Chapter 2 -

What are non-exempt employees?

Nonexempt employees: >> must be paid at least the minimum wage for all hours worked, and >> an overtime premium for hours worked over 40 in a workweek.

Types of Exempt Employee:

>> "White Collar Exemption" : applicable to Executive, Administrative, Professional and outside sales employees. >> Retail and Service establishment exemption; >> Hotel and Restaurant employees and others.

Which employees count as "tipped employees?"

>> Anyone who makes more than $30 in tips a month falls under the tip credit rules. >> These workers are called "tipped employees" and include waitstaff, movers, bartenders, bellhops, and anyone else who regularly receives tips as part of their job.

What happens to areas not regulated by FLSA?

Areas left unregulated by FLSA, are most likely regulated by all States one degree to another.

What is the minimum cash wage you can pay to tipped employee and what is the tip credit?

As per the FLSA, minimum cash wage paid to a tipped employee is .. $2.13 per hour and .. the tip credit is $5.12 per hour.

What if state law and federal law has the same provision? Which one is applicable to the employer?

Even where the FLSA has an applicable provision, the employer must comply with a state law covering the same issue if the state law is more favorable to the employee. (However, there are several states that exempt employers and employees covered by the FLSA from state law coverage.) Example: State minimum wage is higher than federal wage; in certain states - city minimum wage is higher than the state then that law applies.

What is an exception to the factors that FLSA does not cover?

FLSA does not require that the wages be paid within a certain amount of time after services are performed. But federal courts have ruled that the wage are considered as "unpaid" unless they are paid on the employees regular pay day. Payment beyond that date violates the FLSA's minimum wage and overtime payment requirements. Although, overtime pay may lawfully be delayed until it can be correctly calculated.

What does FLSA do?

Fair Labor Standards Act : 1. Sets the minimum wage 2. Sets the overtime rate 3. requires record keeping by the employer 4. places restrictions on types of work children can do and the hours they can work 5. mandates equal pay for equal work

What is FLSA?

Fair Labors Standards Act (1938), is a payroll and employment law, explaining its requirements governing minimum wages, overtime pay and child labor etc. as well as how the law is enforced and how costly violations can be. The Fair Labor Standards Act of 1938 29 U.S.C. § 203 (FLSA) is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits employment of minors in "oppressive child labor".

Who regulates employees wages and hours?

Federal and State laws regulate employee's wage and hours.

Are Salaried employees exempt from FLSA requirement of OVERTIME Pay requirements?

Salaried employees are not necessarily exempt from the FLSA's overtime requirements. Only those employees whose salaries exceed a certain level and who meet the duty and responsibility tests for exemption are classified as exempt.

Is there a difference between Federal and State laws pertaining to tip credit and tip pay?

Some States do not allow the tip credit or may have a minimum wage that is higher than the Federal minimum wage. In this case, whatever favors the employee should be applicable.

Study Enterprise coverage and non-employee coverage

There are two tests to determine if an employee is covered by FLSA. Enterprise coverage and Individual Employee coverage

What must a employer do if the tips are not enough to meet the regular rate of pay of 7.25 as per the FLSA minimum wage?

The employer must pay the difference.

Who administers and enforces the "equal pay for equal work?

The equal pay provisions are enforced by the Equal Employment Opportunity Commission.

What are the rules for tips when received by credit card?

The tips received by credit card should be paid to employee by the next payday, though the credit company percentage charge for the use of the card can be subtracted from the tip.

Are there employees that are not covered by FLSA? OR Who are "Exempt Employees"?

Yes, there are employees who are called "Exempt employees" and are not covered by FSLA. Exempt employees are those who do not have to be paid the required minimum wage or overtime payments, and the employer does not have to keep certain records detailing their work.

What are the rules for tip pay?

1. the employees must actually receive the amount of tip credit in actual tips from the employer 2. the employee must be informed about the tip credit provision of the law before the credit is taken. 3. All tips received by the employee must be kept by the employee, even though there can be the concept of pooling. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors. 4. The additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (unless state laws are more favorable for the employee) 5. Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed the full $7.25 minimum wage and reimbursement of the amount of tips that were improperly utilized by the employer.

What should employers and payroll practitioners be aware of?

All employers and payroll practioners must be aware of not only of the FLSA, but of the state wage hour laws in states where they operate.

Who are Exempt Employees?

Exempt employees are those: > who do not have to be paid the required minimum wage or overtime payments, and > the employer does not have to keep certain records detailing their work. The most well- known of these exemptions is the "white collar exemption" for executive, administrative, professional, and outside sales employees, but there are also narrower exemptions that apply to retail and service establishment employees, hotel and restaurant employees, and others. There are three categories under which an employee may be considered exempt. They are: >> administrative, >> executive, and >> professional. These categories generally define an exempt employee as one who customarily and regularly exercises discretion and independent judgement in the performance of his/her duties.

What does FLSA not cover?

FLSA does not cover: 1. Does not require employers to provide paid vacation, sick days, jury duty leave, holidays, lunch breaks or coffee breaks. 2. Does not regulate the frequency of pay i.e. how often they must be paid 3. Does not regulate when they must be paid after termination of employment (either voluntarily or involuntarily) 4. Restrict the hours that employees above 16 years of age may be required to work. These areas are governed by other federal law or regulation, but in most instances they are handled by the individual states.

Who administers and enforces the FLSA?

The FLSA is enforced by Wage and Hour Division of US Dept of Labor (DOL). This does not include the enforcement of "equal pay for equal work"