A Practical Guide for Employers
For employers, navigating wage and hour issues can be complex, especially when unexpected circumstances arise. It’s important for employers to understand their obligations under the Fair Labor Standards Act (FLSA) and related state laws. Here’s a straightforward guide to help you manage these situations effectively.
Paying Employees Who Aren’t Working
One of the most common questions employers face is whether they must continue paying employees who are not working. Under the FLSA, the general rule is that you don’t have to pay employees who are not working. The FLSA’s minimum wage and overtime requirements apply only to hours worked during a workweek. However, the situation can be different for salaried employees.
For employees who are classified as exempt under the FLSA’s “white collar” exemptions, the rules are stricter. These employees must be paid on a salary basis, meaning that if they do any work during the employer’s designated seven-day workweek, they are entitled to their full salary for that week. There are only a few exceptions to this rule. There is no obligation to pay exempt employees when a business closes for a week, and they perform no work.
On the other hand, non-exempt employees paid on a “fluctuating workweek” basis under the FLSA also have specific requirements. These employees typically must be paid their full fluctuating-workweek salary for any week in which they perform work, with even fewer exceptions than those for exempt employees.
It’s also important to remember that other legal obligations might require you to keep paying employees, such as employment contracts, collective bargaining agreements, or certain policies that are enforceable as contracts. Additionally, state wage laws may impose additional requirements, such as call-in pay rules, which guarantee a minimum amount of pay when employees are called in to work.
Charging Time Missed to Vacation and Leave Balances
Employers often wonder whether they can deduct time missed from an employee’s vacation or leave balances. The FLSA doesn’t regulate how vacation and leave are accrued or used, leaving these decisions largely up to the employer. However, the salary requirements for exempt “white collar” employees can sometimes influence time-off allotments.
When deciding whether to charge missed time to vacation or leave balances, you must also consider any relevant employment contracts, collective bargaining agreements, or policies that function as contracts. Additionally, state and local wage laws may impose specific requirements regarding paid leave, and these are becoming more common.
While it may be legally permissible to charge missed time to leave balances, consider the potential impact on employee morale. Making decisions that negatively affect employee satisfaction can have long-term consequences, so it’s essential to weigh the pros and cons carefully.
Overtime Pay During Recovery Periods
As businesses recover from challenging times like natural disasters, employers might be tempted to cut costs by reducing overtime pay. However, the FLSA does not provide an “emergency” exception to overtime requirements. Employees who are subject to the FLSA’s overtime rules must be paid at least 1.5 times their regular rate for any hours worked over 40 in a seven-day workweek.
In some cases, collective bargaining agreements or other contracts might specify different overtime rules during emergencies. However, no agreement can override the FLSA’s requirements, so employers must continue to comply with federal overtime laws, regardless of the situation.
Volunteering to Work Without Pay
Another common scenario is employees offering to volunteer their time to help the company recover from difficult periods, including natural disasters. However, the FLSA does not allow employees to volunteer their services to their for-profit employers without pay. There are limited exceptions, such as volunteering for employer-sponsored events, but these are rare and must be handled carefully.
Before allowing any unpaid volunteer work by employees, employers must evaluate the legality of the arrangement. Failing to pay employees for their work, even if they volunteer, can lead to significant legal issues.
Handling Lost Time Records
If you lose time records during a natural disaster for work that has already been performed, the best approach is to recreate the most accurate records possible under the circumstances. Once you’ve done this, have the affected employees review, correct, and confirm the recreated time records.
Another option is to ask employees to estimate their hours worked based on their best recollection. Be sure to obtain written acknowledgment from the employee, confirming their estimates and authorizing any necessary corrections once more accurate information becomes available.
Remember, it’s essential to pay employees promptly for time worked, even if the records are incomplete. Delaying payment can lead to legal consequences under state wage laws.
Recording Worktime Without Electronic Time Clocks
If your electronic time clocks are unavailable, employees can still accurately record their work hours using handwritten timesheets or other methods. Each employee should be responsible for entering their own time, noting the exact times when they start and stop work each day, including breaks.
Accuracy is key, so ensure that employees are diligent in recording their hours. Handwritten timesheets can be just as effective as electronic systems if they are used consistently and correctly.
By understanding and applying these principles, you can navigate wage and hour issues more effectively, ensuring compliance with the law while maintaining a positive work environment for your employees.
