The Fair Labor Standards Act (FLSA) was a hot topic of discussion in 2016 when the Department of Labor proposed rule changes to exempt versus non-exempt employment criteria that were ultimately rejected by the federal court. While the lawyers duke it out to decide its fate, the FLSA has faded into the background for most employers. While the bright light on FLSA may have dimmed a bit, here are a few of the lesser known requirements that I will be sharing while facilitating the FLSA workshop session in a few weeks at the IPI Conference and Expo.
You know those posters that list the minimum wage and a bunch of other fine print that are typically where employees clock in and out or in the lunch room? Posting current versions of these posters is a requirement of the FLSA. In addition to publicizing the federal minimum wage, child labor, overtime and tip credit regulations are addressed. In order to be in compliance with the FLSA posting requirements, make sure you place these posters in an area where all employees have access to them and that you have the most up to date version. The good news is that you can obtain free copies directly from the Department of Labor if you don't already have them. If you operate in multiple states, a very reasonable alternative is to connect with vendors such as JJ Keller to establish an annual program where your organization receives alerts when it's time to update the posters.
The FLSA requires employers to maintain records regarding employees and the hours worked by non-exempt workers. Payroll records, collective bargaining agreements, sales and purchase records should be retained for at least three years, while records on which wage computations are based should be retained for two years, i.e., time cards, wage rate tables, work and time schedules, and records of additions to or deductions from wages. Below is a list of the basic records employers should keep under lock and key.
- Employee's full name and social security number.
- Address, including zip code.
- Birth date, if younger than 19.
- Sex and occupation.
- Time and day of week when employee's workweek begins.
- Hours worked each day.
- Total hours worked each workweek.
- Basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a week", "piecework")
- Regular hourly pay rate.
- Total daily or weekly straight-time earnings.
- Total overtime earnings for the workweek.
- All additions to or deductions from the employee's wages.
- Total wages paid each pay period.
- Date of payment and the pay period covered by the payment.
A common practice of parking industry employers is to deduct the cost of uniforms and/or cashier shortages from employee wages. While this is an acceptable practice according to the FLSA, there are certain guidelines you must follow to maintain compliance. Anytime you plan to deduct from an employee's wages, make sure the deduction does not reduce the employee's hourly rate below minimum wage. Deductions can be spread out over multiple pay periods to avoid this. Most payroll systems will raise a red flag if a deduction is going to violate this requirement, but it is still a good idea to make sure managers are aware of it and taking steps to avoid a violation. In addition, obtain written authorization from the employee for the deduction during the new hire orientation. This may be in the form of a uniform issuance record including language addressing the deduction, or a cash shortage repayment form as examples. Written authorization does not exempt an employer from the minimum wage requirement but does create a record that the employee is aware of the deduction in case it is contested at a later date.
Equal Pay Act
In 1963, the FLSA was amended to include the Equal Pay Act (EPA). The EPA prohibits employers from paying lower wages based on gender. Employers should review wage scales to ensure there aren't any violations in this area. It is okay to have pay differences related to different job responsibilities and geographic locations. The EPA requires equal pay for equal skill, effort, and responsibility, performed under similar working conditions.
Not sure if your complying with the FLSA or other HR regulations? We can help! Click the button below to schedule a time to meet at the IPI Show. We look forward to seeing you there!