Wage and Hour


There is a big focus on Wage and Hour litigation these days.  What is Wage and Hour? Well, the Wage and Hour Division is a division of the Department of Labor and was created clear back in 1938 when the Fair Labor Standards Act (FLSA) was enacted.  The WHD is responsible for the administration and enforcement primarily of the the FLSA which includes the Federal minimum wage, overtime pay,  record keeping, child labor requirements of the FLSA.  It is also responsible for the administration and enforcement of the Migrant and Seasonal  Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act,  wage garnishment in the Consumer Protection Act, wage requirements in the Davis Bacon Act, and the Service Contact Act.

Their mission statement is as follows:

The Wage and Hour mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation’s workforce.


According to ADP, 90% of all state and federal class or collective actions filed in the US are wage and hour claims and in 2010 the average settlement in the top 10 reported wage and hour class and collective actions was $34 million! The DOL is significantly increasing its wage and hour enforcement actions and has increased its 2013 budget by approximately $6.0 million to support an additional 57 investigators which in in addition to the 300 investigators added since 2009.  The DOL is buoyed by data that suggests that 70% of employers are not in full compliance with the FLSA.

From the HR Pro perspective, the three biggest Wage and Hour concerns are the misclassification of employees (exempt vs non exempt), remote work (technology), and working off the clock (meal periods).

Misclassification is basically classifying an employee who is non-exempt as exempt.  This is often done without trying to be dishonest or not understanding the duties tests that must be performed  to determine proper classification.

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hour worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 in a workweek. However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempts certain computer employees. To qualify for exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week.

I recommend an annual audit, using the duties test for each job, of your FLSA classifications taking into account job and job description changes that have occurred.  If you discover that you have a misclassification, consult your attorney immediately.

I do an annual audit and have a checklist I use and will post it here after I clean it up a bit.

Remote work is use of technology enabling the employee to do work outside of the workplace.  Being able to access the company server and do email and taking and making work related phone calls from home are two examples.

I recommend that you have a clear policy that addresses allowing a non exempt employee access to the ability to do remote work.  If it is part of their job, supervisors must ensure that the employees time keeping records are reflecting any work that is done while not at the workplace.  Supervisors need to monitor this closely and counsel or discipline when appropriate.

Working off the clock often comes in the form of starting to do work before clocking in or continuing to do work after clocking out or during meal breaks.  It used to be seen as “going the extra mile” and many employees want to empress their supervisors by doing this.

I recommend that you have a clear meal time policy that is enforced by you and your supervisors. Do not allow them to do work while on their meal break and if you see them doing it, make sure the time is reflected on their time sheet and make sure you counsel or discipline them.  If your system automatically deducts for meal periods, develop a system to have employees report any variances and have both employees and supervisors sign off on their time keeping documents.

This is a re-post from www.RichBoberg.com