By: Brian D. Boreman
The Fair Labor Standards Act (“FLSA”) was enacted by Congress in 1938 to ensure that, among other things, certain employees receive overtime compensation for all hours worked in excess of 40 hours in a workweek. These employees are considered “non-exempt” (and are often referred to as “hourly” employees). Other employees, however, are not required to be paid overtime even if they work in excess of forty hours in a workweek. These employees are considered “exempt” (and are often referred to as “salaried” employees). Needless to say, employers who violate the FLSA by not paying overtime compensation when required face potential liability and the imposition of severe penalties.
There are many instances when a violation of the FLSA occurs. Often, an employer misclassifies a non-exempt employee as exempt, and thus, does not pay the employee for overtime hours. Unfortunately, many employment positions do not have a bright-line to follow when determining an employee’s classification under the FLSA. As such, it is incumbent on the employer to evaluate the duties of the employee in conjunction with federal law to determine whether the employee is entitled to overtime compensation.
Although misclassifying an employee’s status is one way to run afoul of the FLSA, it is certainly not the only way. For example, employers need to ensure that they do not improperly round down the payable time worked at the beginning and end of works shifts and bona fide breaks for non-exempt employees. Another common example of a FLSA violation occurs when an employer inappropriately deducts the pay of an exempt employee to recoup damages it sustained as the result of the employee’s actions or inactions.
These are just a few of the examples that could lead to liability for your company and are mentioned merely to highlight the many issues facing an employer when complying with the FLSA. To help your company ensure that its policies are compliant with the FLSA, or for any other employment-related issues, please contact Brian Boreman.