Overview: The Fair Labor Standards Act (FLSA) was written in 1938, at a time when manufacturing and agriculture dominated the American economy. The law's structure for employee classification as exempt or nonexempt from minimum wage laws and overtime requirements reflects that simpler time. Although it has been updated periodically in the decades since, the FLSA's classification scheme is often difficult to apply to more modern service- and information-related jobs.
One type of employee that has proven especially difficult to fit into the employee classification structure – and has also been the plaintiff in hundreds of lawsuits – is managers. Today's lean, flexible workplace often necessitates that managers pitch in and perform nonexempt work, rather than stand around with a clipboard in hand directing other employees. The more nonexempt work they do, the more likely it is they need to be paid overtime.
Complicating matters is the fact that employees' job duties change frequently. Employers often make the mistake of classifying all employees with a particular job title as exempt. When changes in the workplace necessitate changes in an employee's job duties, that classification can be jeopardized. HR is well-positioned to stay on top of these changes, and must remember that FLSA classification is an ongoing challenge, not a one-time task.
In addition, it's important that employers follow state requirements regarding employee classification.
Trends: The two-headed dragon of employee lawsuits and government enforcement continues to make FLSA classification a key concern for HR. Many lawsuits have been collective actions, in which hundreds and sometimes even thousands of similarly situated employees sue as a group. The standard for certifying these collective actions is relatively lenient compared to other employment laws, and for many years, most courts allowed them to proceed. Recently, the pendulum appears to be swinging in the other direction, with more and more courts taking a more stringent stance on whether employees truly are similar enough to sue as a group.
Author: Michael Cardman, Legal Editor
The New Hampshire Department of Labor and the US Department of Labor have agreed to conduct joint investigations, coordinate enforcement activities, and make referrals of potential violations.
For the first six months of 2015, the US Department of Labor will not bring enforcement actions against employers that fail to comply with new FLSA regulations. During the next six months, the DOL "will exercise its discretion in determining whether to bring enforcement actions."
The classification of employees as exempt or nonexempt under the Fair Labor Standards Act (FLSA) is one of the most complex and difficult issues in federal wage and hour law. This section assists HR professionals in determining whether employees qualify for any of the exemptions from the FLSA's overtime and/or minimum wage requirements.
Alabama is the 16th state to join the US Department of Labor's Misclassification Initiative, following California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.
As provided by the Internal Revenue service, IRS Publication 15-A, Supplement to Circular E, Employer's Tax Guide, Publication 15, Employer's Supplemental Tax Guide is a tax information guide for every employer.
New York is not quite California when it comes to employment law, but the Empire State has taken steps in that direction the past year with many new developments affecting employers. On this podcast, New York City employment attorney Jason Habinsky, of Haynes & Boone, examines the changes at both the state and local level.
Employers covered under the Fair Labor Standards Act (FLSA) and required to properly classify their employees should consider including this model policy statement in their handbook.
Newly revised IRS procedures allow independent contractors to stop or prevent backup withholding on reportable employer payments by validating and presenting a Social Security card to an employer.
In-depth review of the spectrum of Maine employment law requirements HR must follow with respect to recruiting.
HR guidance on complying with the FLSA and state employee classification requirements. Support on following rules and regulations regarding this topic.