The Fair Labor Standards Act (FLSA) was enacted by Congress in 1938 to ensure employees are paid a fair wage for the time they spend working for an employer. Federal minimum wage and overtime requirements are enforced through the FLSA.
The purpose of FLSA is to establish a baseline of protections for both employee and employer to follow. After that, individual States can come up with their own protections which are sometimes often greater.
For example, the federal minimum wage is currently set to $7.25 per hour for employees but California has its minimum wage set to $11 per hour.
In addition, State’s may also include a longer statute of limitations for employees to bring claims against an employer who failed to pay proper wages.
The FLSA and state labor laws that regulate minimum wage and overtime is known as Wage and Hour laws.
If an employer fails to pay proper wages, an employee can sue to recover unpaid wages for up to two years under the FLSA. However, if it’s found that the employer acted willfully in failing to comply with the FLSA, the employee can recover unpaid wages for up to three years.
The FLSA allows an employee to recover liquidated damages, which is a doubling of damages, f an employer acted in bad faith by failing to provide proper wages.
Lawsuits against an employer can be brought about individually, in a collective action, or as a class action, in either federal or state court.
If an employee asserts their rights under the FLSA, federal and most state laws prohibit an employer from taking retaliatory action against them.
In section 15(a)(3) of the FLSA states it is unlawful for a person to,
“Discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.”
General Requirements of FLSA
As of 2018, the federal minimum is set to $7.25 an hour. An employer is required to pay non-exempt employees this rate for all hours worked. If an employee works over 40 hours within a workweek, the employer is required to pay what is known as “time and a half”, a premium pay rate.
For example, if an employee making the regular rate of $7.25 an hour would then be bumped up to $10.88 an hour per each hour worked past a 40 hour workweek.
Some employees may receive non-discretionary bonuses or incentives that encourage the employee to work more steadily, rapidly, efficiently and to remain with the employer. These bonuses, as well as any commissions, are included in the regular rate of pay when determining the employee’s premium overtime rate.
The employer is required to maintain accurate time sheets and payroll records for all employees.
There are exemptions from the minimum wage and overtime pay requirements for administrative, executive, and professional employees. These employees are considered exempt and not entitled to minimum wage or overtime pay.
However, in order for the employee to be exempt, the actual primary job of the employee performs is taken into consideration; not just the job title assigned to them. Exemptions found in the FLSA are “narrowly construed” against the employer.
Examples of exempt employees may include:
- Executive Employees
- Must be a salaried employee at a rate not less than $455 per week;
- Primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
- Must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
- Must have the authority to hire or fire other employees.
- Administrative Employees
- Must be a salaried employee at a rate not less than $455 per week;
- Primary duty must be the performance of office or non-manual work dilated to the management or general business operations of the employer or the employer’s customers; and
- Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
- Professional Employees
- Must be a salaried employee at a rate not less than $455 per week;
- Primary duty must require advanced knowledge, predominantly intellectual in character which includes consistent exercise of discretion and judgment;
- Advanced knowledge must be in a field of science or learning; and
- Advance knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
- Highly Compensated Employees
- Must be paid $100,000 or more per year; and
- Must customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee.
Federal law does not require employers to provide rest periods such as a lunch or coffee break. However, when an employer does offer rest periods lasting between 5 and 20 minutes, federal law considers such periods as work time and is included in the total hours for the workweek.
A list of FLSA common violations can be found below:
- Misclassifying employees as “exempt” and not entitled to protections under the FLSA
- Requiring employees to work “off the clock”
- Failing to pay employees for overtime hours worked
- Failing to pay employees for rest breaks lasting 5 to 20 minutes
- Failing to pay employees for on-call work hours, training sessions, work meetings and take-home work
Industry Violations
Financial Services, Mortgage Loan Officers
Prior to 2010, the United States Department of Labor considered loan officers exempt under the FLSA’s administrative exemption. However, in March of 2010, the department issued an interpretive guidance that mortgage loan officers are non-exempt and entitled to overtime pay. It was determined that their primary job is selling financial products.
Loan officers typically work long hours and are entitled to overtime pay. This determination was established in the 2015 decision from the United States Supreme Court in Perez v. Mortgage Bankers Association.
Call Centers
Call center employees are typically subjected to off-the-clock work. They are the customer service operators that are central to operations. Often referred to as ‘customer care specialist’ or ‘customer service representatives’, their work requires them to interact with a company’s clientele.
Under FLSA, an employee must be compensated for all hours work, starting with the first principal work activity of each workday until the last principal work activity for the day. This could be logging onto a computer and checking emails when they first begin their day. Some call centers have been known to automatically clock an employee out at the end of their shift, even if they are still interacting with customers. This would be considered off-the-clock work and and employee is therefore entitled to recover unpaid wages.
Tow Truck Drivers and Roadside Assistants
Tow truck drivers or roadside assistants are subject to various FLSA violations, such as wrongful denial of minimum wages and premium overtime pay. That is because they have been wrongfully classified as independent contractors.
If a person is classified as an independent contractor but treated as an employee, they are protected under the FLSA and entitled to minimum wages and premium overtime pay.
Non-exempt drivers paid on a commission-only basis but required to remain on call, may actually see their wages fall below minimum wage. The same goes for deductions that are made from wages for damages to vehicles. In either case, drivers are entitled to recover unpaid wages.
Home Health Care
People who provide home health care are generally entitled to minimum wage and overtime pay under the FLSA. These types of employees include home health aides, nurses, certified nurse aides and others that provide care to those unable to care for themselves or infirmity.
When home health workers rights are violated under the FLSA, it is because they are typically paid “straight time”. This means they are not given overtime when they work over 40 hours in a workweek, but the regular rate of pay.
For example, if an employee is paid $15 and hour, and they work 50 hours in one week but only receive $150 for their $10 in overtime, they are owed an extra $75 of overtime pay. ($15 x 10 hours = $150 versus $22.50 x 10 = $225)
Questions About a FLSA Lawsuit? Contact a Johnson//Becker Lawyer for a Free Case Review.
Are you or a loved one experiencing unfair overtime wages? You may want to speak with the lawyers at Johnson//Becker. We are currently accepting new overtime lawsuits across the country, and you may be entitled for financial compensation.
We offer a Free Case Evaluation. Please contact us using the form below or by calling us at (800) 279-6386.
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