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Why FLSA is Important to all Employers

July 28, 2012

HR employment tools regarding wage and hour.       

HR has the important responsibility of assigning pay rates and benefits to their employees.  If this task is not done correctly or sloppy the organization can be faced with fines, criminal charges, and in severe cases the organization can be shut down.

FLSA BASICS:

The Fair Labor and Standard Act (FLSA) is a federal statute in the United States that establishes laws for employment wages such as: national minimum wage, overtime wage rates, and oppressive child labor (restriction of minors’ jobs/hours).

As of right now the federal minimum wage is $7.25/hr; however some states have their own minimum wage laws but have to comply with the federal law i.e. the states legally cannot enforce a minimum wage law below $7.25 (federal laws will override state).

FSLA requires that overtime is paid as 1.5 time regular rate for hours worked of 40/week within seven consecutive 24 hour periods.

FSLA also requires employers to display FSLA guidelines where visible by the employees.  It is also required that wages paid and hours worked b non-exempt employees records are kept for 3 years.

Exemption: by FLSA

  • Executive (engaged in management): Direct 2 or more FTEs (full time equivalent), Authorized to affect terms and conditions of other employees though hiring, firing, etc.
  • Administrative:  Office of non manual work related to general business operations, independent judgment and discretion in significant matters.
  • Professional:  Functions that require advanced knowledge in a field of science or learning.
  • Computer:  Functions that require application of systems analysis techniques, design or development of computer systems or programs, or the creation or modification of programs relating to operating systems.
  • Outside Sales.

Solutions:

  • Know the law
  • Train managers and employees on time-keeping
  • Complaint system
  • Audit records
  • Address any discrepancies immediately

In addition, Employer should stay up to date on all wage, labor and exemptions laws.  If employees are not paid adequately and HR does not comply with FSLA any of the following penalties can be assessed:

  • Class action
  • Back Pay
  • Over Time Pa
  • Monetary Fines
  • Punitive Damages
  • Injunctive Relief
  • Criminal Penalties
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