Archive | FLSA

A recent US Labor Department investigation confirms the importance of monitoring any off the clock worked performed by employees and of maintaining proper record keeping. An employer was recently investigated by the US Department of Labor’s Wage and Hour Division for possible violation of the overtime and record keeping provisions of the Fair Labor Standards Act (“FLSA”). That employer was alleged to have failed to record, account and pay for all hours worked in a work week. The employer has agreed to pay the overtime back wages due and to take proactive steps to prevent repeat violations. Due to this agreement, the employer is paying nearly $6,000,000 in unpaid overtime wages and damages to 359 employees. In addition, that
employer is agreeing to additional terms such as compliance training.

In light of this, we caution employers of the risks associated with non-exempt employees performing off the clock work such as checking and/or responding to emails after hours, coming in early or staying late to complete work assignments, and/or working through lunches. To the extent this time is recorded and paid in accordance with the Fair Labor Standards Act, such practices are acceptable; however, when these employees are performing this work and are not properly recording and/or receiving payment for this work, then that violates the FLSA. Under the FLSA, employers who violate the law are generally liable to employees for their back wages as well as an amount equal to those back wages in liquidated damages.

Accordingly, the damages associated with FLSA violations add up quickly. In addition, the FLSA requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law. In conjunction with this, we remind employers of the importance of ensuring that their employees are properly classified under the FSLA.

As most employers know, the FLSA provides a computer professional cxemption; however, this tends to be one of the most misunderstood and misapplied exemptions.For an employee to qualify for the computer professional exemption, the following criteria must be met:

1. The employee must be compensated either on a salary or fee basis at a rate not less than $455.00 per week or, if compensated on an hourly basis, at a rate of not less than $27.63 per hour.
2. The employee must be employed as a computer systems analysis, computer programmer, software engineer, or other similarly skilled worker in the computer field performing the duties as described below:
3. The employee’s primary duty must consist of:

• the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or  system functional specifications;
• the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
• the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
• a combination of the aforementioned duties, the performance which requires the same level of skills.

This exemption does not include employees who are engaged in the manufacture or repair of computer hardware and related equipment. Further, employees whose work is highly dependent or facilitated by the use of a computer or computer software programs but who are not primarily engaged in computer systems analysis and programming or other similarly skilled occupations are also not exempt. Additionally, help desk employees are generally not considered to be exempt. Rather, this exemption is very specific and is specifically designed to only apply to certain IT professionals.  Accordingly, we recommend that all employers review their IT departments to ensure proper classification of their employees.

The FLSA creates a narrow exception to the applicability of its minimum wage and overtime provisions for unpaid internships when certain enumerated criteria are satisfied. If these strict criteria are not satisfied, then the position is not exempt from the overtime and minimum age requirements of the FLSA. Therefore, those individuals would be considered normal employees and must be compensated in accordance with the FLSA. These criteria are as follows:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2.  The internship experience is for the benefit of the intern;
3.  The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

These criteria have been provided specific meanings and uses by the FLSA and the applicable case law; therefore, we recommend that employers secure legal advice as to whether these criteria are satisfied in their specific circumstances. However, one rule to keep in mind is that if the employer is using the intern as a substitute for a regular worker, then it is quite likely that the intern would be subject to the minimum wage and overtime provisions of the FLSA.