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Wage and Hour Laws

The Fair Labor Standards Act (FLSA) sets basic minimum wage and overtime pay standards.  Employers are required to pay overtime wages to certain employees after 40 hours of work in a week.  In some states, overtime must be paid after 10 hours in a day, regardless of how many hours are worked during the week.  Overtime rates must be at least one and a half times the regular rate of pay.  The FLSA does not require companies to provide holiday pay, sick pay, paid or unpaid vacation time, or severance pay.

Generally, federal law does not require companies to provide meal or rest periods.  However, if a company does provide a short break (usually 5 to 20 minutes), then the FLSA requires the company to count that time as compensable work hours.  Under the FLSA, companies must treat any required “pre” and “post” work activities as compensable time. Examples include preparing tools or work surfaces, cleaning tools or work surfaces, and meeting at a central location for transportation to a job site.

Under the terminology used by the FLSA, “nonexempt” employees are entitled to overtime pay, whereas “exempt” employees are not. In 2016, however, the U.S. Department of Labor implemented sweeping changes to overtime rules regarding so called "white collar" exemptions under the FSLA for executive, administrative, professional and highly-compensated employees.

As of December 1, 2016, employees earning an annual salary less than $47, 476 ($913 a week) are entitled to overtime pay if they work more than 40 hours a week. This more than doubles the current threshold of $23,660. The exemption amount will be increased every three years beginning January 1, 2020 (based on the 40th percentile of weekly earnings of full-time salaried employees in the lowest region of the country). Lastly, the exemption threshold for highly-compensated employees will be raised from $100,000 to $134,004. This amount will also be adjusted every three years (based on the 90th percentile of full time workers in the lowest-wage region).

An employer must be careful to properly classify employees as exempt or nonexempt; if employees are incorrectly classified, they may be eligible to receive back overtime pay and other compensation by pursuing a lawsuit under the FLSA. Employers are encouraged to seek qualified legal advice if they have questions about whether an employee should be classified as exempt or nonexempt.

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