The importance of properly classifying and paying workers cannot be overstated.
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, and recordkeeping requirements for workers in private businesses and federal, state, and local governments.
- The federal minimum wage is $7.25 per hour. States may impose a higher minimum wage requirement.
- Employees who are not exempt from the FLSA overtime rules must be paid for all hours worked over 40 in a workweek at a rate of at least one and one-half times the rate of regular pay.
- Hours worked include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace. Employers must keep employee time and pay records.
Employers must pay their employees for all time worked in accordance with the FLSA. If a non-exempt employee is working, the hours must be tracked and compensated. This holds true for employees working outside of the office.
These tracking and payment requirements were brought to light this week when the Department of Labor announced a settlement with the social media company LinkedIn. It is being reported that LinkedIn Corp agreed to pay about $6 million in back overtime and damages to 359 current and former employees for failures to pay actual hours worked. A small portion of salespeople did not track their hours properly, which lead to an investigation of underpayment by the Company.
LinkedIn voluntarily agreed to make the back payments and has announced that it will train its employees that “off-the-clock” work is not permitted for non-exempt workers.
This settlement serves as a reminder to employers with employees subject to the FLSA that all work, whether scheduled or not, must be recorded by the employee and compensated by the employer.
