursuant to the laws outlined above, the employee must first present sufficient evidence that, if believed by a judge or jury would be considered sufficient evidence to support the allegations of discrimination being made by the employee.

This is what is referred to as a prima facie case which is the latin term which means “on its face” or “at first glance”. Essentially this requires a plaintiff to have enough evidence that a judge or jury could infer from the evidence presented that discrimination occurred.

In order for an employee to prove a prima facie case of employment discrimination (discriminatory treatment) pursuant to Title VII, essentially the following four elements must be proved by a preponderance of the evidence:

  1. The affected employee is part of a protected class;
  2. That the employee was qualified for the position;
  3. That the employee was discharged (or not accepted/hired) from the position, and
  4. The position remained open and was ultimately filled by someone outside the employee’s protected class.

If the employee successfully proves a prima facie case as outlined above, then the burden is shifted to the employer to produce evidence that the adverse employment actions were taken for legitimate, non-discriminatory reasons.

An example of a legitimate, non-discriminatory reason might be that the employee had exhibited poor job performance or engaged in some type of workplace misconduct.

Thereafter, an employee is permitted to present evidence to challenge the employer’s evidence by showing that the employer’s reasons given for the decision were in fact a pretext for discrimination.

As outlined above, a plethora of employment discrimination laws exist in the United States to protect employees and applicants from unlawful employment discrimination.

When engaging in the decision-making process with regard to issues of employee hiring, discipline and discharge, employers need to carefully analyze the impact of the existing anti-discrimination laws and how those laws may impact those decision making processes.

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Exempt vs. Non-Exempt Employees under the FLSA Wed, 25 Apr 2018 14:22:08 +0000 The Fair Labor Standards Act of 1938 (FLSA) is the “primary federal wage-hour legislation,” which sets minimum wage, overtime, and minimum age requirements for employers and employees and restricts child labor. For the purposes of the minimum wage and overtime requirements, the FLSA established two classification of employees. Those classifications are referred to as exempt [&hellip

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The Fair Labor Standards Act of 1938 (FLSA) is the “primary federal wage-hour legislation,” which sets minimum wage, overtime, and minimum age requirements for employers and employees and restricts child labor.

For the purposes of the minimum wage and overtime requirements, the FLSA established two classification of employees. Those classifications are referred to as exempt employees and non-exempt employees. The FLSA is not the only law that sets legal standards for the employee-employer relationship.

Several states have legislated their own labor standard laws, some of which have higher minimum wage rates, more stringent overtime rules, and different child labor requirements with which employers must also comply.

The FLSA only applies if an employment relationship exists. It does not apply to independent contractors. An “employer” is considered any person acting directly or indirectly in the interest of an employer in relation to an employee. The term includes public agencies, but excludes labor organization and anyone acting in the capacity of officer or agent of a labor organization.

An employee’s exemption status will depend upon how the employer elects to classify that employee. Ultimately, this classification will determine the employee’s right to overtime, meal periods, minimum wage, and rest breaks.

The FLSA regulates these rights, as well as individual state labor laws, such as the California Labor Code. Note, these exemptions can vary under state or federal law.

Nonexempt Employees

The minimum wage rates and overtime requirements are set forth in the FLSA. For non-exempt employees, the standard federal minimum wage is $7.25 per hour. Employees under the age of 20 may be paid no less than $4.25 per hour of the first ninety (90) consecutive calendar days of employment. The ninety (90) consecutive calendar days include both days worked and days not worked.

Non-exempt employees are entitled to time and one-half their “regular rate” of pay for each hour they actually work over a 40 hours work week as required under the FLSA overtime rules. Employers are subject to monetary penalties and punishment for failure to comply with the minimum wage laws.

Exempt Employees

The FLSA groups employees into two categories of exemptions: (1) employees who are exempt from both minimum wage and overtime requirements; and (2) employees who are exempt from only the overtime requirements.

Under the FLSA, employees are exempt from its overtime and minimum wage rules if employed in a bona fide executive, administrative, or professional capacity, as a skilled computer employee, or as an outside sales employee. These are known as “white collar” exemptions. The exemptions are not applicable to “blue collar” employees, such as police and correctional officers, or emergency personnel.

Employers must exercise great care in how they classify their employees. For example, an “outside sales” employee will be classified as exempt, while an “inside sales” employee will be classified as non-exempt.

Consequently, how an employer elects to classify an employee as exempt or non-exempt will be governed by (1) how much that employee is paid; (2) how the employee is paid; and (3) what kind of work does the employee perform.

Under the FLSA Regulations, to be considered an “exempt” employee, one must: (a) be paid at least $23,600 per year ($455 per week); (b) be paid on a salary basis; and (c) perform exempt job duties. In addition, there are three “tests” employees must meet to be deemed exempt.

Exemption Tests

The first test an employee must qualify for is the “Salary Basis Test.” Under that test, an employee is paid on a “salary basis.” The employee is paid on a weekly or less frequent basis, a “predetermined amount” of wages that is not subject to any type of reduction, because of the variations in the quality and quantity of the work performed.

The second test for qualification is the “Salary Level Test.” The FLSA demands that employees paid less than $23,600 per year ($455 per week) are non-exempt.

The third test is the “Duties Test,” which requires an exemption status for those employees who meet the salary level and the salary basis tests if he or she performs exempt job duties.

An employee’s job title will not determine their exempt status. The exemption status for any employee is applicable if their job duties and their salary meet the standard requirements under the FLSA. Courts look at the agreed upon salary between the employer and employee, when determining whether the salary satisfies the minimum requirement and not what the employee actually received.

The benefits an employer provides to its’ employees, such as life insurance, cash bonuses, educational assistance, severance pay, vacation, holidays, and sick leave are usually based on an agreement between the employee and the employer.

However, all employers are required to comply with the federal and state hour and wage laws. When a conflict arises between the federal and state laws, courts will apply the law that established the higher standard.

For example, in California, the FLSA does not supercede California’s wage orders, which generally provide more extensive right to its’ employees. But the relationship between the two is harmonious. It does not overlap.

Exempt Job Categories

As noted before, the FLSA divides exempt job duties into three categories, executive, professional, and administrative.

To determine whether an employee is considered an “executive,” his or her job duties must consist of the following:

  1. Supervises two or more employees on a regular basis (Note: the supervision of non-employees does not meet the standard);
  2. Management is their primary job duty; and
  3. He or she has some input regarding the job status of other employees.

A “professional” applies to those job duties of a “traditional learned profession.” For example, doctors, teachers, clergy, lawyers, dentist, etc. This would also include nurses, accountants and engineers. The work performed by these individuals is “predominantly intellectual” with an expectation of “specialized education.” The measurement being an advanced degree.

The “administrative” exempt category refers to those employees who are considered “high-level” employees. Their job duties “keep the business operating.” Their job duties must consist of the following:

  1. office or non-manual work, which is
  2. directly related to management or general business operations of the employer or the employer’s customers, and
  3. a primary component of which involves the exercise of independent judgment and discretion about
  4. matters of significance.


Determining the difference between an exempt or non-exempt employee can be difficult. The federal and state law requirements can vary extensively depending on the industry and what the employee’s job duties and salary are with regards to the FLSA regulations. The difference between the two classifications can impact an employee’s rights to overtime, meal breaks, rest breaks, and wages.

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The Law on Meal and Rest Breaks in the United States Sun, 15 Apr 2018 14:08:00 +0000 Many employers provide their workers with meal and rest periods to give them recovery time during their shifts. In general, federal law does not require employers to provide such breaks. But when they do, there are certain rules that must be followed. Of course, it’s important to look at whether your particular state has laws [&hellip

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Many employers provide their workers with meal and rest periods to give them recovery time during their shifts. In general, federal law does not require employers to provide such breaks. But when they do, there are certain rules that must be followed.

Of course, it’s important to look at whether your particular state has laws that might be more favorable to employees than federal law. Many states have laws that require employees to be given more rest and meal breaks than federal law requires.

California, for example, provides for mandatory meal and rest breaks far in excess of those required by federal law. Check out this article on California break laws to learn more about the law in that state.

Other states, like Kansas (where I practice), follow federal law and do not provide for any legally-required breaks. Read this article for more on Kansas break laws.

The rest of this article aims to provide an overview of the law on meal and rest breaks under federal law. While federal and state laws are often similar, employers should be aware of the fact that they must comply with the laws, state or federal, that provide greater benefits and protections to their employees.

What Rest Periods Are

Rest periods, sometimes referred to as “coffee breaks”, are generally paid time.

In Mitchell v. Greinetz, 235 F.2d 621 (10th Cir. 1956) the employer and employees had agreed that employees would take two 15-minute breaks per day, and that the breaks would be unpaid. Nevertheless, suit was brought by the Secretary of Labor alleging violation of minimum wage requirements.

While the employees were required to leave their work places (at weaving machines) during the breaks, they in fact almost always remained on the employer’s premises in a restroom where they could make coffee and tea.

The district court found in favor of the employer; the Court of Appeals reversed. It noted that no hard or fast rule could be laid down governing such cases, that 29 CFR § 785.18 did not establish a “bright line” rule with respect to how much time a “rest period” lasted, and that the fact that all parties had agreed to the arrangement was not decisive.

What was decisive was that “the time involved here under the conditions of employment is such that it cannot be effectively used by the employees for purposes not connected with their employment.”

Thus, while each arrangement between employer and employee must be judged on its own merits, the general rule is that if the rest period is so short that employees cannot attend to their own business during the period, it must be considered work time and must be paid.

What Meal Breaks Are

Contrary to rest periods, as a general rule meal breaks are not paid time. To be considered a “bona fide” meal period, the employee must be completely relieved from duty. A number of courts have addressed the “completely relieved from duty” issue and, as is discussed near bottom, the law has evolved to a “predominantly for the benefit of the employer” test rather than the statutory language “completely relieved from duty” test.

Generally No Substantial Duties Are Permitted

In Hill v. United States, 751 F.2d 810 (6th Cir. 1984) The Court of Appeals addressed the issue of what constituted “substantial duties”, and whether de minimis interference in plaintiff’s meal break would render the break compensable.

The plaintiff in Hill was a letter carrier employed by the U.S. Postal Service. He argued that he had certain duties during his 30-minute lunch break that included remaining responsible and accountable for the security of accountable items and mail as well as for the undelivered mail, and that on occasion he had to provide information to members of the public or accept first class mail from them.

The district court held that the restrictions on appellant’s time during his lunch period did not interfere with the free disposition of his lunch period, and granted defendant’s motion for summary judgment, denied plaintiff’s.

The Court of Appeals affirmed and held:

“We approve the district court’s conclusion that appellant’s meal period is not compensable because he was not required to perform any activities that could be characterized as substantial duties. Our holding is based on the need for a flexible and realistic standard for compensability and on the particular circumstances of this case.?.?.?.?As long as the employee can pursue his or her mealtime adequately and comfortably, is not engaged in the performance of any substantial duties, and does not spend time predominantly for the employer’s benefit, the employee is relieved of duty and is not entitled to compensation under the FLSA (Fair Labor Standards Act).

Thus, Hill established that for a meal break to be compensable, the employee must be responsible for the performance of “substantial duties”. If there are no substantial duties, and if the time is not spent predominantly for the employer’s benefit, there is no entitlement to compensation.

That plaintiff in Hill was still responsible during his break for certain items (most of which were kept locked in his truck, which he did not have to keep within view while he ate lunch) was not considered a substantial duty, nor was an apparently rare request for service by a member of the public.

Substantial Duties

On the other side of the coin, in some cases meal breaks have been held compensable. In F.W. Stock & Sons, Inc. v. Thompson, 194 F.2d 493 (6th Cir. 1952), the plaintiffs worked for a mill that ran 24 hours a day, six days a week.

Evidence introduced at trial demonstrated that “engineers were not expected to leave their engines unattended at any time during their shifts, because the engines had to be constantly observed to assure safe and efficient operation”; that millers, oilers, flour and feed packers “were required to stand by on the alert” due to “frequent chokeups in the operation of the machinery”; and that all workers were expected “to eat lunches in the immediate vicinity of their work.”

The Court of Appeals noted with approval comments by the trial judge: “A man who has to oil machinery with a sandwich in his hand is not having a free lunch period” and “a man who has to have his eyes glued upon the watching of grain coming down from floors above and be careful that there is no stoppage during the entire eight hours of his shift, including his lunch period, does not have a free lunch period.”

Thus, the Court of Appeals found “that the employees did not have a free lunch period during which they could serve their own interest and do as they pleased, but that their duties and responsibilities to their employer were continued during the lunch periods.”

The duties that the plaintiffs had during their “meal breaks” were, in contrast to the “duties” of the plaintiff in Hill, supra, were not de minimis, rather were substantial and clearly interfered with plaintiffs’ ability to use the break time for their own purposes, and held that they were entitled to overtime pay.

Predominant Benefit versus Completely Relieved

Two tests have been used over time to determine whether particular meal breaks were breaks or not: the “completely relieved from duty” test and the “predominantly for the benefit of the employer” test.

As the O’Hara court observed, the Supreme Court had certainly adopted the predominant benefit test by 1984, as it was used in Hill. Under the predominant benefit test, “the courts focus on various factors, such as the limitations and restrictions placed upon the employees, the extent to which those restrictions benefit the employer, the duties for which the employee is held responsible during the meal period, and the frequency in which meal periods are interrupted.”

In O’Hara certain police officers in Boston sued for overtime based on a claim that during their lunch breaks they were required to be available for emergency calls, to maintain radio contact, and similar duties.

The district court applied the “predominantly for the benefit of the employer” test and rejected the officers claims, finding that “the restrictions imposed do not prevent them from comfortably and adequately passing the mealtime”

Summing Up

Briefly, what to be looking for when determining whether breaks are breaks: with respect to rest periods, the most important factor is whether the circumstances of the break, including the duration and location, permit the employees to attend to their own business. If the break is so short, or if the employees are so confined with respect to where they may go, that the time cannot possibly be considered their own, then the break must be paid.

With respect to meal breaks, the “predominantly for the benefit of the employer” test should be applied. This test focuses on factors such as the limitations and restrictions placed upon the employees, the extent to which those restrictions benefit the employer, the duties for which the employee is held responsible during the meal period, and the frequency in which meal periods are interrupted.

In short, any restrictions must not interfere with the free disposition of the lunch period, and, at least for the most part, the employees must have a free lunch period during which they can serve their own interest and do as they please.

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