Most small business owners are familiar with the basics of the Fair Labor Standards Act. During a recent workshop I facilitated on FLSA, when asked to share what they knew about the law, the majority of the group responded, “minimum wage”. While the FLSA does require that employees be paid the minimum wage, there is much more to the law.
Violations of the FLSA carry significant penalties. Considering the Department of Labor is cracking down on employers that fail to comply with the law; now is a good time to brush up on the requirements. The Department of Labor recently shared a list of the more frequent violations it encounters during investigations.
Some common FLSA violations include:
- Improper rounding of hours worked. The FLSA allows for rounding of hours as long at it has a neutral impact on the employee. In other words, the rounding must not result in the employee being paid less. So if an employee works 20.23 hours, the time could be rounded to 20.25 hours, not 20.20 hours.
- Off-the-clock work. Non-exempt employees must be paid for all time worked. This includes time for required meeting and training activities.
- Travel time. Employees that travel during the course of their work should be paid for time spent traveling. For example, a cleaning crew that travels to clean buildings on their assigned route must be paid for the travel time between locations.
- Employees vs. independent contractors. There are specific guidelines established that define employees and independent contractors.
- Misclassification of exempt and non-exempt employees. Non-exempt employees are required to be paid overtime, while exempt employees are not. If an employer decides to have exempt workers, specific exemption tests must be met.
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