Overview: Determining if an employee should be classified as an independent contractor or an employee under the FLSA and IRS is a perennial issue that continues to confound many workplaces; misclassification is surprisingly common and results in costly litigation.
To further complicate matters, properly classifying an employee regarding their exempt or non-exempt status befuddles many HR professionals; employee misclassification similarly results in a long list of costly litigation, many resulting in companies owing years of back pay for overtime due to having improperly classified employees as exempt when the proper employee classification should have been non-exempt (and thereby eligible for overtime).
Other FLSA regulations and state compliance challenges pertaining to employee compensation laws include deciding whether employees must be paid for certain activities, such as meal and rest breaks or training. minimum wage laws, overtime laws, child labor, and recordkeeping are additional aspects of FLSA compliance, most of which have variations by state.
Trends: Of concern to employers, not only are employees continuing to file FLSA lawsuits at a rapid pace but also the U.S. Department of Labor has stepped up its enforcement of employee compensation laws. So it's more important than ever to ensure compliance with this law.
Author: Michael Cardman, Legal Editor
Updated to reflect increases in the statewide minimum wage and in local minimum wages in San Diego, San Jose, Sacramento, Oakland, Sunnyvale, Richmond, Mountain View and El Cerrito, effective January 1, 2017; enhanced to improve comprehensiveness with the addition of minimum wage ordinances in San Mateo, Santa Monica, Palo Alto and Cupertino.
Updated to reflect an increase in the local minimum wage in Johnson County, effective January 1, 2017; enhanced to improve comprehensiveness with the addition of minimum wage ordinances in Linn County and Wapello County.
Updated to reflect increases in the minimum wage in multiple states and municipalities, effective January 1, 2017; enhanced to improve comprehensiveness with the addition of minimum wage ordinances in San Mateo, California; Santa Monica, California; Palo Alto, California; Cupertino, California; Linn County, Iowa; and Wapello County, Iowa.
HR and legal considerations for employers regarding employee compensation laws. Support on following rules and regulations regarding this topic.