The FLSA Rundown

Welcome back to Otegrity’s labor law series!

If you missed our first post, click here to read about Title VII. In this post, we will be focusing on the Fair Labor Standards Act otherwise known as FLSA.

The Fair Labor Standards Act was signed into law by President Franklin D. Roosevelt in 1938. Prior to this, working conditions were not the greatest to say the least. Workers, including children, were severely overworked and underpaid. As more and more workers were taken advantage of, the government realized they needed to get involved. FLSA established a federal minimum wage, protects children in the workplace, and introduced overtime pay when working over 40 hours per week.

What Does FLSA Regulate?

FLSA primarily regulates federal minimum wage (currently set at $7.25) and overtime pay. The act also has restrictions on child labor. Teenagers between 14 to 17 are not allowed to work a dangerous job and if a child is under the age of 14, they cannot work at all.

It’s important to note that FLSA typically does not cover volunteers or independent contractors. It also does not regulate the following:

1. Holiday pay

2. Sick pay

3. Breaks

4. Different pay on weekends or holidays

5. Termination of employment notice

Violations and Consequences

How do you violate FLSA? FLSA violations can include

1. Not paying your employees if they are doing work-related tasks off the clock

2. Incorrectly classifying employees as exempt

3. Not keeping detailed records of employees

Of course, there are consequences for these actions as well. As an employer you could face hefty fines from the Department of Labor. Overtime and minimum wage violations could cost your company up to $1,000 per violation. Child labor violations result in a $10,000 fine per child employed by the company.

Now, we do not think you would intentionally violate the Fair Labor Standards Act. Without a proper time and attendance system in place, though, it can begin to become overwhelming trying to keep track of when and how long your employees are working. It can also be a hassle to keep track of when they need breaks (especially minors). Let’s take a look at an example of an FLSA violation.

Don’t Be This Guy

There was a popular café located in a beach town and was a tourist hot spot during the summer months. The owner was looking for ways to increase profits, while reducing costs and came up with a plan to hire a group of teenagers. For months, the owner of the café did not allow them any breaks during their shift. They scheduled the teenagers for 40-hour work weeks with no overtime pay. One day, a tourist and her family who were in the café almost every day noticed what was happening. They decided they would report the owner for conducting illegal labor practices concerning minors. The owner of the café was audited by the Department of Labor and had to pay the high schoolers back for their hours.  

Don’t be like the café owner, who had to learn the hard way. Contact Otegrity today to find out how you can automate your employees time tracking and payroll and ultimately prevent an FLSA violation.

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What is Title VII and Why Does It Matter?

To kick off our labor law series, let’s talk about Title VII of the Civil Rights Act of 1964. What is it and why should you worry about it? To answer that, we first need to discuss why Title VII was enacted and why it matters.

Picture this. It’s the 1960s and the Civil Rights Movement is in full swing. African American citizens are fighting for their right to vote, their right to be respected, their right to be treated fairly in the workplace. Then, in 1964, Lyndon B. Johnson signed the Civil Rights Act with Rev Dr. Martin Luther King Jr. at his side. But what does the Civil Rights Act have to do with HR? The answer lies in one section called Title VII.

What Title VII Covers Title VII states employers cannot legally discriminate against any employee because of race, color, religion, sex (sexual orientation or gender identity), and national origin. Let’s define what each of these categories means.

• Race: a concept that groups people together based on physical, behavioral and cultural characteristics

• Color: the color of someone’s skin

• Religion: someone’s belief and/or worship of a higher power

• Sex (sexual orientation or gender identity): how a person identifies their own gender and the gender(s) they are attracted to; under Title VII it also includes pregnancy, childbirth and related medical conditions

• National Origin: the place a person is from

It’s important to remember that Title VII is only required of employers with over 15 employees but should be practiced by all employers.

What is Considered Discrimination Discrimination in the workplace can come in many forms. This may be:

• Different compensations, terms, conditions or privileges of employment based on the protected traits

• Not hiring someone due to protected traits

• Limiting, segregating or classifying the individual in any way that would deprive them of employment or adversely affect their employment status

• Adjusting someone’s employment-related test or holding them to a different standard

• Including preferences, limitations or specifications in a job posting based on protected traits

• Harassing or allowing harassment based on protected traits

• Retaliating against someone who submitted a discrimination complaint, formally or informally

All of these are direct ways you could violate Title VII; however, you can also violate Title VII through disparate impact or treatment. Disparate impact is when there are policies in place that may have an unintended impact on people who possess certain traits. For example, you may have a policy that applies to all genders but has a negative impact on the women at your company. It’s important to be aware of how company policies affect all employees regardless of race, color, religion, sex, or national origin.

Title VII Consequences In 2016, a man was fired from his job with The City of Venice, Florida and replaced with a white employee after undergoing a series of unwarranted disciplinary actions such as 2 unpaid suspensions. The man claimed that he was called racial slurs by his former coworkers and was not even able to eat his lunch peacefully. The former employee filed a Title VII claim and secured $195,000 in lost wages and damages from the city. Finding yourself charged with a Title VII violation isn’t a good situation to say the least. Here are some of the consequences the court can order if your business is found guilty of a Title VII violation:

1. Fines and damages up to $300,000

2. Cease unlawful employment practices

3. Pay back wages covering up to 2 years before the charge was filed

4. Reinstatement of any affected individual

5. Pay any other costs the court deems appropriate

6. Cover any attorney fees for the prevailing party

To help avoid any violations, you should keep proper employment data on file for three years and file an EEO-1 report each September. The EEO-1 report is required of businesses with over 100 employees or if you have an Affirmative Action Plan. All businesses should also have the necessary Workplace Discrimination posters posted on the worksite for all employees and applicants to see.

Title VII is just one of many important labor laws you should be aware of as an employer. Follow Otegrity as we explore what labor laws are, what the consequences of each are, and preventative actions you can take to avoid violations. Next up: FLSA.

3 Ways to Retain Your Employees

One of the most pressing issues employers have faced in the post-COVID world is retaining employees. Since the start of COVID we have seen thousands of employees switching companies and even careers. This leaves you with a question that is hard to answer: how do you keep your employees?

Luckily, Otegrity has some answers that may help you! Here are our top 3 solutions for retaining employees.

1. Offer great benefits

Offering great benefits is more than health insurance and worker’s compensation. It’s about providing solutions that work for you and your employees. There are several types of coverage you can provide including voluntary or group plans. Contact Otegrity to find out what might work best for you!

2. Allow for remote or hybrid work

Remote work is becoming the preferable way to work for many employees following the pandemic. In fact, 40% of workers expressed a desire for flexible work arrangements. If some of the positions in your company can operate remotely, we definitely recommend it!

Working from home can sound scary for an employer, but it does have its benefits! Studies have shown that employees who work from home are more productive, happier with their job, and are less stressed due to decreased commuting costs, healthier work-life balance, and flexible scheduling.

3. Provide competitive pay

Offering competitive pay is a great way to retain and attract employees. It shows that you care about the talent you are hiring and allows you to be more selective in the candidates you choose to move forward with. Contact us to learn more about ways to increase pay in a cost-effective manner.

By adopting these solutions, your employees will feel appreciated and want to stay with your company. They can also assist you with attracting great new hires! Find out how Otegrity can help you solve retention issues in a way that works for you by using our contact page or leaving a comment below.