National Clothesline

The Fair Labor Standards Act will celebrate its 70th birthday in 2008. You would think that after seventy years, there would be nothing left to be interpreted or decided about hours of work, overtime, and other topics under the FLSA. You would be wrong.

In December, the Supreme Court refused to disturb a lower court ruling that a construction company did not owe employees for travel time.

The employees in question were required to park in a particular lot, from which they were shuttled through a security checkpoint and to the actual jobsite on a company bus.

The employees contended that they were owed for the travel time from the time they reported to the parking lot.

The lower court had found that under the Portal-to-Portal Act, which amended the FLSA in the 1940s, “walking, riding, or traveling to and from the actual place of performance” was not considered hours worked.

This language was designed to prevent employees from claiming, for example, that they should be compensated for the time it takes to drive to work, the time it takes to walk from the car to building, and the time it takes to put a lunch bag in a locker.

The court reasoned that this was just a longer walk (or ride) than normal.

This case is important, and not just because it clarified the FLSA in favor of employers. It is important because it illustrates that more and more employees are suing their employers under the FLSA, and that their lawyers are getting more creative.

Moreover, these cases are attractive to plaintiff’s lawyers because employees can recover double back pay and attorneys’ fees, and there are limitations on the employer’s ability to settle or compromise wage claims.

It is also important because it illustrates that the law under the FLSA is very complicated. Earlier this year, the Supreme Court allowed employees to recover for time spent getting changed into uniforms to go to work.

Employers need to audit their wage and hour practices regularly to make sure that they are complying with this complicated law. Further, when supervisors are hired or promoted, they need to be trained on how to deal with issues under the FLSA.

For example, most untrained supervisors believe that they can force an employee to straighten out his foul-up on the employee’s own time.

Most untrained supervisors believe that if the employee suggests it, they can do it, like allowing the employee to “bank” hours without receiving overtime pay in cash.

To avoid problems under the FLSA and other wage payment laws, I suggest you consider the following:

1. Untrained supervisors make mistakes.

2. Paying an employee a salary does not automatically make him exempt from overtime. On the other hand, if an employee is not paid a salary, it is almost impossible for him to be exempt.

3. Understand what you can and cannot dock from an exempt employee’s salary. If you dock the wrong thing, you may end up losing the exemption.

4. Breaks of less than 20 minutes duration are compensable. Clocking out makes no difference. Smoke breaks are compensable; lunch breaks over 20 minutes do not have to be paid.

5. Employees can never, never, ever waive their rights under the FLSA. If the employee says he agrees, with an oath in blood, that he will not be paid for his five-minute smoke breaks, he still must be paid.

6. Most deductions from pay must be authorized in writing. Further, if a deduction takes an employee below the minimum wage, it may not be allowed in that particular workweek.

7. The Department of Labor does not have a problem with employees being disciplined for excessive breaks, screwing up a project that requires the employee to work overtime, or punching in one minute late. The DOL, however, does have a problem if the employee is not paid for that break, paid for the overtime, or paid for the one minute. Good and bad employees are treated the same for purposes of payment under the FLSA.

8. The overtime exemptions are based on what employees actually do, not on titles or the amount of their pay. In other words, an employee making $200,000 a year could, conceivably, be entitled to overtime.

9. The wage and hour laws are complicated, and they are not intuitive. Unless you are sure you are in compliance, get legal assistance. If you are hopelessly cheap, the DOL website has compliance help. If you can surf the net, you can find an answer — or at least DOL’s position on the matter, which is not always correct when it favors the employee.

10. There are recordkeeping requirements under the FLSA. If you do not keep records, you can be fined. If you do not keep records on hours worked, the employee’s personal records will be presumed to be correct. Keep good records.

11. State wage and hour laws trump federal law, in most cases. If the benefit is greater, the state law supersedes the federal law. For example, the minimum wage in some states is higher. Moreover, if there is a federal exemption, the state can negate the exemption under state law.

12. Most wage and hour lawsuits are brought by employees who have been fired. Even where discharge was warranted, employees can seek to recover up to three years of unpaid wages and overtime.

So, celebrate the birthday of the FLSA with an audit of your payment practices. No gifts please. Just make sure you are complying to the fullest extent possible.