The Fair Labor Standards Act (FLSA) has applied to public employers in Minnesota for over fifteen years. Compliance should be easy at this point. However, some employees are working in more than one capacity at different pay rates, without the appropriate overtime rate being paid. In some cases, employees are being allowed or asked to “volunteer” for special projects or activities doing the type of work that falls within their normal job duties. Employees are being allowed to start work before their scheduled work time or continue after their scheduled end time without being paid for the time. As a result, time sheets reflect an exact forty hours per week, week after week, which judges could find suspect. These issues and others can create significant liability risks for employers.

The FLSA is the federal law of most general application concerning wages and hours of work. 29 U.S.C. § 201, et seq. The FLSA requires that all non-exempt employees be paid not less than one and one-half times their regular rate of pay for all hours worked over forty in a work week. Id. at § 207. The overtime provisions of the FLSA are mandatory and cannot be waived. As a result, an employer cannot refuse to pay overtime based upon a policy or practice, and an employee may not offer to work for less than time and one-half. In addition, the United States Supreme Court has broadly defined “work” under the FLSA to be all time spent in physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and the employer’s business. See Jewell Ridge Coal Corp. v. Local No. 6167, 65 S.Ct. 1063 (1945). Furthermore, the Department of Labor has taken the position that any work “suffered or permitted” is work time even if it is not requested by the employer. 29 C.F.R. § 785.11. Some common employment scenarios can trigger substantial liability under the FLSA as a result of the Act’s mandatory overtime requirements and the broad interpretation of work time.

Employers must be aware of potential FLSA violations since penalties can include back pay, liquidated damages, and possible civil liability. See 29 U.S.C. § 216. Individual liability is even possible in some circumstances in which the individual exercises a great degree of control over the wage and hour practice or the employment relationship.

The FLSA applies to all employees unless excluded or exempt. Elected officials, policy-making appointees, legal advisors, independent contractors, and volunteers are excluded from FLSA coverage. In addition, an employee may be exempt from coverage if the employee performs a certain type of work and is paid on a salary or fee basis. Exempt employees are not entitled to overtime pay or compensatory time. The Department of Labor has developed various tests to determine whether an employee is exempt from FLSA coverage as an executive, administrator, or professional. Employers should be aware of the appropriate test and its application to specific employees to avoid confusion or conflicts over whether a particular employee is entitled to overtime, and to avoid potential FLSA violations.

A common FLSA issue that often gets overlooked is when an employee holds multiple jobs with the same employer. Even if the jobs are completely different occupations, at different rates of pay, and at different locations, the employee’s total hours must be combined for overtime purposes as long as the positions are covered by the FLSA. For example, if a secretary working 35 hours per week also holds another position with the same employer in which the employee works ten hours a week, the employee would be paid for 45 hours, with the FLSA mandating that five of the hours be paid at the overtime rate. The overtime rate in these situations must be based on either the weighted hourly rate or at the rate that the overtime work was done if the employee and employer agree. See 29 C.F.R. §§ 778.115 and 778.419. The FLSA’s requirement that an employee’s hours must be combined should be considered on an employer’s hiring decision when a current employee is considered for an additional job.

Further, asking an employee to “volunteer” to perform additional work does not circumvent the FLSA’s requirements. If an employee “volunteers” and performs the same type of services as in the employee’s regular job, the time is compensable. See 29 C.F.R. § 553.101(d). An awareness of the FLSA’s dictates can help employers avoid potential FLSA violations before they occur.

Employees also should not be asked or coerced to work before or after scheduled work times without being compensated. As discussed above, the FLSA plainly requires that all work suffered or permitted by an employer is compensable. An employer cannot generally avoid liability for overtime payments by simply claiming that the overtime work was not specifically authorized. Employers should require employees to accurately record time spent working and must compensate the employees for that time. If an employer desires to avoid paying overtime wages, it must be made clear to employees that they are not to work more than forty hours in a week. Timesheets and other record-keeping should be uniformly and accurately maintained to preclude employees from performing overtime work that is not desired by the employer. The law is somewhat unsettled on whether an employer is liable for overtime wages for time that the employer did not know about, but the FLSA clearly favors the rights of employees. In addition, the FLSA provides for the imposition of liquidated damages and reasonable attorney’s fees if an employee successfully alleges an employer violation. As a result, employers should take the necessary precautions to minimize any potential overtime disputes.

The FLSA grants employees with significant rights regarding compensation and hours of work. In addition, the FLSA imposes severe penalties for violations, resulting in substantial liability risks for employers. However, employers may take steps to minimize liability by reviewing personnel practices, policies, rules, and manuals for compliance with the FLSA. Supervisors and other employees may need to be trained and educated on the application of the FLSA. Employers should confirm whether or not certain employees are exempt under the FLSA, and treat them accordingly. Finally, employers should develop procedures or mechanisms to monitor wage and hour practices. Taking such steps can serve to reduce employee wage and hour disputes, and more importantly, to prevent violations of the Fair Labor Standards Act.

RRM: 53895

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Terrence Foy

About Terrence Foy

Terrance Foy is a shareholder of Ratwik, Roszak & Maloney, P.A. and represents public employers in all aspects of labor and employment law, with an emphasis on collective bargaining, grievance and interest arbitration, and issues of employee discipline and discharge. Mr. Foy also provides legal advice and representation to counties and other municipal clients regarding reductions in force, the FLSA and discrimination claims. He has represented numerous public sector entities, including counties, cities and school districts, in civil litigation and administrative proceedings involving the Minnesota Open Meeting Law, data privacy laws, claims of discrimination, land use, competitive bid law and other aspects of public sector and municipal law. Mr. Foy received his B.A. degree from the University of Wisconsin-Madison and received his law degree from Hamline University School of Law. He is a member of the Minnesota State Bar Association, State Bar of Wisconsin, National Public Employer Labor Relations Association and the Minnesota Public Employer Labor Relations Association.