REPRESENTING EMPLOYEES FOR OVER 25 YEARS

Fair Employment Legal Services, S.C.

           Attorney John D. Uelmen

Fair Labor Standards

Minimum wages rates, overtime requirements, and employment of minors are regulated by federal and state laws regarding fair labor standards. The principal federal law is the Fair Labor Standards Act ("FLSA"). The FLSA defines the 40-hour workweek, covers the federal minimum wage, and sets requirements for the employment of minors. An employer must also comply with other local, state or federal workplace laws that set higher standards.

The FLSA applies only to employers whose annual sales total $500,000 or more, or who are engaged in interstate commerce. With few exceptions, virtually every employer is covered by this law. Some employees, however,  are exempt from FLSA requirements, such as pay for overtime and minimum wages. Exempt employees include executive, administrative and professional workers.

 To qualify as an exempt executive, the employee must: be paid with a salary, so that compensation is not subject to reductions for quality and quantity of work; use discretion in performing job duties; regularly direct the work of two or more people; have the authority to hire and fire other employees, or to order such hiring and firing be primarily responsible for managing others; and devote no more than 20% of work time to other tasks that are not managerial. For certain retail and service companies, 40% of non-managerial time is allowed. The definitions of administrative and professional employees are similar, but contain minor differences. For example, employees categorized as professionals must perform work that is primarily intellectual. The definitions also change with the employee's salary level. For example, if the weekly salary of the executive, administrative or professional employee exceeds a certain minimum, fewer factors are required to qualify for the exemption.

No one is exempt from the FLSA merely because he or she is a salaried employee; the work must also be of a certain type as well. Moreover, an employee who receives a salary but loses pay for missing work or receives a bonus for working more hours may not be exempt and may be entitled to overtime for some of hours which are worked.

An outside salesperson is exempt from FLSA coverage if he or she: regularly works away from the employer's place of business while making sales or taking orders, and spends no more than 20% of work time doing work other than selling. Typically, an exempt salesperson will be paid primarily through commissions and will require little or no direct supervision in doing the job.

Computer specialists are also exempt from FLSA coverage. This exemption applies to computer system analysts and programmers who receive a salary of at least $170 a week or who, if paid by the hour, receive at least $27.60 an hour. An employee will be exempt from the wage and hour laws as a computer specialist if  the primary duties consist of such things as determining functional specifications for hardware and software, designing computer systems to meet user specs and creating or modifying computer programs.

 Several other types of miscellaneous workers are exempt from the minimum wage and overtime pay provisions of the FLSA. The most common include: employees of seasonal amusement or recreational businesses; employees of local newspapers having a circulation of less than 4,000; newspaper delivery workers; switchboard operators employed by phone companies that have no more than 750 stations; workers on small farms, and personal companions and casual babysitters. Officially, domestic workers -- housekeepers, childcare workers, chauffeurs, gardeners -- are covered by the FLSA if they are paid at least $1,000 in wages from a single employer in a year, or if they work eight hours or more in a week for one or several employers. For example, a teenager who baby sits only an evening or two each month for the neighbors cannot claim coverage under the FLSA while a fulltime au pair would be covered.

Apprentices who are at least 16 years old and who have signed an agreement to learn a skilled trade are also exempt from the requirements of the FLSA. State laws may  limit the number of hours that can work as an apprentice. State law may also require that an apprentice be paid a certain percentage of the minimum wage.

Finally, the FLSA covers only employees, not those who work as independent contractors. However, whether a person is an employee for purposes of the FLSA generally turns on whether that worker is employed by a single employer, not on the Internal Revenue Service definition of an independent contractor. If a person classified as independent contractor receives nearly all of his income come from one company, a court might determine that the is actually  an employee of that company for purposes of the FLSA -- even if other details of the work situation might convince the IRS otherwise.

In court cases determining close questions of employment status, workers are increasingly found to be employees rather than independent contractors. These courts often note that the relationship appeared to be permanent, the workers lacked bargaining power with regard to the terms of their employment and the individual workers were economically dependent upon the business to which they gave service. But workers' skill and pay levels can push courts to the opposite conclusion. Some courts are more likely to class workers with higher skills and higher pay as independent contractors rather than employees.

The FLSA is enforced by filing a complaint with the Department of Labor or by filing a lawsuit. In most cases a lawsuit needs to be filed within 2 years of the violation. In cases where a willful violation is proven, the statute of limitations is extended to 3 years and the recovery of liquidated damages is possible. The recovery of liquidated damages can double the recovery for unpaid wages. An employee can also recovery his or her attorney's fees if a violation of the FLSA is proven.
 

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Copyright © 2008 Fair Employment Legal Services, S.C.
Last modified: 09/24/08