The Fair Labor Standard Act (also referred
to the as Fair Labor Act or just FLSA) provides certain
guarantees to employees about the minimum rate of pay for
overtime. Generally, eligible
employees must be paid overtime at the rate of 1 ½ times
their regular
rate of pay for all hours over 40 in a week. Time and
attendance software can be used to help you comply with these
labor laws.
What
Employees Are Covered under the FLSA?
The Fair Labor Standards Act has specific rules about which
employees are covered under the act and which are exempt
employees . The terms “exempt” and “non-exempt” have
become commonplace terms that refer to employees who are
either not covered under the FLSA (exempt) and those that are
covered (non-exempt).
Generally, managerial and professional employees are exempt
from the requirements of the Fair Labor Standards Act, and all
other employees are covered. However, the requirements
are very complex. For specific information, we recommend
that you consult one of The
Fair Labor Standard Act References that we have
compiled.
In addition, there are specific rules and regulations that
apply to many different industries such as restaurants (rules
about tipped employees, for example), construction,
manufacturing, etc. Again, please refer to one the
references listed below for more information.
Many states, such as California, have other overtime labor
laws with which you may need to comply as well.
Required Overtime Rate
The Fair Labor Standard Act generally requires employers to
pay employees overtime for hours worked over 40 in a
week. Overtime must be paid at 1 ½ times the employee’s
“regular
rate” as defined by the FLSA.
The FLSA does not require employers to pay overtime
for Saturdays, Sundays, holidays, time over 8 hours in a day,
or for any other situation. Employers may elect to pay
overtime in these situations. However, such overtime is
paid either as a custom, as required by state law, or as
negotiated in a union contract. When the employer
pays such overtime, it may be eligible as a credit toward the requirements of the Fair Labor Standards
Act.
What is the
Regular Rate of Pay for FLSA?
The regular rate of pay is the “average” rate of pay that
the employee received during the period. For example if
an employee worked multiple jobs in a period and each was paid
at a different rate, any overtime hours must be paid at the
weighted average rate.
The average rate must also take into account certain
additional payments to employees. Items that generally
count towards the regular rate are shift premiums and
non-discretionary bonuses. Items that are generally
excluded from the regular rate are overtime pay at a rate of 1
½ times or higher than the employee’s base rate.
Defining what is included or excluded from the regular rate
is one of the most difficult aspects of the Fair Labor
Standards Act. Consult one of The
Fair Labor Standard Act References that we have compiled
for you for more information.
Credit for Daily
Overtime or Premium Pay?
The Fair Labor Standards Act permits employers to receive a
credit against the amount of overtime due to an employee for
certain types of payments. Generally, any payment that
is at or in excess of 1 ½ pay is eligible for a
credit.
Complying with FLSA Regulations using Time
and Attendance Software
Proper compliance with the FLSA regulations requires an
understanding of the laws and regulations. However, you
must also calculate and compute the regular and overtime
rates, and handle credits properly. Unless you do so,
you might be required to pay back wages and/or
penalties.
The WorkForce Software timesheet system can handle almost
any problem that you face in complying with the Fair Labor
Standards Act. The table below summarizes the
problems you face in implementing the Fair Labor Standards Act
and how our system can solve these problems.
| Problem |
Solution |
Need to segregate the exempt and non-exempt employees
|
Our solution lets you group employees into policy
groups. You would set up groups for both exempt
and non-exempt employees.
|
Consistent calculation of the regular rate.
|
Our time and attendance solution will let you
determine exactly what types of pay is to be included in
the regular rate. You can decide whether all or
just a portion of a particular pay type is
included.
|
Calculation of overtime for semi-monthly employees
|
Regardless of the pay frequency, our software will
apply the Fair Labor Standards Act correctly. If
you use a semi-monthly or monthly pay frequency, the
software will revert back to the last week of the prior
period to determine if FLSA overtime is due to an
employee.
|
Piece rate and the Fair Labor Standards Act.
|
Our time and attendance system can both calculate pay
according to piece rate formulas as well as use that
figure in applying the FLSA.
|
Credits to the employer for overtime and premium pay.
|
You can designate any pay or portions of pay as a
credit to the FLSA requirements for overtime pay.
|
| Comply with
state overtime labor laws |
Our flexible
user defined formulas allow you to designate formulas
for specific states. |
Fair Labor
Standards Act References
The first place to look for more information is the Fair
Labor Standards Act Handy Reference Guide, provided by the
Department of Labor
We also suggest you check out the Department of Labor’s E-law bulletin on the
FLSA which walks you through your specific situation to
see how you are affected by the FLSA.
Notice: The information above and the references are
provided “as-is” without any representation as to their
accuracy or applicability to your specific situation. We
recommend that you seek competent legal advice for all
employment issues.
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