FLSA’s most common pitfalls
The Texas Workforce Commission (TWC) offers its view on the FLSA‘s most common pitfalls, and suggestions for avoiding confusion concerning wage and hour law.
- We’re too small to be covered. Some employers assume they are not covered by the FLSA because their business is not of adequate size to qualify. The TWC points out that unlike most state and federal employment laws, the FLSA covers employees whose work affects interstate commerce, not depending directly upon the number of employees. The suggestion made by the TWC is for businesses to assume all their employees are in fact covered under the FLSA.
- Our salaried managers are exempt. Many non-exempt employees are paid a salary, despite some employers belief that a salaried employee is not qualified to receive overtime pay. The TWC argues that the Department of Labor (DOL) focuses on the nature of the job and how the employee performs his or her job, not the presence or lack of a salary.
- Our salaries cover all the time employees work, so we don’t owe overtime. This problem occurs when an employer identifies an employee as non-exempt and therefore eligible for overtime pay, but believes that paying the employee a fixed salary compensates him or her for overtime pay.
- We don’t have overtime work, although employees volunteer some extra time. The TWC points out that there is no such thing as ‘voluntary unpaid overtime’ under the FLSA, and any agreement to the contrary with an employee is “null, void, and completely unenforceable.”
- Our employees keep their own time records. The FLSA has strict record-keeping requirements, including maintaining detailed records of all hours worked by non-exempt employees. Having employees keep their own time records is problematic for a number of reasons, including DOL action against an employer that may be instigated by non-compliance of maintaining required records.
- We give our employees comp time instead of overtime pay. Governmental employers may provide compensatory time off in lieu of overtime pay, but not in the private sector. Generally, overtime work hours may not be averaged out over a longer period of time; overtime work must be calculated and paid for each workweek.
- Our contract labor does not qualify for overtime pay. The TWC explains what is difficult about this strategy is that employers mistakenly believe that a contract deems a worker an ‘independent contractor’. This status is instead determined by the underlying nature of the work relationship.
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