Ch 14 Employment Fair Labor Standards Act The Fair Labor Standards Act FLSA a federal law adopted in 1938 to eliminate unfair methods of compensation and labor conditions injurious to the health and efficiency of workers It mandates minimum wages one and one half pay for overtime work equal pay for equal work and restrictions on child labor Minimum Wage The FLSA requires that with few exceptions employers involved in interstate commerce pay employees at least the minimum wage set by Congress If an employer fails to pay minimum wage employees can sue for unpaid wages Low Sales Exception to Minimum Wage requirement Excepted from the minimum wage requirement are employers with less than 500 000 in annual sales If two businesses are not in close proximity but rather separated by several miles the outcome may be different Additional factors to consider include whether the units share a common business purpose and whether the activities performed by each unit are related operational autonomy for example whether the units have separate records and bookkeeping whether each unit has dedicated employees not shared by the other Tips Exception to Minimum Wage Requirement Another exception to the minimum wage requirement applies to employees who routinely receive at least 30 per month in tips on the job For those employees an employer can credit a percentage of the tips against the hourly minimum wage requirement Under federal law tip pooling among tipped employees including wait personnel counter help bus help and bartenders is permitted for purposes of the employer utilizing the tip credit to reduce an employee s pay below minimum wage 7 states have adopted laws that do not allow tip credits to reduce the minimum wage an employer must pay California Washington Oregon Nevada Alaska Montana and Minnesota Youth Minimum Wage Exception to Minimum Wage Requirement An employer can pay a wage below minimum to a limited class of young employees Called the youth minimum wage the amount is 85 of the federal minimum wage Ages between 16 19 and then only for the first 90 days of employment consecutive days not work days After the employer must pay minimum wage Overtime Pay The FLSA requires that certain employees who are paid on an hourly basis and who work more than 40 hours in one week be paid at least one and one half times their regular pay for the hours in excess of 40 Exempt Employees The statute contains an exemption to the overtime and minimum wage requirements for executive administrative and professional employees Two general rules apply 1 to qualify an employee must pass a salary test and a duties test job titles are not controlling 2 employees paid an hourly wage are nonexempt regardless of their duties Executive Employees To qualify as an executive employee for the purposes of exemption from overtime pay all of the following tests must be met 1 The employee must be compensated on a salary basis as opposed to an hourly wage at a rate of not less than 455 per week 2 The employee s primary duty must be managing the business or a department or other business subdivision 3 the employee must regularly direct the work of at least two full time employees or their equivalent for example one full time and two half time employees 4 The employee must have the authority to hire or fire other employees or have significant input in those decisions Administrative and Professional Employees To qualify for the administrative employee exemption the employee must satisfy all of the following criteria 1 They must be compensated on a salary or fee basis at a rate of at least 455 per week 2 They must have as a primary duty the performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer s customers 3 The employee s primary duties must include the exercise of discretion and independent judgement with respect to matters of importance To qualify for the professional employee exemption workers must satisfy the following tests 1 They are compensated on a salary or fee basis in a minimum amount of 455 a week 2 Their primary duty is the performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction Time Worked The FLSA identifies what constitutes time worked for purposes of determining the number of hours for which an employee is entitled to hourly pay and for determining whether an employee has worked overtime Also time worked coffee and snack breaks meetings to discuss daily operations problems rest periods of 20 minutes or less travel from one job site to another or to customers required training and clearing a cash register or totaling receipts after regular work hours Split and Partial Shifts an employee with a split shift does not get paid for the time in between work hours if you are sent home you are not paid for the remainder of your scheduled shift Equal Pay for Equal Work A 1963 amendment to the FLSA called the Equal Pay Act EPA requires that men and women who do the same job or jobs that require equal skill effort and responsibility be paid the same or according to the same pay schedule a practice known as equal pay for equal work Comparable Worth Sometimes men and women work at jobs that are quite different and one is paid more than the other yet the value of their work to the employer is equal Comparable worth refers to jobs requiring different skills and responsibilities that have equal value to the employer Courts have rejected the argument that comparable worth requires equal pay Retaliatory Discharge If employees believe they are being paid unfairly and complain or commence a lawsuit under the FLSA the employer is often irritated and sometimes antagonistic toward them The EPA addresses this circumstance by prohibiting an employer from discharging or otherwise discriminating against such employees Restrictions on Child Labor Hours The minimum work age is 14 During the school year an employee who is 14 or 15 cannot work more than 18 hours a week not more than 3 hours on a school day and cannot begin work earlier than 7 00 am or end later than 7 00 pm During vacation that same employee can work up to 8 hours a day but cannot exceed 40 hours a week The workday cannot begin earlier than 7 00 am or end later than 9 00 pm No federal law restricts the number of hours a 16 or 17 year old can work Restrictions on Child Labor Tasks