Section 2

Regular Rate of Pay is an hourly rate of pay that is determined by dividing the total regular pay actually earned for the workweek by the total number of hours worked. For salaried nonexempt employees, the regular rate of pay is the employee's salary divided by the number of hours the salary is intended to compensate.

What is the "regular rate of pay" and how is it determined?

-Vacations, sick pay, holiday pay, breaks -How often employees must be paid and pay on termination -Hours worked by employees over age 16

What does the Fair Labor Standards Act (Federal Wage and Hour Law) not regulate?

COMER -Child Labor -Overtime -Minimum Wage -Equal Pay for Equal Work -Recordkeeping Requirements

What does the Fair Labor Standards Act cover?

Regular recurring period of 168 hours (7 consecutive 24 hour periods) exemption for hospitals and nursing homes

What is a workweek?

Any trade, transportation, or communication between one state and another state (or states) or between a state and foreign country

What is interstate commerce?

-Gifts -Paid time off and reimbursed expenses -Discretionary Bonuses -Volunteer work counted towards group bonuses -Benefit plan contributions (employer) -Stock options -Overtime compensation -Premium pay for extra days worked -Premium pay under a union contract for extra hours

What is not included in regular rate of pay?

Employees of a business are covered and protected by FLSA if: 1. At least two of the employees of the business are employed in jobs closely related and directly essential to interstate commerce or the production of goods or interstate commerce and 2. The business has annual gross sales of at least $500,000

What is the Enterprise Coverage test?

There is no minimum

What is the FLSA salary test of outside salespersons?

$455/week or $27.63/hour

What is the minimum salary requirement for a Computer Professional to be exempt?

$455/week ($23,600 annually)

What is the minimum salary requirement for an Administrative employee to be exempt?

- Belo Plan - The plan guarantees a fixed salary for irregular hours that includes a set amount of overtime pay

A plan similar to the fluctuating workweek plan was approved by the U.S. Supreme Court and later made part of the FLSA and its regulations. What is this plan called, and what does it provide?

-Performance off office or nonmanual work directly related to the management or general business operations of the employer or employer's customers; and -The exercise of discretion and independent judgement with respect to matters of significance

Administrative primary duties include:

All must be met for it to be considered nonwork time: - Not held during the employee's regular work hours - Attendance is voluntary - Not directly related to the employee's job - The employee does not perform any productive work for the employer while attending

Attendance at lectures, meetings, seminars, and training sessions is considered work time unless certain conditions are met. What are these conditions?

B. $332.86

Barbara is an hourly paid employee making $7.48 per hour. She is scheduled to work 35 hours a week. For the past week, Barbara worked 43 hours. Under the FLSA, what is the minimum she must receive as gross pay? A. $261.80 B. $332.86 C. $310.42 D. $321.64

915

David, a nonexempt hospital employee, has agreed with the hospital to work on a 14-day work period basis, and his regular rate of pay is $10 an hour. David works 5 days at 9 hours each and 4 days at 10 hours each during the 14-day period. Calculate his gross for the period.

B. Overtime pay requirements

Employees covered by collective bargaining agreements may be exempt from which provisions of the FLSA? A. Minimum wage requirements B. Overtime pay requirements C. Minimum wage and overtime requirements D. Child labor restrictions

1. Their regular rate of pay on a weekly basis (hourly rate plus commissions) is at least 1 1/2 times the federal minimum wage in effect AND 2. More than half of their pay for a representative period (at least one month) comes from commissions

Employees in retail or service industries are exempt from the overtime pay requirements of the FLSA if:

-Management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; -Customarily and regularly directs the work of two or more employees -Has the authority to hire and fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are give particular weight.

Executive primary duties include:

D. 48

FLSA does not restrict the number of hours that are worked by children ages 16-17. Michigan limits the number of hours that 16-17 year old can work to 48 hours per week. If a 16 year old employee works in the State of Michigan, what is the maximum number of hours they can work? A. No limit B. 20 C. 40 D. 48

More than $30 per month in tips regularly

How much in tips must an employee earn to be considered a tipped employee?

Annual Salary / Cover hours (hours expected to work) = RROP

How to calculate Regular Rate of Pay for salaried nonexempt

Whichever is most favorable to the employee

If states have differing regulations from FLSA, which law must employer comply?

A. $10.10

The Federal minimum wage is $7.25/hr. The minimum wage in CT is $10.10/hr. What minimum wage rate must be paid to the employees in CT? A. $10.10 B. $7.25 C. $10.00 D. $6.55

To ensure employees receive all OT entitled: 1. Add the overlapping days to the old workweek 2. Calculate the overtime hours and pay due for the old and new workweeks on this basis. 3. Add the overlapping days to the new workweek. 4. Calculate the overtime hours and pay due for the old and new workweeks on this basis. 5. Pay the employee the greater amount from step 2 or 4.

What steps must be taken if an employer changes workweeks?

B. Discretionary Bonuses

When calculating overtime pay, all of the following are included in the regular rate of pay except: A. Per diem pay B. Discretionary bonuses C. Shift differentials D. Retroactive pay

B. Equal pay for equal work

Which of the following areas is not governed by the Portal-to-Portal Act? A. Travel time B. Equal pay for equal work C. De Minimis time D. Preliminary and postliminary activities

B. Equal Employment Opportunity Commission

T/F What government agency enforces the Equal Pay Act? A. National Labor Relations Board B. Equal Employment Opportunity Commission C. Wage and Hour Division D. Federal Trade Commission

False FLSA does not require overtime for Sunday unless the total hours worked for the workweek exceed 40

T/F The FLSA requires overtime pay for hours worked on Sunday.

CAPES - Computer Professional - Administrative - Professional - Executive - Salespersons (outside)

The "white collar" exemption from the minimum wage and overtime provisions of the FLSA is made up of what categories of employees?

An employee is covered by the FLSA if he or she is engaged in interstate commerce or the production or goods for interstate commerce. It does not matter if the business is not a covered enterprise, so long as the employee's job is in interstate commerce.

What is the Individual Employee Coverage test?

- Exempt employees - Do not have to be paid minimum wage or overtime and the employer does not have to keep certain records detailing their work - Nonexempt - Must be paid the required minimum wage and overtime pay and the employer must keep detailed records of their work hours and wage payments.

What is the basic difference between exempt and nonexempt employees?

$7.25/hour

What is the current federal minimum wage?

Under FLSA, all covered employees must be paid at least 1 1/2 times their "regular rate of pay" for all hours physically worked over 40 hours in a workweek.

What is the general overtime requirement?

The minimum wage for newly hired employees under the age of 20 is $4.25/hour for the first 90 consecutive days. If the employees turns 20 during this period, the employee must be paid at least federal minimum wage as of their birthday.

What is the lower opportunity wage?

A. 40

What is the maximum number of hours a nonexempt employee can work in a workweek under the FLSA before overtime premium pay is due? A. 40 B. 55 C. 80 D. 168

All hours during which the employee is under the employer's control, even if the time is unproductive, so long as the time spent is for the employer's benefit

What is the meaning of the term "compensable time"?

$455/week ($23,600 annually)

What is the minimum salary requirement for a Executive Employee to be exempt?

$455/week ($23,600 annually)

What is the minimum salary requirement for a Professional Employee to be exempt?

No requirement to qualify as exempt

What is the minimum salary requirement for a Salesperson (outside) to be exempt?

$27.63

What is the minimum wage that hourly paid computer processionals must be paid to be exempt from the overtime requirements of the FLSA?

D. $27.63 per hour

What is the minimum wage that hourly paid computer professionals must be paid to be exempt from the overtime requirements of the FLSA? A. $4.25 per hour B. $10.00 per hour C. $29.067 per hour D. $27.63 per hour

2 years after the alleged violation; 3 years if the violation was willful

What is the time limit for filing an FLSA complaint with the Wage and Hour Division?

- Office or nonmanual work directly related to the management or general business operations of the employer or the employer's customers - Must include the exercise of discretion and independent judgement regarding matters of significance

What must an employee's primary duty be to qualify for the administrative employee exemption under the FLSA?

Employers can be fined up to $12,529 for each violation and up to $55,947 for each violation that causes the death or serious injury of a minor.

What penalties can be assessed for violations of the FLSA's child labor restrictions?

- What is the employees workweek? - What constitutes hours worked? - What payments made tot he employee are considered wages? - What is the employee's regular rate of pay?

What questions must be answered before overtime pay can be calculated?

Under 18 - No work in a job that has been declared hazardous by the Wage and Hour Division. Some minors 16-17 are exempt under student learner or apprenticeship programs.

What restrictions does the FLSA place on employer regarding the employment of minors under 18?

B. Recordkeeping requirements

Which of the following conditions of employment is governed by FLSA? A. The frequency of pay for employees B. Recordkeeping requirements C. Hours worked by employees over the age of 16 D. Lunch and rest break requirements

B. Fair Labor Standards Act

Which of the following laws established minimum wage and overtime standards in the U.S.? A. Civil Rights Act B. Fair Labor Standards Act C. Age Discrimination in Employment Act D. Federal Insurance Contributions Act

Wage and Hour Division of the U.S. Department of Labor - All areas except Equal Pay provisions Equal Employment Opportunity Commission - Equal Pay provisions

Who administers and enforces the Fair Labor Standards Act?

Yes $27.63/hour is the minimum a Computer Professional must earn to be exempt

Company B hires a computer systems analyst and agrees to pay the employee $25 an hour. If this person works over 40 hours in a week, is the employee due overtime pay?

-Unauthorized overtime -Meal and rest periods -Travel time -On call time -Waiting time -Time spent at meetings and training sessions -Preliminary and postliminary activities -Receiving medical attention

Compensation Time Issues

Typically cannot give time off in other weeks at time and a half vs Overtime but there are exceptions -Time off in the same pay period - can give at least 1 1/2 hours off for every hour of OT worked, so long as given in the same pay period -Public sector employees - can provide comp time instead of overtime up to 240 hours

Compensatory Time Off

Any contractual or agreed-upon bonus or incentive related to production, efficiency, attendance, quality, or some other measure of performance

Non-discretionary Bonus

Regular Earnings 95x15.75= $1496.25 Overtime Premium Pay 15x15.75x.5= $118.13 Total Earnings $1496.25 + $118.13 = $1614.38

Scotts employer pays him $15.75 per hour and he is paid biweekly. During the current pay period, Scott worked 46 hours in the first week and 49 hours in the second week. What will his wages be for this pay period?

An amount added to an hourly rate to compensate an employee for working an evening, late night, or other undesirable shift

Shift Differentials

D. There is no salary minimum

What is the FLSA salary test for outside salespersons? A. $425 per workweek B. $250 per workweek C. $455 per workweek D. There is no salary minimum

-Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications -Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to users or system design specifications -Design, documentation, testing, creation or modification of computer programs related to machine operating systems or -A combination of the aforementioned duties, the performance of which requires the same level of skill

Computer professional primary duties must include:

The law allows such employer to use a 14 day period rather than the workweek for determining OT. All of the following must be met: -There must be an agreement or understanding between the employer and employee before the work is performed -If the agreement is not in writing, the employer must keep some special record of it -The employer must pay employees covered by the agreement or understanding at least 1 1/2 time their regular rate of pay for all hours worked over 8 in a day or 80 in the 14 day period, whichever is higher.

Explain the workweek exemption for hospitals and nursing homes.

True

T/F The FLSA requires employers to pay tipped employees a cash wage of at least $2.13 per hour.

If payments to an employee are made in the form of goods or services rather than cash, the reasonable cost to the employer or the fair market value of the goods or services.

Payments other than cash

-Performance or work requiring knowledge of an advanced type (defined as work which is predominately intellectual in character, and which includes work requiring the consistent exercise of discretion and judgement) in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or -Performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

Professional primary duties include:

-Making sales of tangible or intangible items such as goods, insurance, stocks, bonds, or real estate OR -Obtaining orders or contract for services or the use of facilities *must customarily and regularly work away fro the employer's place or places of business in performing the employee's primary duty

Salesperson (outside) primary duties include:

D. 3

Sam's regular workweek consists of 40 hours and he is paid biweekly. If Sam works 38 hours in week one and 43 hours in week two, how many overtime hours must he be paid for? A. 0 B. 1 C. 1.5 D. 3

True

T/F The FLSA requires overtime pay at 1 1/2 times the employee's regular hourly rate of pay.

True

T/F "Mom and Pop" shops whose only employees are immediate family members are excluded from coverage under the FLSA.

False When employees are required to wear uniforms that cannot be worn as street clothing and their cost and maintenance would put the employee below the minimum hourly wage, the employer must pay for the purchase, cleaning, and repair of the uniforms.

T/F A mechanic must be reimbursed for the cost of laundering his work clothes if the clothes are required by the employer

True

T/F Exempt employees do not have to be paid the required minimum wage or overtime payments.

True

T/F FLSA wages include the fair market value of facilities such as board and lodging.

True

T/F For a 40-hour workweek, Paul, who is a nonexempt employee, is paid $270. This is a violation of the FLSA.

False Service charges automatically added to the customer's bills and then turned over to the employee are not tips and are considered wages when determining whether the minimum wage has been paid

T/F For the purpose of determining whether the minimum wage has been paid, service charges automatically added to a customer's bill are classified as tips.

True

T/F Hospital workers are covered by the FLSA regardless of the hospital's annual volume of revenue.

True

T/F Seamen working on foreign ships are fully exempt from the FLSA's minimum wage and overtime requirements.

False Since the state minimum wage is more favorable you must pay the state minimum wage

T/F Sharon works in Hawaii, where the minimum hourly wage is $10.10. At that time, Sharon must be paid at least the federal minimum wage of $7.25 if she is covered by both state wage-hour law and the FLSA.

False Employers must comply with whichever law is more beneficial tot he employee

T/F The FLSA always overrides any state wage-hour law.

True

T/F The FLSA does not require that an employee's preliminary and postliminary activities be counted as time worked.

True

T/F The FLSA is commonly known as the Federal Wage-Hour Law.

False FLSA does not require the employer to pay for hours not worked because of illness

T/F The FLSA requires employers to play employees for hours not worked because of illness.

True

T/F The Portal-to-Portal Act of 1947 generally state that travel time spent commuting from home to work and work to home is not considered compensable time.

True

T/F The basic unit for determining the proper wages due to employees is the workweek.

False The employees actual duties and salary must meet the tests of the exemption

T/F The job title is a strong factor in determining whether an employee is exempt from the minimum wage and overtime provisions of the FLSA.

False If the employee is completely removed from their duty it is not working time

T/F Time spent by employees during bona fide meal breaks is considered working time.

False To determine gross the total overtime earnings are added to the total regular earnings

T/F To determine gross earnings, the the total overtime earnings are subtracted from the total regular earnings.

False Included in wages if they primarily benefit the employee

T/F Wages other than cash are included in the minimum wage calculation if they primarily benefit the employer.

False FLSA does not require rest periods

T/F Employers are required by the FLSA to give rest periods to employees.

True

T/F Employers that enter into an agreement with their employees to pay them a fixed weekly wage even though their hours vary from week to week are operating under a fluctuating workweek.

False Only exempt from the overtime pay requirements

T/F Taxicab drivers are exempt from the minimum wage and overtime requirements of the FLSA

$2.13/hour as long as the employee's tips are enough to make up the remainder of the hourly minimum wage or $7.25/hour

Under the FLSA, how much are employers required to pay "tipped employees" per hour?

- Enterprise Coverage - All the employees are covered by the FLSA so long as at least two employees of the business are engaged in interstate commerce and the business has annual gross sales of at least $500,000 - Individual Coverage - Individual employees can be covered even if the business is not a covered enterprise if the employees is engaged in interstate commerce or the production of goods for interstate commerce.

Under the FLSA, what are the differences between enterprise coverage and individual coverage?

COMER -Child Labor -Overtime -Minimum Wage -Equal Pay for Equal Work -Recordkeeping Requirements

What are five areas regulated by the Fair Labor Standards Act?

Total annual compensation of at least $100,000 if the employee customarily and regularly performs one or more of the exempt duties of an exempt administrative, executive, or professional employee Compensation must include a salary of at least $455 per week

What are the factors for determining if an employee is a highly compensated employee and exempt under FLSA?

-Different rates of pay - calculate all regular earnings and divide total by the total hours worked -Salaried non-exempt - Annual Salary divided by hours scheduled for the year. -Workweek less than 40 hours - As long as the employee is paid minimum wage they don't need to be paid for the hours worked over the schedule but under 40. If hours exceed 40 overtime must be paid. RROP = Pay / scheduled hours *only pay OT on hours over 40 -Piecework - Add piece-rate earning to any other earnings and divide the total by the total number of hours worked. -Tipped employees - Must calculate wages, tip credit, and tips to ensure minimum wage -Fluctuating workweeks - salary divided by actual hours worked to get RROP -Belo-type - Guarantees a fixed salary for irregular hours -Overtime prepayment plan -Daylight savings time issues

What are the special problems related to Regular Rate of Pay?

CAPES -Computer Professional -Administrative -Professional -Executive -Salesperson (outside)

What are the types of White Collar Exemptions?

-Enterprise Coverage -Individual Coverage

What are the types of coverage under FLSA?

-Hospitals -Nursing Homes -Elementary and Secondary schools and colleges -Public (government) agencies

What businesses are specifically covered by the FLSA regardless of annual sales?

- Must regularly receive at least $30 a month to be considered a tipped employee - Must receive as much in tips as the tip credit to ensure they earn at least minimum wage. - The employee must be informed about the tip credit provisions of the law before the credit is taken - Credit card tips must be given tot he employee by the next payday.

What conditions must be met for an employer to take advantage of the tip credit?

-Requires equal pay for men and women doing equal work under similar working conditions. -Equal Work means jobs requiring equal skill, effort, and responsibility -Enforced by the Equal Employment Opportunity Commission

What does Equal Pay for Equal Work require and who enforces it

-Shift differential -Non-discretionary bonus -Payments other than cash -Retroactive pay -On-call pay -Supplemental disability payments -Sick leave buyback payments -Per diem pay -Cash in lieu of benefits

What is included in Regular Rate of Pay?