In 1937, President Franklin D. Roosevelt passed the Fair Labor Standards Act (commonly referred to as the “FLSA”). The purpose of the Depression era legislation was to protect the individual employee against abusive employers and to ensure a minimum standard of living to the American worker. FLSA guarantees workers a federal minimum wage and overtime pay for employees who work over 40 hours a week.
Expanding FLSA Over the Years
Over the years, FLSA has been expanded to include other areas of employee protections, such as restrictions on employing children, and employee documentation and recordkeeping. In recent months, the US Department of Labor released an “Administrative Interpretation” (AI) to clarify the definition of “clothes” under the FLSA.
The Definition of “Clothing”
Currently, the FLSA excludes time spent “changing clothes or washing” at the start or end of a workday from compensable time, and the vague exemption has led to many lawsuits and conflicting court decisions on what constitutes ‘clothes.’ The AI provides clarity by stating that the time spent changing into or out of protective gear or equipment required by law, the employer, or the nature of the job, is indeed compensable.
The AI further clarifies that even if ‘changing clothes’ does not fall under a compensable activity or time, it may still trigger the ‘continuous workday rule’ if the subsequent activities after changing clothes would be compensable under FLSA, activities such as walking, waiting, or other travel time. Employers should review their compensation policies or practices to reflect this change to remain compliant with the law.
The guidelines covered by the FLSA can be confusing, and costly, if not adhered to. Speak with a CPEhr HR Consultant for an audit of your FLSA practices.
Source: EPLI Pro News, July 2010
Last month, Joshua Sable, Esq., CPEhr’s in-house General Counsel, conducted a webinar covering important changes to labor laws affecting small businesses. The “2010 Employment Law Updates” webinar covered a wide range of HR topics, including the HIRE Act, health care reform, disability discrimination, harassment claims, arbitration agreements, spying on employees, and trade secret protection.
According to the U.S. Government Accountability Office (GAO), the IRS claims to lose millions of dollars in uncollected taxes each year due to independent contractor misclassification by employers. As such, as part of a national research project on employment taxes, the IRS is scheduled to audit 6,000 randomly selected companies ranging from large to small firms and even non-profits. The goal of the program, which is scheduled to last from 2010 to 2012, is to create a scoring system for employment taxes. The audit will focus on the following items: failure to file, fringe benefit issues, executive compensation (including stock options) and employees misclassified as independent contractors.
If you are like most employers, the chances are you use Independent Contractors. Employers engage the services of Independent Contractors (IC’s) instead of employees for numerous reasons. Mostly, to save money on a range of employment costs, such as:
In our last post we reviewed some of the basic guidelines relating to wage and hour compliance, and how California law differs from Federal law. In this post we continue to review wage and hour laws, but move to bonuses.
