The Fair Labor Standards Act (FLSA) was passed in 1938 to help end the depression by ending child labor, establishing a floor on wages, and providing an incentive to employers to spread the work by requiring overtime pay. Despite its long time on the books, it’s the law most frequently violated and also one the plaintiff’s bar has recently targeted. Ten ways to protect yourself include:

1. Post a notice advising the staff of coverage under the act. If you don’t have a copy, contact the U.S. Department of Labor, Wage & Hour Division, which will furnish you with one.

2. Maintain required records for all staff, including the name of the employee, home address, date of birth, time of day the work week begins and ends and, importantly, the precise time an employee began and quit working. The record should also clearly spell out the hourly rate that an employee receives, including overtime hours worked. Any deductions from wages should be shown.

3. Review which employees are paid a salary. In professional offices and small businesses, it’s common practice to treat all staff as salaried. This is a mistake, and illegal under the Act. If an employee is non-exempt, and thus entitled to minimum wage and overtime, they must be paid on an hourly rate. Consequently, we strongly recommend that if you currently have all of your staff on salary, you convert the non-exempt staff to an hourly rate. You choose to pay what you call a “salary” (meaning no deductions for lunch or partial day absences) as long as you keep time records and pay overtime for any employee not exempt under the FLSA.

4. Pay only executive, administrative and professional employees on a salary. Typically, only the office managers, professional employees like accountants (but not bookkeepers), supervisors who spend over half their time supervising, and those making decisions for the entire organization as administrative employees will be exempt. Ask your labor counsel to advise on this to avoid serious potential liability.

5. Pay a fixed, predetermined salary to exempt employees without improper deductions to keep the employees’ exempt status. The only deductions allowed:

A. Deductions may be made when the employee is absent from work for a full day or more for personal reasons, other than sickness or accident. Thus, if an employee is absent for a day or longer to handle personal affairs, his or her salary status will not be affected if deductions are made from his salary for such absences.

B. Deductions may also be made for absences of a full day or more occasioned by sickness or disability if the deduction is made according to a sick leave policy.

So, if you have a sick leave plan or vacation plan, you can use time from those plans to make up the difference in salary. Once the leave time is exhausted, you can continue to make deductions for absences of a day or more but not for absences when the employee works at least part of the day.

6. For hourly employees, keep accurate time records of all “hours worked.” Remember, it’s the employer’s burden to see that accurate records of hours worked are maintained. You cannot transfer this burden to the employee; however, you can ask him to manually record his hours.

7. Pay for all “hours worked” even if you did not request or approve the work. It’s not enough that you did not tell the employee to work those hours or even that he worked those hours without your knowledge–all that’s required is that “you knew the hours were worked or should have known that the hours were worked.” If you’re ever sued for back wages by the Department of Labor or a disgruntled employee, all he would need to do is show that he worked some hours for which he was not properly compensated. If he meets this burden, the burden shifts to the employer to produce records to prove the precise number of hours worked. If no records exist, than an award of back wages will be made based mainly on the testimony of the disgruntled employee. So, if you do not maintain good records, it’s the employee’s word against yours, and in a jury trial, which party do you think the jury normally believes?

8. Avoid paying for additional “hours worked.” In the wage and hour audits of professional offices that we’ve conducted, perhaps the most frequent violation of the “hours worked” standard is staff members working before their shift begins, after it ends, and during their lunchtime. If the employee answers the phone or organizes files and work, this is compensable time. Under the government standards, this would be “hours worked” even though the employee may have been told not to begin work until a later time or told not to work on lunch breaks

9. Don’t let employees eat lunch in work areas. Any interruption of the lunch break, even one phone call, makes the entire lunch break “hours worked” and must be paid. Also, lunch or other breaks must be for at least 30 minutes to be unpaid.

10. Don’t hire minors (under age 18) without checking on restrictions on the hours the minor can work and restrictions on the type of work allowed.

Keeping informed on the FLSA, auditing your practices, and confirming with your employment attorney which employees may be exempt, is simply part of good “risk management”–and good business.

Mary Jarrett is an attorney at Coffman Coleman Andrews & Grogan,
P.A. She can be reached at 904-389-5161 or by Email at
mjarrett@ccaglaborlaw.com.