Chapter 12 Wages, Hours, and Pay Equity

comparators

a person of the opposite sex who is in the same workplace and receives a higher rate of pay for performing the same type of work as the plaintiff

pay secrecy policies

a policy that discourages employees from sharing information about their pay

job evaluation

a systematic process of rating jobs in terms of certain compensable factors

responsibility

accountability for outcomes, supervisory duties, and involvement in important decisions

migrant and seasonal agricultural work protection act (mspa)

an act that covers most seasonal agricultural employees and farm-workers with basic but important provisions

Pay docking rule

an approach of the DOL to determine whether employees are paid on a salary basis

Defending pay decisions is much easier if employers establish

and consistently apply specific job-related criteria for making those decisions

Outdoor salesmen

another significant category of exempt employees

factor other than sex

any factor other than sex that an employer in an equal pay act case can use to justify the differential pay

Workweek

any fixed and recurring period of seven consecutive days (168 hours). The workweek does not necessarily correspond to the calendar week or begin at the start of a workday. Work does not necessary occur on every day of the workweek. With just a few exceptions, FLSA overtime is earned on a weekly basis. IT does not matter how many hours an employee works on a particular day; the relevant issue is the number of hours worked in the workweek.

Under the FLSA employers must pay employees

at a rate no less than the minimum wage for each hour worked during a workweek.

Under the FLSA, employers can meet their minimum wage obligations to tipped employees by paying them

at least $2.13/hr, provided that this amount plus tips equals at least the minimum wage. However, to take advantage of the tip credit, employers must inform employees about it beforehand and allow employees to retain all tips, either individually or pooled among employees

employers are permitted to deduct from tips the transaction fees charged

by credit card issuers when tips are paid using credit cards

Public employers (government agencies) ______pay for overtime required under the FLSA with compensatory time off in the future

can

Private employers______ pay for overtime required under the FLSA with compensatory time off in the future

cannot

employers should be careful not to dock the pay of exempt executive, administrative, or professional employees for lack of available work to perform, partial day absences for personal reasons, and time spent on jury duty. employers should establish and communicate

clear policies prohibiting improper deductions from the pay of exempt employees and providing a mechanism for handling complaints about any such deductions. employees who are nonetheless subjected to improper deductions should be promptly reimbursed

To determine whether an individual is or is not an exempt executive administrative, or professional employee, the nature of that individuals duties and responsibilities must be

closely examined (duties test), as well as the manner in which the person is paid (salary basis test)

jobs frequently entail a mixture of exempt and nonexempt activities. Courts have to determine whether the primary duties of an employee are exempt in nature. Although exempt work normally

consumes more than half of an exempt employee's work time, the primary duties of an employee are not necessarily those performed most regularly

Although wages must generally be paid in cash (paychecks) the "reasonable cost" of goods customarily provided by employers for their employee's benefit, such as lodging and meals can be

credited against minimum wage and overtime pay obligations

duties test are used to determine whether

employees duties are genuinely executive, administrative, or professional in nature. Job titles, by themselves, mean nothing.

Tipped employees

employees who customarily and regularly receive at least $30 per month in tips

the terms exempt and nonexempt employees are used to contrast employees for whom

employers do not have to follow FLSA requirements (exempt) with employees entitled to the acts protections (nonexempt)

overtime pay

employers must pay at least one and one half times an employees regular rate of pay for each hour worked in excess of forty in a workweek

Fair Labor Standards Act (FLSA)

establishes a federal minimum wage and require premium pay for overtime work. It also sets out certain work-hour limitations for minors.

White collar exemptions

executive, administrative, and professional employees. These occupations are found in all types of businesses and comprise an estimated 20-27% of full-time U.S. workforce. Employees holding these jobs often work long hours and earn relatively high rates of pay.

Not everyone paid a salary is an

exempt employee

another important criterion for identifying administrative employees is the

exercise of discretion and independent judgment with respect to matters of significance

sweatshops

firms that pay very low wages for long hours of work, provide unsafe conditions, and staunchly oppose unionization

Additional sums (generally limited to 25% of disposable earnings) may be deducted because of court of government agency has ordered an employees pay to be

garnished to recover money owed for obligations such as child support, alimony, and student loans

if employers do not want their employees to work extra hours, thereby incurring overtime liability, they must communicate and enforce policies prohibiting employees from working outside of assigned work hours without prior authorization. For these policies to be genuine, supervisors cannot

ignore workers starting work early, staying late, or coming in on scheduled days off. Nor should employees be assigned work and given deadlines that effectively require them to work late or take work home. Similarly, employees should not be pressured or allowed to under report hours worked

Employers are required to withhold

income taxes from employee's gross pay as well as the employees share of social security and medicare

consent deductions can be made for items such as

insurance, union dues, and savings plans

salary

is a pre-specified sum that an employee is paid for discharging the responsibilities associated with a position. the amount of time needed to do so and the quality and quantity of work output will likely vary week to week and are not the bases for payment

living wage

levels of hourly pay in excess of federal and state minimums

employers should be prepared to account for pay decisions, particularly when males and females performing similar jobs in the same workplace are

paid differently

under the pay docking rule, exempt employees must receive pre-determined amounts of pay not subject to reduction due to variations in the quantity or quality of work performed. Employers cannot reduce pay for

partial-day absences for personal reasons, time missed due to jury duty, court appearances as a witness, and temporary military leave; and for absences occasioned by the employer or the operating requirements of the business when the employee is other wise ready and able to work

employers must be aware that, depending on geographic location and dealings with government entities, they might be required to

pay a state minimum wage, prevailing wage, or living wage that exceeds federal minimum wage

avoid basing pay decisions on the

pay level in a prior position or on demands made in negotiations unless these actually reflect abilities of the individuals in question

Comp-time

paying for overtime work with compensatory time off rather than overtime pay.

employers justifying differential pay on the basis of individual salary negotiations should be able to

point to abilities or experience that justify acceptance of demands for higher pay

the fundamental criterion is whether the individual performs primarily office or non-manual duties that relate to the general operations and policies of the company, as opposed to

producing the goods or services that it sells.

if pay discrimination exists, it must be remedied by

raising the pay of the lower paid individual(s)

Because FLSA claims can go back as far as three years

records of wages paid and hours worked must be kept for at least three years

pay secrecy policies are likely to violate employees rights regardless of whether the policy is written or only spoken, whether or not the policy is strictly enforced, and whether the workplace is unionized or not unionized thus employers should

refrain from establishing and enforcing pay secrecy policies

Minors (14-15 years of age) can be employed in certain service or retail occupations, subject to

restrictions on their hours of work.

effort

the amount of physical and mental exertion required by a job

prevailing wage

the average wage paid to a class of employees in the relevant geographic area as determined by the DOL

An employees job description should clearly support

the determination that he or she is an exempt employee.

Employers are prohibited from paying a person of one sex at a lower rate of pay than a person of another sex performing substantially equal work in the same establishment-unless

the differential in pay is accounted for by a legitimate factor other than sex

employers making this claim should ensure that the more lucrative positions are open to both male and female employees and that

the differential profitability is not itself a product of discrimination

employers are not free to charge employees for items that primarily benefit the employer (e.g. uniforms or the laundering of uniforms, fees to cover breakage) when

the effect of those deductions would be to push an employee's hourly wage rate below minimum wage

Duties test

the examination of the nature of an individuals duties and responsibilities

Other than for minors the FLSA does not limit

the number of hours employee can be required to work

compemsable factors

the requirements of a job

compensable time

time spent in the principal work duties of an employee, during work hours or during time off and not punctuated with breaks, periods of waiting or downtime and other activities

A significant exception to the general requirement of hourly pay at least equal to minimum wage is made for

tipped employees

compensation takes many forms

tips, commissions, piecework earnings, bonuses, and merit pay; lodging and meals; pay for holidays, vacations, and sick days; premium pay for working on nights and weekends; and profit sharing and benefits

hours of work generally cannot be averaged across workweeks (e.g. long workweeks followed by a short one)

to avoid overtime liability. However, employers can rearrange hours within workweeks (e.g. a long day followed by a shorter day or day off in the same workweek) to avoid incurring overtime liability.

skill

what one needs to know and be able to do to perform a job

working conditions

"hazards"(how dangerous the job is in terms of physical hazards) and "surroundings" (e.g., elements such as fumes, outside work in cold weather).

Many questions about compensable time hinge on whether the time in question was or was not spent

"predominantly for the benefit of the employee"

The federal minimum wage

$7.25 an hour

When school is in session, minors must be employed outside of school hours between ___________________, not more than __ hours per day and not more than __ hours per week.

7 a.m. and 7 p.m. 3 18

When school is not in session minors can work up to

8 hours a day 40 hours per week. In the summer, the work day of a minor can be extended to 9 p.m.

prima facie case of pay discrimination

A case established when there is one or more persons of the opposite sex working in the same establishment who receives a higher rate of pay although preforming work substantially equal to that performed by the plaintiff

oppressive child labor

An FLSA requirement that minors (14-15 years of age) can be employed in certain service or retail occupations, subject to restrictions on their hours of work

Davis-Bacon Act

An act for construction contracts

Equal Pay Act

An act that is targeted specifically at pay discrimination based on sex

McNamara-O'hara Service Contract Act

An act to do with contracts for many different types of service