WPCR ;hj}/ LϲNX/(N B/, 98V[|=EW6W_eV]pEa1SvDVVlrmbi@׻p=@ 0_72h؇ ߾F-]HoS͖P* j8ݵ&m +3݉}ۃ'#^Ds:xPL >C7kiCM +~q(f\0BU_0w`!#Z:u㺴bPl̕E,}9Q'pZ[)."*3p%gl2TT0bzxl^u #1Yp7dw\7RA%`W_5Ӱ]1 4rv%N<5c SH 0x 0 J 0bU.> 0l 0B 0| 0M 0C\tA 0tB nR 0 f%#g%N0(^ 2(w>(4B(V( mX(X( 0-1o(U^*(M(UD>( 0= ) 0I) 0>* 0O* 0+ 0+ 0a, 0, 0- 09J. 0. 02_/ 0/ 0:0 00 0_L1 0 1 0k2 0 4 B*5 D35 D+6 0=6 07 068 08 0:9 0h1: 0F: C:U6:M/;M3;U:7;Mq;Mu;My;M};M;M;M;U.;(;; 0u=U,=#> 1u9> 72> 0$c> BC? 0w`? 0? 0a@MA A A dCB B jeC C iD l+E E Z%F 0F 03G 0G 0H 0DI 1uK 72}K}K}KK 0CuL 0(L AMLN-M-M-M-M-M-M-M-M-M@{No/N@No/N@No/N@ Oo/(O@WOo/_O@Oo/O@Oo/O@Oo/P@3Po/;P@jPo/rP@Po/P@Po/P@Qo/Q@FQo/NQ@}Qo/Q@Qo/QQ@Qo/QQ@"Ro/*R*R@YRo/aRaR@Ro/R\  `*Times New RomanTT' FLSA IN 2003 2 ,Stephen J. Padula"0Mark Osherow .   h:Default ParaDefault Paragraph Font        V :footnote texfootnote text  W\  `*Times New RomanTTW        XXXW\  `*Times New RomanTTW  `:footnote reffootnote reference        T} :Balloon TextBalloon Text  C%2A`ArialTTC        XXXW\  `*Times New RomanTTW  %2A`ArialTT<;T .headerheader   (#        >4X` hp x (#>  <;T .footerfooter   (#        >4X` hp x (#>  P8page numberpage number        (Y2$ !XXXXXX  ($      !X\XX\XXX\  _X XXX\  ؽ XX  Hؽ                1        ݀ؽ HAlthoughagriculturalworkersinmostinstancesandsomegovernmentalemployeesarestatutorilyexcluded e fromthe_FLSA_sdefinitionof employee,theActgenerallycoversemployeesofpublicagencies,including ) thefederalgovernment,stategovernmentsandpoliticalsubdivisions.Inaddition,theActcoversalllevels  ofeducationalinstitutions,hospitalsandotherhealthcarefacilities. Hؽ j !X\XX\XXX\  _X XXX\  ؽ XX  Hؽ                2        ݀ؽ HThechildlaborprovisionoftheFLSAlimitsthenumberofhoursthatachildemployeemayworkinany e workweek. Hؽ     !X\XX\XXX\  _X XXX\B.` hp x (#XB  ؽ XX  Hؽ                3  J      ݀ؽ H Salarymeanstheemployeereceivesapredeterminedamounteachpayperiodwithoutregardtovariations e inthequalityorquantityoftheworkperformedorthenumberofdaysorhoursworked. Feepaymentsare ) characterizedbythepaymentofanagreedsumforasinglejobregardlessofthetimerequiredforcompletion. Hؽ(2\j$ !XXXXXX  XmXXX  0  3|x \  `*Times New RomanTTC\  P6QP\  `*Times New RomanTTXXP\  P6QXP%2A`ArialTTomanTT;2PQP%2A`ArialTTomanTTXXX2PQXP%2A`ArialTTomanTT2PQP%2A`ArialTTomanTTJ2PQPH`9 !"Courier NewTTTTXX H`X(>$XzXXzXXXzBrother HL-1440 series,,,,0%5 5lients"U0.Normal%2A`Arial\  `&Times New Roman<:Definition T<GD:Definition L , ;1` hp x (#;  8.` hp x (#886Definition('z&H1      XXX(o&H2  XXX(o&H3  XXX(&H4 XXX XXX(o&H5  XXX(o&H6  XXX20Address8SP6Blockquote , , ;1` hp x (#;   8.` hp x (#8,*CITE,dl*CODEKB<6X9`(Courier NewKXXXS#\  `&Times New RomanS42Emphasis6&)4Hyperlink            <:FollowedHype    4go2Keyboard KB<6X9`(Courier NewK XXXS#\  `&Times New RomanS<:Preformatted/%  ,Kk (#/KB<6X9`(Courier NewKXXXS#\  `&Times New RomanS/%  ,Kk (#/<:zBottom of =8( **=  B  ?!%2A`Arial?-9 -  XXXS#\  `&Times New RomanS&0 d d7777'dxd'dxd<:zTop of For=8(**=  B  ?!%2A`Arial?-9 -  XXXS#\  `&Times New RomanS0Kl.SampleKB<6X9`(Courier NewKS#\  `&Times New RomanS0.Strong 8dl6TypewriterKB<6X9`(Courier NewKXXXS#\  `&Times New RomanS42Variable:8HTML MarkupB      2 0CommentB   d<6X9`(Courier New,cAZ"Arial Regular $Verdana  PvC'X\XX\XXX\  _ HXX\Qؽ H Osherow,Shiner&Associates,P.A.  FLSAOverview n April2004 ,| Page  1  # HQؽ##X\X Hi#(Z3vC$ !XXXXXX  ,cAZArial  e 3#37=CIQYag1.a.i.(1)(a)(i)1)a)Si)(;3$2#  0  .3  0   d(O;$0  2#  a  .3  0` (#(#(b$0  0` (#(#2#   .3  0 ` (#` (#(xir$0  0` (#(#0 ` (#` (#2#(  0  )3  0 (# (#2. Do you have to give paid vacation days, sick days, and holidays to exempt employees3. Do you have to pay exempt employees when work is not available4. What about for jury duty and military leave5. Do we have to pay exempt employees on days they cannot work because of inclement weather6. Can deductions be made from an exempt employee7. Can you make deductions for disciplinary reasons, such as a suspension8. Can you require exempt employees to work 40 hours a week or to be at work during set times9. Can you pay exempt employees extra compensation10. Can you keep track of the number of hours exempt employees workPenalties for Misclassification Are Severe($0  0` (#(#0 ` (#` (#0 (# (#2#(  a  )3  0h(#(#(F$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#2#(   )3  0h(#h(#($0  0` (#(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#2#  0  )3  0(#(#({$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#0(#(#2#  a  )3  0p(#(#(F$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#0(#(#0p(#(#2#     )3  0p(#p(# UWXYefghx3MQUY]aeiBullets Listji Level 1 Level 2 Level 3 Level 4 Level 5(2C$ !  ($nop9A<< c Capezzali OPMon onHomeworkershomeworkingnonmanual FMLAworksite&Misclassificationmisclassified CBApayouts FLSAbackpayOSHEROW|WPC~WPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPCWPC !X\XX\XXX\  _TRX3'Avery 12-294/295 Laser TaX3' Letter3'Letter2-294/295 Laser Ta-294/295 L3'LetterT  XX\  p4 ROO  @*  r @  @`  @  @  @h  @ WAGE&HOURLAW/FLSAOVERVIEW#rz#  n  X X April,2004  F  Thisoverviewisforinformationalpurposesonly,andisnotintendedasasubstitute P  forobtaininglegaladviceaboutaspecificpolicy,practice,orcircumstance. 6     `     h I.  FLSABASICS   8 TheFairLaborStandardsAct,29U.S.C.201,etseq.(2002)(the FLSAorthe Act),   morecommonlyknownasthe wageandhourlaw,establishesfederalwageandhour   standardsforcoveredemployees.   TheFLSArequiresthatemployerspayemployeesatleastthehourlyminimumwage T  currently($5.15perhour)forallhoursworked.Certainstatesmayhaveadifferentstate : minimumwage;Floridadoesnot.  p UndertheFLSA,nonexemptemployeesmustbepaidovertimecompensationforhours < workedinexcessin40hoursinaworkweek.Theemployerisrequiredtomaintaindetailed $ recordsoftheemployeesdailyandweeklyhoursworked.     TheFLSAhasmanynuances,whichmaymakereadingandunderstandingtheActvery  complicated.Infact,theFLSAisoneofthemostconvolutedofallfederalemployment l laws,and,consequently,oneofthemostchallengingwithwhichtocomply.Asevidence R ofemployercompliancedifficulties,theU.S.DepartmentofLabor(DOL)recentlynoted 8 thatin2002thereweremoreFLSAclaimsandcollectiveactionsthantherewereclaims n andclassactionsallegingjobdiscrimination.Notethatsuchcasesareexpectedto T multiplyinSouthFlorida!withalreadythehighestpercentageofFLSAclaimsinthe : country!duetoacombinationofeconomicandemploymentfactors,thehighnumberof   immigrantworkers,employernoncompliance,andaggressiveplaintiffsattorneys.      `     h  Question:WhatistheFLSA? "  Answer: TheFLSAisthemostgeneralfederallaborlaw.Itcontainstheminimumwage V$" provisions,EqualPayAct,childlaborrestrictions,andavarietyofotherfederallaborand B% # employmentlawsections.AkeyprovisionoftheFLSAisthatmostemployees(knownas *&z!$  nonexemptemployees)mustbepaidtimeandonehalfforovertime hoursworked.The 'b"% FLSAcontainsnorequirementfor doubletimepay.Doubletimepay,ifavailable,isa 'J#& matterofagreementbetweenanemployerandemployee. (2$'  Question:Whenisovertimedue?  +&*  Answer: Forcovered,nonexemptemployees,theFLSArequiresovertimepayatarate l-(, ofnotlessthanoneandonehalftimesanemployee'sregularrateofpayafter40hours p ofworkinaworkweek.Someexceptionstothe40hoursperweekstandardapplyunder X  specialcircumstancestopoliceofficersandfirefightersemployedbypublicagenciesand @  toemployeesofhospitalsandnursinghomes. (  Somestatesalsohaveenactedovertimelaws.Whereanemployeeissubjecttoboththe   stateandfederalovertimelaws,theemployeeisentitledtoovertimeaccordingtothe  p higherstandard(i.e.,thestandardthatwillprovidethehigherrateofpay). X  Question:Whatactivitiesareconsidered"work?"  &  !X X XX  Answer: WorktimeundertheFLSAincludesalltimespentperformingjobrelatedactivities f  which(a)genuinelybenefittheemployer,(b)whichtheemployer"knowsorhasreasonto R  believe"arebeingperformedbyanemployee,and(c)whichtheemployerdoesnotprohibit :  theemployeefromperforming.Thesecanincludeactivitiesperformedduring"offthe "  clock"time,atthejobsiteorelsewhere,whether"voluntary"ornot.    #X X X!X ##X\X XX     [  SE S#X XX#X\<#CourtshaveawardedFLSAdamagesfor"offtheclock"timespentbyemployees E maintainingequipment,stayinglateafternormalshiftswithout"puttingin"forovertime, - doingjobrelatedpaperwork"athome,"makingandrespondingtojobrelatedtelephone  calls,workingthroughmealperiods,andmanyotheractivities.Employeessometimes  underestimatetheamountof"offtheclock"timetheyspendperformingcompensable u tasks.EX X XX  [v݌ ] Ќ  B.` hp x (#XB      S&C Question:Howmanyhoursisfulltimeemployment?Howmanyhoursisparttime & employment?     ݌  Ќ  S      S! M S Answer: The#X X XEX #FLSAEX X XX Ԁdoesnotdefinefulltimeemploymentorparttimeemployment.This ! isamattergenerallytobedeterminedbytheemployer.Whetheranemployeeis ! consideredfulltimeorparttimedoesnotchangetheapplicationoftheFLSA.#X X XEX Z# ݌ "t Ќ  *` XX* Question:Howarevacationpay,sickpay,andholidaypaycomputedandwhenare X% theydue?  B& + X` X+ Answer: TheFLSAdoesnotrequirepaymentfortimenotworked,suchasvacations,sick ' leaveorholidays(federalorotherwise).Thesebenefitsareamatterofagreementbetween k(  anemployerandanemployee(ortheemployee'srepresentative). S) !  Question:Isextrapayrequiredforweekendornightwork?  +W##  Answer: Extrapayforworkingweekendsornightsisamatterofagreementbetweenthe -$$ employerandtheemployee(ortheemployee'srepresentative).TheFLSAdoesnotrequire -%% extrapayforweekendornightwork.However,theFLSAdoesrequirethatcovered, p nonexemptworkersbepaidnotlessthantimeandonehalftheemployee'sregularrate X  fortimeworkedover40hoursinaworkweek.  @  Question:Whenarepayraisesrequired?   J  Answer: Payraisesaregenerallyamatterofagreementbetweenanemployerand   employee(ortheemployee'srepresentative).Payraisestoamountsabovethefederal s minimumwagearenotrequiredbytheFLSA. [  Question:Whencananemployeesscheduledhoursofworkbechanged?  ?   Answer: TheFLSAhasnoprovisionsregardingtheschedulingofemployees,withthe |  exceptionofcertainchildlaborprovisions.Therefore,anemployermaychangean h  employee'sworkhourswithoutgivingpriornoticeorobtainingtheemployee'sconsent P  (unlessotherwisesubjecttoaprioragreementbetweentheemployerandemployeeorthe 8  employee'srepresentative).    Question:Whenmustbreaksandmealperiodsbegiven?  $  Answer: TheFLSAdoesnotrequirebreaksormealperiodsbegiventoworkers.Some a states(notFlorida,asappliedtoadults)mayhaverequirementsforbreaksormeal M periods.Ifyouworkinastatewhichdoesnotrequirebreaksormealperiods,these 5 benefitsareamatterofagreementbetweentheemployerandtheemployee(orthe  employee'srepresentative). u  Question:Cananemployeeberequiredtoperformworkoutsideoftheemployee's  y jobdescription?  !c  Answer: Yes.TheFLSAdoesnotlimitthetypesofworkemployeesage18andoldermay # berequiredtoperform.However,therearerestrictionsonwhatworkemployeesunderthe # ageof18cando.Thisistruewhetherornottheworkaskedoftheemployeeislistedin $t theemployee'sjobdescription. %\  Question:Mustyoungworkersbepaidtheminimumwage ? y) !  Answer: Thefederalminimumwageis$5.15perhour.However,aspecialminimumwage *H"  of$4.25perhourappliestoemployeesundertheageof20duringtheirfirst90 +4#! consecutivecalendardaysofemploymentwithanemployer.After90days,theFLSA ,$" requiresemployerstopaythefullfederalminimumwage. t-%# RO Re R      \*  SxS%Otherprogramsthatallowforpaymentoflessthanthefullfederalminimumwageapply xS toworkerswithdisabilities,fulltimestudents,andstudentlearnersemployedpursuantto ` ; subminimumwagecertificates.Theseprogramsarenotlimitedtotheemploymentof H # youngworkers. \*w*݌ 0  Ќ   Question:MustemployersgrantleavetoemployeescalledupbytheNationalGuard   orReserve?  i  Answer: Yes,anemployeemustbegrantedaleaveofabsencetoperformmilitary  service.   Question:ArefederalemployeescoveredbytheFLSA?  +   Answer: Yes,withsomedifferences.TheFLSAappliestofederalemployees,unless hC  somespecificfederalstatutecreatesdifferentwagerules.Therearesomeofthese T/  (typicallyinTitle5).Inaddition,federalemployeesrightsundertheFLSA!X X XX Ԁareregulatedby <  OPM,whoseregulationsaresimilarbutnotidenticaltotheFLSAregulations.#X X X!X .# $  II.  EMPLOYERSANDEMPLOYEES  s  A.TheEmploymentRelationship   Essentially,theFLSAappliesto employmentrelationships.UndertheFLSA, employ i isdefinedas tosufferorpermittowork.Forexample,peoplewhoprovideservicestoan tO employerareconsideredemployeeswhenthevalueofsuchservicesbenefittheemployer Z 5 andtheemployercouldhavediscoveredtheperformanceofsuchservicesthrough @! reasonablediligence.Inaddition,theFLSAgenerallyappliestoallemployers. Employer &" isdefinedas anypersonactingdirectlyorindirectlyintheinterestofanemployerin  # relationtoanemployee8Similarly,tobecoveredundertheFLSA,anindividualmustbe # an employee. Employeeisdefinedas anyindividualemployedbyanemployer.         1      $ Ordinarily,employeesfallunderFLSAscoverageiftheyworkforan enterprisewhichhas & employeeswhohandle,sellorotherwiseworkongoodsormaterialsthathavebeen & movedinorproducedforinterstatecommerce,andthebusinesshasanannualbusiness ' dollarvolumeofatleast$500,000.00.Butbeawarethat,evenifanemployers annual (  businessdollarvolumedoesnotexceed$500,000.00,employeesmayindividuallyfall % withinthescopeoftheFLSAiftheyareinvolvedininterstatecommerce,assistwiththe   productionofgoodsforinterstatecommerce,ormeettherequirementsofinterstate   commerce.Forexample,arestaurantmayonlytransact$50,000.00annually,butifthe   waitpersonobtainscreditcardauthorizationsforpatronschecks,he/shehaslikely   obtainedthemtelephonicallythroughtelephonelinesthatcrossstateboundariesand,thus   viainterstatecommerce.  f  B.IndependentContractors     Bewareofclassifyingworkersas independentcontractors.TheFLSAusesthe uP   economicrealitiestest,whichbasicallylooksatwhethertheindividualiseconomically [6  dependentuponthebusinesstowhichtheindividualrendersservicebasedoncontrol, A  profitpotential,degreeofskill,permanency,andintegrationconsiderations.Ifthe '  individualiseconomicallydependent,thenthat independentcontractormayactuallybe    anemployee,andentitledtotheprotectionsoftheFLSA.   C.VolunteersandTrainers e@   Notethat volunteerand traineestatusarethemostcommonnonstatutoryexclusions  fromtheFLSAs employeedefinition.Any volunteerrelationmustbetrulyvoluntary  withoutanyexpectationofcompensation,monetaryorotherwise.Any traineerelation  requiresenrollmentinaprogramofaprofessionalnaturewithoutanyexpectationof l compensationandthebenefitobtainedthroughthetrainingmustbeforthebenefitofthe yT studenttrainee.  _ : Accordingly,ifanemployerandemployeefallwithintheFLSAsbroadumbrella,the " employer must payovertimetothatemployeeunlesshe/shefallsunderoneoftheFLSAs # specific whitecollarexemptions(discussedlater). p  $~  III.  FLSAOVERTIMEREQUIREMENTS    p  '  !X X XX #X X X!X ?# !X X XX Question:Whatis"overtime?" )j!   #X X X!X /@##X\X XX     @  S+"*" #X XX#X\@#!X X XX Answer: ThewordovertimehasatechnicaldefinitionundertheFLSA,andmeansalltime +"! actuallyworkedovera"threshold."Theusualthresholdis40hoursperworkweek.Some  ,#" governmentormedicaljobsmayhavealternativethresholds. @@݌ ,$# Ќ  S#X X X!X BA##X\X XX      C  S ` ; S #X XX#X\B#!X X XX Question:WhatisanFLSAthreshold?  C(C݌   Ќ   S #X X X!X C##X\X XX     wD  SC   S #X XX#X\XD#!X X XX Answer: TheFLSAgenerallyrequiresovertimeforhoursworkedinexcessof40hours C  perweek.Inaregular,40hourweeksituation,theFLSA"threshold"isthus40hoursper /  week.ForFLSApurposes,only"actual"worktimecountstowardtheovertimethreshold.   LeavetimedoesnotcountasworktimeundertheFLSA,evenifthetimeispaidforand   consideredworkingtimeforotherpurposes.Forexample,anemployeewhoworks4to5  regularlyscheduledeighthourdaysinaweek,andtakesleaveonthefifthday,willhave  worked32"regular"hoursthatweek.Anyadditionaltimeworkedbytheemployeeduring  thatweek(whether"ontheclock"or"offtheclock")willnot"count"forFLSAovertimeuntil z  (andtotheextentthat)thetotalnumberofhoursworkedthatweekexceeds40inthe b  example,thefirst8"extra"hoursneednotbepaidasovertimeundertheFLSA.#X X X!X E#  wDD݌ oJ  Ќ  !X X XX Question:Alaborpracticeorcontractmayprovideforovertimeforemployees   workinginexcessof8hoursperday,or37.5hoursperweek,orsomeother  formula.Mustthisovertimebepaidattimeandonehalftheemployee'sFLSA  regularrate?   S #X X X!X I##X\X XX     zK  S7 S #X XX#X\[K#!X X XX Answer: Notnecessarily.Thewordovertimehasatechnicalandrestricteddefinitionin 7 theFLSA.FLSArequirementstypicallyapplyonlywhenhoursworkedexceedthe # applicableFLSAovertimethresholdinaworkweekorworkperiod.FLSAovertimeisdue   onlyforhoursworkedovertheFLSAthreshold,evenif"contractovertime"mayprovide  employeeswithovertimeonsomeotherformula(suchashoursworkedover8perday).  UntilandunlesstheFLSAovertimethresholdsaremetandexceeded,theFLSArulesfor  regularratesorovertimeratesaregenerallyinapplicable(assumingnominimumwage  violations).Ifalabormanagementcontractorpracticecallsforovertimetobepaidfor  n hoursworkedbelowtheFLSAthreshold,neithertheFLSAregularratenorovertimerate {!V requirementsnecessarilyapply.UntilandunlesstheFLSAovertimethresholdismetand c"> exceeded,anemployee'swageratecanbedifferentfromtheFLSAmandatedratewithout K#& violatingtheFLSA(again,assumingnominimumwageviolation).#X X X!X L# zKK݌ 3$ Ќ  !X X XX Question:Doesleavetimecountasworktime? &  S #X X X!X _Q##X\X XX     #R  S7( ' S #X XX#X\R#!X X XX Answer: No."Hoursnotworked"neednotbecountedas"hoursworked"forpurposesof 7(  FLSAwagecomputations,eveniftheyarecountedasworktimeforsomeotherpurpose #)  suchaspensionsorforpaycomputationsunderemploymentagreements. #R>R݌  *!! Ќ  Question:Theemployeegets"compensatorytime"(alsocalled comptime)inlieu ,\$# ofcashforovertime.Isthisallowed? k-F%$  S #X X X!X R##X\X XX     0U  SxS% S #X XX#X\U#!X X XX Answer: Noexcept,forpublicsector(government)employees. Comptimeinlieuofcash xS forFLSAovertimeisnotgenerallypermittedintheprivatesector.Apublicsectoremployer d ? maypay(atleastsome)FLSAovertimewithcomptime.#X X X!X U# 0UKU݌ L ' Ќ  !X X XX Question:Whatisthe7(k)Exemption?    S #X X X!X ^W##X\X XX     X  SP+  S #X XX#X\W#!X X XX Answer: TheFLSAgenerallyrequiresovertimeattimeandonehalfforallhoursworked P+ over40perweek.Thereis,however,aspecialruleforgovernmentpoliceagenciesand < firedepartmentswhichallowsadifferent"workperiod"insomecircumstances.Ifthe $ employerestablishesanalternativeworkperiodundersection7(k)oftheFLSA,overtime   isowed(undertheFLSA)onlyforhoursworkedinexcessofathresholdnumberofhours   perworkperiod,whichwillbedifferentfrom(andmorethan)thenormal40hoursper   week.Forexample,apoliceemployermayestablisha7(k)workperiodof14days.Ifthe   employerhascompliedwiththerequirementsforestablishingsuchanalternativework   period,FLSAovertimeisowedonlyforhoursworkedinexcessof86hoursina14day o  workperiod.#X X X!X X#Ԁ Thistypeofcalculationisnotallowedintheprivatesector.  X5X݌ |W Ќ   TheWorkweek   Thereisnolimitationonthenumberofhoursthatanemployeemayworkinanyworkweek, 3 aslongastheemployerpaystherequiredovertimecompensation!timeandonehalfof  anemployeesregularrateofpay!toanemployeeforhoursworkedinexcessofthe  maximum40hourworkweekprescribedbytheFLSA         2     .TheFLSAdefines workweekas  afixedandregularlyrecurringperiodof168hoursorseven(7)consecutive24hour  periodsandrequiresthattheworkweekbeusedasthebasisforcompensation.Note,  however,thatemployeesneednotbepaidonaweeklybasis.Theworkweekmaybegin r atanytime,onanyday.Theworkweekmustbeconsistentforanindividualemployee,but } X canvaryfromemployeetoemployee. c!>  1.EachWorkweekmustbecountedseparately. #  Eachworkweekstandsalone.Thus,ifanemployeeworks20hoursinoneweekand60 S&. hoursthenext,he/shemustbepaidovertimecompensationfortheovertimehoursworked 9' inthesecondweek,eventhoughtheaveragenumberofhoursisonly40hoursperweek. ( TheFLSA,however,doesnotrequirethattheemployerpayanemployeeovertimefor )  hoursworkedinexcessofeightperday.   )!! ЇForexample,ifanemployeeworksmorethan8hoursinoneday,butnotover40hours % in1week,he/sheisnotentitledtoovertimecompensationforthehoursworkedinexcess   of8inthatoneday.However,iftheemployeeworksover40hoursinoneweekby   workingsix8hourdays,thenhe/sheisentitledtoeighthoursofovertimecompensation.   Notethatsomestates,likeCalifornia,mandatethatemployeeswhoworkmorethan8   hoursinonedaymustbepaidovertimeforthehoursworkedinexcessof8hoursinthat  ~ oneday,regardlessofwhetherhe/sheworkedover40hoursthatweek.Floridaisnotone  d ofthosestates. oJ  2.Comptimedoesnotsatisfytheemployersovertimeobligations .   Givingemployeescompensatorytimeoffor comptimegenerallydoesnotsatisfythe Y4  employersobligationtopayovertime.Theonlyknownexceptionisforpublicsector ?  employeesifthereismutualagreementbeforetheemployeeperformstheworkatissue. %  AlthoughthereareproposalspendingbeforeCongressthatwouldallowemployersto    voluntarilyoffer,andemployeestovoluntarilychoose,comptimeinlieuofovertimepay,  employersshouldnotengageinthismannerofpay,asitcurrentlyviolatestheFLSA.   ComputinganEmployees RegularRateofPay  Q,  ComputingOvertime    !X X XX Question:AtwhatratemustFLSAovertimebepaid? A  S #X X X!X j##X\X XX     Hk  S ~ Y S #X XX#X\)k#!X X XX Answer: Timeandonehalfthe"regularhourlyrate."(Foremployeeswhosenormalpay   isnotan"hourly"rate,theirregularraterequiresconvertingpaytoanhourlyequivalent. ! TherearesomepeculiarFLSAarithmeticrulesabouthowtodothis.)Longevitypay,shift " differentials,andsimilarnondiscretionarywageaugmentspaidforworkshouldgenerally #h beincludedincalculatingtheFLSAovertimerate.Thereareprovisionswhichmaypermit u$P arrangementstopayforsomeworkatadifferentrate,butonlyiftheworkisdifferentfrom ]%8 theemployee'sregularjob,andonlybyagreementbeforetheworkisperformed.#X X X!X k# Hkck݌ E&  Ќ  Anemployees regularratemaybedifferentfromhishourlyrateofpay,butmustbeat (  leastequaltotheminimumwage.Itisdeterminedbydividingthetotalremunerationfor )z!  employmentinaworkweekbythetotalnumberofhoursworked.Additionalpaysuchas *`"! oncallpay,contestwinnings,employerpaidlunchesormealtimes,nondiscretionary k+F#" bonuses(bothastopaymentandamount),salaryincreases,shiftdifferentials,and Q,,$# employerpaidtravelingexpensestoandfromworkmay(andgenerallyshouldbe 9-%$ consideredto)increasetheemployeesregularrateofpay.Notethatstockoptionsare % generallynotincludedincalculatinganemployeesregularrateofpay.    1.RestPeriods . } X    ` Restperiodsor breaksofshortduration,runningfrom5minutestoabout20minutes,are   commonbutarenotrequiredinFlorida.Iftheyareprovided,however,thetimemustbe  countedashoursworkedand,thus,compensable.Paidrestperiodsmaynotbeoffset  againstotherworkingtimesuchascompensablewaitingtimeoroncalltime.  ̀ 2.Waitingtime .     Waitingtimemaybecompensabledependingontheindividualemployeesstatus.The r  distinctioniswhethertheindividualis engagedtowait(compensable)or waitingtobe }X  engaged(notcompensable). Engagedtowaitmeanstheemployeeisonduty,but c> inactiveforshortperiodswhilewaitingtoreceiveanassignmentandcannoteffectivelyuse I$ thistimefortheemployeesownpurposes. Waitingtobeengagediswhenanemployee /  caneffectivelyuseinbetweentimeforpersonalactivities.   A.  HourlyRateEmployees . b Toproperlycalculateovertimeforhourlyrateemployees,theemployermustusethe  employeesregularrateofpayasthehourlyrate.Theregularrateiscalculatedbydividing  theemployeestotalcompensation(exceptstatutoryexclusions)inanyworkweekbythe   totalnumberofhoursactuallyworkedinthatworkweekforwhichsuchcompensationwas ! paid. "t  B.  SalariedEmployees .  % Toproperlycalculateovertimeforweeklysalariedemployees,theemployermustusethe '^ employeesregularrateofpayascalculatedbydividingthesalary(plusnonexcluded i(D  othercompensation)bythenumberofhoursthesalaryisintendedtocover.Ifthe O)*! employeessalarycoversaperiodlongerthantheworkweek,theemployeesregularrate 5*"  ofpayiscomputedbyconvertingthewagesintotheworkweekequivalent.Forexample, +"! thiscalculationcanbeachievedbytakingtheweeklypayanddividingitbythenumberof ,#" hoursworkedduringtheregularworkweek. ,$# Ї C.  PieceRateEmployees . % Toproperlycalculateovertimeforpiecerateemployees,theemployermusttakethe  x employeesregularrateofpayastheemployeestotalcompensation,derivedfrompiece  ^ ratesandallothersources,andanyearningspaidforwaitingtimeorotherhoursworked, i D dividedbythenumberofhoursworkedthatweekforwhichtheemployeereceived O * compensation. 5  D.  FixedSalaryforFluctuatingWorkweek .  Toproperlycalculateovertimeforfluctuatingworkweeksalariedemployees,theemployer   mustcalculatetheemployeesregularrateofpaybydividingthesalarybythenumberof   hoursworkedinthegivenweek.Ofcourse,theemployeesregularrateofpaywillvary   fromweektoweekbasedonthenumberofhoursworked.Ifanemployerusesthe   fluctuatingworkweeksalarymode,itmustensurethattheemployeeclearlyunderstands  thesalarypaidcoverswhateverhoursaredemandedinthatparticularworkweek,evenif x theworkweekisoneinwhichafullscheduleofhoursisnotworked.Makesurethatthe ^ amountoftheemployeessalaryissufficienttoensurethattheregularrateisnotlessthan iD minimumwage. O*    ` E.  DifferentJobsWorkedDuringTheWorkweek.   Toproperlycalculateovertimeforanemployeewhoworksintwodifferentpayscaledjobs 9 duringaworkweek,theemployermustcalculatetheemployeesregularrateofpayby   addingthetotalcompensationfromallsourcesofemploymentanddividingthatfigureby ! thetotalnumberofhoursworked. !  OtherConsiderations  ]$8  1.OnCallDuty. Generally,allworkperformedbyanemployeewhile oncallis & compensable.Iftheemployeeisnotobligatedtostayonthejobsiteandusestheoncall ' timemainlyforpersonalpurposes,thenthattimegenerallydoesnotrequirecompensation. (  Butbeawareofthe24hourdistinction.Ifanemployeemustbeononcalldutyforless )h!  than24hoursandcanrest/sleepwhennotoccupied,thenthistimeislikelycompensable. s*N"! Iftheemployeeisononcalldutyformorethan24hoursandisallowedtosleep,thenthe Y+4#" sleephoursarelikelydeductible.Oncalltimeiscompensableiftheemployeeisrestricted ?,$# totheemployerspremisesortoafixedgeographicallocationinsuchawaythathe/she %-%$ ispreventedfromusinghertimeforpersonaluse. %  2.Commuters. Normalcommutinginanemployeesownvehicleisnoncompensable.  r Traveltimesbetweentheemployees normalworkplaceandanother assigned  ^ workplaceandtravelbetweenassignmentsduringaregularworkdayarecompensable. i D Ifanemployeeusestheemployersvehicle,andthetravelthereinisnotsubjecttoan O * agreementbetweenthetwoand/orisoutsidethenormalcommutingrangeofthe 5 employersbusiness,thenthetraveltimeiscompensable.Iftheemployeedrivesthe  companyvehiclemerelyasamatterofconvenience,traveltimeisnotcompensable.  B.` hp x (#XB   ` <(  hp x (#X< 3.Training .Ifanemployeeattendsimplicitorexplicitlyrequiredtraining,thenattendance uP  atsuchtrainingmustbecompensated.Trainingprogramsarenotcompensableif: _:  attendanceisoutsidenormalworkinghours;isvoluntary;isnotdirectlyrelatedtothe E  employeesjob;andtheemployeeperformsnoproductiveworkduringattendance. +  Homeworkforrequiredtrainingprogramscanalsobecompensableunlesstheemployee   isgivenallottedtimeduringworkinghours.  E.` hp x (# XE   ` <(  hp x (#X< 4.TippedEmployees .Ifanemployeeisengagedinanoccupationinwhichthe kF employeecustomarilyandregularlyreceivesmorethan$30.00amonthintips,then U0 he/sheisa tippedemployee.Employerswithsuchemployeesmustensurethatthe ; employeeskeepalloftheirtips,otherthaninthecaseofvalidtippools.Theemployers ! compensatedwageobligationtoatippedemployeeisfixedundertheFLSAat$2.13per  hour.Thismeansthatiftheemployeestipsplus$2.13perhourdoesnotequalatleast  theminimumwageof$5.15perhour,theemployermustpaytheemployeethedifference.  Iftheemployeestipsplusthemandatedemployerpaid$2.13perhourequalmorethan  theminimumwage,thentheemployermustusethehigheramounttocomputeany  z overtimepaydue. !` E.` hp x (# XE   ` <(  hp x (#X< 5.Homeworkers .Forhomeworkingemployees,theemployermaypaytheemployee # accordingtoanyreasonableagreementthattakesintoaccountpertinentfactssuchas $ periodsofcompletefreedomfromdutiesanddifficultieswithtrackingtheexacthours % worked.Theexceptionappliesonlyiftheemployerandemployeehaveanagreementfor & thenumberofhoursworked.Ifthereisnoagreement,allhomeworkthatiscontrolledor 'n  requiredbytheemployeriscompensable. y(T ! E.` hp x (# XE   ` <(  hp x (#X< 6.GrievanceTime .Timespentregardingemployeegrievancesis,generally, *"# compensableunlessaunionagreementstatesotherwise. +#$ E.` hp x (# XE -$% p4      Oncethe regularrateandworkweekareestablished,theemployercancalculateovertime % compensationduebymultiplyingtheregularratebyoneandonehalfthenumberofhours   workedinexcessof40hoursinagivenworkweek.Calculatingafluctuatingworkweek   scheduleismorecomplicated.Forexample,ifanemployeesemploymentagreement   providesasalaryof$500.00perweekasstraighttimecompensationregardlessofhours   workedinaweekandtheemployeeworks40,50and48hoursoverthenextthreeweeks,  ~ herregularhourlyrateofpayforeachoftheseweeksisapproximately$12.50,$10.00and  d $10.42(calculatedbydividing$500.00byhoursworkedinthatworkweek).Since oJ employeealreadyhasreceivedstraighttimecompensationonasalarybasisforallhours U0 worked(unlessthereisaminimum,wageviolation),onlyanadditionalhalftimepaymust ;  bepaidforhoursworkedinexcessof40.Thus,forweek#1,compensationis$500.00(no !  overtimecompensation).Forweek#2,compensationis$550.00($500.00plus10hours   at$5.00).Forweek#3,compensationis$541.76($500.00plus8hoursat$5.21).While   thiscalculationmaybeacceptableundertheFLSA,theemployermaywishtoconsider   payingovertimeatthehighestrate($500/40hours=$12.50perhouror$6.25forone   hourofovertime)[sincestraighttimewasalreadypaid]underthisscenario.  z    IV.THE WHITECOLLAREXEMPTIONS   !X X XX MostjobsaregovernedbytheFLSA.Somearenot.SomejobsareexcludedfromFLSA 6 coveragebystatute.Otherjobs,whilegovernedbytheFLSA,areconsidered"exempt"  fromtheFLSAovertimerules.  #X X X!X ##X\X XX B.` hp x (#XB      StO #X XX#X\J#!X X XX ExclusionsfromFLSAcoverage.  Ơ݌  Ќ  S#X X X!X ##X\X XX       SY 4  S#X XX#X\ӡ#!X X XX ParticularjobsmaybecompletelyexcludedfromcoverageundertheFLSAovertimerules. Y 4 Therearetwogeneraltypesofcompleteexclusion.Somejobsarespecificallyexcluded ?! inthestatuteitself.Forexample,employeesofmovietheatersandmanyagricultural %" workersarenotgovernedbytheFLSAovertimerules.Anothertypeofexclusionisforjobs  # whicharegovernedbysomeotherspecificfederallaborlaw.Asageneralrule,ifajobis # governedbysomeotherfederallaborlaw,theFLSAdoesnotapply.Forexample,most $ railroadworkersaregovernedbytheRailwayLaborAct,andmanytruckdriversare % governedbytheMotorCarriersAct,andnottheFLSA.ManyoftheFLSAexclusionsare &~ foundin213oftheAct.  ݌ 'd  Ќ  S#X X X!X z##X\X XX       S) (  S #X XX#X\#!X X XX  ݌̌  ExemptorNonexempt. T*/""  S #X X X!X ,##X\X XX       S+#+n# S#X XX#X\֧#!X X XX EmployeeswhosejobsaregovernedbytheFLSAareeither"exempt"or"nonexempt." +## Nonexemptemployeesareentitledtoovertimepay.Exemptemployeesarenot.Most ,$$ FLSAemployeesare"nonexempt." ݌ -%% Ќ  S#X X X!X }##X\X XX     $  SxS% S#X XX#X\#!X X XX Somejobsareexemptbystatutorydefinition.Forexample,"outsidesales"employeesare xS exempt("insidesales"employeesarenonexempt).FormanyFLSAemployees,however, ` ; whethertheyareexemptornonexemptdependson(a)howtheyarepaidandalso(b) H # whatkindofworktheydo. $?݌ .  Ќ  S#X X X!X ##X\X XX       S g B S#X XX#X\#!X X XX Withafewexceptions,tobeexemptanemployeemust(a)bepaidonasalarybasis,and   also(b)performexemptjobduties.ThesephrasesaredefinedintheAct(andthe  } Regulations).Anemployeewhoisnotpaidonasalarybasisisgenerallynonexemptno c matterwhatkindofworktheemployeedoes.However,beingpaidonasalarybasisisnot nI thesameasbeingexempt.Anemployeewhoispaidonasalarybasisisexemptonlyif T/ theemployee#X X X!X F#!X X XX alsoperformsexemptjobduties. ٬݌ :  Ќ  S#X X X!X ##X\X XX       S sN  S #X XX#X\l#!X X XX SalaryBasisPay.  ݌   Ќ  S#X X X!X ##X\X XX     ۱  SX3   S#X XX#X\#!X X XX Generally,anemployeeispaidonasalarybasisiftheemployee#X X X!X c#!X X XX hasa"guaranteed X3  minimum"amountofmoneytheemployee#X X X!X #!X X XX cancountonreceivingforanyworkperiod >  duringwhichtheemployee#X X X!X t#!X X XX performs"any"work.Withafewexceptions,thebasepayof $  asalarybasisemployeemaynotbereducedbasedonthe"qualityorquantity"ofwork   performed(providedthattheemployeedoes"some"workintheworkperiod).For  example,asalarybasisemployeeshouldreceivethesamebasepayiftheemployee  #X X X!X #!X X XX works30hoursinaworkperiodasiftheemployeeworked35hoursinaworkperiod.This  issometimescalledthe"nodocking"rule. ۱݌ } Ќ  S#X X X!X յ##X\X XX       S.  S#X XX#X\#!X X XX TheFLSAprohibitionagainstreducingthebasepayofsalariedemployeesappliesonlyto .  reductionsinmonetaryamounts.Requiringanemployeetochargeabsencesfromwork  toleaveaccrualsisnotareductioninbasepay,becausethemonetaryamountofthe  employee'spaycheckremainsthesame.Similarly,payinganemployeemorewhenthe  employeeworksmorethanthenormalnumberofhoursisnotnormallyinconsistentwith  salarybasispaystatus,becausethatdoesnotresultinanyreductioninthebasepay. 9݌   Ќ  S#X X X!X ##X\X XX       S8"! S#X XX#X\#!X X XX Basepaymaybereducedundercertaincircumstanceswithoutcompromisingthesalary 8" basispaystatusofanemployee.Thesalarybasispayrulesareprimarilydesignedto # prohibitreductionsinbasepayforabsencesfromworkoccasionedbytheemployer.Work $ absencesoccasionedbytheemployeemaysometimesvalidlyresultinreductionsinthe $ salarywithoutchangingtheemployee'ssalarybasispaystatus.Forexample,asalary % basisemployee'spaymaybereducedforabsencesofadayorlonger(butnotforpartial & dayabsences)forpersonalreasons,orforsicknessunderabonafidesickleaveplan. 'w Salarymaynotbereduced,however,forabsencescausedbylackofwork,or"furloughs" (]  orlayoffs,ordisciplinarysuspensions(providedthattheemployeedoes"some"workinthe h)C!! workperiod). ֺ݌ N*)"" Ќ  S#X X X!X C##X\X XX     ǿ  S+#+b# S#X XX#X\#!X X XX ԀTheFLSARegulationsprovidethatactualreductionsinpayarenotstrictlynecessaryto +## compromiseanemployee'ssalarybasispaystatus(andthustheemployee'sexempt ,$$ statusiftheemployee#X X X!X O#!X X XX alsoperformsexemptjobduties).Anemployeeisnotpaidona -%% salarybasisifthebasepayis"subjectto"reductionforreasonsinconsistentwithsalary % basispaystatus.Thisdoesnotmeanamerelytheoreticalpossibilitythatanemployee's   basesalarymightbereducedforabsences.However,itispossiblethatanemployee'spay   issubjecttoreductionifthereisanactualpracticebytheemployerofdockingthesalaries   ofsimilaremployees,orifthereisaspecificemploymentpolicyrequiringreductionsin   salariesofsimilaremployeesinspecifiedsituations.Anactualpracticeofreductions  ~ meansasufficientnumberofactualinstancestoshowthattheemployee'spayreallywill  d infactvarydependingonthequalityorquantityofworkperformed.Anemploymentpolicy oJ mayalsobesufficienttoshowthis,ifitisspecifictothetypeofemployeeinvolvedand U0 equallyspecificthatpaydocking"will"(notjust"might")resultbasedonthequalityor ;  quantityofworkperformed. ǿ݌ !  Ќ  S#X X X!X {##X\X XX       S Z5  S#X XX#X\#!X X XX Some"rulesofthumb"indicatingthatanemployeeispaidonasalarybasisinclude   whetheranemployee'sbasepayiscomputedfromanannualfiguredividedbythenumber n  ofpaydaysinayear,andwhetheranemployee'sactualpayislowerinworkperiodswhen yT  theemployee#X X X!X u#!X X XX worksfewerthanthenormalnumberofhours.However,whetheran _:  employeeispaidonasalarybasisisa"fact,"andthusspecificevaluationofparticular E  circumstancesisnecessary.Whetheranemployeeispaidonasalarybasisisnotaffected + bywhetherpayisexpressedinhourlyterms(asthisisafairlycommonrequirementof  manypayrollcomputerprograms),butwhethertheemployeeisinfactpaida"guaranteed  minimum"amountnotsubjecttoimpermissibledockingbasedonthequalityorquantityof  workperformed. ݌  Ќ  S#X X X!X ##X\X XX     :  SO* S#X XX#X\#!X X XX Thesalarybasispayrequirementforexemptstatusdoesnotapplytosomeofthe"learned O* professions,"suchaslawyers,doctors,orschoolteachers.Thesejobsareexemptevenif 7 theemployeesarepaidhourly.Anotherexceptionisfor"computerprofessionals"(as  definedundertheAct),whomaybeexemptiftheyarepaidonasalarybasisoriftheyare  paidhourlyatarateofatleast$27.63. :U݌  Ќ  S#X X X!X ##X\X XX     \  Sy!T&! S #X XX#X\=#!X X XX ExemptJobDuties. \w݌ y!T Ќ  S #X X X!X ##X\X XX       S #" S#X XX#X\#!X X XX Asalarybasisemployeeisexemptonlyiftheemployee#X X X!X 5#!X X XX alsoperformsexemptjobduties.  # TheFLSAovertimeexemptionsarelimitedtoemployeeswhoperformrelativelyhighlevel # workinvolvingagooddealofjudgmentanddiscretion.Whetherthedutiesofaparticular $ jobqualifyasexemptdependsonwhattheyare.Jobtitlesorpositiondescriptionsareof % limitedusefulnessinthisdetermination.(Asecretaryisstillasecretaryevenifthe &~ employee#X X X!X #!X X XX iscalledan"executiveassistant,"andthechiefexecutiveofficerisstilltheCEO 'd  eveniftheemployee#X X X!X #!X X XX iscalledanassociate).Itis,rather,theactualjobtasksthatmustbe o(J ! evaluated(alongwithwhereandhowtheparticularjobtasks"fit"intotheemployer's U)0!" overalloperations).Therearethreetypicalcategoriesofexemptjobduties,called ;*"# "executive,""professional,"and"administrative." ݌ !+"$ Ќ  S#X X X!X ##X\X XX       S,$Z,5$ S #X XX#X\#!X X XX  ݌̌  ExemptExecutiveJobDuties. -%&  S #X X X!X D##X\X XX       SxS% S#X XX#X\#!X X XX Jobdutiesareexemptexecutivejobdutiesiftheemployee(a)regularlysupervisestwoor xS moreotheremployees,andalso(b)is,asapracticalmatter,"incharge"ofaunitorsubunit ^ 9 oftheorganizationwhenonduty.Thesupervisionmustbeofotheremployees. D  Supervisingpeoplewhoarenotemployeesdoesnotcount.Thesupervisionmustbe *  regular,anormalpartofthejob,andmustbeoftwoormorefulltimeemployees(or   enoughparttimerstobetheequivalentoftwofulltimeemployees).Inaddition,the   employeemustbe"incharge"ofaunitorsubunitoftheorganization,suchasa   "department"ora"shift."Thismeansthattheemployeeis,asapracticalmatter,"theboss"  oftheunitorsubunitwhenonduty.Asaruleofthumb,ifatelephonecallcomesintothe  unitorsubunit,andthecalleraskstospeakto"theboss,"theemployee(atthatunitor i  subunit)towhomthecallisforwardedisusuallytheone"incharge." /݌ tO  Ќ  S#X X X!X ##X\X XX       S   S#X XX#X\#!X X XX Generally,onlyonepersonisinchargeofaunitorsubunitatanyparticulartime.Thus,if   an"assistantmanager"isneverondutyalone,buta"manager"isalwaysondutyatthe   sametime,thenonlythe"manager"isinchargeandthe"assistantmanager"isnot.Ifa   sergeantandlieutenantarebothondutyatthesametimeatthesameunitorsubunit,then   thelieutenantisprobablythe"executive"andthesergeantisnot.However,ifasergeant s isthehighestrankingemployeeondutyattheunitorsubunitataparticulartime,the ~Y employee#X X X!X N#!X X XX isprobablytheexecutiveatthattimeevenifthereisalieutenantwithoverall d? managerialresponsibilitybutwhoisnotactuallyonduty. ݌ J% Ќ  S#X X X!X 0##X\X XX       S^ S#X XX#X\b#!X X XX Anemployeemayqualifyasperformingexecutivejobdutieseveniftheemployee#X X X!X #!X X XX performs  avarietyof"regular"dutiesinadditionaltothesupervisoryresponsibilities.Forexample,  thenightmanageratafastfoodrestaurantmayinrealityspendmostoftheshiftpreparing } foodandservingcustomers.Theemployee#X X X!X #!X X XX is,however,still"theboss"evenwhennot c actuallyengagedin"active"bossingduties.Intheeventsome"executive"decisionsare nI required,theemployee#X X X!X #!X X XX istheretomakethem,andthisiswhatitmeanstobe"theboss." T/ Ontheotherhand,anemployeewhoholdsafancytitleimplyingthattheemployee#X X X!X #!X X XX is"the :  boss"butwhodoesnotinfactsupervisetwoormoreemployeesorwhoisnotreally"in  ! charge"whenondutyisnotperformingexecutivejobduties.Thus,forexample,a " "manager"whois"demoted"toapurelyproductionjobbutretainsthejobtitleisnot " performingexecutivejobduties. ݌ # Ќ  S#X X X!X ##X\X XX     "  S^%9 % S #X XX#X\#!X X XX ExemptProfessionalJobDuties. "=݌ ^%9 Ќ  S #X X X!X ##X\X XX       S&&x S#X XX#X\a#!X X XX Employeesareperformingexemptprofessionaljobdutiesiftheirworkinvolvesthe & applicationofadvanced,usuallyspecialized,learningorcredentialsofthetypecommonly '  associatedwiththe"traditionallearnedprofessions"suchasmedicine,law,accountingor ( ! engineering.Typically,butnotnecessarily,aprofessionallyexemptemployeewillholda )}!" specializedacademicdegreeinthefield,andprofessionallyexemptjobdutiesimplythat *c"# theemployeeexercisesagooddealofjudgmentanddiscretioninperformingthework. n+I#$ TheFLSAdistinguishestheexerciseofjudgmentanddiscretionfromtheapplicationof T,/$% particularskills,evenhighlevelskills.Alumbergrader,forexample,maybehighlytrained :-%& indistinguishingsubtlevariationsinwoodbutisnotperformingprofessionallyexemptjob % duties.Ontheotherhand,theprofessionalexemptionisnotlimitedtothetraditional   learnedprofessions.A"real"computerprogrammer,forexample,isperformingexempt   professionaljobduties.Ofcourse,tobeprofessionallyexemptevenatraditionally   credentialedemployeemustactually"practice"theprofessionforwhichtheemployee#X X X!X #!X X XX is   qualified.Anengineerdoingrealengineeringworkisperformingprofessionallyexemptjob  ~ duties,butanengineerworkingasatechnicianisnot.Anaccountantdoingaccountingis  d performingprofessionallyexemptwork,butaCPAwhosejobisreallybookkeepingisnot. ݌ oJ Ќ  S#X X X!X ##X\X XX       S S#X XX#X\#!X X XX Theincreasinguseofcomputersinbusinesshasgeneratedsome"specialrules"inthe  FLSAdefining"computerprofessionals.""Real"programmers,systemsanalysts,and   systemsengineersareconsideredtobeperformingprofessionaljobduties.However,   employeesarenotperformingprofessionaljobdutiesmerelybecausetheymayhappen   toworkwithcomputers.Jobssuchascomputerinstallationortroubleshootingcomputer n  problemsarenottypicallyprofessionallyexempt(althoughemployeesinthesejobsmay yT  beexemptasexecutivesoradministratorsiftheiractualjobdutiesfitwithinthose _:  definitions).Asnotedabove,computerprofessionalsareexemptiftheyarepaidona E  salarybasis,orhourlyatarateofatleast$27.63. ݌ + Ќ  S#X X X!X ;##X\X XX     k  Sd? S #X XX#X\L#!X X XX ExemptAdministrativeJobDuties. k݌  Ќ  S #X X X!X ##X\X XX       SI$ S#X XX#X\#!X X XX Themostelusiveandimpreciseofthedefinitionsofexemptjobdutiesisforexempt I$ administrativejobduties.Employeesareperformingexemptadministrativejobdutiesif /  theydo(a)nonmanualorofficeworkwhich(b)"supports"theoverallbusinessoperations  oftheemployer,and(c)whichinvolvestheirexercisingindependentjudgmentand  discretiononimportantmatters.Administrativelyexemptworkislimitedtosupportor"staff"  jobs,asdistinguishedfrom"production"or"operations"or"line"jobs.Administrative  employeesareengagedinworkrelatedtocompanypolicyorthegeneraloperationsofthe  employer,asdistinguishedfromworkrelatedto"producing"whattheemployer"sells."For  n example,employeesinvolvedinpreparingacompany'spayrollareperforming y!T administrativework(butnotnecessarilyexemptwork),whileemployeesinvolvedin _": manufacturingproductssoldtocustomersarenot.Apolicedetectiveisnotperforming E#  administrativework.Theemployeeis"doinglawenforcement,"whichisthe"product"of +$ apolicedepartment.Policeofficerswhoworkin"records"maybeperforming % administrativework,in"support"oftheoperationallawenforcementmissionofthepolice % department.Tobeexempt,theworkmustbeatarelativelyhighlevel,involveagooddeal &  ofjudgmentanddiscretion,andbeimportanttotheoveralloperationoftheenterprise.An '! exampleofadministrativelyexemptworkcouldbethebuyerforadepartmentstore.The ( " employee#X X X!X S#!X X XX Ԁperformsnonmanualorofficeworkandisnotengagedinproductionorsales. )j!# Thejobinvolvesworkwhichisnecessarytotheoveralloperationofthestoreselecting u*P"$ merchandisetobeorderedasinventory.Itisimportantwork,sincehavingtheright [+6#% inventory(andtherightamountofinventory)iscrucialtotheoverallwellbeingofthe A,$& store'sbusiness.Itinvolvestheexerciseofagooddealofimportantjudgmentand '-%' discretion,sinceitisuptothebuyertoselectitemswhichwillsellinsufficientquantityand % atsufficientmarginstobeprofitable.Otherexamplesofadministrativelyexemptemployees   mightbeplannersandtrueadministrativeassistants(asdifferentiatedfromsecretarieswith   fancytitles).Bookkeepers,"galFridays,"many"executivesecretaries"andmost   employeeswhooperatemachinesordevicesarenotadministrativelyexemptemployees. ݌   Ќ  S#X X X!X ##X\X XX       SI $  S#X XX#X\r#!X X XX Merelyclericalworkmaybeadministrative,butitisnotexempt.Mostsecretaries,for I $ example,mayaccuratelybesaidtobeperformingadministrativework,buttheirjobsare /  notusuallyexempt.Similarly,filing,fillingoutformsandpreparingroutinereports,  answeringtelephones,makingtravelarrangements,workingoncustomer"helpdesks,"  andsimilarjobsarenotlikelytobehighlevelenoughtobeadministrativelyexempt.Some   primarilyclericalworkersdoinfactexercisesomediscretionandjudgmentintheirjobs.   However,to"count"theexerciseofjudgmentanddiscretionmustbeaboutmattersof   considerableimportancetotheoperationoftheenterpriseasawhole.Routinelyordering n  supplies(andevenselectingwhichvendortobuypaperclipsfrom)isnotlikelytobe yT  consideredhighlevelenoughtoqualifytheemployeeforadministrativelyexemptstatus. _:  Thereisno"brightline."Some"secretaries"mayindeedbehighlevel,administratively E  exemptemployees(iftheyarepaidonasalarybasis),whilesomeemployeeswithfancy + titles(e.g.,"administrativeassistant")mayreallybeperformingnonexemptclericalduties. ݌  Ќ  S#X X X!X ##X\X XX     :   SxJ% S #X XX#X\ #!X X XX 0   : U ݌ (#(# Ќ  RightsofExemptEmployees.   S #X X X!X ##X\X XX        SnI S#X XX#X\ #!X X XX AnexemptemployeehasvirtuallynorightsatallundertheFLSAovertimerules.Aboutall nI anexemptemployeeisentitledtoundertheFLSAistoreceivethefullamountofthebase T/ salaryforanyworkperiodduringwhichtheemployee#X X X!X ?#!X X XX performs"any"work.Nothinginthe : FLSAprohibitsanemployerfromrequiringexemptemployeesto"punchaclock,"orwork   aparticularschedule,or"makeup"timelosttoabsences.NordoestheFLSAlimitthe   amountofworktimeanemployermayrequireorexpectfromanyemployee,onany   schedule.("Mandatoryovertime"isnotrestrictedundertheFLSA.)   ݌ ! Ќ  S#X X X!X ##X\X XX       S^#9 # S #X XX#X\#!X X XX RightsofNonexemptEmployees. ݌ ^#9 Ќ  S #X X X!X ##X\X XX     V  S$$x S#X XX#X\7#NonexemptemployeesareentitledundertheFLSAtotimeandonehalftheir"regularrate" $ ofpayforeachhourthey"actuallywork"overtheapplicableFLSA"overtimethreshold"in % theapplicableFLSA"workperiod." Vq݌ & Ќ  S Question:1.Whatdoesitmeantobepaidona salarybasis?  .) !  B.` hp x (#XB      SU+0#+" S Answer: TobeexemptfromtheFLSA,andnotentitledtoovertime,anemployeemust U+0#" meetcertainjobdutyrequirements,generallyinvolvingtheuseofindependentjudgment A,$# anddiscretion,andbepaidona salarybasis.TheFLSAprovidesforfivebroadlyused )-%$ classificationsofexemptions,including: ݌ % Ќ  S      S ` ; S1.bonafideadministrativeemployees, ݌   Ќ  S      SA   S2.bonafideexecutiveemployees, ݌ A  Ќ  S      S | W S3.bonafideprofessionalemployees, ݌   Ќ  S      S]8  S4.outsidesalesemployees,and ݌ ]8 Ќ  S    ^  Ss S5.highlyskilledcomputerrelatedemployees. ^y݌  Ќ  S    @  SyT &  SSalarybasisisdefinedasthepaymentonaweeklyorlessfrequentbasisofa yT  predeterminedamountthatconstitutesallorpartofcompensation,withoutreductionsfor a<  variationsinthequalityorquantityoftheworkperformed.Underthisdefinition,exempt I$  employeesgenerallymustreceivetheirfullsalaryforanyweekinwhichtheyperformwork, 1  withoutregardtothenumberofdaysorhoursworked.Deductionsmaybemadefromtheir   salary,butonlyinlimitedcircumstances.(Seequestions2through7,below.)Itshouldbe   noted,however,thattheFLSAregulationsindicatethatdoctors,lawyers,andteachers   (typicallycategorizedasprofessionalexemptemployees)donothavetobepaidona   salarybasistobeconsideredexempt. @[݌  Ќ  S       S]/  S% [ Question:2.Doexemptemployeeshavearighttopaidvacationdays,sickdays, ] andholidays?    ݌ lG Ќ  S    !  S S Answer: Paidtimeoffgenerallyisconsideredabenefitgivenattheemployersdiscretion.  However,iftheemployermakesdeductionsfromanexemptemployeessalaryforunpaid  timeoff,theemployershouldbesurethatitdoesnotviolatethesalarybasistestorthe  employermaylosetheexemptions.Thetypeandamountoftimeofftakendetermines   whethertheemployercanmakethedeductions.AccordingtotheFLSAregulations,the !{ employermaymakeapaydeductionwhenanemployeeisabsentforafulldayfor "c personalreasons.Thus,iftheemployerdoesnotprovidepaidvacationorpersonaldays, p#K theemployermaydeductthedayofffromtheemployeessalary.Similarly,iftheemployer X$3 givespaidvacationdaysandtheemployeehasusedthemall,theemployermaydeduct @% anyadditionalpersonaltimeoff. !!݌ (& Ќ  S    d&  S'c'> STheemployeralsomaymakedeductionsforadaysabsenceduetoillnessorinjuryifthe ' employerhasabonafideplan,policy,orpracticethatprovidescompensationforlossof (y  salaryduetosicknessordisability,suchasapolicythatallowsemployeestoaccruepaid )a! sickleave.Thisdeductionispermissibleeveniftheexemptemployeehasnotyetqualified n*I" fortheplanorhasexhaustedtheplanssickleaveallowance.However,accordingtothe V+1#  regulations,iftheemployerdoesnothaveapaidsickleaveplan,theemployermaynot >,$! deductthedayfromtheemployeessalaryiftheemployeehasworkedanydaythatweek. &-%" AnexceptiontothisruleissickleavetakenundertheFamilyandMedicalLeaveAct % (FMLA).TheFMLAallowsdeductionsfromanexemptemployeessalaryforleaverequired   bytheFMLA. d&&݌   Ќ  S    +  S ^0  STheFLSAregulationsdonotspecificallyallowdeductionsforholidays.Therefore,the  ^ employershouldnotmakedeductionsfromanexemptemployeespayforunworked k F holidays +!+݌ S . Ќ  S    ,  Si S%[ % \ Question:3.Doestheemployerhavetopayexemptemployeeswhenworkisnot  available?%\ -Ԁ ,,݌  Ќ  S     -  S[6  S Answer: Iftheexemptemployeeisready,willing,andabletowork,deductionsmaynot [6  bemadefortimewhenworkisnotavailable. -.݌ G"  Ќ  S    >/  S   S% ] Question:4.Whataboutforjurydutyandmilitaryleave?%]/Ԁ >/Y/݌   Ќ  S     Q0  S{M( S Answer: Deductionsforpartialweekabsencescausedbyjuryduty,attendanceasa {  witness,ortemporarymilitaryleavearenotpermitted.Theemployermayoffsetanymilitary g  payormonetarypaymentsreceivedasjuryorwitnessfeesforaparticularweekagainst tO theemployeessalaryforthatsameweek.Remember,however,thatpaymentusuallyis \7 notrequirediftheemployeedoesnotworktheentireweek. Q0l0݌ D Ќ  S    2  S  S% ^ Question:5.Doesanemployerhavetopayexemptemployeesondaystheycannot   workbecauseofinclementweather? 23݌  Ќ  S     G4  Sb4 S Answer :TheFLSAregulationsdonotspecificallyallowemployerstoreduceanexempt b employeespayfortimeoffrelatedtoinclementweather.Therefore,exemptemployees s N generallyshouldbepaidforabsencesresultingfrombadweatheriftheyhaveworked [!6 duringanyoftheworkweekinwhichtheabsencesoccur. G4b4݌ C" Ќ      d6  %^`3% _ Question:6.Candeductionsbemadefromanexemptemployeessalaryforpartial $ dayabsences?%_6Ԁ d66݌ %~ Ќ  S     7  S3'& S Answer: No.Generally,theregulationsindicatethatiftheemployermakesdeductions 3' fromanexemptemployeespayforabsencesoflessthanaday,theemployeris ( consideredtobetreatingtheemployeeasanhourlyworker,insteadofanexempt )  employeepaidonasalarybasis.(Asdiscussedinquestion2,above,youmaymake )! deductionsforcertainfulldayabsences.) 77݌ *" Ќ  S    :  Se,@$,# SManyemployershaveattemptedtoavoidthepartialdaypaydockingissuebyrequiring e,@$  exemptemployeestousepaidleavefortheseabsences.TheDepartmentofLabor(DOL), M-(%! theagencythatenforcestheFLSA,traditionallyhaspermittedthistypeofarrangement % sincetheemployeedoesnotexperienceanactualreductioninsalary.Therealsoare   specialrulesforexemptpublicsectoremployeesthatallowthemtobeconsideredexempt   eveniftheirpayisreducedforpartialdayabsences. :6:݌   Ќ  S    =  Sk F  SAnumberofcourtshavesidedwiththeDOLspositiononthisissue.However,othercourts k F havedisagreedandhavedeterminedthatthispracticedoes,infact,treatanexempt S . employeelikeanhourly,nonexemptemployeeand,therefore,causeslossofthe ; exemption. =7=݌ # Ќ  S    ?  S^9 SBecauseofthesplitinthecourts,youshouldconsultlegalcounselonthismatter.Asa  practicalmatter,anemployermayfindthatexemptemployeesresentbeingrequiredtouse t  paidleaveforpartialdayabsences,particularlyiftheyregularlyworkmorethan40hours \  perweek.Underthistypeofpolicy,theyarenotentitledtoadditionalpaywhentheyput iD  inlonghours,butarerequiredtousevacationorsickleaveiftheyneedafewhoursoff. ?4?݌ Q,  Ќ  S    A  S g  SFinally,asdiscussedinquestion2,above,theFMLAallowsemployerstorequiretheuse   ofaccruedpaidleaveforpartialdayabsencesforanyhourstakenasintermittentor  reducedFMLAleave,withoutaffectingtheemployeesexemptstatus. AB݌  Ќ  S    C  S= S% ` Question:7.Cantheemployermakedeductionsfordisciplinaryreasons,suchas = asuspension?%`DԀ CC݌ ' Ќ  S     E  Sd? S Answer: No,unlesstheemployersuspendstheexemptemployeeforafullweek.  However,theemployermaymakedeductionsforpenaltiesimposedforinfractionsof ~  safetyrulesofmajorsignificance.Theseinfractionsincluderulesrelatingtothe f preventionofseriousdangertotheworksiteortootheremployees,suchasnosmoking sN rulesinexplosivesplants,oilrefineries,andcoalmines.Remember,theemployercan [6 suspendanexemptemployeeforlessthanaweekaslongastheemployerpayshim. C  Sinceasuspensionisoftenthefinalstepbeforetermination,theemployeewillmostlikely +! understandtheseriousnessofthesuspensioneveniftheemployeedoesnotloseanypay. "  EE݌̌  S    H  S%q%L S% a Question:8.Cananemployerrequireexemptemployeestowork40hoursaweek % ortobeatworkduringsettimes? HI݌ & Ќ  S     LJ  S>( ' S Answer: Iftheemployer%afIrequiresexemptemployeestoworkaspecificnumberofhours >(  orarriveataspecifictime,youwillappeartobetreatingthemlikenonexemptemployees *)! andmay,thus,jeopardizetheirexemptstatus.Insteadoffocusingonthenumberofhours *!  anemployeeworksorstartingtime,theemployerisbetteradvisedtofocusonthe *"! employeesjobrequirementsandoutput.Forexample,ifanemployeemanages +#" nonexemptemployeeswhomustbeatworkbetween9a.m.and5p.m.,thentheemployer ,$# canrequirethatemployeetobeatworkduringthesamehourstosuperviseproperly. -%$ Similarly,theemployermaydisciplineanemployeewhodoesnotcompleteaprojecton % timeorisnotavailableforameetingbecauseheleftatnoononFriday. LJgJ݌   Ќ  S    N  S vH # S% b Question:9.Cantheemployerpayexemptemployeesextracompensation?%bO  NN݌  v Ќ  S    O  S+   S Answer: Generally,theemployermaypayextracompensationtoexemptemployees +  withoutaffectingthesalarybasisqualification.TheFLSAregulationsgiveonlylimited   examplesofacceptableadditionalcompensation,andtheseincludethepaymentof   commissionsandbonuses. OO݌  Ќ  S    Q  SuP" SSomeemployerspayexemptemployeesadditionalcompensationthatisbasedonthe uP numberofhourstheemployeesworkinexcessof40inasingleworkweek.Theregulations ]8  donotspecificallydiscussthispractice;however,thecourtsthathaveaddressedtheissue E  disagree.Somecourtshaveheldthatanotherwiseexemptemployeewhoreceivesextra -  paymentsbasedonthenumberofhoursworkedinexcessof40isnot paidonasalary   basisandmustthereforebepaidovertime.Othercourts,however,havedeterminedthat   paymentofanhourlyrateinadditiontothesalarydoesnotaffecttheexemptstatusofthe   employee.Becauseofthissplitinthecourts,mostexpertsrecommendpayingextra  compensationintheformofbonusesorotherlumpsumpaymentssothatitdoesnotlook  likeovertimepay. QQ݌ x Ќ  S    mV  SfA S% c Question:10.Cananemployerkeeptrackofthenumberofhoursexempt fA employeeswork?%cVԀ mVV݌ P+ Ќ  S     W  Sh S Answer: Employersthatrequireexemptemployeestoaccountfortheirworktimeonan  hourlybasismayjeopardizethestatusoftheseemployeesiftheaccountinghastheeffect  oftreatingthemlikehourlyworkers.Forexample,iftheemployeessalaryfluctuatesbased  onthenumberofhoursworked,theemployeemostlikelywillnotbeconsideredexempt.  w However,theemployergenerallymaykeeptrackofhoursworkedforotherpurposes !_ unrelatedtotheemployeespay,suchastoaccountforworktimetobebilledtoclientsor l"G underafederalcontract.Youalsomayrecorddailyattendance. WW݌ T#/ Ќ  S    ?[  S&% S% d PenaltiesforMisclassificationofExemptEmployeesMaybeSevere.%d[  ?[Z[݌ & Ќ  S    `\  S'\'7 SAsindicatedintheabovediscussion,ifanemployeeisclassifiedasexemptbutdoesnot ' meetthenecessarysalarybasistests,theemployeemaylosetheexemption.Underthe (p  FLSA,theemployercanbeliableforbackovertimepayofuptotwoyearsforany {)V! employeewhoismisclassifiedasexempt.Thisbackpayliabilitytypicallyisextendedto a*<"  threeyearsiftheFLSAisdeterminedtohavebeenwillfully(intentionally)violated.In G+"#! addition,asinglemisclassificationcantriggeralossofexemptionforawholegroupof -,$" employeesiftherestofthegrouphasbeentreatedsimilarlyundertheorganizations -$# policiesandpractices.Andasafinallegalwakeupcall,somecourtdecisionsinterpreting -%$ theFLSAhavefoundthattheindividualdecisionmakercanbepersonallyliableforany % violationsundertheAct.Inotherwords,theemployersrepresentativedecisionmaker   couldbepersonallyresponsibleforanybackpayandotherpenalties. `\{\݌   Ќ  S    a  S} X*  SAsapracticalmatter,itisunlikelythattheemployersdecisionmakerwillbeassessed } X personalliabilitybytheDOLoracourtunlesstheemployerintentionallyviolatestheFLSA. c > However,theemployerneedstorealizethatmanydisgruntledemployeesandtheir I $ attorneysthreatenlegalactionagainsttheindividualdecisionmakerasawaytoput /  pressureontheemployer.Therefore,theemployershouldmakesurenottobeexposing  theorganization,itsprincipalsanddecisionmakerstounnecessarylegalactions.Thebest  waytodothisistobefamiliarwiththeFLSAregulations,inparticulartheregulations   dealingwiththesalarybasisrequirements,andthendocumentexemptclassification   decisions.Agoodstartingpointistocomparepoliciesthataffectexemptemployeepay   withthetenquestionsandanswersaddressedabove.Afinalcommonsensetiptohelp n  ensurethatexemptemployeesarepaidonasalarybasisistofocusontheirjobdutiesand yT  completedwork,notonthenumberofhoursworkedortheirarrivalanddeparturetimes.MXWX XX  aa݌ _:  Ќ  #X XXMXWg#Ingeneralterms,theFLSAexcludesexemptemployeesfromitsovertimeandminimum  wagemandates.Anexemptemployee!oronenotsubjecttoovertime!isanyemployee  employedinabonafideexecutive,administrative,orprofessionalcapacity.Wenotethat  onMarch31,2003,theDOLproposednewregulationswhichwillsubstantiallychangethe j exemptemployeelandscapethathasbeeninplaceforover50years.Althoughthe uP proposednewregulationsarenotyetapproved,theywilllikelybeandcontaintwomajor [6 changes,namely:(1)raisingtheminimumsalarythresholdforexemptions,resultingin A lowerincomeemployeesnolongerqualifyingasexempt;and(2)clarifyingandnarrowing ' thestandardsforwhatjobdutiesemployeesmustperformtoqualifyforanexemption,   resultinginincreasingtheranksofexemptemployees.Theregulationsonceenacted,are  expectedtoaffect6.5millionbusinessesandincreasewagesforover1.3millionlower   incomeworkers. ! MXWX XX  S#X XXMXWBl# CurrentandProposedRegulations ( SeelaterSectionregardingenactedchanges =$ totheRegulations) )%  Theproposedregulationswillbeeasiertoapply,lessstringent,andwillallowandan &  estimated644,000nonexemptemployeestobereclassifiedasexempt.Theproposed '! regulationswillreplacethe longand shortexemptiontestwitha singlestandardduties ( " test.Theproposedregulationsraisetheminimumsalary         3     requirementtoqualifyforany )!#  whitecollarexemptionfrom$250perweekto$425perweek.Inotherwords,tomeet % thisthresholdrequirement,anemployeemustbesalariedandnotearnlessthan$425per   week.Ifanemployeeearnsless,theemployeewillnolongerqualifyforanexemption,   regardlessofjobduties.Assuming,preliminarily,thattheemployerpaysthisminimum   salaryamount,theemployermustnextconsidertheremainingelementsofthetestfor   eachtypeofexemptionsought:    1.  ExecutiveExemption .Theemployeesprimarydutyistomanagetheenterprise qL orsubdivisionandregularlydirecttheworkofatleasttwo(fulltime)ormore(parttime) ]8 employees.Theproposedregulationsincludeauthoritytohireandfireotheremployees C  orbeanindividualwithsufficientinfluenceoverthesedecisions. )     ` 2.  AdministrativeExemption .Theemployeesprimarydutyconsistsofofficeornon   manualworkdirectlyrelatedtotheemployersmanagementpoliciesorgeneralbusiness   operations.Theproposedregulationsprovidethattheemployeemustalsoholda position   ofresponsibilitydefinedaseitherperformingworkofsubstantialimportanceorperforming   workrequiringahighlevelofskillortraining.Thisnew positionofresponsibilitystandard n replacestheambiguous discretionandindependentjudgmentanalysis. yT    ` 3.  ProfessionalExemption .Theemployeesprimarydutyconsistsofperformance E  ofofficeornonmanualworkrequiringknowledgeofanadvancedtypeinafieldofscience 1  orlearningcustomarilyacquiredbyaprolongedcourseofspecializedintellectual  instruction.Theproposedregulations,however,permitanemployeetoqualifyasexempt  whensuchknowledgewasacquiredbyalternativemeanssuchasacombinationof  instructionandworkexperience.Moreover,theproposedregulationsremovethe  requirementthattheemployeemust consistentlyexercisediscretionandjudgment.  Remember,givingemployeesimpressivesoundingtitleswillnotprotecttheemployerfrom { V theeffectsoftheFLSA.Iftheemployeesdutiesmaketheemployernonexempt,the a!< employermustpaythoseemployeesovertime!eveniftheemployeestitleisimportant G"" soundingsuchas SeniorVicePresidentandDirectorofGlobalExecutiveManagement. -# Theburdenlieswiththeemployertoestablishthatanyexemptemployeeisproperly $  classified.Notethatpayinganotherwiseexemptemployeeovertimewillgenerallynot %! destroyhisexemptstatus,althoughsomecourtshavedisagreed. &"  V.PAYROLLDEDUCTIONS  (l $ Wagesarenotconsideredpaidunlesstheyarepaidfinallyandunconditionallyor freeand c*>"& clear.NotethatitisaviolationoftheFLSAtorequireemployeesto kickbackforthe I+$#' employersbenefitanypartofanemployeeswages.Accordingly,anemployermust /, $( exercisecautionwhenmakingpayrolldeductionsfromanemployeespaycheck.Although -$) exemptemployeesarenotsubjecttoFLSAsovertimeorminimumwagerequirements,the % Actdoesrequirepaymentonasalaryorfeebasisthatrequiresaminimumamount.Ifan   exemptemployeedoesnotreceivecompensationaccordingtoasalaryorfeebasis,then   hegenerallyloseshisexemptionand,thus,mustbepaidovertime.Generally,anexempt   employeespaycannotbe subjecttoquantityorqualityofworkdeductions.    r A. r DeductionsforBenefittotheEmployee  d  1. r LodgingandBoard. Theonlystatutoryexceptiontothe freeandclearrulefor [6 wagesisthatemployersareallowedtocount, thereasonablecost8totheemployerof G"  furnishingsuchemployeewithboard,lodging,orotherfacilitiesifsuchboard,lodgingor -  otherfacilitiesarecustomarilyfurnishedbysuchemployertohisemployees.Notethatthis   typeofdeductionmaybemadetoanexemptemployeespayaswellwithoutjeopardizing   anexemption.    r 2. r PayrollAdvancesandLoans .Paycheckdeductionsforfreeandclearpayroll   advancesbytheemployertotheemployeewillnotaffecttheexemptstatusoftheemployee. r Employersshouldbeverycarefulwhenmakingthistypeofdeduction,especiallywith }X respecttononexemptemployeesconsideringthelegislativeintentoftheActtoensurefair c> compensation.Anysalaryadvanceorloanshouldbeproperlydocumentedatthetimeof I$ distributionshouldtheemployerintendonrecoupingthemoneythroughpayrolldeductions. /   B. r DeductionsforPaymentstoThirdParties   Whenanemployerpaysathirdpartyattheemployeesrequest,theemployeehassufficient  controlanddominionoverthemoneyastoqualifyasreceivingit freeandclear.The t paymentmustbemadetothethirdpersonforthebenefitandcreditoftheemployee.  Z Pleasenotethattheemployershouldproperlydocumentsuchanagreementatthetimethe e!@ arrangementwasmade. K"&  C. r DeductionsforPaymenttotheEmployer  $ Repaymentofadebtowedbytheemployeetotheemployerarisingoutofanonloan %! transaction(e.g.,forrepaymentofdamagedequipment)isnottobeconstruedassatisfying &" thefreeandclearminimumwagepaymentrequiredbytheActifthedeductiondrivesthe '# amountbelowthestatutoryminimum.Anemployercandeductnonloandebtrepayments (v $ fromanemployeespaycheckonlyiftheamountdoesnotdrivetheemployeespaybelow )\!% theminimumwage. g*B"&  r D. r DeductionsforMisappropriationsofFunds  -$) ЇAjudicialexceptionregarding freeandclearwagepaymentspermitspayrolldeducted % repaymentofemployeemisappropriatedfunds,evenifthedeductedpaymentsreducethe   netpaytobelowthestatutoryminimum.Inotherwords,inasituationinwhichtheemployer   intendstorecoupmisappropriatedfundsfromacurrentemployee,theemployermaymake   adeductionthatbringstheemployeespaybelowthestatutoryminimumwage.Torecover   suchpayments,thecasemustfirstbeprovenbeyondareasonabledoubtinacourtoflaw.  ~ Foremployersconcernedwithcompanyprovidedcreditcardfraudandlossrecovery,an  f alternativeistohavetheemployeeoutlayallexpendituresandthenprovidereimbursement. qL  E. r MiscellaneousDeductions  =  Anonexemptemployeemaybesubjecttomanydifferentdeductionssolongashispayis   notdrivenbelowthestatutoryminimum.Forexample,anonexemptemployeespaymay   bedockedforabsencesoccasionedbytheemployer,juryduty,portionsofaday,andfor   disciplinaryreasons.Inaddition,thecostforequipment,uniformsandothermaterialsthat   arearequiredaspectofajobmaybedeductedfromtheemployeeswagesprovidedthat   thedeductionsdonotdecreasetheemployeeswageamountbelowtherequiredminimum h wageorcutintoanyovertimecompensation.Notethat,ifauniformiswashandwearand/or sN washablewithotherpersonableclothing,thennoreimbursementsarerequiredtothe Y4 employeeundertheFLSA.Iftheuniformrequires distincttreatment,theemployermust ? reimbursetheemployeethedifferencebetweentheminimumwageandthatamountbelow % theminimumwage.    F. r DeductionsforDisciplinaryReasonsforExemptEmployees   Deductionsmaybetakenfromanexemptemployeessalaryforviolationsofmajorsafety  rulesdesignedtopreventseriousdangertotheplantorotheremployees.Suchdeductions j willnotcompromisetheemployeesexemptstatus.Salarydeductionsorapolicypermitting u P suchdeductionsforminordisciplinaryinfractions(actualdeductionsarenotrequired)will [!6 resultinanemployeeslossofexemptstatus. A"  G. r DeductionsforAbsences  %! Anemployeewhosepayisreducedforabsencesoccasionedbytheemployerorbythe '# operatingrequirementsofthebusinesscannotbepaidonasalarybasisandis,thus,non (l $ exempt.Deductionscannotbemadewhenanexemptemployeeisready,willing,andable w)R!% towork.Deductionscanbemadewhenworkisnotavailable,whenlessthanaday ]*8"& absencesaretakenforpersonalreasons,forjuryduty,attendanceasawitness,orfor C+#' temporarymilitaryleave.Note,however,thatsuchdeductionswillcauseanexempt ),$( employeetoloseexemptstatus.Butanyamountsearnedintheseroles(e.g.,juryduty)may -$) besetoffagainsttheemployeessalarywithoutlossoftheexemption.Deductionscanbe -%* madetoanexemptemployeessalarywhentheemployeeisabsentfromworkforadayor % moreforpersonalreasons,otherthansicknessoraccident.   Deductionsmayalsobemadeforabsencesoccasionedbysicknessordisabilityifthe   employeeisreceivingcompensationunderothermeansduringhistimeofdisabilityor   sickness.Ifanimproperdeductiontoanexemptemployeessalaryisinadvertent,oris  ~ madeforreasonsotherthanlackofwork,theexemptionwillnotbeconsideredtohavebeen  d lostiftheemployerreimbursestheemployeeforsuchdeductionsandpromisestocomply oJ inthefuture. Inadvertentisconsideredtohaveoccurrediftheactisaonetimeeventas U0 opposedtodeductionsthatreflectasettledpolicyofsubjectingthepayofitsemployeesto ;  improperdeductions.Althoughcorrectiveaction,suchasreimbursement,neednotbe !  immediate,itshouldbetakenpromptly.     r VI.RECORDKEEPINGANDENFORCEMENT     !X X XX Question:Doesitmatterthatanemployeedidnot"putinfor"thetimespent r performingworkactivities? \  #X X X!X V##X\X XX     R  SU0 S #X XX#X\3#!X X XX Answer: Probablynot."Failuretoask"isnotadefenseforanemployerinanFLSAcase.  Failuretoaskmightconceivablyberelevantonthequestionofwhetheranemployerknew o orhadreasontobelievethatanemployeewasperformingoffdutywork,buteveninthis |W situationfailuretoaskwouldbeonlyonefactoronthequestion. Rm݌ d? Ќ  S#X X X!X ݟ##X\X XX        S- S #X XX#X\#!X X XX Question:Howdoesanemployeeprovethattheemployerkneworhadreasonto - believethatofftheclockworkwasbeingperformed?  ;݌   Ќ   S #X X X!X ##X\X XX       S!T!/ S #X XX#X\ܣ#!X X XX Answer: Anemployerwillbeheldto"know"whatit"couldhavefoundout"ifithadpaid ! attentiontowhatitsemployeesweredoing.Thelegalstandardiswhetheranemployercould "n havelearnedoftheemployees'activitiesbymakingreasonablydiligentinquiries.According {#V tothecourts,itisa"rare"caseinwhichanemployerwillbefoundtolacktherequisite c$> knowledgewhentheactivitiesinquestionare"partandparcel"ofanemployee'sjob,unless K%& theemployeehasdeliberatelyhiddenthefactthattheemployeeisperformingthem. ݌ 3& Ќ  S#X X X!X ##X\X XX     ħ  S( (  S #X XX#X\#!X X XX Question:Howdoesanemployerprovetheamountoftimespentdoingofftheclock ( ! compensableactivities? ħߧ݌ )!" Ќ   S #X X X!X O##X\X XX       Sv+Q##+" S #X XX#X\h#!X X XX Answer: Itisuptotheemployertocontroltheworkofitsemployees,andtomaintain v+Q## recordsofthetimespentbyemployeesperformingcompensableactivities.Ifanemployer b,=$$ doesnotmaintaintherequiredrecords,theemployeeisentitledtorecoverbasedongood J-%%% faith,reasonableandrealisticestimates.#X X X!X # ݌ % Ќ  !X X XX Question:D