How to Comply with FLSA Overtime Regulations
As an employer, you’ve certainly heard of the Fair Labor Standards Act (FLSA). It sets working standards that affect eligible employees, including:
- Minimum wage
- Child labor
- Nursing mothers
Are you compliant with FLSA overtime regulations and other requirements? Stay tuned as we explore some of the top FLSA regulations every employer should know.
There are recent updates to FLSA overtime regulations all employers should be aware of. As of January 1, 2020, the threshold for salaried employees under the so-called “white collar exemptions” was raised from $455 per week ($23,600 a year) to $684 per week ($35,568 a year). This means that an employee who didn’t qualify for overtime pay last year could this year.
Paying employees who qualify for overtime is important (and the law). But there are different categories of exempt employees to be aware of to avoid misclassification.
This exemption applies to employees who work directly with general business operations of a company, including human resources, marketing, purchasing, accounting, budgeting, and legal compliance.
Employees working in professions that require an advanced degree likely fall under this exemption. Examples include lawyers, dentists, professors, and engineers.
Reserved for high-level managerial employees, the executive exemption applies to employees who interview, hire, and train employees. They might also control the budget or mandate employee processes.
Outside sales exemption
If your business has outside sales members that regularly work away from your place of business and sell either goods, insurance, stocks, bonds, or secure contracts for your business’ services or facilities, they may fall into this exemption.
Understanding different categories of exempt employees is important when following FLSA overtime regulations. Let’s say you own a medical supply factory. John manages the floor. He hires employees and establishes safety protocols. John makes $75,000 a year and falls under the executive exemption.
Matt is an engineer in the same department. He makes $65,000 and falls under the professional exemption. Mary is a purchasing manager that maintains vendor relationships and makes purchasing decisions for the factory. She makes $50,000 a year and falls under the administrative exemption.
Sarah is Mary’s assistant. She often comes in on the weekend to catch up on paperwork. She makes $30,000 a year and did not qualify for overtime pay last year. But with the new changes, she does qualify for overtime pay on those long weekends.
Gary travels the country discussing your medical products with healthcare professionals in the hopes of getting them to sign a contract. He would fall into the outside sales exemption and be paid for fulfilling his duties rather than the hours he works.
Since July 24, 2009, the nationwide minimum wage has stayed put at $7.25 an hour. However, most states and even several cities require employers to pay a higher minimum wage. It’s best to check with local resources to determine local pay requirements. You can check your state here.
There are a few exceptions to the federal minimum wage law. For example, employees who receive gratuities, like bartenders or servers, are still entitled to a minimum wage of at least $7.25 but as a combined total between hourly wage and tips. Apprentices and full-time students also fall under different minimum wage requirements.
Employers are often surprised to learn the FLSA does not provide guidelines on rest breaks or meal breaks for employees. Instead, this is determined at the state level. Some states even leave the choice to provide breaks entirely up to employers.
When researching your state’s unique guidelines for paid and unpaid breaks, make sure to look for special regulations for younger workers, both those under 18 and those under 15.
The FLSA requires employers to keep certain records for non-exempt workers. The following list is not exhaustive but can point you in the right direction for your own recordkeeping:
- Employee’s full name
- Social security number
- Birthdate (if younger than 19)
- Hours worked each day and total hours worked each workweek
- Total wages paid each pay period
- Total overtime, if any
Employers are required by the FLSA to provide their employed nursing mothers reasonable break time to express milk for her nursing child. The area provided must be shielded from view and free from intrusion from the public and other employees. A bathroom does not meet these requirements. Nursing breaks must be provided for the first year after a nursing child’s birth.
Compliancy and FLSA Overtime Regulations
FLSA requirements aren’t optional. Employers who willfully or repeatedly fail to remain compliant with FLSA overtime regulations and other requirements can be fined up to $1,000 per violation.
If you’re unsure of your requirements as an employer, don’t assume you’re compliant. Reach out for confirmation before you find yourself in legal hot water.
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