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We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave

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April 07, 2003
Increased Complaints, Enforcement, Warrant FLSA Changes
For a Limited Time receive a FREE Compensation Special Report on the "Top 100 FLSA Q&As," designed to provide you with an examination of the federal FLSA Overtime Regulations in Q&A format, including valuable tips for FLSA Coverage, Salary Level, and Deductions from Pay. Download Now
ch federal law do you think spurred the most court activity in 2002, and continues to do so now? The Americans with Disabilities Act? Family and Medical Leave Act? Title VII of Civil Rights Act? Age Discrimination in Employment Act? Equal Pay Act?

Actually, the answer is 'none of the above.' It is the Fair Labor Standards Act. Yup, that old law that everyone thinks they understand-and far fewer really do. Who's exempt? Are they always exempt, or only sometimes? Can they become nonexempt? How does that happen?

What's Going on with FLSA?
The answer is that two trends are emerging at the same time. In one, the U.S. Department of Labor (DOL), whose Wage and Hour Division is in charge of enforcing the law, has kicked into high gear. During the agency's fiscal 2002, it collected the largest amount of back pay awards in the past decade-more than $175 million, a 33 percent increase over the previous year. Those awards went to 264,000 employees, nearly 50,000 more than in fiscal 2001. Wage & Hour finished more than 40,250 "compliance actions" in the same 2002 period, up 6 percent.

But make no mistake about what triggered these enforcement activities. Wage & Hour didn't go looking for trouble; instead, 75 percent of its activities were in response to complaints by employees. So, individuals are now more aware of their rights and more likely to contact authorities. The other trend is that of employees, sometimes urged on by attorneys, to band together in classes that take their employer to court for FLSA violations. They don't always win, as we will see, but when they do, the resulting awards can be very expensive for the employer.

What Do Employees Want? Overtime!
When Do They Want It? Now!

The biggest problem seems to be the question of who's exempt, with salaried individuals and groups charging that their jobs are structured in such a way that they should not be exempt. That would mean, of course, that they should be entitled to overtime pay. And, there's no question that in this down economy, employers are working their people harder and longer than ever. The contention usually revolves around whether workers classified as managers are actually managing anything. They can argue, convincingly in some cases, that they are not even allowed, much less required, to exercise independent judgment-that all their decisions are made according to detailed written procedures or must be reviewed by a higher-level manager. Groups of RadioShack store managers, United Parcel Service workers, Pacific Bell engineers, and Farmers Insurance Exchange adjusters have all taken this approach to seek overtime pay, and they have all won in court. They should have been classified as salaried nonexempt, the courts agreed.

In a recent South Carolina case, however, the plaintiffs were not successful. These managers all worked at a nuclear power plant, and they did not question their exempt status under normal circumstances. But every 18 months or so, the plant was shut down for routine maintenance that involved many work-intensive procedures. For the five or six weeks that the reactor was not operational, all employees were asked to work overtime, and a portion of the managers assumed jobs normally done by nonexempt employees. Eventually, those reassigned managers took the employer to court, charging that they should have been reclassified as nonexempt during each of two recent shutdowns, so that they could be paid overtime for those periods of time. The court found that the shutdowns were of such short duration that it was neither necessary nor practical to reclassify the managers. So the employer got off the hook in that case.

What Else Do Employees Want?
Several other problem areas revolve around extra pay for hourly, nonexempt workers. In one case, for example, chicken processors at Perdue Farms charged they should be paid for time spent putting on, taking off, and cleaning the protective outfits they were required to wear on the job. These tasks had been done off the clock, before shifts began or after they ended, but employees felt they should have been on the clock. Wage and Hour tended to agree, and Perdue ultimately settled the case for $10 million.

More notorious is the rash of lawsuits-estimated at 40-against Wal-Mart, in which groups of employees charge that managers routinely force them to clock out after 40 hours and then return to work for several more hours each week. In a successful suit in Oregon, 400 current and former employees from 18 different stores in the state took Wal-Mart to court. Some testified that they frequently cleaned the store off the clock after it had closed, while other witnesses said they were told to subtract hours from their time cards in order to stay at or under 40 each week. Still others said they were asked to change numbers in store computers to avoid any overtime payments. They, rather than company managers, convinced a jury that they were telling the truth.

And, in Alabama and Mississippi, groups of public school employees have been suing for systems' refusal to pay them overtime. The workers hold nonteaching positions, and they charge such practices as requiring custodians to clean and close schools after the end of the school day or after athletic events and off the clock. Or, schools have employed a single individual as both a bus driver and a substitute teacher but paid the person separately for each job. The goal of these practices, of course, is to avoid paying overtime. In Alabama, courts are considering proposed class actions covering 17 different counties; in each case, judges must decide whether a group of workers has enough evidence of a "pattern and practice" of attempts to avoid paying overtime.

Another frequent complaint involves whether employees should be paid for time spent traveling to and from job sites. For example, one class of 165 Washington state employees works at a confinement facility located on McNeil Island. In order to reach their job site, they must travel 20 minutes each way from the mainland on a ferry run by the Department of Corrections. The employees said they were under strict supervision by the department for the length of their commutes, so they complained that they should be paid for that time. But a state court of appeals disagreed, primarily because the employees were not required to do any work during the trips. A judge reasoned, "Riding the ferry boat requires no physical or mental exertion and does not occur on the employer's premises."

Never Mind Extra,
Just Pay Me the Minimum

In another set of cases, DOL has charged some employers with failing to pay workers even the federal minimum wage. The department went after 11 Chinese buffet-style restaurants in the Chicago area for this violation, alleging that more than 125 busboys and kitchen help had been underpaid. The employees were mostly Asian and Hispanic immigrants; some had been paid less than $5.15 an hour, while others had worked as many as 66 hours a week without overtime pay. The restaurants have settled the suit for approximately $650,000, which will be distributed to workers by DOL.

Attorneys say that such targeted federal efforts should trigger caution and reform throughout the restaurant industry. Knowing that Uncle Sam is watching you, they say, means being on your best FLSA behavior. They note that, after Farmers Insurance Exchange lost its claims adjusters' overtime suit, the entire insurance industry took a careful look at its compensation practices.

We don't know how big the exotic dancing industry is, but it may need to monitor its pay practices too. Dancers at a California strip club should have been covered by the state's minimum wage law, but club management required them to earn all their pay directly from customers, as well as to pay rent to the club for use of its stage. The court found that club management in fact governed the dancers' performances with such strict written rules that they should have been classified as employees and paid minimum wage by the employer. The club had instead classified the dancers as artists.

FLSA Will Be Revised
In March 2003, DOL issued proposed regulations revising the rules for white-collar exemptions under the FLSA. Unlike other proposed regulations that languish for years before becoming final, all signs point to a quick notice and comment period for the rule and for final rules to be issued in 2003

Date posted: 4/07/03

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