Legal compliance is essential at any time. However, it becomes even more critical in today’s litigious environment for organizations to minimize risks by taking steps, such as the following:
1. Develop an understanding of how the FLSA and applicable state laws impact your organization. This federal law’s primary focus is on regulating overtime, recordkeeping and posting requirements, minimum wages and child labor. The Department of Labor, the agency charged with enforcement, has information available on its Web site, http://www.wagehour.dol.gov/.
2. Avoid assumptions that employees are exempt from overtime and minimum wage provisions based on criteria such as job titles or whether they are paid on a salaried rather than hourly basis. Instead, take responsibility for analyzing relevant facts prior to making exemptions. For example, when considering potential white-collar exemptions, examine information related to salary and duties to determine whether employees meet standards for executive, professional, computer, outside sales, or administrative designations.
3. Generally pay overtime at a rate not less than 1 1/2 times a non-exempt employee’s “regular” rate of pay for all hours worked in excess of the standard 40-hour workweek. Regular pay normally includes all remuneration (e.g. on-call pay, shift and weekend differentials, non-discretionary bonuses), unless specifically excluded by the Act.
4. Compensate non-exempt employees for any work performed in excess of a 40-hour workweek, even if overtime has not been authorized by the employer. There is a common misperception that employees do not have to be paid for overtime if the employer’s policies require the employee to obtain authorization prior to working any overtime. While employees must be paid for those hours worked, employers are not prevented from applying discipline for such policy violations.
5. Pay attention to activities that may be compensable for non-exempt employees, including attendance at training programs and meetings, waiting and on-call time, rest and meal periods, travel and clothes changing time. Review the Act and related information to determine whether compensation is required.
6. Maintain and preserve required records for non-exempt and exempt employees in an accurate and consistent manner. Examine organizational recordkeeping procedures periodically to ensure FLSA compliance.
7. Establish a compliance plan that includes implementing appropriate policies and procedures, researching issues and documenting decisions reached, and conducting periodic reviews of organizational practices. Throughout the process, seek legal or human resource expertise, as needed, to provide assistance in interpreting this complex Act.
