1. #troubleandahalf #flsa #maspa #2014 #hrtwentyfour7 #Lansing Download this presentation at: www.luskalbertson.com/MASPA2014 Robert T. Schindler #L&A (248) 988-5696 RSchindler@LuskAlbertson.com @LuskAlbertson.com on Twitter

2. #importantpoints #whattoknow #roadmapforpresentation What is the purpose of the FLSA and WOWA (Michigan version); Who is covered by the Act and who is not; What does it mean if workers are covered; What is the potential liability if laws are not followed.

3. #purposeoftheFLSA Regulates the time and manner of employee wages, hours worked and payments. Creates minimum wage and overtime standards. Prescribes rights and responsibilities. Requires pay and hours record keeping. Except as noted, WOWA generally mirrors the FLSA.

4. #coverage #Employer Employer  Right to hire and fire;  Right to direct and control;  Right to set hours of work; and  Obligation to pay wages Specifically encompasses “public agencies” including public school districts.

5. #coverage #employee Employee  Anyone that the employer “suffers or permits” to work. 29 USC § 203(g).  All individuals who spend time “in physical or mental exertion (whether burdensome or not) controlled or required by employer... primarily for the benefit of the employer of his business” Tenn. Coal v Muscoda Lodge, 321 US 590 (1944).  Has been referred to as one of the broadest definitions in the law. #broad

6. #coverage #volunteers #notemployee Volunteers  Performs hours of service for a public agency for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation. May be paid expenses, reasonable benefits, or a nominal fee (no more than 20% of what employee would be paid).

7. #coverage #volunteers #notemployee #continued  Offer services freely and w/out pressure or coercion, direct or implied from employer; and  Is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer. Two Parts: same agency and same services. Parent volunteering in activities directly involving their child’s education and participation not a violation of FLSA. #teacher #roomparent

8. #coverage #independentcontractors Independent Contractors  Extent of investment in equipment and facilities;  Opportunity for profit or loss;  Degree of control exercised over them;  Permanency of the relationship;  Skill required of the individual;  Degree of independent initiative, judgment or foresight exercised. No factor is controlling – joint status possible. #control #thisoneisimportant #donttreatcontractorslikeemployees

9. #coverage #students #interns #studentteachers #notemployee Students and Trainees/Interns  Students are not employees if work is part of educational process. No employment relationship found where students required to perform cafeteria duties. Bobilin v Board of Ed, 403 F Supp 1095 (D Haw, 1975).  #cantturnstudentsintocustodialstaff

10. #coverage #students #interns #studentteachers #notemployee Students and Trainees/Interns (continued)  Trainee/Intern: Similar to that in vocational school/program; For benefit of trainee; No employees displaced; Employer derives no immediate advantage; Trainee not necessarily entitled to job afterward; Both employer and trainee understand no entitlement to wages.

11. #coverage #boardmembers #notemployee Others Not Deemed Employees  Appointed or elected members of Board of Education;  Any personal staff members of an elected or appointed Board of Education official;

12. #exemptstatus The FLSA creates exemptions for administrative, executive, or professional employees. If an employee is exempt, the minimum wage and maximum hour requirements do not apply to them.

13. #exemptions #executives Executive Exemptions  Compensation: $455 per week (or $380 in American Samoa) in salary and performance of the following duties; May also be met in periods of longer than one week; i.e., if average is at least $910 biweekly; $985.83 semimonthly; or $1,971.66 monthly.

14. #exemptions #executives #continued  Management of the employment enterprise or a recognized division or subdivision thereof;  Customarily and regularly directs the work of two or more employees; and  Has the authority to hire or fire, or whose suggestions and recommendations as to the hiring, firing, advancement promotion or change of status is given particular weight.

15. #exemptions #administrativeemployees Administrative Employee  Compensation: Same  Primary Duty: Office or non-manual work directly relating to management policies or general business operation of the school or its constituents or work directly related to academic instruction or training. Must generally utilize discretion and independent judgment; carry out major functions; formulate, interpret, or implement management policies or operating procedures.

16. #exemptions #continued #administrativeemployees  This exemption generally includes superintendents or a head of an elementary or secondary school, assistant responsible for administration of matters such as curriculum, quality and methods of instructing, accounting, human resources, etc., academic advisors, and school resource officers.

17. #exemptions #professionals Professional Exemption  Compensation: Same (Caveat –does not apply to individuals employed as teachers)  Primary Duty: work requiring knowledge of an advanced type in a field of science or learning customarily acquired by prolonged specialized study.

18. #exemptions #professionals #continued  Teachers specifically designated professionals. Teachers who possess an elementary or secondary certificate qualify for the exemption. Substitute teachers, even if not degreed or certified, are exempt as long as “primary duty is teaching and imparting knowledge” Student teachers do not qualify – Trainee/Interns  Generally also includes guidance counselors, accountants in the business office, school board attorneys, school psychologists, and school nurses.

19. #exemptions #highlypaidemployees Highly Paid Exemption  Compensation - $100K per year  Must perform any one or more of the duties or responsibilities of an executive, administrative or professional employee  #momoney #ballin

20. #exemptions #computeroccupations #techies Computer Related Occupations  Compensation: hourly rate of $27.63 or $455 per week in salary.

21. #exemptions #techies #continued  Primary Duty (50%) must consist of one or more of the following: Application of system analysis techniques and procedures; Design, development, documentation, analysis creation testing or modification of computer systems or programs; Design, documentation, testing creation or modification of computer programs related to machine operating systems; or A combination of the aforementioned duties, the performance of which requires the same level of skills.  Employees must have attained a level of skill to warrant independent work and discretion.

22. #nonexempt #hoursworked #statutecounts Hours Worked  All working time is considered compensable under the FLSA whether or not is was expressly authorized by the employer if on employer’s behalf – “work not requested but suffered or permitted is work time.” 9 CFR § 785.11  “On behalf of employer” is broadly construed.

23. #nonexempt #hoursworked #continued  Meal/Break Periods: No compensation necessary for meal periods of 30 minutes or more. Predominant Benefit Test – The employee bears the burden to prove that the normally uncompensable meal period should be compensable because it is spent predominantly for the employer’s benefit. Johnson v Koch Foods, Inc., 670 F. Supp. 2d 657 (E.D. Tenn. 2009). Short rest or break – 5 to 20 minutes must generally be compensated.

24. #nonexempt #hoursworked #continued  Mandatory meetings are compensable unless: Attendance occurs outside employee’s regular work hours; Attendance is voluntary; Employee does non productive work while attending meeting/training; and Program, lecture, or meeting is not directly related to the employee.

25. #nonexempt #hoursworked #continued When employee asserts they are underpaid it will be the burden of the employer to disprove assertion. This can be difficult without policies or timekeeping records. #quagmire #uhoh

26. #nonexempt #dualemployment Dual Employment  The FLSA allows for the exemption of overtime pay for hours worked by non exempt employees that meet the following criteria: Work is solely at the employee’s option; Work is done occasionally or sporadically; and Work is done on a part-time basis for the same public agency in a different capacity from the employee’s regular employment.

27. #nonexempt #dualemployment #continued  Employee’s Option: Employee’s decision must be made freely and without coercion, implicit or explicit by the employer, and the employee must be free to refuse to perform such work without justification or sanction. #doitoryouarefired #overtime

28. #nonexempt #dualemployment #continued  Occasional or Sporadic: Infrequent, irregular, or occurring in scattered instances. 29 CFR § 553.30(b). An activity may be occasional or sporadic even though it recurs seasonally (i.e., a holiday concert), but the activity is not occasional or sporadic if it occurs regularly (i.e., every week or every other week).

29. #nonexempt #dualemployment #continued Dual Employment (continued)  Different Capacity In determining if work is in a different capacity, DOL will “consider the duties and other factors contained in the definitions of the 3-digit categories of occupations in the Dictionary of Occupational Titles..., as well as all the facts and circumstances in a particular case.

30. #nonexempt #dualemployment #overtime Computing Overtime in Dual Employment  Where an employee in a single workweek works at two or more different types of work for which different non-overtime rates of pay have been established, his/her regular rate for that week is the weighted average of such rates. 29 CFR § 778.115  However, “an employee who performs two or more different kinds of work, for which different straight time hourly rates are established, may agree with his employer in advance of the performance of the work that he will be paid during overtime hours at a rate not less than one and one-half times the hourly nonovertime rate established for the type of work he is performing during such overtime hours.” 29 CFR § 778.419(a).

31. #nonexempt #comptime Compensatory Time  Must be granted at time and a half.  Can only be used if previously agreed to.  If employee is terminated they must be paid for unused comp time.  Can accrue up to 240 hours of comp time (160 hours of actual work).

32. #nonexempt #minimumwages Minimum Wages  Federal Currently $7.25 per hour (since July 24, 2009). Also allows for $4.25 per hour for first 90 calendar days for workers under the age of 20. They must be raised to minimum wage after 90 days or when they reach 20 years old – whichever comes first. Student-Learner – student at least 16 may be paid 75% of minimum wage if employed in bona fide vocational training program and employer has received a special DOL certificate.

33. #nonexempt #minimumwages #continued  Michigan $8.15 per hour as of September 1, 2014.  Goes up to $8.50 on January 1, 2016;  $8.90 on January 1, 2017;  $9.25 on January 1, 2018;  Changes in wage do not take effect if unemployment rate is 8.5% or higher. Also allows for the $4.25 training wage for workers under 20 years old. Youth sub-minimum wage of 85% of state minimum for workers under 18 – current sub-wage is $6.93 per hour

34. #requirements #recordkeeping #liability Record Keeping Requirements  Time records must be kept for two years and pay records must be kept for 3 years. Liability for Non-Compliance  Back Wages  Liquidated Damages  Attorney Fees and Court Costs

35. #requirements #liability Statute of Limitations  FLSA – Two years, but three years for a willful violation. Willful violation = “the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the [FLSA].” McLaughlin v Richland Shoe Co, 486 US 128 (1988). Statute of limitations is tolled with each improper paycheck – i.e., continuing violation  Michigan – Three years