FLSA Q&A

FLSA Q&A

Q: What is the FLSA?

A: The FLSA is the most general federal labor law. It contains the minimum wage provisions, Equal Pay Act, child labor restrictions, and a variety of other federal labor and employment law sections. A key provision of the Act is that most employees must be paid time and one-half for all overtime "hours worked."

Q. What activities are compensable?

A. The courts have consistently held that compensable time under the FLSA includes all time spent performing job-related activities which (a) benefit the employer (at least in part), (b) which the employer "knows or has reason to believe" are being performed by an employee, and (c) which the employer does not prohibit the employee from performing. These can include activities performed during "off-the-clock" time, at the job site or elsewhere, whether "voluntary" or not. Courts have awarded FLSA damages for "off-the-clock" time spent by employees maintaining equipment, staying late after normal shifts without "putting in" for overtime, doing job-related paperwork "at home," making and responding to job-related telephone calls, working through meal periods, and many other activities. Employees sometimes underestimate the amount of "off the clock" time they spend performing compensable tasks.

Q. Is "commuting time" compensable?

A. Probaby not. If travel is "work," it is compensable." Mere commuting" to and from regularly scheduled shifts is not compensable. However, all time spent actually performing "work" during travel is compensable.

Q. How do I prove the amount of time spent doing off-the- clock compensable activities?

A. It is up to the employer to control the work of its employees, and to maintain records of the time spent by employees performing compensable activities. If an employer does not maintain the required records, the employee is entitled to recover based on good faith, reasonable and realistic estimates.

Q. What are "liquidated damages?"

A. The FLSA provides that a successful employee is entitled to double the amount of unpaid back wages, called "liquidated damages." Essentially, liquidated damages are in lieu of interest. An employer can avoid paying liquidated damages only if it shows that it acted in good faith in failing to pay for off the clock work, and that it had a reasonable basis to believe that it need not pay for off the clock work. "Good faith" has a special meaning under the FLSA, and requires that employers have made specific investigation of the application of the FLSA to particular types of employees. Liquidated damages are the rule, not the exception. Employees are normally entitled to liquidated damages.

Q. What is an FLSA "threshold?"

A. The FLSA generally requires overtime for hours worked in excess of 40 hours per week (but see the special "7(k) Exemption" rulesfor some public empllyees). In a regular, 40 hour week situation, the FLSA"threshold" is 40 hours per week. Irrespective of any labor-management contracts or employment practices, the FLSA requirestime and one-half for hours worked over 40 per week. For example, suppose an employee works 4 of his or her 5 regularly scheduled eight-hour days in a week, and takes leave on the fifth day. The employee will have worked 32 "regular" hours that week. Any additional time worked by the employee during that week (whether "on the clock" or "off the clock") will not "count" for FLSA overtime until (and to the extent that) the total number of hours worked that week exceeds 40 -- in the example, the first 8 "extra" hours need not be paid as overtime under the FLSA. However, there is authority that these 8 hours would have to be paid at "straight time" rates, at least in weeks in which overtime is owed.

Q. What is the "7(k) Exemption?"

A. The FLSA generally requires overtime at time and one- half for all "hours worked" over 40 per week. There is, however, a special rule for police agencies and fire departments which allows a different "work period" in some circumstances. If the employer establishes analternative work period under section 7(k) of the FLSA, overtimeis owed (under the FLSA) only for hours worked in excess of a "threshold" number of hours per work period, which will be different from (and more than) the normal 40 hours per week. For example, a police employer may establish a "7(k) work period" of, say, 14 days. If the employer has complied with the requirements for establishing such an alternative work period, FLSA overtime is owed only for hours worked in excess of 86 hours in a 14 day work period. The special "7(k)" rules are complex, and a public sector employee's entitlement to overtime may vary depending on the "work periods" established by the employer.

Q. What is the rate at which overtime must be paid under the FLSA?

A. Another way to ask this question is "time and one-half of what?" The FLSA generally requires that FLSA overtime be paid at one and one-half times the employee's "regular rate." The regular rate is generally calculated by dividing the amount of compensation (wages) by the number of (non-overtime) hours of work which the compensation is intended to pay for. The "regular rate" includes the "base" amount of compensation plus additional compensation which may be paid for such things as "on-call pay," bonuses promised for accuracy of work, good attendance, longevity, quality of work, shift differentials, educational "bonuses" and other "nondiscretionary" bonuses. (A nondiscretionary bonus is one an employee is entitled to "automatically" if s/he meets the criteria). For example, if an employee is paid "base pay" of $50,000 per year and that compensation is intended to compensate for 2,000 hours worked in a year, then the base pay would be $25.00 per hour. If the base pay is "augmented" by items of additional includable compensation which total $5000 per year, the employee's regular rate would be $55,000 divided by 2000 hours, or $27.50 per hour. FLSA overtime would be calculated at time and one-half of $27.50 per hour, or $41.25 per hour.

Q. A labor practice or contract may provide for overtime for employees working in excess of 8 hours per day, or 37.5 hours per week, or some other formula. Must this overtime be paid at time and one-half the officer's FLSA regular rate?

A. Not necessarily. The Fair Labor Standards Act typically comes "into play" in a relevant way only when FLSA overtime is due for hours worked in excess of whatever the appropriate FLSA "threshold" is -- typically 40 hours per week (sometimes more under a "7(k) Exemption" alternative work period plan for some public sector employees). FLSA requirements typically apply only when hours worked exceed the applicable FLSA overtime threshold in a work week or work period. Until and unless the FLSA overtime thresholds are met and exceeded, the FLSA rules for "regular rates" or overtime rates are generally inapplicable (assuming no minimum wage violations). If a labor- management contract or practice calls for overtime to be paid for hours worked under the FLSA threshold, neither the FLSA regular rate nor overtime rate requirements necessarily apply. Until and unless the FLSA overtime threshold is met and exceeded, an employee's wage rate can be different from the FLSA-mandated rate without violating the FLSA (again, assuming no minimum wage violation). (See, "Thresholds and Gaps.") State or local laws may provide otherwise.

Q: I already get overtime. Does the FLSA apply to me?

A: Probably. Many employees put in "off the clock" time for which they are entitled to be paid. The Act defines "work" very broadly, and sometimes employers have failed to capture or compensate a variety of "off the clock" activities which count as "work" under the Act.

Under the Act, "work" is any activity which provides a benefit to the employer, and all work must be compensated appropriately if the employer "knows or has reason to believe" it is occurring. Most "job-related" activities are compensable whether performed during "on the clock" or "off the clock" hours.

Q: What effect do the provisions of a collective bargaining agreement have on FLSA overtime rights?

A: Almost none. FLSA rights cannot be waived, by collective bargaining or otherwise. (Generally, employees are entitled to the benefits of the FLSA or their CBA, whichever is more favorable.)

Q: Does it matter that I never reported the time or asked for overtime?

A: Probably not. It is the employer's obligation to "control the work." If an employer does not wish work to be performed it must prohibit it. "Failure to ask" for overtime is usually not a defense for an employer in an FLSA case. An exception might be if the employer has a requirement that generally all time be reported and actually has enforced it, or if an employee's failure to report means that the employers did not know the work was being performed.

Q: I get "compensatory time" in lieu of cash for overtime. Is this allowed?

A: Maybe, but only for public sector employees. Comp. time in lieu of cash for FLSA overtime is not generally permitted in the private sector. A public sector employer may pay overtime with comp. time under some circumstances. Comp. time is credited at time and one-half for overtime hours worked. Employees must be allowed to take off their comp. time when they want to. An employer may not restrict taking comp. time unless it will "unduly disrupt" operations. This is interpreted narrowly, and pretty much is restricted to emergencies. No more than 240 hours of comp. time may be maintained "in the bank" (480 for law enforcement officers). All additional overtime must be paid in cash. Employees are entitled to cash out their comp. time banks when they leave the job.

Q: When am I entitled to overtime?

A: Typically for all hours worked over forty per week. Some law enforcement or fire protection employers are permitted to establish so-called "alternative 7(k) work periods," which may raise the overtime threshold somewhat.

Q: How do I enforce my FLSA rights?

A: Either by complaining to the federal Department of Labor or bringing a private lawsuit. Private lawsuits are more common. These are typically brought in federal court, and are not class actions. Employees must bring their own suits or join existing suits as individuals. Unions may not bring collective suits on behalf of their members. Caution: The FLSA is a complex and specialized legal area, and you should be sure you have consulted an attorney with particular experience in FLSA.

Q: What do I get if I win?

A: Money. Successful FLSA plaintiffs are entitled to back pay for all unpaid overtime, usually beginning two years before the complaint is filed. In most cases, they are also entitled to double the amount of back pay. This is called "liquidated damages," and is essentially in lieu of interest on the unpaid wages. The Act also requires the employer to reimburse out of pocket litigation expenses and pay an additional attorneys' fee award. Some pre-tax FLSA recoveries by employees have been quite substantial. For employees nearing retirement, back pay awards may increase pension benefits.

Q: What are the "downstream consequences" of an FLSA case?

A: The FLSA prohibits retaliation or discrimination against an employee who brings an FLSA case. These provisions have "teeth," but do not cover "routine hassling." The FLSA does not prohibit management from changing working conditions to minimize or eliminate FLSA overtime liabilities in the future. Local laws or collective bargaining agreements may govern and limit the changes an employer may make.

Q: Where do I get more information?

A: Good question. There are few general information sources on the FLSA, and in most cases individual employees will want analysis and evaluation of their individual circumstances. The statute itself is at 29 USC §201 et seq. Your best bet is to contact an attorney with experience in FLSA matters. Employees with individual questions may contact Chamberlain and Kaufman for free consultations. Call us at (518) 435-9426 or send e-Mail to [email protected]. There are rooms full of regulations, administrative interpretations, and judicial decisions.

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