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Coronavirus & the Fair Labor Standards Act (Overtime & Minimum Wage)

The Fair Labor Standards Act (FLSA) imposes minimum wage and overtime requirements on most employers. Many employers are currently considering various options to address the financial recession being caused by the coronavirus pandemic.

In an effort to help employers minimize potential issues with the FLSA, here are six topics for employers to consider when making employment decisions during this pandemic.

1. Employees Remotely Working from Home:

Employees need to be instructed (preferably in writing) to: (a) keep logging their time like usual; (b) not work unapproved overtime; and (c) full-time employees need to continue taking breaks and logging them.

Best practices: Employers should institute uniform policies and procedures to address these issues and reach out to their payroll provider to determine if the provider can institute a time-keeping program, preferably on the employees’ computer/workstation. Alternatively, employers may consider having employees submit daily time logs and productivity reports to their direct supervisor, and have the direct supervisor confirm that the time keeping is correct and immediately address any potential unapproved overtime issues[1]. Generally, employers must pay non-exempt employees for any hours worked, including overtime, even if the work was performed against company policy[2]. Normal disciplinary measures must be enforced and records should be kept of any and all such actions taken.

2. Avoiding Retaliation Claims:

If an employment action (whether reduction of hours or wages, layoff or furlough) is taken after one or more employees request leave under the Families First Act or a request for payment of overtime, the employees may assert claims of retaliation.

Best practices: Employers should institute uniform policies and procedures to address these issues. Employers need to document every action and reason for the action, and set forth a non-retaliatory reason for the action.

3. Non-Exempt[3] Employees and Reduction of Wages:

Any reduction of wages needs to comply with minimum wage requirements. Federal minimum wage is $7.25 & Florida’s minimum wage requirement is $8.56. This article does not reference or discuss tipped employees.

Employers need to be careful with potential retaliation claims, especially if the reduction comes after a request for leave under the Families First Act or a request for payment of overtime.

4. Exempt Employees and Reduction of Hours or Wage:

To maintain certain FLSA exemptions, employers need to make sure employees are being paid the minimum of $684 per week (equivalent to $35,568 per year for a full-year worker). If employers go below this amount, they will likely lose certain exemptions. The loss of an exemption would then create a requirement for the employer to comply with all standard overtime and minimum wage requirements, including keeping accurate records of time worked per week per each non-exempt employee.

5. Exempt Employees and Change of Position:

In order to keep certain FLSA exemptions when changing an exempt employee’s position, the employer needs to ensure the employee’s duties and obligations are substantially similar to those which entitled the employer to the exemption. If not, the employer will lose the exemption and need to make sure to comply with all standard overtime and minimum wage requirements.

6. Record Keeping When Working Remotely from Home:

Employers still have to keep records and make them available for the Department of Labor upon request. Employers may want to move these records to electronic versions or copies accessible via a (preferably secured) VPN or Cloud database.

For more information on records that need to be kept, please see:

[1] The employer needs to take actions to ensure that the method(s)/procedure(s) ensure accurate time keeping, and that any changes or modifications are clearly tracked and marked.
[2] It’s legal for an employer to discipline employees for working unauthorized overtime. The standard states that overtime has to be paid for every overtime hour their employer “suffers or permits” them to work. If an employer wants to demonstrate that it does not intent to “suffer or permit” unauthorized overtime, it will impose disciplinary actions for violations of its overtime policy. Depending on the circumstances, the employer may still have to pay the employee for the overtime work (at least the first instance of discipline). If, however, the employee continues to work overtime after being disciplined and told not to do so, the employer argument that it neither suffered nor permitted this work and shouldn’t have to pay overtime, is substantially strengthened.
[3] Employees can be exempt from the FLSA under certain enumerated exemptions. If an employer is not sure whether an employee is “exempt”, the employer should consult with an employment attorney to make this determination. Simply having a contract that states an employee is exempt is not sufficient.


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