Here are the Top 5 FLSA Mistakes That Employers Make

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FLSA mistakes employers make.The federal Fair Labor Standards Act (FLSA) is the primary law controlling overtime and minimum wage requirements in the United States. Also, the FLSA establishes the basic requirements employees need to meet to earn overtime or be exempt from earning overtime.

Unfortunately, many of these requirements aren’t clear. In addition to being an old law—Congress passed the FLSA in 1938—the FLSA is quite complex.

Consequently, it’s no surprise that employers constantly make FLSA mistakes. In this article, we’ll discuss the five top FLSA mistakes employers make.

For the employees whose employers have made one of these top FLSA mistakes, it’s critical to know that you have rights.  Reach out to one of our employment legal matters attorneys today so that you can obtain the compensation that you deserve.

FLSA Mistake #1: Misclassifying Employees as “Exempt”

The FLSA allows for two kinds of employees: exempt and nonexempt. As the name suggests, exempt employees are not bound by FLSA wage and overtime regulations. The Act provides several different exemption tests to determine whether a certain group of employees is exempt. These exemption tests include:

  • The executive exemption test;
  • The administrative exemption test;
  • The learned professional exceptional test;
  • The creative professional employee exemption test; and
  • The computer employee exemption test.

Each one of these tests has several prongs, including a minimum salary requirement and a specific job duty requirement.

Rather than following the specific exemption tests, employers often assume that all employees with certain types of jobs are exempt. Therefore, they’re all too likely to misclassify employees and then deny them their overtime and wage rights under the FLSA.

FLSA Mistake #2: Wrongly Accounting for Meal Breaks

The FLSA does not require employers to give their employees a lunch break or rest period. Yet it does require that all employers who give their employees meal breaks actually allow the employee to rest during that time.

Oftentimes, employers automatically deduct a lunch break from their employees’ pay but fail to take steps to ensure that employees are relieved from duty during that break period. When that happens, the employer cheats its employees out of their full wages. If you’re a nonexempt employee, it’s essential that you are actually allowed to take any lunch breaks that your employer provides you “on paper.”

FLSA Mistake #3: Failing to Pay Employees for All the Time They’ve Worked

Another FLSA mistake that employers make is not paying their employee for all time worked. This issue frequently arises in the context of travel assignments. The FLSA requires that all time spent traveling in an employer’s vehicle during normal work hours be considered compensable work time. Moreover, any time that the employee spends traveling for the employer beyond their regular commute time is generally also compensable time.

For example, imagine employee John Smith—who is a non-exempt employee—has a daily commute of 15 minutes to his job. One day, his employer requires him to drive out to another office that is 1 hour away. The additional 45 minutes that John spends driving should be considered compensable time.

FLSA Mistake #4: Poor Recordkeeping

The FLSA requires employers to maintain accurate records relating to nonexempt employee work hours and wages for at least three years. Specifically, employers must record:

  • Each employee’s daily work hours;
  • Each employee’s full name and social security number;
  • The time and day of week when each employee’s work week begins;
  • The regular hourly pay rate of each employee;
  • The total workweek hours of each employee;
  • The pay period length;
  • The basis of time for pay (i.e., hourly or daily); and
  • The total wages earned by each employee during any given pay period.

The employer must keep these records either at the employees’ work location or at a central records office. Employers must also keep copies of any collective bargaining agreements and sales and purchase records.

FLSA Mistake #5: Employing “Interns” Instead of Employees

Yet another FLSA mistake that employers make is employing “volunteers” or “interns” to do substantive work rather than paid employees. The FLSA has tests for each of these two groups. For volunteers, courts evaluate whether an intern or student is actually an employee using the “primary beneficiary test.” There are seven factors that court weight as part of this test:

  • The extent to which the intern and the employer clearly understand that there is no expectation of compensation—if there is any implied or explicit promise of pay, then the intern may be an employee;
  • The extent to which the internship provides training that would be similar to what would be given in an educational environment;
  • The extent to which the internship is tied to the intern’s formal education program;
  • The extent to which the internship accommodates the intern’s academic commitments;
  • The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
  • The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and
  • The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

While this test is flexible to accommodate a variety of different factual situations, it is not something that employers should take lightly. If even one of these factors suggests that the intern should actually be an employee, the employer is liable to pay that individual both minimum wage and overtime pay under the FLSA.

Contact an Experienced FLSA Attorney Today

If you think that your employer is failing to meet an FLSA requirement, then you should consider hiring a legal practitioner to help you defend your rights.

However, not all lawyers are made equally.

Here at Smithey Law Group LLC, aside from being seasoned practitioners, we have written countless widely-published articles, won several awards, and regularly appear in print and broadcast media.

That means that we know how to prosecute your case, negotiate with your employer, and ensure that you obtain the compensation you deserve.

Our employment legal matters lawyers will be able to discuss your rights and legal options. Then we can advocate for your best interests and help you enforce your right to fair wages and working conditions.

Don’t wait. Give us a call today at 410-919-2990, or contact us online.

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Joyce Smithey, a seasoned employment and labor law attorney, has over 22 years of experience representing both employers and employees in Maryland and D.C. Her practice, rooted in a deep understanding of employment law, spans administrative hearings to federal litigation. Joyce's approach is comprehensive, focusing on protecting client interests while ensuring legal compliance. A Harvard graduate, her career began in Fortune 500 companies, transitioning to law after a degree from Boston University School of Law. Joyce's expertise is recognized by numerous awards, including Maryland’s Top 100 Women. At Smithey Law Group LLC, which she founded in 2018, Joyce continues to champion employment rights, drawing on her rich background in law and business.

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