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Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. One of the tests to be met is that an executive must “customarily and regularly” direct the work of at least two other employees. The two or more employees test is an equivalency test. Four half-time employees are equal to two full-time employees. Supervision may be split among two or more employees, but each must supervise two or more full-time equivalents. A department with five non-exempt employees, for example, may not have more than two exempt supervisors under this test. Assistance in the actual manager’s absence is not sufficient to meet the requirements of this section. An employee’s work can only be credited to one supervisor; an employee who works eight hours can be credited four hours each to two different supervisors, but not eight hours to each supervisor. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the executive exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. One of the tests to be met is that an executive must manage an enterprise or department or subdivision thereof. The department or subdivision must be permanent and continuing. The regulations explain that a “human resources department might have subdivisions for labor relations, pensions and other benefits, equal employment opportunity, and personnel management.” Enterprises with more than one establishment may consider each establishment a subdivision for this purpose. There is however, no physical presence test for a department or subdivision. Likewise, the fact that the employees that the executive manages may change from time-to-time is irrelevant. Neither the physical presence nor the static employee test is determinative; instead the facts and circumstances surrounding the employee’s management activities are what are critical to classifying the employee as an executive. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the executive exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. Earlier posts discussed that to qualify for the executive exemption, employees must be involved in management. Management duties have been defined as “interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.” The regulations specifically state that other duties not listed above may also be included in the duties of management. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the executive exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. An earlier post listed four tests that if met would qualify an employee as an executive. Alternatively, any employee who owns a twenty percent or more equity interest in his place of employment and is actively involved in its management will qualify for the executive exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. Unless exempt, all employees must receive a minimum wage and overtime premium. Paying an employee salary or giving an employee a certain job title does not automatically exempt an employee from the FLSA. Only statutorily enacted exemptions, as clarified by Department of Labor regulations, exempt an employee from minimum wage requirements, overtime requirements, or both. Even then, employer actions such as making improper deductions from salaried, exempt employees can result in the loss of exemption for that employee and others. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. Only employees “employed in a bona fide executive capacity” qualify for the exemption. Any employee who meets all the following tests shall be considered an “executive” for this purpose: 1) The employee must receive a salary of at least $455 per week, not including board, lodging, or other facilities. 2) The employee’s primary duty must be management of the enterprise (or a department or subdivision thereof) in which the employee is employed. 3) The employee must “customarily and regularly” direct the work of at least two other employees. 4) The employee must have the authority to hire and fire other employees or have the power to suggest and recommend which employees are hired, fired, advanced, promoted, or otherwise changed in status and such suggestions and recommendations must be “given particular weight.” Future posts will provide further clarification of certain terms in the executive exemption as well as provide other tests that may qualify an employee as an executive. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the executive exemption.

The US Department of Labor recently issued non-Administrator signed Opinion Letter FLSA2008-10NA. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA). Unlike signed Opinion Letters, unsigned Opinion Letters do not “provide a potential good faith reliance defense for violations of the FLSA.” This Opinion Letter discusses whether service coordinators qualify for the learned professional exemption of the FLSA. Service coordinators act as a concierge for the program participants, by assessing their needs, facilitating independent living, intervening on their behalf if necessary, and documenting all of the above. Although a bachelor’s degree and several years experience is preferred, candidates may qualify if an RN or with an associate’s degree in health or human services and one year of experience. The Department of Labor concluded that “[b]ecause the academic requirements for service coordinators may be met with an associate’s degree, the position lacks the requirement of ‘knowledge of an advanced type…customarily acquired by a prolonged course of specialized intellectual instruction.’” Therefore, service coordinators do not qualify as exempt under the FLSA. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-5. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA). This Opinion Letter discusses whether a school district can add an extra week to a pay period about five times over a twenty-eight year period and still comply with the Fair Labor Standards Act. For example, an employee who earns $13 per hour is paid a bi-weekly salary of $1,040 ($13 per hour X 40 hours per week X 52 weeks per year ÷ 26 pay periods per year). Non-exempt employees are paid overtime for hours worked in excess of forty in any particular week. Since there is a day or two more than fifty-two weeks in every year, the district would sometimes have twenty-seven pay periods. To maintain its policy of twenty-six pay periods per year, the district adds a third week to one pay period, but still pays the same salary. The employee in the example above would still receive $1,040 for a three-week period. Since the rate of pay is $8.67 for the three-week period, ($1,040 ÷ 120 [40 hours per week X 3 weeks]), the pay rate exceeds federal minimum wage. Furthermore, since non-exempt employees were paid overtime for hours worked in excess of forty in any of the three weeks, the policy did not violate the FLSA. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-4. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act. This Opinion Letter discusses whether a requirement to wear a certain type of shoe constitutes a uniform. It also discusses whether the employer is allowed to deduct a portion of the cost of the shoes from the employee’s pay, even if such deduction causes the employee’s pay rate to be below minimum wage. In this case, the employer “requires employees to wear ‘dark-colored’ shoes without prescribing any particular quality, brand, style, model, or type.” Optionally, an employee may purchase such shoes from a vendor through a program administered by the employer that allows the employee to elect to have the employer pay the cost of the shoes and deduct the cost from the employee’s paycheck. Since the employer’s only requirements were the color and that the shoes have non-slip soles and not be open-toed, they were not considered to be part of a uniform. Also, as the shoes were not part of a uniform and the employer did not deduct more than the actual cost of the shoes, the shoes can be considered “other facilities” furnished by the employer and therefore part of the wages paid the employee. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.

A wage garnishment is when an employer, generally as a result of a court order, withholds an amount from an employee’s earnings in payment of a debt. Restrictions on wage garnishments are defined in Title III of the Consumer Credit Protection Act. §303 of Title III restricts the amount of most garnishments to the lesser of 25% of the employee’s “disposable earnings” or the amount by which the employee’s disposable earnings exceed 30 times the Federal minimum wage. Disposable earnings for this purpose generally means gross wages less deductions required by law. Voluntary deductions not required by law are not included in the calculation of disposable earnings. With the recent increase in the federal minimum wage, the calculation of the maximum garnishment amount has changed. For employees with disposable earnings greater than $262.00 ($6.55 X 40), a maximum of 25% can be garnished. For employees with disposable earnings less than $262.00 but more than $196.50 ($6.55 X 30), the garnishment equals the amount by which disposable earnings exceed $196.50. For employees with disposable earnings of $196.50 or less, no garnishment is allowed. There are exceptions for child support, alimony, certain bankruptcy court orders, and debts for federal and state taxes. A state law that allows a smaller garnishment takes precedence over the federal law. There are also different calculations for some other debts owed to the federal government and its agencies. Contact Vision Payroll if you have any questions on calculating the correct amount of garnishments on employee’s wages.

Several states have minimum wage increases effective for work performed after July 23, 2008. Idaho, Indiana, Maryland, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Oklahoma, Puerto Rico, South Dakota, Texas, Utah, and Virginia all have increases to $6.55 to match the federal minimum wage. The District of Columbia minimum wage increases to $7.55. Different minimum wages may be paid to certain classes of employees in some situations. Contact Vision Payroll if you have any questions on minimum wage law changes.