Just came across a terrific article covering come common misconceptions about the provisions of the Fair Labor Standards Act (FLSA) — misconceptions that might mean you’re paying your employees more than you have to.
Of course, as the authors note, the FLSA provides a floor, not a ceiling. For a variety of reasons, many employers choose to pay more than the minimum required by the law… perhaps in the interest of attracting and retaining better workers, or to reward top employees for their productivity, or simply to keep up with the labor market in their area.
What’s sad is when you come across an employer who incurs unnecessary costs simply because they have misunderstood the provisions of the FLSA.
So, what are these misconceptions?
In a nutshell, they set out three common issues that trip up many employers:
Paying overtime based on non-work time. The law says overtime is paid when an employee works more than 40 hours in a workweek. Just because they may be paid for things like holidays, those aren’t work hours… and thus, those hours don’t need to be included when figuring overtime pay.
Not monitoring/adjusting work schedules to limit unnecessary overtime. Just because your normal schedule is an eight hour day, you don’t have to keep people there for the full eight hours every single day. Just as you can ask them to work extra time on some days if the workload demands it, you can send them home early on others if they’re getting close to the overtime threshold.
Two caveats: first, if you’re in California or another area that mandates you calculate overtime based on the hours worked each day (as opposed to calculating overtime weekly, as under the FSLA), sending overtime-eligible people home early one day will not get you off the hook for overtime incurred on a different day. Second, if you’re covered by a collective bargaining agreement that says you can’t send folks home early, that would naturally take priority. What we’re talking about here is simply what federal law allows. If you have any questions, you’d do well to consult with your employment law attorney.
Paying employees the same rate for doing different jobs. Sometimes employees actually do multiple jobs for the same employer. The article gives the example of construction workers who also transport equipment to and from the job site. Another example I see frequently is a teacher who also coaches the school soccer team or drives a school bus. Some employers believe that they have to pay these workers the same hourly rate for all the work they do, regardless of what the task actually is. In fact, because the different jobs may require different skills and have different market rates of pay, you can pay the same person different rates for different jobs.
Read the article for all the gory details.
Of course, in order to keep from accidentally paying for non-work time, accurately monitor employee work hours and pay according to the job, handwritten paper time sheets aren’t going to cut it. You need a good time tracking system. One that automatically differentiates between work time and benefit time (such as holidays and vacations). One that allows you to run reports on employee hours whenever you need them. One that includes work codes, so you can segregate and track employee time by the actual job they’re performing. One like, oh, for instance, our timeQplus Product Suite. (I’m just saying…)
So, what about you? Have you fallen victim to any of these (or other) misconceptions about the FLSA?