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Do I have to pay my employees overtime?

Fri, 19 Dec 2008 03:31:28 GMT

Generally, if you allow your employees to work overtime, or more than 40 hours in a one week period, the Fair Labor Standards Act (“FLSA”), which is a federal law, requires you to pay your employees premium pay, or at least one and one-half times your normal pay rate, for those overtime hours worked. However, the FLSA contains several exceptions to the overtime pay requirement for certain kinds of businesses and certain kinds of employees. Because overtime pay can cost your business a significant amount of money, you need to be aware of which employees are non-exempt, or subject to the FLSA overtime pay requirement, and which employees are exempt from the overtime pay requirement under some exception.

For instance, the overtime pay requirement does not apply to regular hours worked on weekends, nights, and holidays, so long as there is not more than 40 hours worked in one week period. In other words, you are not required to pay overtime to an employee solely because he or she works on Sundays. Likewise, if your employees are executive, administrative, professional, computer, or outside sales employees, as defined by the Department of Labor regulations, and draw a salary of at least $455 per week, or $23,660 per year, then they are exempt from the overtime pay requirement. Department of Labor regulations provide very specific guidance about which positions qualify as exempt, usually based on the types of duties that those positions involve. For instance, in order for an executive position to qualify as exempt, the worker’s duties typically must involve management responsibilities, supervision of at least two other workers, and authority to hire and/or fire other employees. Furthermore, these types of exempt positions usually must be paid on salary, rather than on an hourly basis.

Employees can be covered by the FLSA in two different ways. Employees are entitled to enterprise coverage if they work for businesses or organizations that have at least $500,000 per year in sales, hospitals, nursing homes, schools, or preschools. If there is no enterprise coverage, then employees may have individual coverage under the FLSA if their job duties involve them in commerce or the production of goods for commerce, like factory workers or people who travel to other states for their jobs. Domestic service workers, such as maids or full-time babysitters, also qualify for coverage under the FLSA.

You also have to be mindful of your employees’ duties when classifying them as exempt or non-exempt. Some positions require a worker to perform both exempt and non-exempt duties. Therefore, depending on whether the worker’s duties for that particular week qualify as exempt or non-exempt, you may or may not be required to pay that worker overtime, should he or she work more than 40 hours in a one week period.

Finally, some states have also enacted laws that mandate overtime pay in certain circumstances, or that provide for overtime pay that is more than the FLSA standard of one and one-half times the regular wage. If both the FLSA and a state overtime law apply to your business, you must pay whichever overtime rate is higher to your non-exempt employees who work overtime.

In this economy, Im afraid of being laid off from my job. What will I do?

Wed, 31 Dec 2008 02:21:51 GMT

In the case of some layoffs that involve many workers or an entire workplace, the Worker Adjustment and Retraining (WARN) Act may apply. If the WARN Act is applicable, then your employer may have to give you sixty (60) days notice prior to your layoff, as well as information regarding your rights and options. Likewise, your employer may be subject to the Trade Act, which mandates that laid off workers receive certain benefits and assistance.

In other cases, however, you may not be given any notice of your layoff; it is possible that your employer may simply close the doors to your workplace and completely cease operations. The good news is that all states provide services for workers who have been laid off from their jobs, such as unemployment insurance benefits, job search assistance, training and educational opportunities, and information about continuation of health insurance benefits.

You usually can access several of these programs through one location, which may be referred to as an unemployment office in some states, or a workforce development center in other states. Whatever its name, however, this office can be an invaluable resource in getting you back to work, and to supporting your family during this difficult and stressful time in your life. Not only can you get information about and assistance with filing your claim for unemployment insurance benefits, but you can also get help with searching and applying for jobs, drafting your resume, refining your interviewing skills, and other career-related assistance. Your local office might also offer assistance with job retraining opportunities and other educational development that might help increase your ability to find a job.

You can also seek technical support for your employment search through your local office. For instance, you can often access computers and printers to produce resumes and search and apply for jobs online. Your local office may also give you access to a telephone and a fax machine for contacting employers.

Another common concern in the event of a layoff is financial support. Unemployment insurance benefits are available in every state; the amount and duration of these benefits may differ from state to state. In any case, assuming that you have worked for a certain period of time and are not responsible for your layoff, you should be eligible for some unemployment insurance benefits on at least a temporary basis while you are looking for a new job.

If you are laid off, you might also be wondering about your continued eligibility for health insurance and pension benefits. Your local office can help you understand your rights to continue health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), if your employer had a group insurance plan. Furthermore, the Employees Retirement Income Security Act of 1974 (ERISA) has important provisions that allow you to protect your retirement savings after a layoff. Plus, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) protects you and your family from discrimination on the basis of any preexisting medical conditions that become an issue as a result of your layoff. Be sure to educate yourself about all of the benefits to which you may be entitled in the event of a layoff.

Possible Damages for Wage and Hour Law Violations

Tue, 21 Apr 2009 12:48:07 GMT

Most employees make an agreement with their employers that in return for going to work and performing their jobs they will be compensated with wages. The federal Fair Labor Standards Act (FLSA) defines the minimum wage and overtime pay, among other things. Many states have enacted similar laws that regulate the minimum amount that an employee must be paid in return for doing his or her job. Both FLSA and the similar state laws also define the penalties that may be imposed on an employer who violates the law.

FLSA Damages

Section 16(b) of the Fair Labor Standards Act instructs the courts on the amount of damages that are possible when an employee sues an employer for unpaid minimum wage or overtime claims. The law states that the employer may be required to pay the employee the amount of previously unpaid minimum wage or overtime pay that was not yet paid and an amount equal to that as liquidated damages. If the court finds that the employer failed to pay the employee minimum wage or legally mandated overtime pay then the court must award those damages to the employee. Attorney’s fees and legal costs may also be awarded to the employee by the court.

However, if the employer proves to the court that its failure to pay the mandated compensation was an act or omission that was committed in good faith and that the employer had reasonable grounds for believing that its actions were not a violation of FLSA then the court may use its discretion in deciding whether or not to also award the liquidated damages that are possible pursuant to the statute. If the employer cannot prove these elements then the court is not given discretion and must award the employee liquidated damages.

State Laws: The Massachusetts and California Examples

In 2008, a new law went into effect in the Commonwealth of Massachusetts concerning what an employee may recover if it is proven that his or her employer violated the state wage and hour laws. Massachusetts now requires a court to award an employee damages in the amount of three times the actual pay that was withheld. If an employee proves that he or she is owed pay under the state statutes then this award of treble damages is mandatory and judges do not have the discretion to issue lesser awards even if the employer acted in good faith. The law also requires Massachusetts employers to pay attorneys costs and litigation costs.

Other states such as California have also had recent legal developments concerning damages for wage and hour violations. For the past few years, California courts had been awarding punitive damages against employers who were found to have violated the state’s wage and hour laws. However, in December 2008, the California Court of Appeals held that punitive damages were not allowed for actions arising under the California Labor Code.

Every state has its own wage and hour laws and its own rules about what damages may be imposed for violations of those laws. Therefore, it is important to seek the advice of counsel in the state in which your employer is located if you believe that you have not received all of the pay to which you are legally entitled.

The Lilly Ledbetter Fair Pay Act of 2009

Tue, 21 Apr 2009 12:48:48 GMT

Just days after being inaugurated, President Barack Obama signed a new piece of legislation that was designed to bring fair pay to American workers. The law, known as the Lilly Ledbetter Fair Pay Act of 2009, overturned the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Co and amended the Civil Rights Act of 1964.

History of the Act

In 2007, the United States Supreme Court held in a 5 -4 decision that the statute of limitations for bringing an employment compensation discrimination lawsuit began at the time that the pay was agreed upon and not on the date that the most recent paycheck was received as the 11^th Circuit Court of Appeals had held. That meant that pursuant to Title VII of the Civil Rights Act, plaintiffs who alleged gender or racial discrimination in their pay had only 180 days from the date the pay decision was made by the employer to bring a lawsuit.

Justice Ginsburg wrote the dissenting opinion for the 4 judges who dissented from the majority opinion. Justice Ginsburg’s dissent reasoned that because discrimination takes place over time and because it can be difficult to ascertain what other employees are being paid that the majority’s holding of calculating the statute of limitations as 180 days from the date the pay decision was made was incorrect and inconsistent with the law. She found that if the employer is “knowingly carrying past pay discrimination” forward then the 180 day statute of limitation should still be running.

Revisions to the Civil Rights Act of 1964

Democrats in Congress agreed with Justice Ginsburg and introduced legislation to overturn the Supreme Court’s Ledbetter decision. Accordingly, the legislation was designed to amend Section 706(e) of the Civil Rights Act of 1964. Language was added to the law that made it an unlawful employment practice to discriminate in pay at the time that the payment decision is made or “when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”

Other laws were also amended to extend the statute of limitations for other forms of alleged pay discrimination pay such as discrimination on the basis of disability or age.

The Ledbetter Effect

The new law restores the statute of limitations for discriminatory pay to what it was prior to 2007.It means that every time a pay check is issued that is in violation of the Civil Rights Act or other applicable federal law, the statute of limitations begins again.

It is important to note that this law was controversial. John McCain and many other notable republicans opposed the bill during the 2008 electoral campaign. Some argue that the legislation would subject employers to lawsuits many years after the discriminatory act was alleged to take place. However, these opponents lost the debate on this bill and the law was ultimately passed by the House and Senate and signed by the President to protect the rights of American workers.

Wage and Hour Law Enforcement

Tue, 21 Apr 2009 12:45:29 GMT

Many employees are protected by federal laws which mandate a minimum wage, overtime pay and fair pay that is free from discrimination. Employees can contact the government agencies responsible for investigating allegations of noncompliance with these laws or they can file lawsuits against their employers if they believe that any of these laws were violated. Since agencies play an important part in the enforcement of these laws, employers should be familiar with the agencies’ procedures for investigating allegations of noncompliance.

Department of Labor Wage and Hour Law Enforcement

The Department of Labor’s Wage and Hour Division is the agency responsible for investigating alleged violation of the Fair Labor Standards Act (FLSA) and other federal wage and hour laws. An employee may contact the Wage and Hour division if, for example, the employee alleges that he was not paid the required minimum wage or was not paid mandatory overtime pay. If the Wage and Hour Division determines that the allegations are within its jurisdiction and if true constitute a violation of the law then employers will be contacted by an investigator. The investigator could request to examine documents (such as payroll records or time sheets) and interview the employer or employees relevant to the claim. If a violation is found to have occurred then back pay may be awarded to the employee and the employer may be required to change its practices to prevent future violations.

While the Wage and Hour Division serves an important function, it is important to note that the U.S. Government Accountability Office (GAO) issued an important report concerning the agency in March 2009. The GAO conducted a thorough investigation of the Wage and Hour Division’s practices and found that, “WHD frequently responded inadequately to complaints, leaving low wage workers vulnerable to wage theft.” The investigation was reported to the House of Representatives Committee on Education and Labor so that appropriate action could be taken.

EEOC Equal pay Enforcement

Employers should also be aware that claims can be filed against them alleging pay discrimination. At the administrative level, these claims are handled by the United States Equal Employment Opportunity Commission (EEOC). When the EEOC is informed of an alleged pay discrimination matter over which it has jurisdiction then the EEOC will investigate the claims. The investigation may include a document review and interviews. The EEOC can conduct mediation if both parties agree to it or it can issue the results of its investigation. If no violation is found then the matter is closed. However, if the EEOC does find that a violation of law occurred then it can order the employer to pay back pay, attorneys fees and other costs. The EEOC can also require the employer to change its discriminatory policies and provide evidence of those changes to the commission so that future problems of discriminatory pay can be avoided.

Legal Action

Employees also have the right to file lawsuits against employers for alleged violations of the federal pay laws. The statutes of limitations vary and may, in part, depend on whether or not agency investigations were conducted and rulings were issued.

Pay is central the agreement between employer and employee. It is, therefore, important for employees and employers to be aware of the federal agency investigation procedures and the legal options available to employees to remedy allegations of unpaid wages or discriminatory pay.

What You Need to Know about 401k Withdrawals

Tue, 21 Apr 2009 12:43:35 GMT

401k plans are common retirement investment tools for United States workers. The plans, named for the section of the IRS code that defines them, allow workers to save for retirement and to defer income taxes until the time the money is withdrawn. However, with these tax benefits come restrictions on when money can be withdrawn from the plan without financial penalties.

401k withdrawals

Typically, specific criteria must be met before a person can withdraw funds from a 401k retirement plan. Usually no financial penalties will be incurred if an employee withdraws from a 401k plan and is 59 ½ years old or older, the plan holder dies or becomes permanently disabled, the plan terminates and no successor plan is identified by the employer or the plan holder has a financial hardship that qualifies for an exception to the general rule. 401k plan holders must take care to make sure that what they consider to be a financial hardship will be defined as a financial hardship by the IRS. Otherwise, if a 401k plan holder fails to meet any of the withdrawal criteria described above, then he or she is likely subject to a 10 percent penalty tax for an unqualified 401k withdrawal in addition to the ordinary income tax that is always assessed on 401k distributions.

Required 401k distributions

While many people are concerned about how soon they can take money out of a 401k plan, it is also important to be aware that there are certain circumstances which mandate a 401k distribution. Most plans require that a retired person or a working person who owns more than 5% of the employer maintaining the plan begin to make withdrawals by April 1 of the calendar year in which they turn age 71 ½. If neither of those criteria is met then this required distribution age is put off until April 1 of the calendar year in which the employee retires from the service of that employer.

A 401k distribution may also be required when an employee stops working for an employer. Unlike previous generations of workers, today’s employees often change employers several times during their careers. Employees should make sure that they do not forego any retirement savings in the process of changing jobs and should request that any 401k money be rolled over into an eligible retirement account. Funds that are properly rolled over into eligible retirement accounts will not be subject to either the 10 percent penalty tax for early withdrawals or income tax at the time of the rollover.

401k Loans

Some 401k plans have specific provisions that allow plan holders to take loans out against their 401k investments. If your 401k plan permits loans then the IRS will allow plan holders to borrow up to 50% of the vested account balance up to a maximum of $50,000. Borrowers should be aware that the loan must be repaid within 5 years, unless it is used to buy a primary residence and that substantially level repayments must be made over the life of the loan. Failure to adhere to these rules could result in a tax assessment against the borrowed amount.

401k plans are designed to be retirement savings plans. While the IRS allows for early withdrawals in certain circumstances, plan holders must be aware of the potential penalties for unauthorized early withdrawals in order to protect themselves from unwarranted tax penalties.

Free FMLA Law Articles

Sat, 28 Nov 2009 23:00:11 GMT

Free FMLA Law Articles

Free Wages and Hours Articles | Free Wages and Hours Legal Documents

Do I have to pay my employees overtime?

In this economy, Im afraid of being laid off from my job. What will I do?

Possible Damages for Wage and Hour Law Violations

The Lilly Ledbetter Fair Pay Act of 2009

Wage and Hour Law Enforcement

What You Need to Know about 401k Withdrawals

Free FMLA Law Articles

In this economy, Im afraid of being laid off from my job. What will I do?