/* Here is the full text of the U.S. Department of Labor's publication regarding Employer's and the Minimum Wage Law */ Employer's Guide to Compliance with Federal Wage-Hour Laws Note: This publication provides general information about the laws administered and enforced by the Wage and Hour Division. It does not attempt to answer all legal questions which may arise under these laws. It should not be considered in the same light as official statements of position contained in regulations or interpretative bulletins published in the Federal Register and the Code of Federal Regulations, or in the official opinion letters of the Wage and Hour Administrator. Copies of these publications may be obtained free from the Division's nearest office. Why has a Wage and Hour Representative visited me? The Wage and Hour Division of the U.S. Department of Labor administers a number of Federal laws which set basic labor standards. The Division's representative, called a compliance officer, will make an investigation to determine whether these laws apply to your business. If your business is subject to these laws, the compliance officer will verify that your workers are paid according to the law and that youths under 18 are employed as provided by law. The Division does not require a compliance officer to previously announce the scheduling of an investigation. Although in many instances the compliance officer does advise employers prior to opening the investigation, he/she cannot always do so. The compliance officer must have sufficient latitude to initiate unannounced investigations in many cases in order to observe normal business operations and expedite development of the facts. However, you have the right to request that the investigation be delayed briefly if you are unable to meet with the compliance officer due to prior commitments. /* This is very important. You DO NOT have to drop everything and proceed with an investigation. In fact, it's probably better that you don't do so. Of course, you may have counsel present. */ Why was my business selected for an investigation? Wage and Hour conducts investigations for a number of reasons. Many are initiated by complaints. All complaints are confidential; the name of the worker and the nature of the complaint are not disclosable. In addition to complaints, the Division selects certain types of businesses or industries for investigations. Occasionally, a number of businesses in a specific geographic area will be examined. In either situation, the objective is to improve compliance with the law in those businesses, industries, or localities. Regardless of the reason for the investigation, all investigations are conducted in accordance with established policies and procedures. What are my rights as an employer? As an employer you have the right to: * Look at the compliance officer's credentials and, if there is any question, verify his/her identity by calling the Wage and Hour area director for your locality. * Receive a full explanation of the investigative process. o Ask any questions concerning the application of the law and receive copies of Wage and Hour's publications. o Receive an explanation of any violations or back wages found due. o Meet with the compliance officer's supervisor should you fail to resolve any compliance problems with the compliance officer. o Present additional information for consideration if violations are disclosed. o Request the presence of your attorney, accountant, or other advisors at any time during the investigative process. /* USE THIS RIGHT! Don't waive it.*/ o Pursue your case in the courts. What are the laws and how do they apply? Coverage under the Fair Labor Standards Act (FLSA) is very broad. The FLSA applies to all employees of certain enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person. A covered enterprise consists of the related activities performed through unified operation or common control by any person or persons for a common business purpose, and which is: o Engaged in laundering or cleaning or repairing of clothing or fabrics. o Engaged in the business of construction or reconstruction. o Engaged in the operation of a hospital; an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises; a school for mentally or physically handicapped or gifted children; a preschool; an elementary or secondary school; or an institution of higher education (regardless of whether or not such hospital, institution or school is public or private or operated for profit or not for profit). o Comprised exclusively of one or more retail or service establishments (as defined in the Act) whose annual gross volume of sales or business done is at least: Beginning July 1, 1978 - $275,000 Beginning July 1, 1980 - $325,000 Beginning January 1, 1982 - $362,500 (any retail or service enterprise which had an annual gross volume of not less than $250,000 on June 30, 1978 and which later ceases to be a covered enterprise as a result of increases in this dollar volume test must continue to pay its employees at least the minimum wage in effect at the time of the enterprise's removal from the coverage, as well as overtime in accordance with the Act). o Any other type of enterprise having an annual gross volume of sales or business done of at least $250,000. The dollar volume standard mentioned in (4) and (5) excludes excise taxes at the retail level which are separately stated. Employees who are not employed in a covered enterprise may still be entitled to the Act's minimum wage, overtime pay, and child labor protections if they are individually engaged in interstate commerce or in the production of goods for interstate commerce. These include: o Communication and transportation workers. o Employees who handle, ship, or receive goods moving in interstate commerce. o Clerical or other workers who regularly use the mails, telephone, or telegraph for interstate communication, or who keep records on interstate transactions. o Employees who regularly cross state lines in the course of their work. o Employees of independent employers who perform clerical, custodial, maintenance, or other work for firms engaged in commerce or in the production of goods for commerce. o Employees who produce, manufacture, or otherwise work on goods for commerce, or in processes or occupations closely related and directly essential to the production of goods for commerce. If your business is covered by the FLSA, there are certain standards you must follow: Minimum Wage: Presently $3.35 an hour for all covered employees. /* This went up in stages to $ 4.65 */ Overtime: Nonexempt workers must be paid one and one-half times their regular rates of pay for all hours worked over 40 in a workweek. Some employees are excluded from the minimum wage or overtime provisions, or both, by specific exemptions. Because each exemption is narrowly defined under the law, an employer should carefully check its exact terms and conditions before applying it. Recordkeeping: Business owners are required to keep payroll records and records of hours worked for their covered employees. The Act requires no particular form for the records. All it requires is that the records include certain identifying information about your employees, the hours they work and the wages earned. The law requires this information to be accurate. Following is a breakdown of the basic information that an employer must record. Identifying Information o Employee's full name and social security number. o Address, including zip code. o Birth date, if younger than 19 years old. o Sex. o Occupation in which employed. Hours o Time of day and day of week when employee's workweek begins. o Total hours worked each day. o Total hours worked each workweek. Wages o Basis on which employee's wages are paid (e.g., "$4 an hour," "$160 a week" "piecework"). o Regular hourly pay rate for any week when overtime is worked. o Amount and nature of each payment excluded from the "regular rate". o Total daily or weekly straight-time earnings. o Total overtime earnings for the workweek. o All additions to or deductions from the employee's wages for each pay period. o Total wages paid each pay period. o Date of payment and the pay period covered by the payment. Most of the information required by the Act is of the kind that any company would keep in following ordinary business practices. Records with somewhat different information are required for workers with unusual pay arrangements. This would include domestics, homeworkers, certain hospital and nursing home employees, tipped employees, employees whose pay includes board, lodging, or other facilities, and employees who are exempt from the Act's minimum wage and overtime pay requirements. Child Labor: Restrictions on the employment of minors in nonfarm occupations vary according to their age and the nature of the work to be performed. The minimum age when employing minors in nonfarm jobs is 14. Minors who are 14 and 15 years old may work outside of school hours in various nonmanufacturing, nonmining, nonhazardous jobs, under these conditions. o No more than 3 hours on a school day, and 18 hours in a school week. o No more than 8 hours on a nonschool day, and 40 hours in a nonschool week. o No earlier than 7 a.m. and no later than 7 p.m. except from June 1 through Labor Day, when evening hours are extended to 9 p.m. Minors who are 16 and 17 years of age may work unlimited hours and in any occupation other than those which have been determined to be hazardous. These are no restrictions for minors 18 years or older. At any age, youths may work for parents in their solely owned nonfarm business (except in manufacturing or on hazardous jobs). Note Not all businesses are covered by the FLSA, and some employees of those that are covered may be exempt from the minimum wage and/or overtime provisions. The compliance officer will tell you how the law applies to your business. Government Contracts If you have a contract or subcontract to provide goods or services to the Federal government or to perform on federally financed or assisted construction projects, there are several other labor standards laws which may apply. Walsh-Healey Public Contracts Act: Sets basic labor standards for workers performing on contracts in excess of $10,000 for the manufacture or furnishing of goods to the Federal government. Covered employees must receive the FLSA minimum wage and overtime compensation of one and one-half times the regular or basic rate of pay for hours worked after 8 in a day or 40 in a week, whichever is greater. The Act also prohibits the employment of minors under 16 years of age on contract work. Service Contract Act: Requires that service employees performing on contracts in excess of $2,500 for the furnishing of services to the Federal government (as well as any subcontract thereunder) be paid not less than locally prevailing wage rates and fringe benefits, as determined by the Department of Labor, or, in certain cases, the wages and fringe benefits (including prospective increases) provided for in a predecessor contractor's collective bargaining agreement. No employee of an employer performing on a government service contract may be paid less than the FLSA minimum wage. Davis-Bacon and Related Acts: Require payment of locally prevailing wage rates and fringe benefits to employees of contractors or subcontractors performing work on federally financed or assisted construction projects in excess of $2,000. Contract Work Hours and Safety Standards Act: Requires payment of overtime compensation at one and one-half times the regular or basic rate of pay after 8 hours a day or 40 hours a week to laborers and mechanics working on most federally funded or assisted construction contracts in excess of $2,000, on Federal service contracts in excess of $2,500, and on Federal supply contracts in amounts between $2,500 and $10,000. If you have a government contract, the compliance officer will determine your compliance with these laws. Wage Garnishment: The Wage and Hour Division also administers the wage garnishment provisions of the Consumer Credit Protection Act. This law limits the amount of an individual's income that may be legally garnisheed, or withheld to pay a debt. It also prohibits firing an employee whose pay is garnished because of only one debt. /* The rights and obligations regarding wage garnishment are discussed in another tutorial.*/ What are the procedures followed in an investigation? Section 11(a) of the FLSA authorizes representatives of the Department of Labor to investigate and gather data concerning wages, hours, and other employment practices; enter and inspect an employer's premises and records; and question employees to determine whether any person has violated any provision of the Act. An investigation is conducted by a compliance officer of the Wage and Hour Division who will identify him- or herself and show you official credentials. The compliance officer will explain the investigation process to you. If you have any questions as to the identity of the individual, you should ask for the name of the person's supervisor and his/her telephone number so that you may verify the compliance officer's identity. An investigation consists of the following steps: o Examination of records to determine what laws or exemptions apply. These records include, for example, those showing your annual dollar volume of business, your involvement in interstate commerce, and your work on government contracts. Information from your records will not be revealed to unauthorized persons. o Examination of payroll and time records and taking notes or making transcriptions or photocopies essential to the investigation. o Interviews with certain employees in private. The purpose of these interviews is to verify your payroll and time records, to identify workers' duties in sufficient detail to decide what exemptions apply, if any, and to determine if minors are legally employed. Interviews are normally conducted on the employer's premises, but other arrangements may be made at the employer's request. In some instances, present and former employees may be interviewed at their homes or by a mail interview form. o When all the factfinding steps have been completed, the compliance officer will ask to meet with you and/or your representative. You will be told whether violations have occurred and, if so, what they are and how to correct them. If you owe back wages to employees because of minimum wage or overtime violations, the compliance officer will ask you to restore the under payments, and may ask you to compute the amounts due. Should you wish to be represented by your accountant or attorney at any point during this process, it is your right to do so. When the compliance officer has advised you of his/her findings, you and/or your representative may wish to present additional facts for consideration if violations were disclosed. At this point, any questions you have will be answered to the best of the compliance officer's ability. In some cases, the compliance officer may have to do research to provide the correct answers. Should you reach an impasse in the resolution of the compliance problems with the compliance officer, you may ask to meet with the area director who supervises the Wage and Hour operations in your area. What enforcement procedures are provided by law? While every effort is made to resolve the issue of compliance and payment of back wages at an administrative level, the laws also provide for enforcement procedures. You should be aware that the FLSA provides for the following: o A employee may file suit to recover back wages and an equal amount in damages, plus attorney's fees and court costs. o The Secretary of Labor may file suit on behalf of your employees for back wages and an equal amount in damages. o The Secretary may obtain a court injunction to restrain any person from violating the law, including unlawfully withholding proper minimum wage and overtime pay. o Employers who have willfully violated the law may face criminal penalties, including fines and imprisonment. o Employees who have filed complaints or provided information during an investigation may not be discriminated against or discharged for having done so. If they are, they may file a suit or the Secretary of Labor may file a suit on their behalf for relief, including reinstatement to their jobs and payment of wages lost plus monetary damages. In the case of the government contracts statutes, contract funds may be withheld for violations under the Walsh-Healey Public Contracts Act, Service Contract Act, Davis-Bacon and Related Acts, and Contract Work Hours and Safety Standards Act. Administrative hearings or, in some cases, court action may be initiated to recover back pay under these laws. In addition, liquidated damages may be assessed for certain violations. Violators of these laws may also lose their Federal contracts and be declared ineligible for future contracts for a specified period. Where can I obtain additional information? If you have any questions or want additional information, please contact your local Wage and Hour Area Office, listed in the telephone directory under U.S. Government, Department of Labor, Employment Standards Administration, Wage and Hour Division.