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  • In the dynamic business landscape, the importance of fair labor practices cannot be overstated. Ensuring fair treatment and equitable compensation for a company’s employees is every business owner’s responsibility, regardless of company size or industry.

    One crucial piece of legislation that ensures fairness and equality in the workplace is the Fair Labor Standards Act (FLSA). This law has been instrumental in protecting employees and employers, promoting economic stability, and cultivating a more equitable society. Continue reading to explore the significance of the FLSA for small business owners and why complying is critical.

    Understanding The FLSA

    The FLSA is intended to protect workers against unfair pay practices. The U.S. Department of Labor (DOL) enforces the FLSA and sets basic standards enforced by the Department’s Wage and Hour Division. These basic standards include the following:

    • Minimum wage
    • Overtime pay
    • Recordkeeping
    • Youth employment standards

    While the FLSA was passed in 1938, it has seen numerous changes and is one of the most critical laws for employers to understand. Adhering to the FLSA ensures employers treat their employees fairly and ethically, promoting a harmonious work environment. 

    Ensuring fair wages

    One of the foundations of the FLSA is the establishment of a federal minimum wage. By providing a baseline for compensation, the Act guarantees that employees receive a fair wage for their work, regardless of the size or nature of the business. This provision helps workers maintain a decent standard of living and contributes to a more satisfied and motivated workforce, ultimately benefiting business owners through increased productivity and reduced turnover.

    Tori Moldovan, PHR, GMS’ Client Services Manager, added, “Pay transparency has become a hot topic in the recruiting world. Over the last three years, several states and cities have passed laws requiring pay information to be provided, such as salary ranges, or even prohibiting employers from inquiring about an applicant’s salary history. Employers need to keep apprised of laws requiring pay transparency, but also ensure their wages are competitive and non-discriminatory.”

    Overtime pay

    The FLSA also sets overtime pay guidelines, ensuring that employees who work beyond the standard 40-hour workweek are adequately compensated for their additional time and effort. This provision protects employees from exploitation and encourages small business owners to carefully manage their workforce, fostering a healthy work-life balance and preventing burnout. By valuing the well-being of their employees, organizations can build a loyal and dedicated team committed to their company’s success.

    Prohibiting child labor

    The FLSA addresses child labor concerns by setting age limits and work-hour restrictions for young workers; the legislation sets the minimum age for employment at 14 years old and limits the number of hours worked by minors under the age of 16. For small business owners, complying with these regulations is not just a legal requirement but also a moral obligation. By refraining from employing underage workers and providing opportunities for education and skill development instead, small businesses contribute to the overall welfare of society and promote the growth of a competent and educated workforce.

    Encouraging recordkeeping and compliance

    Maintaining accurate records of employee hours, wages, and other employment-related information is essential under the FLSA. Although recordkeeping may seem tedious, it is a valuable tool for small business owners. By diligently documenting employee data, businesses can ensure compliance with the law, defend themselves against potential disputes or claims, and gain valuable insights into labor costs and productivity.

    What Do You Do To Ensure You Remain Compliant With The FLSA?

    The last thing any business owner wants is the DOL knocking on their door, bringing potential legal issues, penalties, and reputational damage. By diligently following FLSA requirements, you can proactively protect your business, foster a fair work environment, and establish a solid foundation for long-term success. However, we understand how challenging it can be to take on these responsibilities by yourself.

    Have you considered partnering with a professional employer organization (PEO) like GMS? Our HR experts are here to help safeguard your organization. We take a proactive approach to address any non-compliance issues. Here are just a few ways our HR experts help your business:

    • Properly classify exempt vs. non-exempt employees
    • Ensure overtime is being recorded and properly paid
    • Travel time pay requirements are compliant 
    • Tipped employee/tip credit compliance 
    • Minor labor law compliance 
    • Independent contractor (1099) evaluation
    • Implement state-specific pay laws 

    Protect your business from unwanted disruptions and let GMS be your trusted partner. Contact us today.

  • For businesses located in areas affected by winter storms, it’s essential to familiarize yourself with wage and hour rules. There can be severe winter storms that prevent employees from coming to work. As a business owner, you may question if and when you need to pay employees affected by weather-related disruptions. Whether your employees are late for work due to road conditions, having to shovel their driveways, kids’ schools being closed, or even the business being closed, it’s critical that you understand your responsibility in all situations. However, the Fair Labor Standards Act (FLSA) and other state laws don’t stop, even during a blizzard.

    What You Must Know

    Employee pay ultimately comes down to the following factors:

    • Non-exempt status
    • Exempt status
    • State and Federal laws
    • Company policies

    Non-exempt status

    Pay for non-exempt, hourly employees is straightforward, with a few exceptions. Non-exempt workers are entitled to minimum wage and overtime pay when working more than 40 hours per week. These workers are to be paid for the hours they work. If the employer closes the business early or the employee is late due to road conditions, they only need to be paid for the time they work.

    However, in some states, there are laws in place for “reporting time pay” or “show-up pay” that requires non-exempt employees to be paid for a certain number of hours whenever the employees report to work as scheduled, even if work isn’t available. In addition, state and city laws could affect an employee’s pay, which requires an employer to allow an employee to use paid leave for an absence related to a snow emergency or school closing. As laws vary from state to state, you must stay on top of the ever-changing rules and regulations.

    Exempt status

    Exempt employees do not receive overtime pay and don’t qualify for minimum wage as they are typically paid a salary rather than by the hour. During the winter months, when roads are dangerous, and businesses shut down, it matters whether the employer is closed for business, or the employee is unable or unwilling to come to work because of the weather. For example, if a business is closed because of weather conditions, exempt employees must be paid their normal salary for the week if they’ve worked at least one day throughout that week.

    However, if the business is open but the employee chooses not to come in due to a storm, then the FLSA permits the employer to treat that as personal time off. Should an employee arrive late or leave early due to poor driving conditions, the FLSA does not permit employers to deduct partial days from these workers’ wages. Depending on state or local laws, it could require more from an employer than federal law does.

    Let’s Have A Compliant Winter Season

    Any business owner who has experienced winter storms understands it can have a drastic effect on one’s business. From having to shut your business down for the day to employees not coming to work due to dangerous driving conditions, you’ve been there. It’s time to have a safe and compliant winter season and partner with GMS. Our experts can help you navigate the intricacies of wage and hour laws. Megan Wagner, PHR, GMS’ Client Services Manager, emphasizes, “One of the biggest ways employers can prepare for winter is to develop handbook policies addressing inclement weather. These policies should include details on how employees will be notified if the business closes, whom they should notify if they are unable to make it to work, and who is eligible to work remotely when conditions preclude commuting into the office. You also must consider if your non-exempt employees can work remotely for part of the day, and how a later commute should be noted on their timesheet. Companies are required to comply with FLSA guidelines regardless of weather conditions, so employers need to understand how to manage exempt versus non-exempt time.”

    Contact us today to learn more.

  • The U.S. Department of Labor recently announced that their Wage and Hour Division (WHD) plans to add over 100 investigators to their team throughout 2022. As a result of the pandemic and great resignation, the division has reached the lowest staffing levels in decades. Acting Wage and Hour Administrator Jessica Looman stated, “While appropriations will determine our course of action, we are optimistic we will be able to bring new talented professionals on board to expand our diverse team.”

    According to the U.S. Department of Labor, some of the responsibilities that investigators include:

    • Conducting investigations to determine if employers are paying workers and affording them their rights as the law requires.
    • Helping ensure that law-abiding employers are not undercut by employers who violate the law.
    • Promoting compliance through outreach and public education initiatives.
    • Supporting efforts to combat worker retaliation and worker misclassification as independent contractors.

    What Is the Wage and Hour Division?

    The Wage and Hour Division’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. The Division is one of the country’s most crucial labor law enforcement agencies, enforcing comprehensive labor laws for over 148 million employees.

    The WHD enforces Federal minimum wage, overtime page, recordkeeping, and child labor requirements of the Fair Labor Standards Act. Additionally, the Division enforces a variety of legislative acts, including the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Act, wage garnishment provisions of the Consumer Credit Protection Act, and a variety of employee standards and worker protections.

    What Does This Mean for Business Owners?

    When partnering with a PEO like GMS, you can rely on support from our HR experts. Our team can help safeguard your company by performing our own FLSA audits to ensure you remain compliant. During the audit, we’ll cover an extensive checklist, covering items such as proper employee classification and proper payroll coding. Upon completing the audit, we’ll dive into any possible areas of concern and provide our recommendations to rectify said issues.

    Reach out to GMS today to ensure that your business will be properly prepared and protected if it is audited.