New Overtime Rule. Summary and FAQ.

 

*On November 22, 2016 a Texas court issued a preliminary injunction blocking the new overtime rule. It will not go into effect on December 1st. *

The US Department of Labor’s new overtime rules go into effect on December 1st. The new rules are getting a lot of hype. However, other than the increase in salary level, not much has changed. Still, it’s a good opportunity to review your employment practices and make sure you’re in compliance.  See below for a list of the most frequently asked questions that I’ve been getting on the new rules.

To summarize, here are the three things that have changed from the old rules to the new.

  • Salary level has increased from $455 per week to $913 per week and will be adjusted every three years.
  • 10% of the required salary can be met by paying non-discretionary bonuses. These bonuses must be paid no less frequently than quarterly.
  • Salary level for the Highly Compensated Employee category has increased from $100,000 per year to $134,004 per year.

The answers to these frequently asked questions only touch on the implications from the federal Fair Labor Standards Act (FLSA) and do not address state wage and hour rules which in some cases may be more restrictive. For example, in California, employers are not allowed to pay non-exempt salaried employees using the fluctuating workweek method. The answers to these questions are not legal advice, I’m just regurgitating information that is publicly available in a concise and easy to read format.

 FAQs

I currently have salaried exempt employees that do not meet the new salary level test. They are upset about going to non-exempt status and having to punch a clock. Do I have any flexibility with how they record their hours?

If these employees work a regular fixed schedule every week you can keep their regularly scheduled hours on record and only record when they vary from their fixed schedule. This is referred to as “exception reporting”.

For other employees whose hours vary from week to week the minimum record you need is their daily hours.  You are not required by the FLSA to keep start and stop times.

Some employers keep more detailed time records to protect themselves in the case of employee complaints regarding hours worked.

 If we have salaried exempt employees who only work part-time, do they have to be paid the $913 amount, or can I prorate it?

The rules make no distinction between part-time and full-time employees. All salaried exempt employees must meet the $913 per week salary level requirement. You are allowed to prorate the salary in the first and last week of an employee’s employment.

 Can I keep an employee on salary if she goes from exempt to non-exempt because her salary isn’t high enough to meet the $47,476 amount?

A non-exempt employee may be paid hourly or salary. Usually, it makes more sense for employers to pay non-exempt employees hourly. If you have good reasons for keeping an employee on a salary you may do so but you still have to pay overtime when the employee works more than 40 hours. If you are planning on paying the employee time and half their rate when they work more than 40 hours, that’s the same as paying them hourly. If you are planning to pay the employee a salary to cover all hours and then pay an additional half for each overtime hour, that’s called the “fluctuating work week method”. There are additional requirements for using this method including: an understanding with the employee, paying the salary no matter how few hours are worked in the week, and making sure the salary is high enough to cover minimum wage for all hours in the busiest weeks. You can also pay non-exempt employees a salary intended to cover a certain number of hours, say 45 per week, and incorporate both half time for the hours 40-45, and time and one half after 45.

 Does our annual holiday bonus count towards the 10% amount in the new rules? No. Only non-discretionary bonuses, incentive payments, and commissions can count towards the 10%. Annual holiday bonuses have generally been treated as discretionary bonuses in the past by the US Department of Labor. And remember, the 10% in bonuses must be paid out no less than quarterly.

 We have a seasonal employment schedule and I have some managers that meet the executive duties test but they don’t make $47,476 per year because they don’t work year-round. Are they still exempt if they make $913 per week while they are working?

Yes, the salary level test is applied on a weekly basis.

 I manage a non-profit. I heard that the Department of Labor is not enforcing the new overtime rule for non-profits until March 2019. Is this true?

No. There is a limited non-enforcement policy but it only applies to “providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds”.

 I saw something that said that salaried exempt employees must be paid their full salary every week. So does this mean we can’t deduct for sick or vacation days?

No. You may deduct money from an employee’s weekly salary for sick or vacation days according to the salary basis rules found in 29 CFR 541.602 which are unchanged by this new rule.  You may always deduct leave from an employee’s leave account when that leave pays out the usual salary but only results in a lower leave balance. That has no effect on the amount of salary paid.

 Are teachers still exempt from the overtime requirements?

Yes. Teachers, academic administrative staff, doctors, lawyers, outside sales employees and other categories of exempt employees are still exempt. Those sections of the rule did not change.

 

Home Health Overtime Changes

 

Important Updates: 

On August 21, 2015 an appeals court decision reinstated the wage rules discussed below. See here for more details.  

On December 22, 2014  a judge says DOL can not cut out 3rd party employers from the overtime and minimum wage exemption. For more information on that court case and the ongoing litigation see this article .  Also, see this article for more legal updates on the issue as of January 2015.

Original Article:

Most employers of home health care workers are aware of the labor law changes affecting their industry starting January 2015. However, many of these employers do not fully appreciate the adjustments they will have to make to their payroll and employment practices in order to be in compliance with the new rules.

Starting January 1, 2015, home health care workers classified as “companions”, who are employed by third-party companies, are no longer exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). Workers directly employed as companions, by the individual, household, or family receiving the services, are still eligible for the exemption but the type of work they can do is limited due to a change in the U.S. Department of Labor’s (DOL) definition of companionship services which no longer includes care of the individual, only “fellowship and protection”. On October 9, 2014, the DOL announced that it would delay enforcement of the rule until July 1, 2015. However, the rule is still technically in effect on January 1, 2015 which means that employees could file private suit for violations occurring after January 1.

So essentially, third-party employers who provide companionship services to their clients must now pay all of their employees at least the federal minimum wage and overtime pay after 40 hours in a workweek. The majority of these employees were already paid at least minimum wage but it was common for employers to not pay overtime.

Paying overtime sounds simple enough but due to a variety of pay practices at home health care companies the actual implementation of correct overtime payment will be quite complicated. For example, many home health care employers pay by the day or by the client. Employers also pay non-discretionary bonuses for work performance and extra pay when employees are on call. Other common practices include paying mileage between visits instead of hours worked, paying set weekly salaries to non-exempt employees, not recording all hours worked, not recording meal and break time, and not recording sleep time for employees who work more than a 24 hour shift. All of these practices complicate the new overtime requirement. For starters, all work time must now be recorded so that overtime can be paid when an employee exceeds 40 hours in a week. That includes rest breaks, travel between clients, morning meetings, trips to the main office to drop off equipment and paperwork, etc. Employers can continue to pay a weekly salary, or a day rate, or a client rate, but they must track all of the hours worked so that any hours over 40 are compensated correctly. Paying a non-exempt employee by any of these methods does not exempt them from overtime pay. When employers pay non-discretionary bonuses and extra amounts for on-call pay, that compensation must be included in the weekly calculation of the regular rate of pay so that the corresponding overtime rate is accurate.

It should be noted that in several states, the state labor law already required that workers providing companionship services be paid minimum wage and overtime.  However, the majority of states in the U.S. had laws that mirrored the old FLSA exemption.  Several employers have asked whether or not the state of Colorado’s overtime exemption for companionship work still applies to their employees. Even though they now have to pay overtime after 40 hours in a week per the federal change, they want to know if they are also liable for overtime after 12 hours in a day. Per conversations held with the Director of Labor of Colorado’s Dept. of Labor and Employment, Michael McArdle, the companionship exemption applicable under Colorado State Minimum Wage Order 30 is reflective of the FLSA exemption prior to the new federal changes and there is no proposal to change it for the upcoming Minimum Wage Order 31. More information on the Colorado Division of Labor’s definition of companionship can be found in its Advisory Bulletin and Resource Guide published in March 2012.

If you employ home health care workers make sure you know the rules and how to stay in the compliance. A seemingly simple thing like overtime can have many hidden complications. It will take several weeks, if not months, for a company to adjust to all of the changes that must be made to payroll, time keeping, and logistics. Begin making changes now so that you’re off to a good start in 2015!

– 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. 

Wage and Hour Compliance Checklist

 

Employers, HR directors, and payroll managers have a lot on their plate when it comes to compliance.  It’s extremely difficult to stay up on all of the changes and details of a myriad of local, state, and federal employment compliance topics. While Wage and Hour audits might not be as familiar to some as OSHA or IRS audits, their notoriety is increasing due to an expansion in enforcement and back wage penalties.  The vast majority of audits done by the Wage and Hour Division of the U.S. Department of Labor are centered on compliance with the Fair Labor Standards Act (FLSA) which regulates overtime, minimum wage, child labor, and record keeping. Although there are countless ways to be found in violation of the FLSA, the ten problems listed below are the ones that result in the largest monetary penalties. Get these ten right and you’ll be well on your way to 100% Wage and Hour FLSA compliance. If you have any questions, feel free to call us for a free 15 minute consultation at 970-402-9196.

1. Do not misclassify employees as contractors: To start off, make sure that you are not treating anyone as a contractor who should be classified as an employee.  The Wage and Hour Division uses a six factor test to determine the correct classification of each person.  Focus on things like nature and degree of control, investment in facilities and equipment, opportunity for profit and loss, economic dependence, and permanency of the relationship.

2. Include all required pay in the overtime rate: Non-discretionary bonuses, shift differentials, performance bonuses, and service charges must be included in a non-exempt employee’s overtime rate of pay. This is probably the most common mistake made in payroll.

3. Pay overtime based on the seven day workweek: The federal overtime requirement applies after 40 hours in a seven day workweek.  The frequency of your payroll (bi-weekly, semi-monthly, monthly) does not affect this requirement. Comp time or banked hours are not allowed for private sector employees. There are a few limited exceptions to the 40 hour week rule for hospital and residential care employees, police officers, and firefighters.

4. Be careful with your tipped employees: Tipped employees are a minefield when it comes to compliance. Employers, managers, and kitchen staff may not participate in tip pools. Make sure to pay overtime on the regular rate, not the lower cash wage. And don’t forget that if tipped employees make enough in service charges it can increase their regular rate past the usual minimum wage.  Also, make sure to inform tipped employees of the five provisions required under the FLSA.

5. Apply exemptions correctly: Commonly referred to as “white collar exemptions” these are exemptions from overtime for executive, administrative, and professional employees.  In order to be exempt these employees must meet certain job duties, salary basis, and salary level tests.  The mere act of paying someone a salary does not exempt them from overtime.  Be aware that changes to the exemption rules are expected late this year or in 2015.

6. Do not make illegal deductions: Federal law does not allow deductions that are for the benefit of the employer (uniforms, tools, etc.) to take an employee below the minimum wage per hour. It does not matter whether the deduction is made from payroll or the employee pays for something out of pocket.

7. Do not steal time from employees: Breaks of less than 20 minutes must be paid. Lunches of less than 30 minutes must be paid. Lunches of 30 minutes or more that are interrupted for work must be paid. Most training time must be paid. Most travel time must be paid. Not paying for all hours worked can result in costly minimum wage and overtime backwages.

8. Know your child labor laws: If you hire anyone under the age of 18 you should be familiar with the federal and state child labor laws that apply to your type of business. Child labor laws are less stringent for agricultural labor. Violations of child labor laws can result in severe civil money penalties and you want to maintain a safe working environment for all of your employees, especially minors.

9. Post the correct posters: There are two ways to know which posters you have to post. Pay the poster companies for the sleek poster collage or download the individual posters for free from the internet.  The US DOL offers a helpful Poster Advisor on their website that asks you questions to determine which posters are required for your place of business.

10. Keep honest and accurate records: This might seem obvious but who really wants to read a list of nine things? Make sure that your time records and payroll records are accurate reflections of what hours were worked and what compensation was paid. It is common for manager level employees to adjust the electronic time punches of employees. If it is done infrequently and there is justification to back up the adjustment it may not be a problem. Take care that adjustments are not done to punish employees or to keep from paying overtime.

We hope you found this week’s tip helpful and informative. Please pass it along to any employers and HR or payroll professionals.  Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/wage-hour-compliance-checklist/

–      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. 

Employing Kids This Summer?

 

With the month of May right around the corner, now is a good time to start thinking about hiring youth for summer jobs. Many employers feel discouraged about hiring employees who are under 18 years old because they are worried about violating child labor regulations. Taking a glance at child labor regulations and penalties can leave you with a daunting feeling of, “I’d rather not take the chance”, but summer employment is a great way for minors to learn job skills and minimum wage pays more than a weekly allowance!  The most important thing to do when hiring is minors is to take a close look at both the applicable federal and state child labor regulations to make sure that the minor employee is working in an allowed occupation and within allowed hours. We’ll go over the federal regulations here in detail.

Remember that if your business is a hospital, school, institution for the sick, aged, etc. or a public agency, all of your employees are covered by these rules. If you are not one of those, but your business does at least $500,000 per year in gross sales and you have at least 2 employees, then these rules also apply to all of your employees. If your business does less than $500,000, but you have minors that engage in interstate commerce activities like swiping credit cards that are processed out of state or ordering goods from out of state, then these rules would also apply to those employees on an individual basis.  Informal arrangements with minors to babysit or mow your yard with their family lawn mower are not covered by federal child labor regulations.

Let’s take a look at the federal guidelines found in the Fair Labor Standards Act.  They apply to covered employees under the age of 18.  Once an employee turns 18 they are no longer considered a minor and no federal child labor regulations apply.  Federal regulations do not require any type of child labor permit or certificate but they do require that you keep the date of birth on record.

Generally speaking there are two types of youth employment, agricultural and non-agricultural. The restrictions on non-ag employment are much greater than on ag work.  Within each category the rules change if the minor is employed by a parent.  So let’s take a look at each category.

Non-Agricultural Employment

For Non-Ag employment there are three important age categories.

16-17 years old: No restrictions on time of day or numbers of hours. They may do any job other than those declared hazardous. There are 17 hazardous occupations.  You may check out the list here. Most are obvious, like working at a manufacturing facility that makes explosives, or working with exposure to radioactive substances, or mining. However there are several that routinely get employers in trouble like operating power-driving meat processing equipment (includes meat slicers), operating power-driven dough mixers, operating power-driven trash compactors, operating power-driven types of saws and working on or about a roof.  The most common child labor violation for hazardous occupations is driving. Even if they have a license, 16 year olds may never drive as part of their job.  If they are 17 years old, they may drive under very limited circumstances.

14-15 years old: Restrictions on type of work and hours. They may not work more than 3 hours on a school day, 8 hours on a non-school day, 18 hours per school week, and 40 hours per non-school week.  They may not work before 7am or after 7pm, except from June 1st – Labor Day when they may work until 9pm. There is a list of 16 permissible occupations for 14-15 years old. If it’s not on the list, it’s prohibited. The list can be found here.

Under 14 years old: Employment not allowed.

Exceptions: These rules do not apply to children employed as actors or performers, children engaged in newspaper deliveries, or children who make wreaths in their home.

Employed by a Parent in Non-Ag Work: If you are employing your child in non-ag work, most child labor restrictions do not apply. Basically, they may do anything other than the hazardous occupations.  Also, children under 16 employed by parents may not work in any type mining or manufacturing.  Watch out for driving. Even if your child has a license, driving is considered a hazardous occupation for anyone under 17, and is very restricted for 17 year olds. Also, be aware that in order for the “employed by a parent” to apply, the business has to be 100% owned by the parent.

Agricultural Employment:

16-17 years old: No restrictions on type of work, time of day, or number of hours.

14-15 years old: May work any number of hours outside of school hours in any occupation except those deemed hazardous.  See the list of hazardous ag jobs here.

12-13 years old: May be employed outside of school hours with written parental consent or on a farm where the parent is also employed.  Only non-hazardous occupations.

Under 12 years old: May be employed outside of school hours with parental consent on a farm where the employees are exempt from federal minimum wage provisions.  Only non-hazardous occupations.

Employed by a Parent in Ag Work: If you are employing your child in agricultural work they may do any type of occupation at any time. There are no restrictions.

Please check out your state’s regulations on child labor. A few states have more restrictive rules, but most are either the same or more lenient than the federal regulations. Here is a list of State Department of Labor websites.  If you are employing a minor in the State of Colorado you should check out this fact sheet.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone who might be hiring minors for summer employment. Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/employing-kids-this-summer/

–       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. 

 

 

 

 

 

 

Coming Soon!

Motor Carrier Overtime Exemption

 

If you employ truck drivers you’ve probably heard of something called the “motor carrier exemption”.  If you don’t know exactly what that means though, you’ve come to the right place.  Here’s what you need to know.

The federal Fair Labor Standards Act (FLSA) requires that most employees be paid overtime after 40 hours in a 7 day workweek.  The motor carrier exemption is an exemption from that requirement.

In order to not pay overtime the following conditions must be met.

  • The employer must be a motor carrier or motor private carrier as defined in 49 U.S.C. Section 13102. 
  • The employee must be a driver, driver’s helper, loader, or mechanic, whose works affects the safety of a motor vehicle (that has a Gross Vehicle Weight Rating of at least 10,001 pounds) that is used in transportation in interstate* or foreign commerce.  The employee must be crossing state/international lines, or continuing to transport goods intrastate that have been on an interstate journey and have not come to rest. In the case of loaders and mechanics the employee must be loading up or working on trucks that are going to be making interstate trips. 
  • The employee must not work as a driver, driver’s helper, loader, or mechanic on any vehicles that have a Gross Vehicle Weight Rating (GVWR) of less than 10,001 pounds. In any week when an employee works on both types of vehicles (GVWR greater than 10,001 and less than 10,0001)  the employee must be paid overtime.  If an employer has both types of vehicles and wants to claim the exemption for certain employees it is recommended that they keep very precise records of the type of work done by each employee.  There are a few types of vehicles that weigh less than 10,001 pounds that do not affect the exemption.  These include 8 passenger vehicles driven for compensation, 15 passenger vehicles not for compensation, and anything used in transporting hazardous materials with DOT requirements.

*Courts have held that even if an individual driver has not taken an interstate trip the exemption will apply as long as the driver was part of a pool of drivers that could’ve been called upon to make such a trip in the previous four months.

Keep in mind that the exemption is from overtime only.  Accurate time records of hours worked each day and each week must be kept in order to satisfy the minimum wage and record keeping requirements of the FLSA.

If you are a motor carrier employer it would also be smart to check out the Labor Brain’s tip on employment relationship and the difference between employees and independent contractors.  Misclassification of truck drivers as independent contractors (1099s) is a hot topic across the country and could result in catastrophic losses for your company.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone who employs drivers of large vehicles.  Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/motor-carrier-overtime-exemption/

–      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. 

 

 

 

 

Child Day Care Compliance

 

Child day care companies on the Front Range of Colorado have been the target of recent audits by the U.S. Department of Labor: Wage and Hour Division (WHD).   In 2012 and 2013 the WHD in Colorado investigated more child day care companies than any other type of business.  This trend is continuing in 2014 and day care companies should be prepared for an audit of their employment practices under the Fair Labor Standards Act (FLSA).

The WHD has been targeting day care employers based on the premise that they are not compensating employees for time spent in training.  Many child day care companies mistakenly think that they do not have to pay for certain training time required by State of Colorado child care licensing requirements but the WHD has taken the position that the time must be paid and included in all hours worked for the week.

All day care companies in Colorado have to abide by the State of Colorado Minimum Wage Order and the federal regulations found in the FLSA.

The FLSA states that time spent in training must be paid for unless it is voluntary, outside of regular working hours, not directly related to the employee’s job, and does not include any productive work.  Many day care companies think that the training time required by the State of Colorado is not compensable since it’s recorded on an individual basis. They misconstrue the state regulations as requiring it of the individual employee when in fact it’s required of the day care center.  The State of Colorado’s “Rules Regulating Child Care Centers”, which are essentially licensing requirements for a day care center, specifically state in 7.702.43(E):

“The center must have a staff development plan that includes a minimum of fifteen (15) clock hours of training each year for all staff. The training must relate to one or more of the following areas-child growth and development, healthy and safe environment, developmentally appropriate practices, guidance, family relationships, cultural and individual diversity, and professionalism.”

The training time is a requirement of the day care center, not the individual employee.  If the day care center follows these regulations and requires its employees to take 15 hours of training per year then the training is not voluntary and it is directly related to the employee’s job.  Therefore, the training time must be paid. The hours of training must be included in the employee’s total hours worked each week when the center is determining whether or not the employee worked overtime.  If this time hasn’t been paid, the WHD will assess back wages and liquidated damages whenever the unpaid time took an employee below minimum wage per hour or cut into their overtime pay.

Other common violations found at child day care centers include:

Unpaid breaks: State of Colorado regulations state that employees are entitled to a 10 minute break for every four hours of work. Federal law states that all breaks of 20 minutes or less must be paid.

Short Lunches: State of Colorado regulations state that employees are entitled to a 30 minute meal break for every five hours of work.  If the lunch break is not a full 30 minutes and free from all work duty then the time must be paid.

Pre-shift/Post-shift time: If day care employees arrive early or stay late, that time must be included in their total hours.  It is common for day care employees to work prior to clocking in for the day or work after clocking out for the day.

Background checks and fingerprinting: Many day care companies require employees to pay for the required background check and fingerprinting.  If the employee pays for this out of pocket, or the employer deducts it from their paycheck, it must not result in the employee being paid less than minimum wage per hour in their first week of work.

Uniforms: State of Colorado regulations do not allow deductions to be made for uniforms.

Misclassifying Preschool Teachers: The FLSA includes an exemption from overtime and minimum wage for teachers. If day care companies are claiming the exemption for any of their preschool teachers they should be prepared to prove that those teachers are spending the majority of their time teaching and instructing children. Examples of this would be a curriculum, lesson plans, etc. If the preschool teacher’s primary duty is caring for the physical needs of the children then the exemption will not be allowed.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone in the day care business.  Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/child-day-care-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. 

 

 

 

 

 

 

 

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: https://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. 

Greenhouse and Nursery Compliance

 

Greenhouses and nurseries on the Front Range of Colorado have been the target of recent audits by the U.S. Department of Labor: Wage and Hour Division (WHD).   The WHD has been targeting these employers based on the premise that they are not paying overtime to their employees. Many greenhouses and nurseries mistakenly think that they are exempt from overtime rules because they are engaged in agriculture. However, as we’ll discuss in this week’s tip, most of these employers are subject to overtime regulations and they face severe overtime liability when they are investigated by the WHD.

The Fair Labor Standards Act requires the payment of overtime after 40 hours a week for most employees. Yet it includes an exemption from overtime for employees who are “engaged in agriculture”.  Employees of greenhouses and nurseries that cultivate, grow, or harvest plants are “engaged in agriculture” while doing this work. This overtime exemption is tricky though because it is applied on a weekly basis. If an employee is engaged in agriculture and only agriculture for every hour in the entire week then he/she is exempt from overtime in that week. However, if the employee does some agricultural work and some non-agricultural work in the same week, then the exemption does not apply.

The complication for greenhouses and nurseries arises from the difficulty in defining the term “agriculture”.  Under the Internal Revenue Service regulations a plant nursery can be considered a farm for certain tax purposes.  But that does not necessarily mean that employees who work there are engaged in agriculture. It is common for greenhouses and nurseries to grow some of their own product and buy in other product from out of state. If the bought in product is to be sold immediately or repackaged for imminent sale, the care of those plants (watering, tending, etc.) is not considered agricultural work and will invalidate an employee’s exemption from overtime in the week that the non-ag work is performed. However, if the bought in product is cared for with the intent of producing substantial growth and maturity, (i.e. to be sold in two years) then the care of that plant is considered agricultural work.

Usually, greenhouses and nurseries have both types of product and the employees work on the two types every day without regard to whether or not they are performing exempt agricultural work.  If greenhouses and nurseries wish to maintain some employees as exempt from overtime they must keep detailed time records. The records must clearly indicate that the exempt employees only cared for the plants that were being cultivated, grown, or harvested and did not work on bought in product that was to be resold quickly.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone in the greenhouse or nursery business.  Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/greenhouse-and-nursery-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. 

 

 

Why Did Wage and Hour Pick My Business for an Audit?

 

The first question that employers ask when they find out that they will be investigated by the U.S. Department of Labor Wage and Hour Division (WHD) is “why me?”

The answer is fairly straightforward. The majority of Wage and Hour audits are initiated as a result of a complaint. Almost all of the complaints come from current or former employees of a company.  When an employee calls the Wage and Hour office with a complaint their information is recorded and analyzed to determine whether or not it is likely that the employer is violating one of the labor laws enforced by the agency.  If the agency believes that the violation is affecting more than just the person who filed the complaint they will initiate an audit of the entire company.  They will not reveal who filed the initial complaint or even that a complaint was filed.  The identity of the person who complained will remain confidential throughout the entire process.

A growing minority of audits are initiated through industry wide sweeps. Each year the WHD develops strategic plans that target certain industries on national, regional, and local levels.  They try to target industries that they believe are committing widespread violations. For example, last year the Denver District office targeted daycare facilities, greenhouses, and nurseries along the Front Range of Colorado and restaurants in Aspen, CO.  These audits were not initiated through the complaint process but rather were specifically chosen because the WHD believes the industry as a whole is at risk for violations.

We hope you found this week’s tip helpful and informative. Please pass it along! Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/why-did-wage-and-hour-pick-my-business-for-an-audit/

–       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. 

Is Travel Time Work Time?

 

A common problem found in Wage and Hour audits is the failure to pay for compensable travel and/or drive time.  Significant overtime liability can result from employers not compensating employees for this time.  It’s understandable that employers are confused about travel and drive time; there are many factors at play and courts are still grappling with some of the finer points of when travel time must be paid. Today we’ll go over some general categories of travel and drive time that employers deal with frequently.

Commuting:

Normal Commuting:  Regular home to work travel is not work time.  If an employee chooses to live two hours away from his employer’s place of business and he drives four hours round trip every day to get to and from work his employer is not responsible for paying for any of that time.

Commuting in a Company Vehicle: The Employee Commuting Flexibility Act of 1996 says that commuting in a company owned vehicle does not make regular home to work commuting time at the beginning and end of the workday compensable as long as the use of the employer’s vehicle is within the normal commuting area for the employer’s business or establishment and the use of the vehicle is be subject to an agreement between the employer and the employee.

Carpooling in a Company Vehicle: The U.S. Department of Labor: Wage and Hour Division states in the Field Operation Handbook that if an employee elects to transport other employees in a company vehicle and that employee is driving the company vehicle for his own convenience the time does not have to be paid. It also says that if the employer requires an employee to report to a central shop, yard, pick up place, etc. to pick up other employees and transport them to the work site than the time is hours worked for the driver.

Check out these summaries of recent court decisions on commuting to get a more nuanced view of the factors that courts are considering when determining whether or not commuting time must be paid:

New York Firefighters Commute Time

Oil Field Workers Commute Time

Cable Installers Commute Time

Commuting in California

Driving During the Work Day:

Any time that an employee spends driving during their work day is considered compensable time. For example, an electrician reports to the shop at 8am for a safety meeting, receives job instructions and spends the rest of the day driving to different jobs. He returns to the shop at 5pm to drop off materials, speak with his supervisor, and turn in his time sheet. All of the time he spent driving during the day between 8am and 5pm must be paid.

Multiple Work Sites:

                If an employer has multiple worksites and employees are expected to work at all or many sites throughout their employment (common in the construction industry), then the employer can require the employees to report directly to the job site and whether the job site is 15 minutes away from the employee’s home or an hour away the time is not compensable.

Set Work Site:

If an employee always works at the same worksite and one day is asked to report to a different worksite then the employer must compensate the employee for the additional commute time.

Travel Away from Home Community:

If an employee is required to spend the night away from his home, the employer must pay for any travel time during the regular work day of the employee.  However, if the employee is a passenger on transportation like an airplane, bus, train, etc. that time is not compensable when it is outside of his regular work hours.

Common Problems:

Eating meals while driving: Many employees who spend their workday in a vehicle driving from one job to the next will eat their meals while traveling to the next job site. Since this travel time is work time the employer may not deduct a half hour lunch if the employee eats while driving.

Pre-shift and Post-shift work:  Once an employee begins a principal work activity his paid time has begun.  Court cases are still defining what exactly is a principal work activity but the DOL has said that things like transporting work tools, loading materials, taking instruction from supervisors, morning meetings, reporting to a central work location, transporting other employees for the employer’s benefit, are activities that begin an employee’s day. This means that any travel after any of these activities have taken place will be considered work time as well as any travel before any of these activities at the close of the day.

Not Counting Drive Time as Regular Hours: If an employer pays for hours spent driving or traveling those hours must be included when determining how many overtime hours were worked in the week.  Many employers try to pay for travel time but consider it a separate category like “Other time”, or “Non-productive Time”, or “Misc. Time” and only pay overtime when the employer exceeds 40 hours of “regular work” time per week.  For the purposes of overtime there are no special categories of work time that aren’t included. If the time was paid and worked it must be included in the total weekly hours.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone you think might be at risk as a result not paying for travel time. Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/tip-of-the-week-is-travel-time-work-time/

–       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.