Classification and Compensation: FLSA
The Fair Labor Standards Act (FLSA), commonly referred to as the Wage and Hour act, was passed in 1936 and updated in August 2004. The major provisions of the FLSA are concerned with minimum wage rates and overtime payments, child labor, and equal rights.
Break and Lunch Periods
At the department's discretions, a non-exempt employee may have a compensable rest period of up to fifteen minutes each morning and fifteen minutes each afternoon during regularly assigned duty hours. The rest period is intended to be a recess following an extended period of work and should be followed by another work period. Rest periods are not cumulative and, if not taken, they are forfeited. Rest periods may not be combined to provide a thirty-minute rest period once a day, nor may they be accumulated for vacation or other time off.
Employees are authorized to take a one hour unpaid meal period each work day. For a meal period to be non-compensable, non-exempt employees must be completely relieved of work duties during the meal period, and whenever possible, be free to leave the work site.
Non-exempt employees must be compensated for any time "suffered (allowed) or permitted to work," even if the work is without the supervisor's approval.
The U.S. Supreme Court defined "hours worked" as "all time spent in physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer or his business."
The University must pay non-exempt employees who are "just trying to catch up" on their work and don't want to be paid for it. This rule also applies to employees who perform work away from the actual work site, such as those who take work home. Non-exempt employees cannot donate or volunteer time doing normal or work related activities.
According to the Department of Labor, Wage and Hour Division, "It is the duty of management to exercise control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefit, without compensating for them."
FLSA overtime rules require that non-exempt employees receive 1 1/2 times their regular rate of pay for time worked in excess of 40 in a given workweek. "Hours worked" refers to actual hours worked and excludes vacation, holiday, sick leave or any other leave without pay.
Exempt and Non-Exempt Status
An employee is exempt from the overtime provisions of the FLSA if they are classified as an executive, professional, administrative, or outside sales employee and meet the specific criteria for exemption. Certain computer employees may also be exempt. Exempt employees generally must be paid at least $455 per week on a salary basis.
Exempt employees must be paid on a salary basis and receive the same salary from week to week regardless of how many hours they work. Salaried non-exempt employees must still receive overtime in accordance with federal and state laws.
An employee who is not exempt from the overtime provisions of the FLSA is non-exempt. A non-exempt employee is entitled to receive overtime for all hours worked beyond 40 in a workweek. A non-exempt employee is generally paid on an hourly basis.
Make sure employees are fully relieved of work duties during their lunch hour. Encourage lunch breaks to be taken away from the usual work area. All work materials should be left in the work area.
Arrangements for necessary additional work time, whether performed at the work site, or off-site, should be made in advance and approved by the supervisor. Do not allow employees to take work home, to come in early, or to work on the weekends without prior approval.
Be careful to properly record work hours when a non-exempt employee is traveling for the university. For more information on travel time for non-exempt employees, see Travel Time.
All additional time worked, whether requested by the employee or department, should be initialed by the supervisor on the time sheet to confirm the supervisor's knowledge of the additional hours. Designate a person from your department to review all time sheets and to ensure all record keeping and overtime rules are followed.
On-call time is not considered work time if the employee can use the time spent on call primarily for his/her own benefit. However, if the employee is required to wait at the University or a directed location then that time must be counted as work time.
Designate someone from your department to oversee FLSA record keeping, and to verify that all overtime and record keeping rules are followed. Be sure that the people working with time sheets are trained. Every supervisor who is signing a time sheet is verifying its accuracy. Ensure that all new employees receive thorough training on time sheet requirements during their departmental orientation.
Non-exempt employees are required to fill out time sheets on a bi-weekly basis. Time sheets are subject to audit by the Department of Labor, ISU Internal Audit, and Human Resources.
Time sheets and associated records (ROA, leave without pay, etc) must be kept for three years in your department files. The employee and supervisor must sign each time sheet. Time sheets must be filled out completely.
Generally the FLSA does not count as working time overnight travel that occurs outside of regular working hours as a passenger on an airplane, train, boat, bus or car and where the employee is free to relax. The Portal-to-Portal Act generally excludes from compensation time spent "walking, riding or traveling to and from the actual place of performance of the principal activity."
Employees who perform work while traveling must be compensated. If a non-exempt employee is required to drive an automobile, the employee must be compensated for the travel time.
A volunteer is generally defined as an individual who performs hours of service for the University for civic, charitable or humanitarian reasons. Moreover, a volunteer performs these services without promise, expectation or receipt of compensation for services rendered. If these conditions are met, an individual will generally not be subject to the FLSA.
An employee of ISU may not be a volunteer for the University when the volunteer hours involve the same type of service which the individual is employed to perform for compensation.