Vision Payroll

September 29, 2013

Use DOL Online Tool to Determine if Your Company Is Subject to the FLSA

A Cashier Who Uses an Electronic Device That Authorizes a Credit Card Purchase Is Considered Engaged in Interstate Commerce
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Employers Required to Provide the Notice

Employers subject to the Fair Labor Standards Act (FLSA) are subject to the notice requirements. The DOL offers an online tool to help employers determine if they are subject to the FLSA. One of the criteria is that employees who are engaged in, or produce goods for, interstate commerce are subject to the FLSA.

Examples of Covered Employees Who Are Engaged in Interstate Commerce

The DOL online tool provides the following examples of employees who are engaged in interstate commerce:

  • An employee such as an office or clerical worker who uses a telephone, facsimile machine, the US mail, or a computer E-mail system to communicate with persons in another state.
  • An employee who drives or flies to another state.
  • An employee who unloads goods which came from an out of state supplier.
  • An employee such as a cashier or waitress who uses an electronic device which authorizes a credit card purchase.

Examples of Covered Employees Performing Support Work

The DOL online tool provides the following examples of employees who perform support functions for instrumentalities of interstate commerce that are so closely related to interstate commerce that they are also considered to be engaged in interstate commerce:

  • A security worker at an airport.
  • A custodian who works for a janitorial contractor which cleans a bus terminal.
  • A laborer or mechanic who performs maintenance or repair work on machines used in the production of goods for interstate commerce or improvements to a city street.

Examples Are Not an Exclusive Listing

The above examples are not intended to be an exclusive listing. Other employees who don’t perform these tasks may still be considered to be engaged in interstate commerce.

Contact Your Labor Law Attorney for Further Information

Vision Payroll strongly recommends that employers consult with a qualified labor law attorney to determine if they are subject to the provisions of the FLSA.

September 25, 2013

Tip of the Week: Deadline Looms for Notice To Employees of Coverage Options

Deadline Looms for Notice To Employees of Coverage Options
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Employers Required to Provide the Notice

Employers subject to the Fair Labor Standards Act (FLSA) are subject to the notice requirements. US DOL Wage and Hour Division (WHD) Fact Sheet #14 provides information on who is covered by the FLSA.

All Employees Must Receive Notice

All employees, including part-time employees and employees not eligible to participate, must receive a notice.

Two Model Notices Are Available

The DOL has prepared and made available two model notices, one for employers that offer health insurance to their employees and one for employers that do not offer health insurance to their employees. An employer would only provide one type of notice to all employees, regardless of whether the individual employee is eligible for health insurance.

Deadline is October 1, 2013

Employers must provide the notice on or before October 1, 2013 to all current employees hired before October 1, 2013. Employees hired after September 30, 2013 must be provided the notice at the time of hiring. For 2014, the DOL will consider notices provided within fourteen days of an employee’s start date as provided at the time of hiring.

Multiple Delivery Methods Available

Employers  may hand deliver the notices, mail them by first-class mail, or by e-mail if the requirements of the DOL’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the notice to employees of coverage options required under the ACA.

October 14, 2011

Question of the Week: Do We Need to Include Bonuses in Overtime Calculations?

Do We Need to Include the Bonus in Overtime Calculations?
Do We Need to Include the Bonus in Overtime Calculations?
This week’s question comes from Sylvia, a payroll manager.

Sylvia asks:

We have employees who worked overtime this past week and received bonuses. Do we need to include bonuses in overtime calculations?

Answer: The bonuses may or may not have to be included in the overtime calculation. Discretionary bonuses are not included in calculating overtime pay, but non-discretionary bonuses are included.

Both the Decision to Pay a Bonus and the Amount of the Bonus Must Be Discretionary

Under 29 USC §207(e)(3)(a), in order for a bonus not to be included:

Both the fact that payment is to be made and the amount of the payment are determined at the sole discretion of the employer at or near the end of the period and not pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly.

Regulations Further Clarify the Law

The regulations issued under this section (29 CFR §778.221(b)) expand upon the explanation under the law:

In order for a bonus to qualify for exclusion as a discretionary bonus under [the law stated above] the employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid. The sum, if any, to be paid as a bonus is determined by the employer without prior promise or agreement. The employee has no contract right, express or implied, to any amount.

State Laws May Be More Beneficial

State laws may provide rules that are more beneficial to the employee and must be followed. Vision Payroll recommends that employers contact a labor law attorney to ensure that their bonus plans will be considered discretionary if they plan to exclude the bonus from the overtime calculation.

July 15, 2011

Question of the Week: What Is the Impact of Not Providing a Tip Credit Notice?

What is the Impact of Not Providing a Tip Credit Notice?
What Is the Impact of Not Providing a Tip Credit Notice?
This week’s question comes from Tony, a restaurant owner. I read that restaurants should obtain a signed tip credit notice from all tipped employees. What is the impact of not providing a tip credit notice? Answer: Employers who do not provide a tip credit notice are not allowed to take the tip credit.

Minimum Wage for Tipped Employees May Be Lower

Current federal law requires most workers be paid a minimum wage of $7.25 per hour when an employee works forty hours or less in a week. For tipped employees, the minimum cash wage is $2.63 per hour as long as the employee receives enough tips to bring the hourly wage up to at least $7.25 per hour. Some states may have higher minimum wage rates that must be followed in that state. See our Minimum Wage Chart for further information.

Under FLSA, Notice Is Required to Take a Tip Credit

Under §3(m) of the Fair Labor Standards Act (FLSA), a tip credit is not allowed, “with respect to any tipped employee unless such employee has been informed by the employer of the provisions of [the tip credit].”

Employers Must Pay Full Minimum Wage

Employers who do not provide a tip notice and therefore are not allowed a tip credit must pay the full hourly minimum wage of $7.25 per hour the state minimum wage if it is higher than $7.25 per hour.

Contact Vision Payroll Today

Contact Vision Payroll today if you have further questions on the tip credit notice.

July 13, 2011

Tip of the Week: Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees

Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees
Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees
On April 5, 2011, the US Department of Labor (DOL) issued a final rule that affects employers who have tipped employees. The rule amended a Fair Labor Standards Act (FLSA) regulation. All employers are required to provide certain required information to all tipped employees in either oral or written form.

Signed Written Notice Would Document That Requirements Were Met

The DOL commented although a written notice is not required, “employers may wish to do so, since a physical document would, if the notice is adequate, permit employers to document that they have met the requirements in section 3(m) and the Department’s regulations to ‘inform’ tipped employees of the tip provision.”

NRA, CSRA, and NFIB Have Filed Suit over Tip Credit Regulation

The National Restaurant Association (NRA), Council of State Restaurant Associations (CSRA), and National Federation of Independent Business (NFIB) have filed suit over the new final rule. According to the NRA:

The Final Rule followed a notice of proposed rulemaking (NPRM) that the DOL published in 2008 that would have made only technical and non-substantive changes to the tip credit notice regulation. Nothing in the 2008 NPRM put the public on notice that the DOL was contemplating significant changes to the tip-credit notice requirements.

Vision Payroll Recommends Restaurants Implement a Written Notice Policy

The NRA has provided sample documents that restaurants and other who have hired tipped employees may download. Vision Payroll recommends that employers review the documents with legal counsel and implement a written notice policy as soon as practicable.

July 11, 2011

Prince George’s County Public Schools Agrees to Pay $4.2 Million in Back Wages

Prince George’s County Public Schools Agrees to Pay $4.2 Million in Back Wages
Prince George’s County Public Schools Agrees to Pay $4.2 Million in Back Wages
The US Department of Labor’s Wage and Hour Division has obtained an agreement for Maryland’s Prince George’s County Public Schools system (PGCPS) to pay $4,222,146 in back wages due 1,044 workers to resolve violations of the H-1B temporary foreign worker program. Investigators from the department found that PGCPS illegally reduced the wages of the H-1B workers by requiring them to pay fees that the school system was required to pay.

H-1B Visas Are for Temporary Hiring in Certain Specialty Occupations

The H-1B program allows employers to hire foreign professionals in certain specialty occupations to work temporarily in the US. Workers hired under the H-1B program must be paid at least the same wage rates and benefits as those paid to US workers doing the same job in the same area, so that the wages of similarly employed US workers are not adversely affected.

Foreign Workers Have Been Paid Back Wages

“The Labor Department has the responsibility for ensuring that employers who use the H-1B program follow the law and do not place US workers at a disadvantage to H-1B workers,” said Secretary of Labor Hilda L. Solis. “We are pleased this investigation has been resolved with workers paid all the back wages to which they are entitled.”

Civil Money Penalties Will Also Be Paid

Due to the willful nature of some of the violations, PGCPS also has agreed to pay $100,000 in civil money penalties and to be debarred for two years from filing new petitions, requests for extensions or requests for permanent residency for foreign workers under any employment-based visa program. Under the statute governing the H-1B program, willful wage violations are subject to a debarment period of at least two years. Violations are willful when an employer knew or acted in reckless disregard for whether its actions were impermissible.

Certain Fees Reduced Workers’ Wages Below Legal Limits

The H-1B visa program requires that employers pay certain fees, including an anti-fraud fee and a filing fee, when they utilize the program. Instead of paying these fees and other costs associated with recruiting H-1B workers and filing their visa petitions, PGCPS required the foreign workers to pay them. As a result, the workers’ earnings were reduced below the amount legally required to be paid. The Wage and Hour Division’s investigation covered fees associated with the H-1B application process from May 2005 to January 2011.

Agreement Subject To Approval

The agreement is subject to approval by an administrative law judge.

July 10, 2011

Farmers Insurance Agrees to Pay $1.5 Million in Back Wages

Farmers Insurance Agrees to Pay $1.5 Million in Back Wages
Farmers Insurance Agrees to Pay $1.5 Million in Back Wages
Los Angeles-based Farmers Insurance Inc. (Farmers) has agreed to pay $1,520,705 in overtime back wages to 3,459 employees following an investigation by the US Department of Labor’s Wage and Hour Division that disclosed significant and systemic violations of the federal Fair Labor Standards Act’s (FLSA) overtime and record-keeping provisions. Violations occurred at 11 customer service call centers located in Florida, Kansas, Michigan, Oklahoma, Oregon and Texas.

Pre-Shift and Post-Shift Work Must Be Compensated

“Failing to properly compensate employees for pre- or post-shift work is a violation of federal law,” said Secretary of Labor Hilda L. Solis. “The Labor Department is committed to ensuring that employers abide by the law so that workers are protected against exploitation, and law-abiding employers are not placed at a competitive disadvantage.”

Farmers Did Not Pay for Pre-Shift Work

Through interviews with employees and a review of the company’s timekeeping and payroll systems, investigators found that the company did not account for time employees spent performing pre-shift work activities. Employees routinely performed an average of thirty minutes of unrecorded and uncompensated work — such as turning on work stations, logging into the company phone system and initiating certain software applications necessary to begin their call center duties — per week.

Farmers Agrees to Maintain Future Compliance with FLSA

Because employees’ pre-shift work times were excluded from official time and payroll records, they were not paid for all hours and are owed compensation at time and one-half their regular rates for hours that exceeded forty per week. Farmers Insurance has agreed to pay back wages, as well as to maintain future compliance with the FLSA by properly recording and compensating all hours worked by its employees.

Call Center Employees Across the Country Are Affected

The agreement affects call center employees who worked between Jan. 1, 2009, and May 10, 2010, at Farmers’ HelpPoint facilities in Olathe, Kansas; Oklahoma City, Oklahoma; Lake Mary, Florida; and Grand Rapids, Michigan. It also affects workers employed at a former location in Overland Park, Kansas, between Jan. 1, 2009, and Jan. 10, 2010. Additionally, it affects employees who worked between Jan. 1, 2009, and Feb. 1, 2010, at Farmers’ ServicePoint and commercial facilities in Austin, Texas; a ServicePoint facility in Grand Rapids, Michigan; a ServicePoint facility in Olathe, Kansas; and ServicePoint and commercial facilities in Hillsboro, Oregon.

FLSA Also Requires Overtime for Hours Worked in Excess of 40

The FLSA requires that covered employees be paid for pre-shift and post-shift job duties, and for attending required meetings. Employees must be paid time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond forty per week. Employers must pay at least the federal minimum wage of $7.25 for all hours worked, and maintain accurate time and payroll records.

March 11, 2011

Question of the Week: Do We Need to Pay for Eight Hours of Work Because of the Switch to Daylight Saving Time?

Filed under: News — Tags: , , , , — Vision @ 4:54 pm
Do We Need to Pay for Eight Hours of Work Because of the Switch to Daylight Saving Time?
Do We Need to Pay for Eight Hours of Work Because of the Switch to Daylight Saving Time?
This week’s question comes from Charlie, a manufacturing plant manager. We have a third shift that works from 11 pm to 7 am the following day. Some of the workers will work this Saturday night into Sunday. Do we need to pay for eight hours of work because of the switch to Daylight Saving Time? Answer: Since Daylight Saving Time begins in most parts of the country at 2 am, Sunday, March 13, 2011 many workers on a third shift will only work seven hours. At 2 am on that day, clocks are turned ahead to 3 am.

FLSA Does Not Require Pay for Hour When Clocks Are Turned Ahead

The Fair Labor Standards Act (FLSA) does not require employers to pay employees for the hour not worked. When Daylight Saving Time ends on November 6, 2011, employers will need to pay an extra hour since clocks are turned back.

Contact Vision Payroll for More Information

Contact Vision Payroll if you have any further questions on the switch to Daylight Saving Time.

November 5, 2010

Question of the Week: How Many Hours Do We Need to Pay for Work on the Third Shift This Saturday Night?

How Many Hours Do We Need to Pay for Work on the Third Shift This Saturday Night?
How Many Hours Do We Need to Pay for Work on the Third Shift This Saturday Night?
This week’s question comes from Meg, an HR manager. We have a third shift that works from 11 pm to 7 am the following day. Some of the workers will work this Saturday night into Sunday. How many hours do we need to pay for work on the third shift this Saturday night? Answer: Since Daylight Saving Time ends in most parts of the country at 2 am, Sunday, November 7, 2010, many workers on a third shift will work nine hours. At 2 am on that day, clocks are turned back to 1 am. Clocks will remain on standard time until the switch to Daylight Saving Time on March 13, 2011.

FLSA Requires Payment for Extra Hour

The Fair Labor Standards Act (FLSA) requires employers to pay employees for the extra hour worked. Some employees may be entitled to overtime if they work forty-one hours in the pay period instead of the usual forty. Under the FLSA, non-exempt employees are generally entitled to time and one-half pay for any overtime worked.

Switch to Standard Time Complicates Payroll Calculations

Contact Vision Payroll if you have any further questions on the switch to Standard Time.

June 26, 2010

Twelve Lawsuits Alleging FLSA Violations by Bank of America to Be Centralized in Kansas

Twelve separate lawsuits from California, Florida, Kansas, Texas, and Washington, all of which allege that Bank of America (either Bank of America, NA or Bank of America Corp.) “routinely fails to pay its employees for off-the-clock overtime work in violation of the Fair Labor Standards Act [FLSA] and/or state law”, have been moved to the District of Kansas for coordinated or consolidated pretrial proceedings by the United States Judicial Panel on Multidistrict Litigation (the Panel). One of the cases “seeks to certify a class of all Bank of America non-exempt employees in the United States” for a class action suit against Bank of America.

The Panel considered not moving some of the cases. Some cases were moved even though the allegations were related to specific jobs, because the allegations were similar to those in other cases, “including allegations that Bank of America systematically prohibits overtime eligible employees from accurately recording their time and, as a result, does not pay its employees for all hours worked, including overtime pay.” Others considered similar “allege that that the timekeeping system used by Bank of America allows managers to modify or decrease the time recorded, and time worked is regularly deleted to avoid paying overtime.” Some cases moved included unrelated allegations, “such as discrimination (the Zhou action), retaliation, defamation and violation of the Family and Medical Leave Act (the Carrero action).” The Panel felt that any differences were not significant enough to outweigh the benefits of moving the cases for coordinated or consolidated pretrial proceedings.

The Panel recommended that, with the consent of the District of Kansas, the coordinated or consolidated pretrial proceedings be assigned to the Honorable John W. Lungstrum, who “has the experience, energy and time to handle this litigation efficiently.”

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