Employment Law - Wage And Hour Law

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Fair Labor Standards Act (FLSA) (Requires)

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All non-exempt employees must
1) Be paid minimum wage
2) Overtime: Be paid time and a half for any work over 40 hours
3) Record keeping: there are record keeping requirements for the employers

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FLSA Covered Employees

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The FLSA has the broadest definition of employee.

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FLSA Covered Employees - Independent contractors

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- not covered under FLSA. There is a totality of the circumstances test based on six factors used to determine if someone is an independent contractor.

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FLSA Covered Employees - Independent contractors - Traditional factors

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1) Degree of employer’s right to control the manner in which the work is performed: MOST IMPORTANT
2) The employee’s opportunity for profit or loss depending on his managerial skill
3) Employee’s investment in equipment or materials required for their task, or their employment of helpers
4) Whether the service renders requires a special skill: More specialized means more likely to be IC
5) The degree of permanence of the working relationship
6) Whether the service rendered is an integral part of the employer’s business.

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FLSA Covered Employees - Independent contractors - ECONOMIC REALITIES TEST

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USED WHEN TRADITIONAL DOESN’T GIVE ANSWER. Is THE PERSON RUNNING THEIR OWN BUSINESS AND COMING IN TO WORK FOR THE BUSINESS FOR A LIMITED (NON-PERMENANT) BASIS.

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FLSA Covered Employees - Prisoners

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Can be included under FLSA, but only if they are working for a private employer not under prison programs.

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FLSA Covered Employees - Undocumented workers

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Can still be covered, or at least are not excluded because they are undocumented.

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FLSA Covered Employees - Interns

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For interns to be exempt the following six criteria are considered:
1) Training is similar to vocational school
2) Training is for the benefit of the trainee
3) Trainee doesn’t displace a regular employee, but works under close supervision
4) Employer does not derive any immediate advantage from the activities of the trainee, and the intern may even impede
5) Trainee is not necessarily entitled to a job after the training
6) Employer and trainee both understand that the trainee is not entitled to wages

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FLSA Exempt employee categories (5)

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1) Executive
2) Professionals
3) Administrative
4) Outside Sales
5) Highly compensated

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FLSA Executive exemption

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- An employee must have the primary duty of managing the enterprise of a recognized department or subdivision.
- Must:
a. Have authority to hire and fire other employees or
b. Make recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees which must be given particular weight.

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FLSA Professional exception categories (2)

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1) Learned professional
2) Creative professional

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FLSA Professional exception - Learned professional

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Employee’s work must
i. Require advanced knowledge: This cannot be attained at the high school level, and must be acquired by “prolonged course of specialized intellectual instruction.”
ii. Be predominately intellectual in nature
iii. Require consistent exercise of discretion and judgment instead of routine and manual work

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FLSA Professional exception - Creative professional

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The primary duties must require invention imagination, originality or talent in a recognized field of artistic endeavor.

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FLSA Administrative Exception

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1) An employee’s primary duty must be the performance of office or non- manual work directly related to management policies or general business operations of the employer or the employer’s customers
2) Employee must exercise discretion and independent judgment with respect to matters of significance.

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Examples of Jobs that may meet FLSA Administrative Exception

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i. Insurance claim adjusters
ii. Employees in the financial services industry
iii. Executive assistants to a business owner or senior executive of a large business
iv. Human resources managers
v. Purchasing agents
vi. buyers

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Examples of Jobs that don't meet FLSA Administrative Exception

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i. Employees that grade lumber
ii. Comparison shoppers
iii. Public sectors inspectors

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FLSA Outside Sales Exception

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Must have the primary duty for making sales.
- Employee must be customarily and regularly engaged away from the employer’s place of business.
- Sales: Any sale, exchange, contract to sell, consignment for sales, shipment for sale or other disposition, including transfer of title to tangible property; or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.

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FLSA highly compensated exception

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make more than 100K a year.

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Compensable Time

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(IBP v. Alvarez)
- Anything after the work day starts before the workday ends is compensable, including the time it takes to don and remove protective gear.

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Pay Difference

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(Wernsing case)
As long as there is a reason that is not discriminatory, then it doesn’t have to be a good difference for a pay difference.