FLSA 101

1. Fair Labor Standards Act Ruth Rock, MBA, SPHR, CCPstaffmanagers.com Noble Benefits August 19, 2010 This material is developed by Staff Managers, Ltd.Co. from information on the dol.gov site and is for discussion purposes at the Noble Benefits August 2010 Seminar only and should not be considered a legal authority.

2. FLSA 1938 Minimum Wage - Federal Overtime Child Labor Recordkeeping 2

3. Exemptions Executive Administrative Professional Highly Compensated Computer Professionals Outside Sales

4. Salary Basis To qualify for exemption, employees generally must be paid at not less than $455 per week ($23,660) on a salary basis. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine.

5. Reducing Salary an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked the predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work

6. Permitted Salary Deductions Seven exceptions from the “no pay-docking” rule: Absence from work for one or more full days for personal reasons, other than sickness or disability Absence from work for one or more full days due to sickness or disability if deductions made under a bona fide plan, policy or practice of providing wage replacement benefits for these types of absences To offset any amounts received as payment for jury fees, witness fees, or military pay

7. Permitted Salary Deductions, cont. Penalties imposed in good faith for violating safety rules of “major significance” Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of workplace conduct rules Proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment Unpaid leave taken pursuant to the Family and Medical Leave Act

8. Executive Exemption The phrase “a customarily recognized department or subdivision” is intended to distinguish between a mere collection of employees assigned from time to time to a specific job or series of jobs and a unit with permanent status and function.

9. Administrative Exemption Exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. Implies that the employee has authority to make an independent choice, free from immediate direction or supervision. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.

10. “Work requiring advanced knowledge” Means work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment Professional work is distinguished from work involving routine mental, manual, mechanical or physical work Generally uses the advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances Advanced knowledge cannot be attained at the high school level

11. Field of Science or Learning Include law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy include occupations that have a recognized professional status and are distinguishable from the mechanical arts or skilled trades where the knowledge could be of a fairly advanced type, but is not in a field of science or learning

12. The learned professional exemption Is restricted to professions where specialized academic training is a standard prerequisite for entrance into the profession. The best evidence of meeting this requirement is having the appropriate academic degree May be available to employees in such professions who have substantially the same knowledge level and perform substantially the same work as the degreed employees, but who attained the advanced knowledge through a combination of work experience and intellectual instruction Does not apply to occupations in which most employees acquire their skill by experience rather than by advanced specialized intellectual instruction

13. Highly compensated employees Paid total annual compensation of $100,000 or more Performing office or non-manual work Must include at least $455 per week paid on a salary basis Must customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption

14. Deductions not allowed items which would be considered to be for the benefit or convenience of the employer are tools used in the employee's work, damages to the employer's property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer's property by the employee or other individuals.

15. Deductions not allowed, cont. if the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, it may not reduce the employee's wage below the minimum wage. Nor may that cost cut into overtime compensation.

16. Travel Time Time spent by an employee in travel as part of his principal activity, such as travel from jobsite to jobsite during the workday, must be considered as hours worked. An employee who travels from home before the regular workday and returns home at the end of the workday is engaged in ordinary home-to-work travel. This is not considered hours worked.

17. Meal Breaks Bona-fide meal periods (typically 30 minutes or more) are not work time, and an employer does not have to pay for them. Must be completely relieved from duty. When choosing to automatically deduct 30-minutes per shift, the employer must ensure that the employees are receiving the full meal break.

18. Remedial Training Employees who lack a high school diploma, or who have not attained the educational level of the 8th grade, can be required to spend up to 10 hours in a workweek engaged in remedial reading or training in other basic skills without receiving time and one-half overtime pay for these hours. However, the employees must receive their normal wages for hours spent in such training and the training must not be job specific.

19. The FLSA requires employers to keep records: (1) personal information, including employee’s name, home address, occupation, sex, and birth date if under 19 years of age; (2) hour and day when workweek begins; (3) total hours worked each workday and each workweek; (4) total daily or weekly straight-time earnings; (5) regular hourly pay rate for any week when overtime is worked; (6) total overtime pay for the workweek; (7) deductions from or additions to wages; (8) total wages paid each pay period; and (9) date of payment and pay period covered.

20. Fair Labor Standards Act Ruth Rock, MBA, SPHR, CCP HR Consultant specializing in Supervisor Trainingstaffmanagers.com 832-413-1493