Cream of the Crop 1/Cream of the Crop 1.iso/BUSINESS/SBA62.ARJ/FSBA.EXE/F251.SBE

Text File | 1992-04-30 | 11KB | 263 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 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 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 was raised to $3.85 an hour, effective
      January 1, 1988.  It was increased again, to $4.75 on 4-1-92, and
      the minimum rate will increase again to $5.25 on January 1, 1993.
@CODE:OF
@CODE: AL 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, as of 1991, was 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.
@CODE:OF
@CODE: AR
      $3.65 an hour in Arkansas, rising to $4.00 on July 1, 1992.)
@CODE:OF
@CODE: CO
      $3.00 in Colorado.)
@CODE:OF
@CODE: CT
      $4.27 per hour in @STATE.)
@CODE:OF
@CODE: MT NB NV WA
      $4.25 per hour in @STATE.)
@CODE:OF
@CODE: MI NM TX
      $3.35 an hour in @STATE.)
@CODE:OF
@CODE: NC
      $3.35 an hour in North Carolina, increased to $3.80 on 1-1-92,
      and is scheduled to increase to $4.25 on 1-1-93.)
@CODE:OF
@CODE: ID MD MO OK OH
      $4.25 for @STATE, the same as the federal minimum wage.)
@CODE:OF
@CODE: WV
      $3.80, for West Virginia, and increased to $4.25 in April, 1992.)
@CODE:OF
@CODE: NJ
      the same as the federal minimum wage in @STATE, but rose
      to $5.05 on 4/1/92.)
@CODE:OF
@CODE: KY
      $4.25 an hour for Kentucky, since July 15, 1991.)
@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
      $4.25 an hour for Iowa.  It increased to $4.65 on 1/1/92.)
@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 tempo-
      rarily reduced to $5.25 from December 5, 1991 until October 8,
      1992, after which it will return to $7.25 an hour, unless other
      legislation is enacted in the meantime.  This is, by far, the
      highest minimum wage in the U.S.)
@CODE:OF
@CODE: GA
      $3.25 in Georgia.)
@CODE:OF
@CODE: WS
      $4.25 an hour in @STATE.)
@CODE:OF
@CODE: MA
      $4.25 in @STATE.)
@CODE:OF
@CODE: ND
      $4.25 in @STATE for most employees.)
@CODE:OF
@CODE: RI
      $4.45 an hour in Rhode Island, effective since April 1, 1991.)
@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 1991 in @STATE was
@CODE:OF
@CODE: IN
      $2.00 an hour for firms with only one employee.  It increased
      to $3.35 to for firms with at least 2 employees, on 7/1/90.
@CODE:OF
@CODE: KS
      $2.65 an hour.
@CODE:OF
@CODE: VA
      $3.65 an hour, and will become the same as federal on 7-1-1992.
@CODE:OF
@CODE: MN
      --$4.25 an hour for most workers.  For workers employed by
      "small employers," the Minnesota minimum wage is now $4.00.
@CODE:OF
@CODE: OR
      $4.75 an hour.
@CODE:OF
@CODE: UT
      generally $4.25 an hour, for covered employees.
@CODE:OF
@CODE: ME NH VT
      $4.25 an hour, effective as of April 1, 1991.
@CODE:OF

    . OVERTIME PAY REQUIREMENT.  This rule requires an employer to pay
      a covered employee at one and one-half times the employee's reg-
      ular 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 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 em-
ployee's regular workweek (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 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.
          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, it will
          generally be exempt from FLSA overtime and minimum wage
          requirements.

       .  Executives, administrators, 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 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 an employer is exempt from the FLSA wage
          and hour rules, state wage and hour laws will probably apply,
          and may be more stringent than federal 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 de-
tailed 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 require-
ments.  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
the official wage-hour poster provided by the U.S. Dept. of Labor.
@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
@CODE: LS
The Labor Law Decree of @STATE makes it a crime, punishable by
death, for anyone but the State or the Party to exploit workers.
@CODE:OF