MGT 391 - Chapter 11 Notes - Wages, Hours, and Pay Equity

MGT 391 - JSU - Chapter 11 Notes

prohibited

Employers are _______ from paying below certain legislatively determined minimum levels of pay and from discriminating in pay.

work hours ; minors

Rather than regulate hours directly, federal law affects _________ primarily by requiring premium pay for overtime work and by restricting the work hours of _________.

Fair Labor Standards Act (FLSA)

The principal federal statute regulating wages and hours.

Fair Labor Standards Act (FLSA)

The ____________ establishes a federal minimum wage and requires premium pay for overtime work.

a federal minimum wage and requires premium pay for overtime work.

The Fair Labor Standards Act (FLSA) establishes:

minimum wage

The ___________ required to be paid by the employers for each hour of work in a workweek. Under the FLSA, employers must pay employees at a rate no less than the minimum wage of $7.25/hr for each hour worked during a workweek.

FLSA

The minimum wage required to be paid by the employers for each hour of work in a workweek. Under the_______, employers must pay employees at a rate no less than the minimum wage of $7.25/hr for each hour worked during a workweek.

minimum wage

Under the FLSA, employers must pay employees at a rate no less than the __________ for each hour worked during a workweek.

state ; local

For the majority of employees, it is ______ and _______ laws that define their minimum rate of pay, rather than federal law.

No

Yes or No:
Does the FLSA specify any particular pay period?

total straight-time (i.e., not overtime) pay for a workweek is divided by total hours worked during that workweek.

To determine whether the minimum wage has been paid:

tipped employees

Employees who customarily and regularly receive at least $30 per month in tips.

tipped employees

Employees who customarily and regularly receive at least $30 per month in tips.

tipped employees

A significant exception to the general requirement of hourly pay at least equal to the minimum wage is made for ____________.

$2.13

Under the FLSA, employers can meet their minimum wage obligations to tipped employees by paying them at least _______/hour, provided that this amount plus tips equals at least the minimum wage.

beforehand

To take advantage of the tip credit, employers must inform employees about it ____________ and allow employees to retain all tips, either individually or pooled among employees.

all

To take advantage of the tip credit, employers must inform employees about it beforehand and allow employees to retain _________ tips, either individually or pooled among employees.

make up the difference.

If tips do not bring employees up to the minimum wage, employers must:

are

Choose: Are / Are Not

Employers (are/are not) permitted to deduct from tips the transaction fees charged by credit card issuers when tips are paid using credit cards.

one and one-half

Under the FLSA, employers must pay at least _________________ times an employee’s regular rate of pay for each hour worked in excess of forty hours in a workweek.

overtime

A pay at least one and one-half times an employee’s regular rate of pay for each hour worked in excess of forty in a workweek.

regular rate of pay

The premium at which overtime hours of work must be compensated.

workweek

The basic unit of time for determining compliance with the FLSA’s minimum wage and overtime requirements.

weekly

FLSA overtime is earned on a ________ basis.

workweek

It does not matter how many hours an employee works on a particular day; the relevant issue is the number of hours worked in the __________.

comp time

The practice of paying for overtime work with compensatory time off rather than overtime pay.

whether the employer is in the private or public sector.

The legality of comp time—that is, paying for overtime work with compensatory time off rather than overtime pay—depends on:

Private employers

_______________ cannot pay for overtime required under the FLSA with compensatory time off in the future.

Government agencies

_________________ pay for overtime required under the FLSA with compensatory time off in the future.

First, it must be in accordance with an agreement to that effect, either with individual employees or with their collective bargaining representative when the public employees are unionized.

The ability of public employers to provide comp time in lieu of cash payment for overtime work is subject to certain restrictions. What are those restrictions?

240

For most public employees, the maximum amount of comp time that can be banked is capped at ______ hours.

be paid for in cash.

For most public employees, the maximum amount of comp time that can be banked is capped at 240 hours. Any additional overtime must:

within a reasonable period after making the request,

Public employees have the right to use their accrued comp time “___________________” but not if taking the compensatory time off would “unduly disrupt the operations of the public agency.”

“unduly disrupt the operations of the public agency.”

Public employees have the right to use their accrued comp time “within a reasonable period after making the request,” but not if taking the compensatory time off would:

can

Choose: Can / Cannot

Public employers (can/cannot) require that their employees use up accrued comp time against their will

False

True or False:
Public employers cannot require that their employees use up accrued comp time against their will.

cash out

Public employers are also allowed to ________ employees’ accrued comp time if they so choose.

are

Choose: Are/ Are Not

Public employers are also allowed to cash out employees’ accrued comp time if they so choose, and employees terminating their employment (are/are not) entitled to be paid for their unused comp time.

False

True or False:
Public employers are also allowed to cash out employees’ accrued comp time if they so choose, and employees terminating their employment are not entitled to be paid for their unused comp time.

tips, commissions, piecework earnings, bonuses, and merit pay; lodging and meals; pay for holidays, vacations, and sick days; premium pay for working on weekends or night shifts; and profit sharing and benefits—among other forms of payment for work.

Compensation takes many forms. Employees receive not only hourly wages or salaries but also:

Most paid absences (e.g., vacation, holiday, illness)

Discretionary bonuses (e.g., not based on merit or attendance) and prizes

Reimbursements for expenses (e.g., travel, materials)

Employer payments for pensions and other employee benefits

Profit-sharing plans

Many forms of premium pay (e.g., extra pay for working on holidays)

Daily or other non-FLSA required overtime pay

When calculating the regular rate of pay on which overtime pay is based, most forms of compensation must be included. The primary exclusions are the following:

three

Records of wages paid and hours worked must be kept for at least ________ years

Rest periods of twenty minutes or less, Employer-required training, traveling between work sites, Waiting while on duty, Restrictive on-call arrangements

Examples of generally compensable time:

Meal periods free of duties (and usually at least thirty minutes), Voluntary training that is not related to regular duties, that is outside work hours, and that is during time when work is not performed, Traveling from home to work site, Waiting to start work and waiting after being relieved from duty for a definite and useful time, Most on-call duties performed outside the workplace

Examples of non-compensable time:

“suffer or permit.”

There are a few basic principles for determining whether activities are compensable. A starting point is that employers are required to compensate all work that they:

compensable time.

The amount of time actually spent performing work duties—not norms or expectations (e.g., “it usually takes an hour to clean up after the restaurant closes”)—determines ________________.

is not

Choose: IS / IS NOT:
Taking “too long” to carry out some task might need to be addressed as a performance issue, but it (is / is not) an excuse for withholding pay from the employee in violation of the FLSA.

True

True or False:
The Portal-to-Portal Act, in relevant part, amended the FLSA to eliminate employer liability “on account of . . . activities which are preliminary to or postliminary to [principal activities,] which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal [activities].”

are not

Choose: Are / Are Not:
The Portal-to-Portal Act provides that activities that are “preliminary” to principal activities (are / are not) compensable, but are also “principal activities,” and are compensable even if they occur before the beginning of an employee’s shift.

continuous workday rule

Work activities performed afterward would be covered by the “______ __________ ____,” which provides that the Portal-to-Portal Act does not apply “to the extent that activities engaged in by an employee occur after the employee commences to perform the first principal activity on a particular workday.”

Portal-to-Portal

The _____________ Act exempts those activities that are “predominantly . . . spent in [the employee’s] own interests,” meaning those activities that are undertaken “for [the employee’s] own convenience, not being required by the employer and not being necessary for the performance of [the employee’s] duties for the employer.”

Portal-to-Portal

The ____________ Act, however, does not relieve employers from liability for any work of consequence performed for an employer from which the employer derives significant benefit.

de minimis

The __________ doctrine allows employers to disregard otherwise compensable work when only a few seconds or minutes of work beyond the scheduled working hours are in dispute.

the amount of time spent on the extra work, the practical administrative difficulties of recording additional time, the regularity with which the additional work is performed, and the aggregate amount of compensable time.

When evaluating whether work performed by an employee is de minimis, courts typically consider:

Fair Labor Standards Act (FLSA)

The ________ imposes an obligation on the employer “to exercise its control and see that work is not performed if it does not want it to be performed.”

True

True or False:
According to the FLSA, “[The employer’s] duty arises even where the employer has not requested the overtime be performed or does not desire the employee to work, or where the employee fails to report his overtime hours.”

twenty (20)

Break periods of ________ minutes or less are seen as serving the employer’s purposes (e.g., safety, productivity) and as not being sufficiently long to predominantly benefit employees.

thirty (30)

Meal periods of _______ minutes or longer are generally not compensable, provided that employees are substantially relieved of work duties.

compensable

Another principle used by courts is that activities must be sufficiently related to employees’ primary job duties to be deemed __________.

is not

Choose: Is / Is Not
Time spent performing activities that are clearly preliminary (i.e., prior to) or postliminary (i.e., following) the employee’s main activities (is / is not) compensable unless made so by “contract, custom, or practice.”

“walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform;” and

“activities which are preliminary to or postliminary to said principal activity or activities.”

The Portal-to-Portal Act amended the FLSA to exclude from compensable time the following:

True

True or False:
Time spent commuting to and from work, clocking in, and walking to the location at which work tasks are performed is usually not compensable.

Is

Choose: Is / Is Not
What about time spent putting on (“donning”) and taking off (“doffing”) protective clothing and safety equipment? Such time (is / is not) compensable when these activities are “integral and indispensable” parts of employees’ principal work activities—that is, they are required by the nature of the job and not merely matters of personal preference

collective bargaining agreement.

The FLSA allows time spent changing clothes to be excluded from working time when permitted under a ____________________.

executive, administrative, and professional

The most significant FLSA exemptions are for _________________________ employees. These occupations are found in all types of businesses and account for an estimated 20 to 27 percent of the full-time U.S. workforce.

exempt employee

An employee for whom employers do not have to follow FLSA requirements.

nonexempt employee

An employee entitled to the protections of the FLSA.

white-collar exemption

Exemptions for executive, administrative, and professional employees.

executive employee

An employee who manages other employees.

professional employee

An employee whose duties are original and creative

administrative employee

An employee whose work is not directly related to production.

duties test

The examination of the nature of an individual’s duties and responsibilities.

salary basis test

Test to determine whether employees are genuinely paid on a salary basis.

False

True or False:
Everyone paid a salary is an exempt employee.

job description

An employee’s ___________ should clearly support the determination that he or she is an exempt employee.

exempt

An employee’s job description should clearly support the determination that he or she is an ________ employee.

primary duties

Courts have to determine whether the ____________ of an employee are exempt in nature.

primary duties

Although exempt work normally consumes more than half of an exempt employee’s work time, the ___________ of an employee are not necessarily those performed most regularly.

the relative importance of the exempt duties as compared with other types of duties, the employee’s relative freedom from direct supervision, and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

In addition to the share of work time allocated to the activity, other factors to consider to be exempt or nonexempt include:

Is not

Choose: Is / Is Not
Performing office work or brushing shoulders with managers (is / is not) enough to confer exempt status.

discretion and independent judgment

Another important criterion for identifying administrative employees is the “exercise of _____________________ with respect to matters of significance.”

formulating management policies or operating practices, committing the employer in matters that have financial impact, waiving or deviating from established policies without prior approval, providing consultation or expert advice to management, conducting investigations into matters of significance, and representing the employer in the resolution of complaints or disputes.

Activities consistent with exempt status include, but are not limited to:

“predominantly intellectual in character, and . . . requir[e] the consistent exercise of discretion and judgment,”

in a “field of science or learning,” which includes accounting, and

of a type where “specialized academic training is a standard prerequisite for entrance into the profession.”

The defining regulations impose a three-pronged test to determine whether a primary duty qualifies for the exemption: the work must be:

True

True or False:
All three prongs must be satisfied for the learned professional exemption to apply, and FLSA exemptions are to be “narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.”

learned professional exemption

All three prongs must be satisfied for the ___________________ to apply, and FLSA exemptions are to be “narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.”

Learned professionals

Those working for firms that provide professional services to other businesses

less

The Secretary of Labor has recognized that the discretion and judgment standard for the professional exemption is “_____ stringent” than the discretion and independent judgment standard of the administrative exemption.

interpret ; analyze

A review of the most analogous cases suggests that workers apply discretion in the application of advanced knowledge when they ______ and ________ information central to the practice of the profession.

outdoor salesmen

Another significant category of exempt employees.

salary

A _________ is a prespecified sum that an employee is paid for discharging the responsibilities associated with a position.

salaried

Employers certainly benefit when _______, exempt employees put in long hours for no extra pay.

True

True or False:
If employees are not paid on a salary basis, they are not exempt from the FLSA’s requirements, regardless of how obviously executive, administrative, or professional their duties.

pay docking rule

An approach of the DOL to determine whether employees are paid on a salary basis.

pay docking rule

Under the ____________, exempt employees must receive predetermined amounts of pay not subject to reduction due to variations in the quantity or quality of work performed.

exempt

Under the pay docking rule, _________ employees must receive predetermined amounts of pay not subject to reduction due to variations in the quantity or quality of work performed.

True

True or False:
Employers cannot reduce pay of exempt salaried associates for partial-day absences for personal reasons; for time missed due to jury duty, court appearances as a witness, and temporary military leave; and for absences occasioned by the employer or the operating requirements of the business when the employee is otherwise ready and able to work.

Exempt status is not jeopardized by deductions for absences of a day or more for personal reasons, for absences due to sickness or accidents (provided that the employer has a policy for compensating employees when days are lost to sickness or accidents), for unpaid disciplinary suspensions of one or more full days “imposed in good faith for infractions of workplace conduct rules,” for hours not worked in the first and last week of employment, and for periods of unpaid leave under the FMLA.

Exempt status is not jeopardized by deductions for absences of a day or more for personal reasons, for absences due to sickness or accidents (provided that the employer has a policy for compensating employees when days are lost to sickness or accidents), for unpaid disciplinary suspensions of one or more full days “imposed in good faith for infractions of workplace conduct rules,” for hours not worked in the first and last week of employment, and for periods of unpaid leave under the FMLA.

Does not

Choose: Does / Does Not
To be absolutely clear, the pay docking rule (does / does not) make it illegal for an employer to dock the pay of salaried employees. Rather, the consequence of doing so is that those employees may no longer be considered exempt because they are not paid a genuine salary.

True

True or False:
If the employer is found to have an actual practice of making improper deductions, exempt status will be lost for all employees who have the same job classification as the employee bringing the complaint and who work for the same manager(s) responsible for the deductions