NOTE FROM ROBIN: In March, I began a series of very basic explanations of the federal laws that govern the workplace. The first installment covered discrimination in general, the second installment covered religious accommodation, and the third installment covered retaliation. My next two posts will be about the minimum wage and overtime provisions of the Fair Labor Standards Act. If there is a topic that you'd like to see covered, please send me an email or leave a comment here.

For these two FLSA posts, I want to thank Jim Coleman, co-chair of our firm's Wage and Hour Practice Group, for keeping me on the straight and narrow. I could not have written these posts without his substantive expertise and editorial assistance.

The Fair Labor Standards Act is a federal law that sets the minimum standards for three sets of requirements: (1) minimum wage, (2) overtime, and (3) child labor. This post will focus on the minimum wage requirements, and next week I’ll talk about overtime.

“The bare minimum”

Employers should think of the FLSA minimum wage provisions as a “floor.” Many states, cities, and counties have a higher minimum wage than the FLSA minimum of $7.25 an hour. Employers must pay employees in those states or localities the highest applicable minimum wage.

If an employee is “non-exempt” -- which I’ll discuss in the overtime post -- and covered only by the FLSA, the employer must pay at least the federal minimum wage ($7.25 an hour) for each hour worked. Simple enough, right? If I’m non-exempt, and I work 40 hours in a workweek, then the FLSA would require my employer to pay me gross wages of at least $290 for that week ($7.25 times 40).

Common employer mistakes

Minimum wage is so straightforward! How can an employer mess up? Unfortunately, in a number of ways. Common mistakes include the following:

Not paying for all “hours worked.” If an employee’s hourly rate is close to the minimum, and the employer doesn’t pay for all of the employee’s “hours worked,” then that could take the employee’s regular hourly rate for the workweek below the minimum. Not cool. Remember, minimum wage compliance is determined by dividing the total of all straight time wages paid for the workweek by the total of all hours worked during that same workweek. The result must be $7.25 or higher.

Even if the employer's stated hourly pay rate is $7.25 an hour or more, there could be a minimum wage violation if the employer doesn't pay the employee for all hours worked. Those hours worked for zero dollars could bring the employee's regular rate below $7.25 an hour.

For example, normally the time an employee spends commuting from home to the workplace is not “hours worked” under the FLSA. But if the boss calls the employee on her commute to help her get a head start on her latest assignment, then that commute time would normally become compensable because now the employee is “working” while commuting. If it’s “work,” the employee has to be paid for that time, and failure to pay could bring the employee’s regular rate for the week below the minimum.

This Fact Sheet from the U.S. Department of Labor has more information about determining what are “hours worked.”

Improper deductions. Some things can be deducted from an employee’s pay, and some things can’t. If an employer makes wage deductions that shouldn’t have been made (for example, for required safety equipment or for required uniforms), then the effect of those improper deductions might be to take the employee’s regular rate below the minimum.

Off-clock work. I know that none of our dear readers would do this, and it isn’t really a “mistake” at all. But there are a few bad apple employers who won't let their employees record all of their hours worked. Even worse, the employees are often low-wage workers, so it is very easy for the off-clock work to bring the employee’s hourly rate below the minimum when the unrecorded time is factored in. (Once the employer gets caught.)

And even ethical employers need to watch out for off-clock work, sometimes from their best employees. A dedicated non-exempt employee who stays late one evening to help out in a crunch but doesn’t put the time down, saying, “Oh, I was happy to do it – no problem at all!” could be putting the employer at risk for a minimum wage violation because the definition of compensable time is so broad.

Lazy recording of time. Employers and employees – especially “salaried non-exempt” employees – can both be guilty of this. Here's an example. The standard workweek is 40 hours, or eight hours a day, five days a week. The supervisor is in a pickle, and the employee works through his lunch hour each day to get the task done . . . and doesn’t take time off in that same workweek to offset the lost lunch hours. At the end of the week, the employee without thinking fills out his time card as 8-8-8-8-8, total of 40 hours, same as always. But this week he actually worked 45 hours. That may not take his regular hourly pay rate below the minimum wage, but it could. 

Are you also seeing overtime problems with these scenarios? Me too. But this post has gone on too long already, so I’ll talk about overtime next week. Don’t go away!