Ch 14 Wage and Hour Laws

Principal activity -

"principal activity" for which they are hired

Provisions under the FLSA: Under the WARN Act, employers of more than ____ employees must give a detailed written notice to employees no less than 60 days prior to closing a plant or initiating a mass layoff that will affect 100 or more full-time workers. Failure to give such notice exposes the employer to civil penalties and back pay damages for the affected workers.

100

Fair Labor Standards Act of 1938 (FLSA) -

1938 federal law applicable to employees engaged in interstate commerce or employed by an enterprise engaged in interstate commerce; sets minimum wages and overtime and regulates youth employment.

Provisions under the FLSA: Federal law establishes the minimum wage rates and requires overtime pay of an additional ____ percent for all hours over 40 worked within a workweek.

50

Federal Insurance Contributions Act (FICA) -

Both employers and employees must pay the Social Security and Medicare Tax required by the Federal Insurance Contributions Act (FICA). To determine employee status, Social Security and Medicare apply the common law tests of the right to control the result and the details by which the result is accomplished.

Minimum wage -

Both federal and state laws and regulations govern the area of wages and hours of employment. The principal federal statute is the Fair Labor Standards Act of 1938 (FLSA). 2 Its purpose was to establish minimum wage and overtime pay requirements and to restrict the use of child labor.

Overtime -

Both federal and state laws and regulations govern the area of wages and hours of employment. The principal federal statute is the Fair Labor Standards Act of 1938 (FLSA). 2 Its purpose was to establish minimum wage and overtime pay requirements and to restrict the use of child labor.

Compensatory time off -

Compensatory Time Off (CTO) Federal law does not authorize the use of compensatory time off in lieu of wages. CTO refers to employees being given time off in lieu of extra compensation or overtime pay.

Federal minimum wage -

Effective July 24, 2009, the federal minimum wage is $ 7.25 per hour. Under federal law, employees under 20 years of age may be paid less per hour. For hourly employees, the hourly rate of pay must be equal to the federal minimum or more per hour.

Exempt employee -

Employees exempt from overtime pay provisions, from both the minimum wage and overtime pay provisions, or from the child labor provisions of the FLSA.

Enterprise coverage -

Enterprise coverage of the FLSA is the most common way in which it protects employees. Workers will be entitled to FLSA protection if the enterprise for which they work has at least two employees engaged in interstate commerce activities or the enterprise generates a total of at least $ 500,000 per year. It extends to employees of not-for-profit and religious entities if the activity of the employed individuals is connected with commercial operations and has a "business purpose."

Provisions under the FLSA: Federal employment tax statutes use different definitions for employment than does the ____.

FLSA

Individual coverage -

FLSA coverage as extended to employees engaged in interstate commerce.

Executive exemption -

FLSA exemption from overtime pay covering employees whose duties and responsibilities involve managing an enterprise, who customarily and regularly direct two or more employees, who have authority to hire and fire or whose recommendations as to staffing are given particular weight, and who customarily and regularly exercise discretionary powers.

Tip credit -

Federal law allows employers to credit tips received from customers toward the minimum wage rate to be paid the employee (" tip credit"). Employees will be deemed "tipped employees" if their occupation is one in which employees customarily and regularly receive more than $ 30 per month in tips.

Portal-to-Portal Act -

Federal law specifying the types of work-related time spent that is compensable. Generally, such time includes all activity of benefit to the employer; time for travel to and from the workplace is not compensable.

Highly compensated employee exemption -

Highly Compensated Employee The Department of Labor's regulations identify highly compensated employees performing office or non-manual work who are paid a total annual compensation of $ 100,000 or more on a salary or fee basis (which must include at least $ 455 per week paid on a salary basis) as exempt from overtime if they customarily and regularly perform at least one of the duties or responsibilities of an exempt executive, administrative, or professional employee identified in the tests for exemption.

Sleeping time -

If an employee is on duty for less than 24 hours, sleeping time is not compensable. If he or she is on duty for 24 hours or more, then the employer and employee may agree to exclude a sleeping period of not more than 8 hours, provided adequate sleeping facilities are furnished and the employee can usually enjoy a reasonable period of sleep.

De minimis -

If the work is de minimis, the employee is not compensated (measured by degree and time of the activity). In all cases, the claimant must show that the employer had actual or constructive knowledge of the overtime work.

Federal Unemployment Tax Act (FUTA) -

In 1935, Congress enacted the Federal Unemployment Tax Act (FUTA), which imposes a tax on employers to fund state work assistance agencies. Employers, not employees, pay the FUTA tax. The employer contributes to the federal government, and a credit is allowed for the amounts paid by the employer to state unemployment agencies.

Section 530 -

In response to the Internal Revenue Service (IRS) aggressively seeking to collect employment taxes, Congress passed Section 530 of the Revenue Act of 1978. Congress intended it to restrain the collection of those taxes from employers who classified their workers as independent contractors even though the workers might not fit the criteria of the 20-factor test.

Meal periods -

Meal and Rest Periods Meal periods are not hours worked if the employee is relieved of duties to eat a meal. It is not necessary that the employee be free to leave the employer's workplace, but if employees are required to eat at desks or a work position, the employer must pay for the time. Ordinarily, 30 minutes or more is sufficient for a bona fide meal period, although shorter periods under special circumstances might be permitted.

Outside sales representative exemption -

Overtime wages need not be paid to a worker whose primary duty is to make sales or obtain orders or contracts and who is customarily and regularly engaged in work away from the employer's place of business.

Integral and indispensable -

Preliminary and Postwork Activities Employees may be entitled to compensation for time spent involving preparatory and concluding activities related to "integral and indispensable"

Safe harbor -

The "safe harbor" test applies only to employment taxes. The worker may be treated as an employee for all other purposes.

Covered enterprise -

The FLSA is based on the power of Congress to regulate interstate commerce. The FLSA provides for two types of coverage: enterprise coverage and individual coverage. If the FLSA entitles employees to protections under either enterprise or individual coverage, then they must receive the FLSA prescribed minimum wages, overtime pay, and equal pay between the sexes.

Liquidated damages -

The employee may also seek liquidated damages in an amount equal to the damages, plus attorneys' fees and court costs. A two year statute of limitations applies to the recovery of back pay, but a three year statute will apply in cases of willful employer violations of the FLSA. Any person who willfully commits a violation of the FLSA is subject to criminal prosecution.

Opportunity wage -

Under federal law, employees under 20 years of age may be paid an "opportunity wage." This wage rate is a subminimum hourly wage rate of at least $ 4.25 per hour for the first 90 consecutive days of employment. An employer cannot displace another employee to hire a youth at the lesser rate. 3 The FLSA also contains record keeping requirements.

Training Time -

Under the Department of Labor regulations, training time is not compensable if: • (1) attendance is outside the employee's regular working hours, • (2) the employee does not perform productive work during the program, • (3) attendance is voluntary, and • (4) the program is not directly related to the employee's job.

Administrative employee exemption -

Under this FLSA exemption, overtime wages need not be paid to a worker who is compensated at a salary basis of not less than $ 455 per week, whose primary duty is the performance of office or non-manual work directly related to management or the general business operations of the employer or its customers, and whose work includes exercise of discretion and independent judgment.

Provisions under the FLSA: Courts use an "economic reality" test to determine if the worker is actually an ____ contractor.

independent

Provisions under the FLSA: Many rules define the hours worked in a workweek. Rest periods are counted as compensable working time. Bona fide ____ periods are not counted as compensable working time. Employees thus must be completely free of duties during the meal period. Employees who must eat at their workstations are entitled to compensation for their meal periods. Federal law provides that 30 minutes is a sufficient bona fide meal period. If an employee is on-call or on duty, all waiting time is compensable. ○ Federal law imposes restrictions on the employment of children. An absolute prohibition prevents their employment in oppressive conditions or in hazardous occupations.

meal

Provisions under the FLSA: Federal law places restrictions on the employment of ____.

minors

Individual employee coverage -

of the FLSA will be extended to an employee if he or she is engaged in commerce or in the production of goods for commerce among the states or a state outside the place of production. This interstate commerce activity is easily found if the employee uses an instrumentality of interstate commerce to perform their job (e.g., use of a telephone or other communication device connected to the interstate telephone system, transportation, banking, or insurance). The FLSA also covers domestic service workers in private households.

Provisions under the FLSA: The requirement to pay _____ has several exemptions. They include exemptions for executives, administrators, professionals, computer-related professionals, and outside salespersons.

overtime

Provisions under the FLSA: The act applies only if an employment relationship actually exists. It does not apply to independent contractors or ____.

volunteers

Rest periods -

A break in the workday, for example, to use restrooms or for coffee. Not required by FLSA, but state laws often require rest periods for nonexempt employees who work a minimum period of time in a workday.

Nonexempt employee -

A worker entitled to the minimum wage and/ or overtime pay protections of the FLSA

Learned professional exemption -

An FLSA exemption from overtime pay for workers who are compensated on a salary basis at a rate not less than $ 455 per week and whose primary work requires advanced knowledge in a field of science or learning mastery of which is acquired through specialized instruction.

Worker Adjustment and Retraining Notification Act (WARN) -

In the 1980s, as American industrial plants began to rapidly close and institute mass layoffs, many employees, their families, and their surrounding communities found they were unprepared because they received no prior notice. In response, Congress enacted the Worker Adjustment and Retraining Notification (WARN) Act in 1989. The act prohibits employers from: ordering a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of such an order: (1) to each representative of the affected employees as of the time of the notice or, if there is no such representative at that time, to each affected employee; and (2) to the State or entity designated by the State to carry out rapid response activities [the State dislocated worker unit]... and the chief elected official of the unit of local government within which such closing or layoff is to occur.

Mass layoff -

It also applies to a mass layoff that will affect 100 or more full-time workers. Under this act, a written notice must be given to employee representatives, such as a union, or to the affected employees if not represented by a union, and to the state unemployment office.

Reduction in force (RIF) -

Seniority and performance are two of the most common methods used by employers to determine whose employment will be terminated in the event of a layoff or reduction in force (RIF). When an employer uses a length of service or seniority system to determine who must be terminated from employment, the employer is well advised to define the procedure very carefully.

Computer professional exemption -

This exemption relates to workers whose primary duty is the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system specifications and the design, development, documentation, analysis, creation, testing, or modification of computer systems or programs or software.

On-call time -

Time during which employees are not required to remain on the employer's premises but are required to be available to work and thus cannot use their time for their own purposes.

Provisions under the FLSA: Travel to and from work is not ____ unless certain exceptions apply.

compensable

Provisions under the FLSA: Provisions under the FLSA: The act applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer is exempt from its ____.

coverage