Best of www.BestZips.com (Collector's Edition)/Best of WWW.BESTZIPS.COM Collector's Edition (JCSM Shareware) (JCS Marketing).ISO/legal___/sba964.zip/F251.SBE

Text File | 1996-11-06 | 13KB | 316 lines

@094 CHAP 5

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

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

    . MINIMUM WAGE REQUIREMENT.  The federal minimum wage,
      after last being increased to $4.25 an hour on April 1,
      1991, increases to $4.75 an hour as of October 1, 1996,
      and will further increase to $5.15 on September 1, 1997.
      An exception to the increase is allowed for youths under
      the age of 20, for their first 90 days of employment,
      during which time they still may be paid $4.25 an hour.
      The latest increase was adopted as part of the new Small
      Business Job Protection Act of 1996, enacted on 8-20-96.
@CODE: CA
      The California minimum wage increases, under state law,
      to be the same as the federal minimum wage, each time the
      federal minimum wage increases, and on the same dates.
      However, in a November 5, 1996 ballot proposition, the
      state's voters approved a slight additional hike in the
      California minimum wage, which will now increase to
      $5.00 an hour in 1997 and $5.75 an hour in 1998.
@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 minimum hourly wage is currently set at
@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 when the federal minimum wage increases on
      October 1, 1996 and September 1, 1997.
@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, and will increase as the
      federal minimum wage increases to $4.75 and $5.15.)
@CODE:OF
@CODE: MO
      A ballot referendum that would have increased the
      Missouri minimum wage to $6.25 in 1997 and to higher
      levels subsequently was turned down by 72% of the
      voters in the November 5, 1996 election.
@CODE:OF
@CODE: NJ
      $5.05 an hour.)
@CODE:OF
@CODE: DE IL NY PA SD
      $4.25 for @STATE, and will increase as the
      federal minimum wage increases to $4.75 and $5.15.)
@CODE:OF
@CODE: IA
      $4.65 an hour for Iowa.)
@CODE:OF
@CODE: DC
      (The District of Columbia minimum wage varies depending
      on the type of job, being $7.25 for certain clerical
      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 are 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 at present is
@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.
@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)
      requirements of the Federal Fair Labor Standards Act.
@CODE:OF
@CODE: OR
      $4.75 an hour.  However, a ballot proposition in the
      November 5, 1996 election approved an increase in the
      Oregon minimum wage to $5.50 in 1997, $6.00 in 1998,
      and to $6.50 an hour by 1999.
@CODE:OF
@CODE: UT
      generally $4.25 an hour, for covered employees.
@CODE:OF
@CODE: VT
      $4.75 an hour, as it has been since January 2, 1996.
      It increases to $5.00 on January 1, 1997, and to $5.15
      an hour when the federal minimum wage goes to $5.15, on
      September 1, 1997.
@CODE:OF
@CODE: ME NH
      $4.25 an hour.
@CODE:OF

    . OVERTIME PAY REQUIREMENT.  This rule requires an
      employer 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
      seventh workday of a week.  California law also
      requires 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," may be
          exempt from coverage under the wage-hour laws.
          What this really means, translated from the
          legalese, is that certain businesses that do
          not significantly affect the flow of goods and
          services in interstate commerce are exempted if
          NONE of their employees are so engaged.  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 working
          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 million in sales
          a year, only those employees who are actually
          engaged in interstate commerce in some way will
          be subject to FLSA overtime and minimum wage
          requirements.  But if you DO have $500,000 or
          more of annual gross sales, and if ANY employees
          are engaged in interstate commerce activities,
          then ALL your employees are subject to the
          wage-hour rules, except certain classes of
          exempted employees, as listed below.

       .  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.  (A new law enacted on August
          20, 1996 also adds an exemption from wage-hour
          coverage for certain "computer professionals,
          including those who are paid by the hour, if paid
          an hourly wage of at least $27.63 per hour.)

       .  Employees who are classified as "outside salesmen"
          are also exempted from FLSA coverage.  Under 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 obtaining
               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
          following:

            .  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 supervision
               in carrying out daily tasks.

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

       .  There are numerous other exemptions from the
          federal wage/hour laws based on the type of
          business, the nature of the work performed by
          the employee, where the work is done, and other
          factors.  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
statutory 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 employers to preserve such records.

If you have employees whose wages, hours and working
conditions 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 poster,
"Notice to Employees," (Form HWHL-1) in the workplace.
@CODE:OF
@CODE: CA
California labor laws require an employer to post a
California poster regarding wages, hours and working
conditions, as well as a "Payday Notice."
@CODE:OF