Software of the Month Club 1996 May/Software of the Month Club 1996 May.iso/mac/ISO9660/ZIPFILES/SBA962.ZIP/F251.SBE

Text File | 1996-02-15 | 10.9 KB | 283 lines

@094 CHAP 5

        ┌───────────────────────────────────────────────┐
        │             LABOR LAW REQUIREMENTS            │
        └───────────────────────────────────────────────┘

FEDERAL WAGE-HOUR LAWS.  The federal Fair Labor Standards
Act (FLSA) encompasses a number of legal requirements re-
garding compensation of employees covered under the Act
(not all employers are covered, and not all employees of
covered employers are covered).  The two major require-
ments you need to know about are:

    . MINIMUM WAGE REQUIREMENT.  The federal minimum wage,
      after being frozen at $3.35 an hour for nine years,
      was finally raised, as of April 1, 1990, to $3.80.
      On April 1, 1991, it increased once more to $4.25.
@CODE: CA
      The California minimum wage is $4.25 an hour, for
      employees subject to California's minimum wage law.
@CODE:OF
@CODE: HI
      The Hawaii minimum wage is higher than the federal,
      and has been $5.25 an hour since January 1, 1993.
@CODE:OF
@CODE: AL AZ FL LA MS TN
      (@STATE has no state minimum wage law.)
@CODE:OF
@CODE: AR CO CT DE GA ID IL IA KY MD MA MI MO MT NB NV NJ NM NY NC ND OH OK PA RI SD TX WV WS WA WY
      (The state's minimum hourly wage, in late 1995, was
@CODE:OF
@CODE: AK
      The minimum wage in Alaska is currently $4.75, and
      will remain 50 cents higher than the federal minimum
      hourly wage.
@CODE:OF
@CODE: AR
      $4.25 an hour, effective since July 1, 1994.)
@CODE:OF
@CODE: CO
      $3.00 in Colorado for certain industries.)
@CODE:OF
@CODE: CT
      $4.27 per hour in @STATE.)
@CODE:OF
@CODE: KY MA MT NB NV NM WS
      $4.25 per hour in @STATE.)
@CODE:OF
@CODE: WA
      $4.90 per hour in @STATE.)
@CODE:OF
@CODE: MI TX
      $3.35 an hour in @STATE.)
@CODE:OF
@CODE: NC
      $4.25 an hour in North Carolina, effective since
      January 1, 1993.)
@CODE:OF
@CODE: ID MD MO OK OH WV
      $4.25 for @STATE, the same as the federal minimum
      wage.)
@CODE:OF
@CODE: NJ
      $5.05 an hour.)
@CODE:OF
@CODE: DE IL NY PA SD
      $4.25 in @STATE, and increases as the federal
      minimum wage goes up.)
@CODE:OF
@CODE: IA
      $4.65 an hour for Iowa.)
@CODE:OF
@CODE: DC
      (The District of Columbia minimum wage varies depend-
      ing on the type of job, being $7.25 for certain cler-
      ical and semi-technical categories of employees.
      However, this new rate has been temporarily reduced
      to $5.25 from December 5, 1991 until further notice.
      A general rate of $4.85 applies to all unclassified
      occupations and industries, and a rate of $4.25 for
      workers who under age 18.)
@CODE:OF
@CODE: GA
      $3.25 in Georgia.)
@CODE:OF
@CODE: ND
      $4.25 in @STATE for most employees.)
@CODE:OF
@CODE: RI
      $4.45 an hour in Rhode Island.)
@CODE:OF
@CODE: WY
      $1.60 an hour in Wyoming, the lowest of any state
      that has a minimum wage.)
@CODE:OF
@CODE: IN KS ME MN NH OR UT VT VA
      The @STATE minimum hourly wage in late 1995 was
@CODE:OF
@CODE: IN
      $2.00 an hour for firms with only one employee.  It
      is $3.35 for firms with at least 2 employees.
@CODE:OF
@CODE: KS
      $2.65 an hour.
@CODE:OF
@CODE: VA
      the same as the federal minimum wage ($4.25 an hour).
@CODE:OF
@CODE: MN
      $4.25 an hour for most workers.  For those workers
      employed by "small employers," the Minnesota minimum
      wage is now $4.00.  Under Minnesota law, a "small
      employer" is one that does not meet the gross volume
      (currently $500,000 a year in gross revenues) require-
      ments of the Federal Fair Labor Standards Act.
@CODE:OF
@CODE: OR
      $4.75 an hour.
@CODE:OF
@CODE: UT
      generally $4.25 an hour, for covered employees.
@CODE:OF
@CODE: VT
      $4.50 an hour, increasing to $4.75 an hour on
      January 2, 1996.
@CODE:OF
@CODE: ME NH
      $4.25 an hour.
@CODE:OF

    . OVERTIME PAY REQUIREMENT.  This rule requires an em-
      ployer to pay a covered employee at one and one-half
      times the employee's regular hourly rate for any
      hours worked in excess of 40 in a week.  The regular
      rate cannot be less than the minimum wage.  For the
      overtime pay requirement, the FLSA takes a single
      workweek as its measuring period and does not permit
      averaging of hours over two or more weeks.  That is,
      if an employee works 50 hours this week, you must pay
      him or her 10 hours at time and a half, even if the
      employee only worked 30 hours the week before.

      Note that the FLSA only requires overtime pay based
      on the number of hours worked during a week, and not
      for long hours that are worked on a particular day.
@CODE: CA
      California, on the other hand, requires time and a
      half on hours  worked in excess of 8 a day (up to 12),
      as well as for each hour worked (up to 8) on the se-
      venth workday of a week.  California law also re-
      quires DOUBLE time pay for hours worked in excess of
      12 in a day (in excess of 8 on the seventh workday
      of a week).  California also follows the federal
      overtime rule for hours in excess of 40 in a week.
@CODE:OF

The above rules generally apply to salaried workers as well
as to those paid on an hourly basis.  To determine the
hourly rate for a salaried employee, it it necessary to
divide the number of hours in the employee's regular work-
week (40 or less) into his or her weekly salary.  As noted
above, there are numerous exceptions to and exemptions from
the wage/hour laws.  Some are as follows:

       .  Employees of certain small companies, other than
          those "enterprises engaged in commerce," are ex-
          empt from coverage under the wage-hour laws.
          What this really means, translated from the le-
          galese, is that certain businesses that do not
          significantly affect the flow of goods and ser-
          vices in interstate commerce are exempted.  An
          "enterprise engaged in commerce" is one that
          "...has employees engaged in commerce or in the
          production of goods for commerce, or that has
          employees handling, selling, or otherwise work-
          ing on goods or materials that have been moved
          in commerce or produced for commerce by any
          person," AND "...is an enterprise whose annual
          gross volume of sales made or business done is
          not less than $500,000...."  All of which means
          that, if your firm does less than a half mil-
          lion in sales a year, it will generally be ex-
          empt from FLSA overtime and minimum wage re-
          quirements.

       .  Executives, administrators, and professionals,
          are not covered, and thus are not entitled by
          law to ANY pay for overtime hours worked.  In
          theory, these classes of employees are smart
          enough to protect themselves from exploitation
          by their employers.

       .  Employees who are classified as "outside sales-
          men" are also exempted from FLSA coverage.  Un-
          der the Code of Federal Regulations (29 C.F.R..
          Sec. 541.5), for an employee to qualify for the
          exemption as an "outside salesman," he or she
          must meet the two following requirements:

            .  The employee customarily and regularly
               works away from the employer's place of
               business while making sales or obtain-
               ing orders or contracts for services or
               for the use of facilities for which a
               consideration will be paid by the client
               or customer; and

            .  The salesman's hours spent engaged in
               work of any other nature do not exceed
               20 percent of the hours normally worked
               in the workweek by the employer's non-
               exempt employees who do such other work
               (20% of 40 hours if there no such other
               employees).

          Various indicators of an employee's bona fide
          status as an outside salesman include the fol-
          lowing:

            .  A contractual designation or a job title
               that reflects involvement in sales;

            .  Significant compensation on a commission
               basis;

            .  Special sales training; and

            .  Little or no direct or constant supervi-
               sion in carrying out daily tasks.

          Note that even where an employer is exempt from
          the FLSA wage and hour rules, state wage and hour
          laws will probably apply, and may be more strin-
          gent than federal wage/hour laws in many cases.
@CODE: CA
          California's wage/hour laws, for example, will
          generally apply to your employees even if feder-
          al law (FLSA) does not.  However, California
          has an exemption for managerial and professional
          employees that is similar to the federal exemp-
          tion for those types of employees.
@CODE:OF

       .  There are numerous other exemptions from the
          federal wage/hour laws based on the type of bus-
          iness, the nature of the work performed by the
          employee, where the work is done, and other fac-
          tors.  Most of these exceptions to coverage are
          quite technical and difficult for anyone but a
          labor lawyer to interpret, so you should assume,
          in most cases except those noted above, that
          your employees are subject to the federal wage
          and hour laws, unless your attorney advises you
          to the contrary.

Perhaps the most important thing to remember, if you have
employees who are subject to federal or state wage-hour
laws, is the need to keep detailed records of hours worked,
the type of work, and wages or salary paid.  Under the
FLSA, if an employee files a claim against you for alleged
failure to pay minimum wage or overtime in the past, you
will need to be able to produce proof that you met the sta-
tutory requirements.  Keeping detailed pay and work records
for each employee is the only way to protect yourself from
such claims for back pay.  Besides, the FLSA requires em-
ployers to preserve such records.

If you have employees whose wages, hours and working condi-
tions are subject to FLSA regulations, you will need to
post in your workplace an official wage-hour poster that
you may obtain from U.S. Department of Labor offices.
@CODE: HI
The Hawaii Dept. of Labor and Industrial Relations also
requires you to display their official wage and hour pos-
ter, "Notice to Employees," (Form HWHL-1) in the workplace.
@CODE:OF
@CODE: CA
California labor laws require an employer to post a Cali-
fornia poster regarding wages, hours and working condi-
tions, as well as a "Payday Notice."
@CODE:OF