cpp chapter 2 notes (1)

Federal and State Wage-Hour Laws

1. Fair Labor Standards Act (FLSA)

  • Regulates:

    • Minimum wage and overtime rates

    • Recordkeeping

    • Child labor

    • Equal pay for equal work

  • Does not regulate:

    • Paid time off and meals/breaks

    • Pay dates or final payment due dates

    • Restriction of hours for employees over 16

  • Federal/State Relationships:

    • Rule favoring the employee prevails

    • Wages considered "unpaid" unless paid on regular payday, violating minimum wage and overtime pay requirements

2. Employer and Employee Coverage

  • Coverage Types under FLSA:

    • Enterprise Coverage: Covered if:

      • At least 2 employees work in jobs essential to interstate commerce or production of goods for interstate commerce

      • Annual gross sales of at least $500k

      • Businesses like hospitals, schools are covered regardless of sales

    • Individual Employee Coverage:

      • Employee is covered if engaged in interstate commerce or production of goods for interstate commerce

      • Exemptions for "Mom and Pop" businesses employing only immediate family members

Exempt and Non-Exempt Employees

3. Exempt Employees

  • Not covered by minimum wage, overtime, or certain recordkeeping requirements

  • White Collar Exemption: Includes:

    • Executive

    • Administrative

    • Professional

    • Computer-related professional

    • Outside sales

  • Non-exempt employees must be paid at least minimum wage and overtime for hours over 40 in a workweek

4. White Collar Exemption Details

  • Tests for Exempt Status:

    • Evaluates actual duties and responsibilities over job titles

    • Salary Requirement: Must earn at least $684 a week

  • States laws and collective bargaining agreements can impose higher minimums

5. Specific Exemption Rules

  • Administrative Employees:

    • Primary duty: office/non-manual work related to management

    • Discretion and independent judgment exercised

  • Executive Employees:

    • Primary duty: management of enterprise or department

    • Customarily directs the work of 2 or more full-time employees

  • Professional Employees:

    • Primary duty requiring advanced knowledge typically gained through prolonged instruction

  • Computer Related Professionals:

    • Must meet primary duties test and earn at least $684/week or $27.63/hour for hourly paid workers

6. Additional Guidelines for Exempt Employees

  • Salary and Docking Rights:

    • Exempt employees don’t need to be paid for weeks with no work

    • Allowed to dock for full-day absences

    • Improper docking leads to loss of exemption

7. Minimum Wage and Equal Pay

  • Current Federal Minimum Wage: $7.25

    • Lower wage for employees under 20: $4.25 for first 90 days

    • Contracts with federal government: $12.90 - $17.20 depending on contract type

  • Equal Pay Act: mandates equal pay for equal work

8. Overtime Pay Requirements

  • Non-exempt employees must be paid 1.5 times the regular rate for hours over 40 in a workweek.

  • Workweek Definition: Regularly recurring 7 consecutive 24-hour periods.

  • Hospitals may utilize the 8/80 Rule for overtime calculation

9. Additional Considerations

  • Travel Time:

    • Travel between job sites must be paid

    • Overall day travel for one-day assignments can be paid

    • Fluctuating workweeks: guaranteed salary and calculated hourly rate based on hours worked.

10. Enforcement and Penalties

  • Majority of issues arise from employee complaints

  • Back pay and damages awarded

  • Statute of Limitations: 2 years, can extend to 3 if willful

  • Penalties for violations: can involve fines and/or imprisonment.