Compliance with the FLSA can be tricky. For example, how do you pay a non-exempt employee who is on-call? When can you withhold pay for non-exempt employees? In a recent CER webinar, Ted Boehm answered these questions and many more. Here are some of the questions and answers from that program.
Paying non-exempt employees for time worked outside the place of employment
Q. How should you pay employees who volunteer their time during town-wide community events in which the company has a booth or table at the event?
A. If you want to err on the side of caution, pay them at their regular hourly rate. While there is a legitimate question of whether that type of work is related to their regular job duties, to reduce the risk of any lawsuit I would err on the side of paying them their regular rate for that type of time.
Q. Is answering an email – or even reading an email – considered compensable work time for a non-exempt employee?
A. Yes. This is an area where we’re seeing technology influence pay problems in the workplace because more and more employees have Blackberries or iPhones (etc.) and are doing work at home and outside of traditional work hours. If the company knows that they are sending emails or responding to messages from home late at night or early in the morning, then the company has an obligation to pay them for that time.
I recommend that the company develop good workplace policies that address the usage of these devices outside of working hours. This issue will only increase as technology becomes more entwined in our daily lives. The DOL has even introduced an app for the iPhone that will allow for the time spent working to be captured—it essentially creates a new time record.
Non-exempt employee conundrums: How to pay on-call employees
Q. If an employee is on-call for a weekend (to come in for an emergency maintenance response), and that employee answers their phone for an emergency maintenance situation, how is that time classified? Is that “waiting to be engaged”?
A. That’s a tough one to answer. On-call time is generally compensable if the employee is required to remain on premises or so close that they can’t use their time for their own purposes. In this hypothetical situation described, we don’t know these details; these details will govern whether the on-call time is compensable or not.
Q. If an employee has a company cell phone and is on-call on the weekends, does the employer only have to pay the employee during the times they are actively on the phone? Or must the employer pay the employee for the entire weekend?
The staff members in question are required to answer their phone whenever it rings, and they may have to go into work if they cannot find anyone else to cover. However, they are not tied to their homes during this time (i.e. they can still run errands, shop, go out to dinner, etc.). Would that be considered “waiting to engage” time or “engaged to wait” time?
A. That sounds more like “waiting to be engaged.” Based on these details, the employer would not have to compensate them for the entire weekend and it would be non-compensable standby time or waiting time.
When Can Pay be Withheld for Non-Exempt Employees?
Q. Can an employer reduce someone’s final check below minimum wage to recoup un-accrued but already used vacation time upon termination?
A. No.
Q. Can you expand on people who may be on site without compensation (interns, for example)?
A. Most likely, interns have to be compensated. There’s been a rash of lawsuits in the last few years and they’re gaining traction in court. Compensable time for interns is an issue that is heating up. The short answer is to be careful with this issue.
FLSA Pay Concerns: Overtime and Break Time
Q. We are required to provide a break for breastfeeding. Is this separate from the normal breaks required?
A. That depends on the normal breaks required in your situation. The break for breastfeeding is required under federal law and it’s compensable. It is typically a separate break. If you’re referring to other breaks required by law, then yes it would be in addition to that.
Q. We have several manufacturing plants that pay an annual attendance bonus. Is this required to be included when calculating the regular rates (which are the basis for the overtime pay amount)? With employees potentially changing hourly rates throughout the year (with progression, promotions, etc.), this is an incredibly time-consuming task.
A. I agree, it’s incredibly time-consuming. The default rule of thumb is that, unless it is a truly discretionary bonus, it must be included in the regular rate of pay when calculating overtime. As such, based on this situation, it does sound like the prudent thing to do would be to include that bonus in the regular rate of pay for that employee.
The above information is excerpted from the webinar “FLSA Compliance: Dispelling Myths and Mastering Pay Policy Challenges for Non-Exempt Employees.” To register for a future webinar, visit CER webinars.
Attorney Ted Boehm is an associate in the Atlanta office of Fisher & Phillips LLP. Mr. Boehm’s practice focuses the defense of wage and hour claims arising under the Fair Labor Standards Act and claims arising under Title VII.