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Are You Unknowingly Violating the Fair Labor Standards Act?

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Common everyday business practices result in unpaid “work” hours that 70% of employers have no idea are unlawful, but do in fact, violate the Fair Labor Standards Act (FLSA).

time and moneyBelow are 5 example of what is considered to be a violation of the Fair Labor Standards Act:

Punching in early (or punching out late) – for example an employee punches in 15 minutes before starting time.

If you are audited, you would have to prove that employee who punched in early was not working.  The Department of Labor assumes that an employee who has punched in is working.

Downtime – for example an employee’s normal workday starts at 9, but they have a long drive and have to drop children off in two different places, so they end up getting into work at 7:30, has breakfast at their desk and reads the newspaper.

If the phone rings and the employee answers the phone; or if they suddenly remember “something” that they must attend to and pull a file so they don’t forget; the Department of Labor considers them to be working and must be paid for the hour or portion of an hour when they were on the phone or pulling the file.

Chatting during breaks – an employee gets in a half an hour early to have a cup of coffee and chat with coworkers.

If, while chatting with co-workers, any business matter that happens to creep into the conversation is considered paid work time and all of the employees involved in that conversation must be paid for that time.

Checking emails from home – before leaving for work, an employee who lives over an hour away, checks a Blackberry or other electronic device for business email.

The Department of Labor considers this unpaid work time.

Supervisors “pitching in” to help – perhaps a Customer Service Supervisor (an exempt employee) puts on the headphones and takes orders for a few hours OR a Maintenance Supervisor sometimes does cleanup himself to make sure the work gets done.

If your company is audited, the Department of Labor may decide that answering the phone is hourly work and can reclassify the Customer Service Supervisor an a nonexempt hourly employee.  Once they do this, if they find that the Customer Service Supervisor worked more that 40 hours in a week (and many do); you could be hit with overtime backpay, penalties, and interest —- possibly for several years.

The same goes for the Maintenance Supervisor, because they are a “manager” and, therefore exempt, should be supervising the work done by others rather than doing the work themselves.

Employees who are exempt because they do managerial work (regardless if their title is “manager” or “supervisor” should be supervising and not doing the work for the people under them.

Wondering why this is such a big deal?

There is a major Department of Labor push on wage-hour enforcement, and according to Secretary of Labor Hilda Solis, “The U. S. Department of Labor is back in the enforcement business.”  There will be a huge jump in wage-hour audits, and 350 investigators are being added – an increase of more than one-third.

For additional information about the Fair Labor Standards Act, visit their website.

4 Responses to Are You Unknowingly Violating the Fair Labor Standards Act?

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert

I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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