Lisa Pate, FRSA Executive Director
Located under the federal jurisdiction of the Department of Labor (DOL), the Wage and Hour Division (WHD) administers and enforces the Fair Labor Standards Act (FLSA) with respect to private employment. FLSA establishes minimum wage, overtime pay, record keeping and child labor standards affecting full-time and part-time workers and categorizes them as exempt and non-exempt employees.
Businesses involved in the activities of new construction or reconstruction, including the repair or renovation of existing commercial or residential structures, painting, sandblasting, tuckpointing, roofing, guttering, spouting, water well drilling, installation of flooring and landscaping are considered part of the construction industry.
A business in the construction industry must have two or more employees and have an annual gross sales volume of $500,000 or more to be subject to the FLSA.
Non-exempt workers are entitled to a minimum wage of not less than $8.46 per hour (effective January 1, 2019) and overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
Wages required by the FLSA are due on the regular payday for the pay period covered. Deductions made from wages for such items as cash or merchandise shortages, employer-required uniforms and tools of the trade are not legal if they reduce the wages of employees below the minimum rate required or reduce the amount of overtime pay due under the FLSA.
The FLSA contains exemptions from these basic standards. Some apply to specific types of businesses; others apply to specific kinds of work. While the FLSA does set basic minimum wage and overtime pay standards and regulates the employment of minors, there are several employment practices which the FLSA does not regulate. For example, the FLSA does not require:
■ vacation, holiday, severance or sick pay
■ meal or rest periods, holidays off or vacations
■ premium pay for weekend or holiday work
■ pay raises or fringe benefits or
■ a discharge notice, reason for discharge or immediate payment of final wages to terminated employees.
The FLSA does not limit the number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old.
On September 24, 2019, the U.S. Department of Labor announced a final rule to make 1.3 million American workers newly eligible for overtime pay. The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the FLSA minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses and commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004.
The following conditions are covered in the final rule:
■ raising the "standard salary level" from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker - nonexempt employee)
■ raising the total annual compensation requirement for "highly compensated employees" from the currently enforced level of $100,000 per year to $107,432 per year and
■ allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.
The final rule goes into effect January 1, 2020.
A workweek is a period of 168 hours during seven consecutive 24-hour periods. It may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of minimum wage and overtime payment, each workweek stands alone; there can be no averaging of two or more workweeks. The practice of paying overtime only after 80 hours in a bi-weekly pay period is illegal since each workweek must stand alone.
If the employer performs work on a federally financed project or a project in which the Federal government has aided in financing, a different and somewhat stricter set of labor standards applies. Typically, this requires that employees performing on such contracts be paid a "prevailing wage rate."
The construction industry must also be aware of the potential for violations of the youth employment requirements of the FLSA. This is especially critical due to the dangerous nature of both the work performed and the tools used in this industry.
Covered employees must be paid for all hours worked in a workweek. In general, "hours worked" includes all time an employee must be on duty or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal activity of the workday to the end of the last principal work activity of the workday. This includes travel time to and from the jobsite.
When calculating time for nonexempt employees, be sure to take the following into consideration to avoid payroll issues:
■ record all hours worked to include time spent working before or after the shift
■ do not short employee hours by using terms such as down time or rain delay
■ compensate for meal breaks where the employee is not completely relieved of all duties to enjoy uninterrupted time for the meal
■ do not "bank" overtime hours or payment of overtime in the form of "comp time"
■ combine the hours worked for overtime purposes by an employee in more than one job classification for the same employer within the same workweek;
■ segregate and pay overtime hours on a workweek basis when employees are paid on a bi-weekly or semi-monthly basis.
Every covered employer must keep certain records for each non-exempt worker. The FLSA requires no form for the records but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned. The law requires this information to be accurate. The following is a list of the basic records that an employer must maintain:
■ employee's full name and social security number
■ address, including zip code
■ birth date, if younger than 19
■ sex and occupation
■ time and day of week when employee's workweek begins
■ hours worked each day
■ total hours worked each workweek
■ basis on which employee's wages are paid (e.g., "$9 per hour," "$440 a week," "piecework")
■ regular hourly pay rate
■ total daily or weekly straight-time earnings
■ total overtime earnings for the workweek
■ all additions to or deductions from the employee's wages
■ total wages paid each pay period
■ date of payment and the pay period covered by the payment
■ completed 1-9 Form.
Each employer shall preserve at least three years of payroll records, collective bargaining agreements, sales and purchase records. Records on which wage computations are based should be retained for two years (e.g., timecards and piece work tickets, wage rate tables, work and time schedules and records of additions to or deductions from wages). These records must be open for inspection by the Division's representatives, who may ask the employer to make
extensions, computations or transcriptions. The records may be kept at the place of employment or in a central records office.
In addition to the FLSA, WHD enforces and administers several other labor laws. Among these are the:
■ Davis-Bacon and Related Acts, which require payment of prevailing wage rates and fringe benefits on federally financed or assisted construction
■ Walsh-Healey Public Contracts Act, which requires payment of minimum wage rates and overtime pay on contracts to provide goods to the Federal Government
■ Service Contract Act, which requires payment of prevailing wage rates and fringe benefits on contracts to provide services to the Federal Government
■ Contract Work Hours and Safety Standards Act, which sets overtime standards for service and construction contracts
■ Wage Garnishment Law, which limits the amount of an individual's income that may be legally garnished and prohibits firing an employee whose pay is garnished for payment of a single debt
■ Employee Polygraph Protection Act, which prohibits most private employers from using any type of lie detector test either for preemployment screening of job applicants or for testing current employees during employment
■ Family and Medical Leave Act, which entitles eligible employees of covered employers to take up to 12 weeks of unpaid job-protected leave each year, with maintenance of group health insurance, for the birth and care of a child, for the placement of a child for adoption or foster care, for the care of a child, spouse or parent with a serious health condition or for the employee's serious health condition and
■ Immigration and Nationality Act.
Form 1-9, officially the Employment Eligibility Verification, is a U.S. Citizenship and Immigration Services form. It was mandated by the Immigration Reform and Control Act of 1986 and is used to verify the identity and legal authorization to work of all paid employees in the U.S.
All employers must complete and retain Form 1-9, Employment Eligibility Verification, for every person they hire for employment after November 6, 1986 in the U.S. if the person works for pay or any other type of payment.
Employers must retain 1-9 forms for at least three years, or for one year following the employee's separation from the company, whichever is later. It is a best practice to store all 1-9 forms together in one file since they must be produced promptly following an official government request.
More Human Resources information is available to FRSA members on our website, www.floridaroof.com, located in the "Members Only" section. As a reminder, FRSA keeps Human Resource company Seay Management on retainer so that members can email or call them with basic questions at no cost. If your project or issue requires additional time, Seay Management can provide you with a quote for working with them.
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