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
As illustrated by the 11th Circuit's new ruling in Reyes v. Goya Foods, outside salespersons may perform work not directly related to sales, such as writing reports or attending conferences, without forfeiting their exemption from the overtime requirements of the Fair Labor Standards Act (FLSA).
California has long been among the most active states when it comes to employment law. Anthony Oncidi, head of the labor and employment law group at the Los Angeles office of Proskauer Rose, discusses recent changes in the law plus other key challenges affecting California employers.
The Minimum Wage and Employee Classification sections of the Employment Law Manual now include information about upcoming changes to the minimum salary requirements for executive and administrative employees, to the minimum wage credit for tipped employees and to the allowances for meals, lodging and uniforms.
In-depth review of the spectrum of New York employment law requirements HR must follow with respect to employee classification.
New York is the 15th state to join the US Department of Labor's Misclassification Initiative, following California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington.
In-depth review of the spectrum of Federal employment law requirements HR must follow with respect to Managing Employees in Special Situations
The Employment Law Manual has been updated to reflect an annual adjustment to the minimum rates of pay for overtime-exempt computer employees in California that takes effect January 1, 2014.
In-depth review of the spectrum of California employment law requirements HR must follow with respect to employee classification.
Ensuring that salaried employees agree their salary covers fluctuating hours could help reduce the amount of overtime the employees are owed in the event a court subsequently finds they were misclassified as exempt, as shown by Black v. Settlepou, 2013 U.S. App. LEXIS 20715 (5th Cir. 2013).
HR guidance on complying with the FLSA and state employee classification requirements. Support on following rules and regulations regarding this topic.