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Most Common Fair Labor Standards Act

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Sidney F. Lewis V Jones Walker LLP

Course Number: 0200141210 1 Hour of CLE

December 10, 2014 2:30 – 3:30 p.m.

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Labor & Employment

Tulane University Law School, J.D., 1985

University of Alabama, B.A., 1982, with honors

Louisiana, 1985

5th Cir., 1986

11th Cir. 1997

E.D. La., 1986

M.D. La., 1986

W.D. La., 1987

N.D. Miss., 1988

Professionals

Bio

A partner and practice group leader of Jones Walker's Labor & Employment Practice

Group, Sid Lewis consults and advises management and human resources personnel

with respect to employment and labor laws in all industries throughout the United

States, including retail, hospitality, healthcare, manufacturing, and service industries.

A majority of his work involves general advice to employers on a variety of

employment situations, including discipline, terminations, applications, leave

requests, transfers, noncompete agreements, trade secret information, wage

payments, wage and hour laws, family and medical leave, disabilities, workers'

compensation, discrimination complaints, workplace harassment, internal

investigations, documentation, policy reviews, preventative counseling, supervisor

training, and early litigation negotiation. He performs approximately 60–70 training

and educational seminars each year for supervisors and associations. The training

centers primarily on federal and state employment laws, as well as effective

supervision techniques designed to avoid litigation and promote a union-free

environment.

Mr. Lewis has successfully defended hundreds of state and federal lawsuits involving

federal and state employment claims. He regularly handles Equal Employment

Opportunity Commission and National Labor Relations Board charges on behalf of

employers.

In the labor sector, Mr. Lewis has represented companies throughout the United

States in union organizing campaigns. As labor counsel and/or chief spokesman, he

also represents companies in contract negotiations and has handled labor arbitrations

in a variety of industries.

Mr. Lewis is a two-time recipient of the Individual Citation Award given by the

International Association of Personnel in Employment Security, Louisiana Chapter,

and a frequent speaker and moderator for personnel associations and trade groups

throughout the Southeast. He is currently Chairman of the Labor and Employment

Committee for the New Orleans Bar Association.

Noteworthy

Listed in The Best Lawyers in America® 2015 (Copyright 2014 by

Woodward/White, Inc., Aiken, SC) in the area of Employment Law -

Management and Labor Law - Management (listed annually since 2006)

Recognized by "Chambers USA – America’s Leading Lawyers for

Business" in the area of Labor & Employment (listed annually since 2003)

Two-time recipient of the Individual Citation Award, given by the International

Partner

201 St. Charles Ave

New Orleans, LA 70170-5100

504.582.8352 tel

504.589.8352 fax

slewis@joneswalker.com

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Association of Personnel in Employment Security, Louisiana Chapter

Listed in the 2014 edition of Louisiana Super Lawyers in the area of

Employment & Labor (listed annually since 2007)

Recognized as a 2013 Top Lawyer by New Orleans Magazine

AV Preeminent® Peer Review Rating in Martindale-Hubbell

News

One Hundred Twenty-Nine Attorneys Listed in The Best Lawyers in America®

2015

Fifty-two Jones Walker Attorneys Rank in Chambers USA 2014

Fifty-Two Jones Walker Attorneys Named Louisiana Super Lawyers

One Hundred Twenty-Seven Attorneys Listed in The Best Lawyers in

America® 2014

Lewis Quoted in CityBusiness Article on Religious Discrimination in the

Workplace

Fifty-One Jones Walker Attorneys Named Louisiana Super Lawyers

More

Presentations

2014 Jones Walker Labor & Employment Seminars, September 25, 2014 and

October 16, 2014

"Human Resources Legal Update", September 12, 2013, PIAA's Technology,

Human Resources, and Finance Workshop

Gulfport Labor & Employment Seminar, August 22, 2013

Baton Rouge Labor & Employment Seminar, June 25, 2013

Goldman Sachs, 10,000 Small Businesses – Legal Clinic, 2013

New Orleans Labor & Employment Seminar, May 8, 2013

More

Publications

"Supervisors Play Crucial Role in Employee Relations"

New Orleans CityBusiness, March 31, 2008

"Precise Employee Handbooks Save Business Headaches"

New Orleans CityBusiness, March 23, 2008

"Employee Wage Laws Present Minefield to Small Businesses"

New Orleans CityBusiness, January 29, 2008

"The Employment Self Audit: Fix It Yourself Before You Are Sued"

Baton Rouge Law Journal, October 2003

"What You Don't Know Can Hurt You"

Textile Rental, February 2002

"Operators Need to be Wary of Organized Labor"

Workboat Magazine, Chapter 20, March 2000

"Employment Hot Spots for the New Millennium"

Textile Rental, Chapter 72, 2000

Memberships

Louisiana State Bar Association

New Orleans Bar Association

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Sidney F. Lewis Direct Dial 504-582-8352 Direct Fax 504-589-8352 slewis@joneswalker.com

THE FAIR LABOR STANDARDS ACT COMMON PROBLEMS

THIS OUTLINE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT DESIGNED TO RENDER ANY LEGAL OR PROFESSIONAL ADVICE. THESE WRITTEN MATERIALS SHOULD NOT BE USED AS A SUBSTITUTE FOR PROFESSIONAL SERVICES. IF LEGAL OR PROFESSIONAL ADVICE IS NEEDED, PLEASE CONSULT WITH YOUR ATTORNEY OR PROFESSIONAL ADVISOR.

The Fair Labor Standards Act mandates two things - - the payment of minimum wage for all hours actually worked and the proper payment of overtime after forty hours in a seven day workweek. Minimum wage and overtime are non-waivable. If the employee does not want the minimum wage and overtime that is owed, the federal government will make the employer write the check to them. You have to pay it one way or the other. In this outline we discuss the ten most common mistakes employers make which result in underpayments to employees in minimum wage and overtime.

I. Exempt Employees.

Misclassifying non-exempt employees as exempt is the most oft-violated provision of the Fair Labor Standards Act. The overtime exemption is available to, among others, the following classifications:

A. Executive Employee

1. The employee must be compensated on a salary basis at a rate not less than $455 per week;

2. The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;

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3. The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and

4. The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

NOTE: “Dirty Hands”

NOTE: Highly Compensated Employee

B. Administrative Employee

1. The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;

2. The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

3. The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

NOTE: Sales roles

C. Professional Employee

1. The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;

2. The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;

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3. The advanced knowledge must be in a field of science or learning; and

4. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

NOTE: OTJ Training

D. Computer Employee

1. The employee must be compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;

2. The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties 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 of which requires the same level of skills; or

• A combination of the aforementioned duties, the performance of which requires the same level of skills.

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E. Outside Sales Employee

1. The employee’s primary duty must be making sales (as defined in the FLSA), 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; and

2. The employee must be customarily and regularly engaged away from the employer’s place or places of business.

II. Salary Test.

To be exempt, an employee must also be paid a guaranteed salary each and every week.

A. Prohibited Deductions

1. The employee’s absence for less than a whole day (except in the case of intermittent leave or a reduced leave schedule covered by the Family and Medical Leave Act);

2. Absences caused by the employer or the operating requirements of the employer’s business;

3. A reduction in the quantity or quality of the employee’s work;

4. Jury duty, attendance as a witness, or temporary military leave (employers are permitted to offset fee or other compensation received by employees in conjunction with these activities against the salary owed for that particular week or pay period); and

B. Permitted Deductions.

Some salary deductions are expressly permitted by the FLSA and do not destroy an employee’s exemption from overtime. These include:

1. Disciplinary suspensions of one or more full days (for violations of safety rules of major significance or workplace conduct rule infractions).

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2. Deductions for an absence of a day or more for personal reasons other than sickness or accident;

3. Deductions for an absence of a day or more for medical reasons, if in accordance with a bona fide leave plan, policy, or practice of providing compensation for salary lost due to illness (for instance, an employer may deduct for whole-day absences once an employee has exhausted all paid sick leave);

4. Deductions for FMLA-qualifying leave;

C. The effect of making a deduction, which is not permitted under the regulations, will be decided based on the particular circumstances of each case. If the deductions were generally made and were due to the unavailability of work, the exemption will e unavailable during the whole period when the deductions were made. If the prohibited deduction is inadvertent or is made for a reason other than lack of work, the exemption will not be lost if the employer reimburses the employee and promises to comply with the law in the future.

III. FWW (Fluctuating Workweek) Method

A. Treating employees as salaried non-exempt has its dangers. If an employer wants to treat an employee as salaried non-exempt:

1. Deductions are as limited as a salaried exempt employee; and

2. You have to have a prior written agreement with the employee regarding the exemption. A standard agreement form would look as follows:

Fluctuating Workweek Pay Plan

This memorandum outlines the method by which non-exempt employees whose hours fluctuate from week to week are compensated. You will receive a regular weekly salary regardless of the number of hours you work. If you work more than 40 hours in a workweek, you will receive overtime compensation for each hour worked in excess of 40 that week at a rate of one-half the regular rate of pay for that week. Your regular rate of pay for each such week will be determined by dividing the total number of hours you worked in that week into your regular weekly salary. If the number of hours you work in a workweek are such that your

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regular weekly salary is not sufficient to pay you at least the minimum hourly wage for all hours worked, you will be paid the difference between such amount and your regular weekly salary. In addition you will receive overtime compensation for each hour worked in excess of 40 that week at a rate of one-half the minimum hourly wage.

* * * * * * * * * *

I acknowledge my receipt of the above memorandum. I have read this memorandum and understand its contents.

__________________________________ Print Employee’s Name

__________________________________ Employee’s Signature

IV. Internships

A. According to the DOL, internships in the “for-profit” sector will be viewed as employment, unless the position meets the following criteria:

• 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.

• The internship experience is for the benefit of the intern.

• The intern does not displace regular employees, but works under close supervision of existing staff.

• 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.

• The intern is not necessarily entitled to a job at the conclusion of the internship.

• The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

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If all the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern. If however, even one of these criteria goes unmet, the intern must receive at least the minimum wage as well as overtime compensation for hours worked over 40 in a workweek. V. Treating Employees As Independent Contractors.

A. Right to Control Test (Basic Common Law Test Used by Some States)

The "right of control" test is the traditional common law test. Under this test, the essential question is whether the organization has the ability or right to dictate the process or "how to" of the work. If the enterprise retains control over the "how to," the worker is an employee. Conversely, if the enterprise relinquishes dominion over the process of the work and instead focuses on defining the completed process or task, the working relationship will be characterized as an independent contractor arrangement.

B. The factors considered in the "right to control" test are:

1. The employer’s control over details of the work;

2. Whether the individual’s business is a distinct occupation or business;

3. Whether the occupation is usually done without supervision;

4. The level of skill required by the occupation;

5. Whether the worker provides tools, supplies, and place of work;

6. The length of time the service is provided;

7. Whether the employee is paid by the job rather than by day or hour;

8. Whether the work is a part of the regular business of the employer;

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9. The intent of the parties to form an independent contractor relationship; and,

10. Whether the hiring entity is a business.

Using these factors, the court will determine whether, under the common law test, the worker is sufficiently "independent" to justify independent contractor status.

C. The IRS Test

Under federal law, employers are responsible for administering three types of employment taxes for employees: employer and employee Social Security contributions; employer contributions to the unemployment fund, and employee personal income tax withholding.

If the IRS determines that workers classified as independent contractors are actually employees, the employer is liable for all unpaid FICA, FUTA, and income taxes. However, absent an employer’s "intentional disregard of its withholding obligation," the employer’s liability is limited to 1.5 percent (or 3 percent if no information returns were filed) of the wages subject to income tax withholding. The employer, however, is still liable for the full portion of the FICA and FUTA taxes at the normal rates.

The IRS may also impose personal liability upon any responsible person with authority over the financial affairs of the business for 100 percent of the total amount of taxes not collected, pursuant to the so-called, "100 percent penalty." Additionally, the IRS may impose penalties for failure to file a tax return. Interest may also be charged to the employer at the statutory rate.

To avoid such liability, employers should be sure to realistically apply the factors outlined below. The mere recitation of the factors in a job description or contract will not supersede the actual working arrangement. Furthermore, employers should note that the Tax Reform Act of 1986 substantially restricted the exemption for "technical service employees" which includes engineers, designers, drafters, computer programmers, system analysts and other similarly skilled personnel who are engaged in similar lines of work who render

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services to clients of the technical service firms. In order to qualify for this exemption, an employer must meet all or most of the factors set forth below.

The IRS Test to determine independent contractor status is much more intensive than the common law test. It considers the following factors: 1. Whether the individual is required to follow instructions;

2. The amount of training relating to particular job;

3. The integration of the job into the employer’s business;

4. Whether the services are rendered personally by the individual;

5. Whether the employer hires, fires and pays assistants;

6. The existence of a continuing relationship;

7. The establishment of a set number of work hours;

8. Whether the individual devotes substantially full time to the job;

9. Whether the individual works on the employer’s premises;

10. Whether the employer sets the sequence of work;

11. Whether the individual submits regular written reports;

12. Whether the individual is paid by time rather than by the project;

13. Whether the individual is reimbursed for expenses;

14. Whether the individual furnishes the necessary tools and materials;

15. Whether the individual provides the facilities for performing services;

16. Whether the individual can realize profit or loss;

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17. Whether the individual works for more than one firm at a time;

18. Whether the individual’s services are available to the general public;

19. Whether the employer has the right to discharge the individual; and

20. Whether the individual has the right to terminate the relationship.

VI. Bonuses and Other Payments Included in Regular Rate

A. Includible in earnings.—Incentive, production and attendance bonuses are part of employees’ earnings which must be included in their regular rates when figuring the overtime pay due them under the FLSA, whether pay is on hourly, daily or weekly basis. To be excluded from the overtime pay calculations, bonuses must not be paid pursuant to a "contract, agreement or promise causing the employee to expect such payments regularly," a limitation found in Section 7(e)(3)(a). For this reason, bonuses fail to qualify for exclusion when they are promised to newly hired employees, when they are embodied in union contracts, and when they are announced to employees to induce them to work more steadily, rapidly or efficiently or to remain with the firm.

B. Types of bonuses.—The types of incentive and production bonuses which must be taken into consideration when figuring overtime pay, because of a contract, agreement or promise, are those based on:

1. Attendance. 2. Production by individual employees. 3. Production by a group of employees. 4. Quality of work. 5. Accuracy of work. 6. Length-of-service. 7. Cooperation. 8. Courtesy. 9. Efficiency. 10. Number of overtime hours worked.

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C. Increase in overtime pay.—The requirement that incentive, production, and attendance bonuses be included in computation of an employee’s regular hourly rate causes a proportionate increase in his overtime pay, since the regular rate is the basis of FLSA overtime compensation.

D. Percentage-of-wage bonus simplifies computations.—All employers interested in bonuses should familiarize themselves with percentage-of-wage bonuses. They will be fully protected from additional liability for overtime pay under the FLSA if they compute a bonus, whatever it may be called, upon a percentage of the individual employee’s total earnings, both straight time and overtime. Such a bonus need not be included as part of the employee’s earnings when computing his regular rate because overtime has already been paid on the bonus. The portion of the bonus based on overtime earnings is payment of overtime on the portion of the bonus based on straight-time earnings.

E. Other Payments to be Included

1. Commissions 2. Shift differentials 3. Value of non-monetary awards (cost to employer) 4. On-call pay 5. Premium pay for long hours IF less than 1 ½ times regular rate

VII. Calculating “Working Time.”

Hours worked generally consist of all time spent in physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.

A. "Off-the-Clock" Time

According to the regulations, hours worked include not just time spent at the employer’s request but also time that the employee is suffered to work. 29 C.F.R. § 785.11. Hours worked by employees who voluntarily continue to work after their shift ends must be considered

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overtime so long as the employer knew or had reason to know that the time was spent. (Continued violations may be a discipline problem.) Likewise, work performed away from the job site, such as work performed at home, is also considered "hours worked."

B. Preliminary and Postliminary Activities

A number of cases have recently interpreted the Portal to Portal Act, 29 U.S.C. §§ 521-262, which excludes from "working time" time spent traveling to and from work, and certain pre-and post-work activities. Activities falling within the language of the statute are compensable, however, if they are an integral and indispensable part of the employee’s "principal" activities. The FLSA also excludes certain clothes-changing and washing time at the beginning or ending of the workday for parties to a collective bargaining agreement.

Donning protective gear such as safety glasses, ear plugs and hard hats takes only a few seconds and requires so little effort that it does not qualify as work. Safety shoes can be worn to and from work and require little greater effort to don than any other shoe. Accordingly, time spent putting on these shoes is not work. But, special protective gear, which is heavy and cumbersome, requiring physical exertion, time and concentration is in a different category. The necessity to combine several protective items and the need to regularly clean the items is also relevant. The time spent putting on this kind of equipment is compensable.

C. Rest and Meal Periods

1. Rest periods are considered as hours worked by the Department of Labor. 29 C.F.R. § 785.18. However, bona fide meal periods are not considered hours worked if the employee is completely relieved from duty and is not required to perform any duties whether inactive or active. A meal period may be excluded without requiring the employee to leave the premises. 29 C.F.R. § 785.19(a), (b).

2. Employees who are required to eat at their desks or at their machines are considered working. Rest periods must be counted as hours worked, unless they are unusually long and the

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employee is allowed to leave the premises with sufficient time to attend to personal matters.

D. Travel Time

1. Ordinary home to work and return travel, whether at fixed or different worksites, not work time

2. Traveling substantial distance to customer worksite after hours for an emergency is work time

3. Travel for special one-day assignments in another city is work time, excluding travel to the airport, train station, or bus depot and any bona fide meal periods.

4. Travel all in a day’s work, such as from one worksite to another as part of his principal activity, is work time.

5. Travel from a designated meeting place, such as a place to receive instructions or pick up tools, to the worksite is work time.

6. Return travel from a worksite to the employer’s premises or meeting place is work time, but return travel home is not

7. Travel away from employee’s home for an overnight stay is work time when it cuts across the employee’s normal work schedule

8. Travel that cuts across normal work schedule is work time even on non-work days

9. Travel away from home outside regular work hours as a passenger on an airplane, train, boat, bus, or automobile is not considered work time by the DOL

VIII. Training.

A. According to the Department of Labor, an employer must satisfy each element of the following six-part test to exclude training from work time:

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1. The training is similar to that offered in a vocational school notwithstanding that it involves the actual operation of the employer’s facilities;

2. Training is for the benefit of the trainee;

3. Trainees to not displace regular employees but rather are closely observed while working;

4. The employer providing training derives no immediate advantage from the trainees’ activities;

5. Trainees not necessarily guaranteed a job at the end of the training program; and

6. Trainees and employer agree that the trainees are not entitled to wages.

IX. Volunteers.

A. Under the FLSA, individuals may not volunteer services to private sector for-profit employers. On the other hand, in the vast majority of circumstances, individuals can volunteer services to public sector employers. When Congress amended the FLSA in 1985, it made clear that people are allowed to volunteer their services to public agencies and their community with but one exception – public sector employers may not allow their employees to volunteer, without compensation, additional time to do the same work for which they are employed.

B. The DOL also provides examples of volunteers who are not deemed employees under the FLSA: students who volunteer at nursing homes and hospitals, parents who assist at their children’s schools, and camp counselors who participate in youth programs.

1. During the period of 2001 to 2008, the Division opined on the volunteer status present in the following circumstances:

• Youth services club employees were volunteers when chaperoning cultural and sporting field trips or bingo games outside working hours.

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• Volunteer work in a Habitat for Humanity project sponsored but not required by the employer was not compensable.

• School staff members who volunteered as athletic coaches and received a small stipend for coaching qualified as volunteers.

• Volunteer “peer reviewers” who performed accreditation evaluations for membership-based religious organization were volunteers not covered by the FLSA.

• The time university employees spent outside normal working hours volunteering at an annual run hosted by the university was not compensable, unless the volunteer work was similar to their regular work duties.

2. The Division found volunteer status not present in the following scenarios:

• Although a technology and media teacher who volunteered as a school baseball coach was not covered by the FLSA, an individual employed to do computer-related work who volunteered to repair computers was covered.

• Nurses performing community service activities under the direction of their employer could not classify these activities as volunteer services.

3. According to the DOL, individuals who are engaged in activities that are an integral part of a for-profit employer’s business, even if performed for a charitable purpose, will ordinarily be deemed employees rather than volunteers.

X. Child Labor Violations.

A. The FLSA is best known for its minimum wage and overtime provisions

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B. The FLSA also prohibits employers from employing "any oppressive child labor in commerce or in the production of goods for commerce or in any enterprise engaged in commerce or in the production of goods for commerce." 29 U.S.C. § 212(c).

C. Using this authority, the Department of Labor has promulgated an extensive set of rules and regulations defining what the DOL feels is "oppressive child labor."

D. Knowledge of these regulations is very important because an employer who violates § 212 "shall be subject to a civil penalty of not to exceed $10,000 for each employee who was the subject of such a violation." 29 U.S.C. § 216(3) (emphasis added).

E. The Child Labor Regulations (29 CFR Part 570)

1. What is prohibited

• Employment of persons under 18 in hazardous occupations.

• Employment of persons under 16 during periods which interferes with schooling or their health and well-being.

F. Employees under 18 may not be employed in seventeen (17) Hazardous Occupations.

1. Occupations in or about plants or establishments manufacturing or storing explosives or articles containing explosive components (Order 1).

2. Occupations of motor-vehicle driver and outside helper (Order 2).

3. Coal-mine occupations (Order 3).

4. Logging occupations and occupations in the operation of any sawmill, lath mill, single mill, or cooperage stock mill (Order 4).

5. Occupations involved in the operation of power driven woodworking machines (Order 5).

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6. Exposure to radioactive substances and to ionizing radiations (Order 6).

7. Occupations involved in the operation of power-driven hoisting apparatus (Order 7).

8. Occupations involved in the operations of power-driven metal forming, punching, and shearing machines (Order 8).

9. Occupations in connection with mining, other than coal (Order 9).

10. Occupations in the operation of power-driven meat processing machines and occupations involving slaughtering, meat packing or processing, or rendering (Order 10).

11. Occupations involved in the operation of bakery machines (Order 11).

12. Occupations involved in the operation of paper product machines (Order 12).

13. Occupations involved in the manufacture of brick, tile, and kindred products (Order 13).

14. Occupations involved in the operations of circular saws, band saws, and guillotine shears (Order 14).

15. Occupations involved in the wrecking, demolition, and shipbreaking operations (Order 15).

16. Occupations in roofing operations (Order 16).

17. Occupations in excavation operations (Order 17).

G. Persons between 14 and 16 cannot be employed in certain occupations such as manufacturing, mining, or processing occupations; operator or service of motor vehicles; construction; and warehousing (5570.33).

H. Persons between 14 and 16 may be employed in retail, food service, and gasoline service establishments (§ 570.34).

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I. Persons between 14 and 16 may only be employed during the following periods:

1. Outside school hours;

2. Not more than 40 hours in any one (1) week when school is not in session;

3. Not more than 18 hours in any one (1) week when school is in session;

4. Not more than 8 hours in any one (1) day when school is not in session;

5. Not more than 3 hours in any one (1) day when school is in session;

6. Between 7:00 a.m. and 7:00 p.m. in any one (1) day except during the summer (June 1 through Labor Day) when the evening hours is 9:00 p.m. (§ 570.35(a)). [There is a provision for obtaining an exemption if the principal of the school certifies that the work periods will not interfere with the minor’s schooling.]

J. An employer has the option of obtaining a federal or state certificate certifying that a particular minor is not employed as oppressive child labor, and as long as the certificate is current, the employer may rely on the certificate’s certification that "the minor is at least the minimum age for the occupation in which he is to be employed." (§ 570.s).

XI. Record Keeping.

A. Ensure That Your Records Are Accurate

To comply with the FLSA, an employer must ensure that the records it keeps contain accurate information about hours worked. An employer must also ensure that its employees are being paid for their hours worked and are not working “off the clock”. An employer can obtain this information only by careful and contemporary documentation by each of its timekeepers. Auditors should review the

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company’s timekeeping policies, procedures, and practices to ensure that accurate information is captured and recorded.

Employers often inadvertently violate wage and hour laws because their employees do not keep accurate records of the actual time they work. Common danger signs of poor employer timekeeping practices are (1) employees who record eight hours of work for every day, regardless of the amount of time they actually spend; (2) nonexempt employees who arrive at work early on their own initiative and begin working before their scheduled starting times without prior approval; (3) nonexempt employees who determine for themselves whether to work overtime; and (4) nonexempt employees who take work home in the evenings without prior approval “just to catch up.” Additionally, when company management emphasizes productivity at the same time it emphasizes overtime cost control, supervisors may be tempted to tell employees not to write down extra hours. Isolated locations where employees work with minimal supervision are also a potential compliance problem. For example, employees who are genuinely responsible and dedicated may work through lunch hours, no take breaks, and not write down overtime hours, without realizing that they are exposing the company to unwanted overtime liability. The following tips should help employers avoid problems.

Required Information Term Maintenance Form 1. Basic records containing the following employee information: name in full; home address; date of birth (if under 19); sex; occupation; time and day when work begins; regular rate of pay; hours worked each day in each work week, total additions to and deductions from pay, total wages paid each period, date of payment, and retroactive wage payment under government supervision; payroll records; individual contracts or collective bargaining agreements; applicable certificates and notices of Wage-Hour administrator; sales and purchase records.

Three years. No particular form specified. (Microfilm is permissible if employer is willing to provide adequate viewing facilities and make any extension, recomputation, or transcript of the film that may be required. Punched tape is permissible if records can be readily converted to reviewable form.)

2. Supplementary Basic records, including basic employment and earnings records; time cards; production cards; wage rate tables; work-time schedules; order, shipping, and billing records; records of additions to or deductions from wages paid; and documentation of basis for payment of any wage differential to employees of the opposite sex in the same establishment.

Two years. Same as above.

3. Certificates of age. Until termination of employment.

Same as above.

{N2924631.1} 20

4. Written training agreements. Duration of training program.

Same as above.

XII. Erroneous Use of Comp Time.

Nonexempt employees may frequently work unusual amounts of overtime on special projects or at certain times of the year. Employees often prefer to accumulate “comp time” in lieu of receiving paid overtime and take extra time off later. Supervisors may prefer giving employees comp time rather than paying overtime because it keeps overall labor costs down.

The problem with comp time is that it is not allowed under the FLSA for private employers. The FLSA allows the payment of compensation time off in the private sector only if the employee uses the time off in the same pay period in which it accrued. For example, under the FLSA, an employee who works 50 hours in the first week and elects compensation time off in lieu of overtime pay must take 15 hours off during the next week of the two-week pay period to meet the requirements of federal law. Confusion often arises because some states allow comp time under limited circumstances, special statutory provisions govern comp time for public-sector employees, and the practice is widespread in the private sector and popular with employees.

Because the FLSA does not allow most forms of private-sector comp-time programs, auditors for private companies should determine whether there are authorized or unauthorized comp-time practices and eliminate them.