Landscaping Company Compliance

 

Landscaping companies have been a specific target of the U.S. Department of Labor: Wage and Hour Division (U.S. DOL WHD) for several years.  According to the U.S. DOL Data Enforcement website, landscaping companies agreed to pay more than $20 million dollars in back wages to their employees between 2006 and 2012 for violations of the Fair Labor Standards Act (an amount that does not include other charges such as penalties and damages).  Landscaping companies are frequently found in violation of labor laws due to a variety of unique pay practices and employment scenarios.  In fact, in 2012, according to the U.S. DOL Data Enforcement website, landscaping companies were the third most commonly investigated sector in Colorado, only behind child care services and full service restaurants. Another reason for increased enforcement is that landscaping companies employ a high percentage of what the U.S. DOL WHD refers to as “vulnerable workers”. Federal labor enforcement agencies have been targeting industries that employ these workers because of their relative high risk of exploitation due to low pay and benefits, ignorance of rights under the law, and/or reluctance to exercise those rights.

A landscaping company is subject to the Fair Labor Standards Act if its annual sales volume exceeds $500,000. Even if it does less than $500,000, some of its individual employees may be covered if they engage in interstate commerce activities like swiping credit cards or ordering goods from out of state. The State of Colorado’s labor laws found in the state Wage Order apply to all private sector employers in four main categories including retail/service and commercial support services.

To stay out of trouble, remember these important nuggets of federal and state compliance information:

General Overtime: Overtime must be paid after 40 hours in a 7 day workweek regardless of the length of the pay period. State of Colorado labor law also requires overtime payment after 12 consecutive hours. Employees cannot waive their right to overtime pay. Overtime is an additional one half of an employee’s regular rate of pay (which can be different from their hourly rate – see below)

Day Rate Landscapers: Landscape workers are often paid a day rate instead of an hourly rate. This method of payment is legal but it doesn’t exempt these employees from minimum wage or overtime law.  Employers must pay these employees the additional one half of their regular rate of pay for all hours over 40 in a week. They must also check to make sure that employees have been paid at least the minimum wage for all of their hours. Employers must keep a record of hours worked for day rate landscape workers just like they do for hourly rate employees.

Pre-shift and post-shift working time and its effect on travel: Landscape workers often load up work trucks and attend morning meets prior to clocking in for the day.  That time is considered work time and must be paid. If employees participate in these duties and then travel to a job site, the travel time is considered hours worked. The same principal applies at the end of the day. If an employee travels back to the shop and unloads tools, meets with supervisors, etc. then the travel time back must be paid. If employees don’t do any principal work activities at the beginning or end of the day (prior to or after traveling) then the drive time is only required for the driver of the vehicle.

Automatic deductions for lunches: Be careful about automatically deducting a 30 minute lunch break from non-exempt employees’ time each day.  Landscape workers are often working on a tight schedule and may not be taking a full 30 minute break even though the full 30 minutes is being deducted. This can result in substantial overtime back wages.  Make sure that employees are taking their full 30 minutes. Eating lunch while driving to the next job site does not count as a lunch break for either the drivers or the passengers.

Tool deductions: Tool deductions have historically been a bit of a gray area but to be on the safe side you should not require employees to provide their own tools. Any tool deductions taken from their check may not take the employee below minimum wage per hour in a given week or cut into their overtime pay.

Non-discretionary bonuses: A common overtime violation occurs when employers fail to pay overtime on non-discretionary bonuses. Non-discretionary bonuses include attendance, safety, performance, travel, and sales bonuses. The weekly amount of those bonuses must be included in the regular rate of pay that determines the overtime amount.

Uniform Deductions: Colorado labor law does not allow deductions from employees’ pay for the cost of uniforms.

Contracting with a temporary staffing agency:  Make sure that temp agencies pay their employees that work at your establishment in accordance with federal and state labor laws. The Wage and Hour Division will assert a joint employment relationship between a landscaping company and its staffing agency, making both entities ultimately responsible for labor law compliance.

Misclassifying Employees as Salary Exempt: A salaried exempt employee is someone who meets certain job duty requirements and is paid a weekly salary of at least $455 per week. Employers do not have to pay overtime to these employees. However, paying an employee a salary does not make them salaried exempt.  They must also meet the specific job duty requirements set forth in the federal regulations. For example, landscape employees might classify several foremen as exempt. To meet this exemption, the primary duty of the foremen must be supervising employees, not planting flowers. Also the foremen must participate in supervisory duties such as scheduling, assigning tasks, maintaining records, interviewing, recommending hiring and firing, etc.

We hope you found this week’s tip helpful and informative. Please pass it along to managers or employers of landscaping companies. Follow us on facebook to get Labor Brain’s Tip of the Week on your newsfeed!

Link: http://laborbrain.com/landscaping-company-compliance/

–       By Kalen Fraser

The Labor Brain Inc. is not a law firm and its employees do not practice law or provide legal services.  The information provided on our website,  in email correspondence with representatives of The Labor Brain, and at outreach events is for informational and educational purposes only.  The information provided is not a substitute for the advice of an attorney.