What is the new minimum wage rate and when did it go into effect?

Workers who are covered by the FLSA are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Prior to July 24, 2009, the minimum wage rate was $6.55 per hour.

Be aware that many states have higher minimum wage requirements. If your state has a higher minimum wage, your employer must pay the higher amount.

An exempt employee does not have to be paid overtime pay and possibly minimum wage. The Fair Labor Standards Act has numerous exemptions written into the law that exempt certain job positions from either getting overtime pay or being paid minimum wage or both.  Each exemption has certain criteria that the position must meet for the exemption to apply. Typically, these are specific job duties.  However, some exemptions also have pay requirements.  For example, the most common exemptions are the Executive, Administrative, and Professional exemptions which require specific job duties and, in most cases, that the employee be paid on a salary basis.

A non-exempt employee means no overtime or minimum wage exemption applies to the position so the employee must be paid at least minimum wage and time and a half after 40 hours per week.

Time and one-half the “regular hourly rate.” If an employee’s regular pay is not expressed as an “hourly” rate, their regular pay rate must be converted to an hourly equivalent. See more details here.

In no case may the regular rate be less than the minimum wage required by FLSA.

If a salary is paid on other than a weekly basis, the weekly pay must be determined in order to compute the regular rate and overtime pay. If the salary is for a half month, it must be multiplied by 24 and the product divided by 52 weeks to get the weekly equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.

The word “overtime” is defined under the FLSA, and, in most cases, means all time worked in excess of 40 hours per workweek.

“Work” under the FLSA includes nearly all time spent performing job-related activities. These can include activities performed while “off-the-clock”, at the job site or elsewhere, whether voluntary or not. Work can include “off-the-clock” time spent maintaining equipment, cleaning up, staying late after normal shifts without “putting in” for overtime, doing job-related paperwork at home, making and responding to job-related telephone calls, working through meals, and many other activities.

The Fair Labor Standards Act (FLSA) is a federal law that governs such matters as the minimum wage, overtime pay, and recordkeeping requirements. The FLSA established the basic threshold of legal protections for employee pay in the United States. While many states offer more generous benefits to workers through their own wage and hour laws, the FLSA acts as the minimum set of rules that ensure employees are paid fairly, accurately, and on time for their work.

The Lore Law Firm has extensive experience representing workers in FLSA claims in state and federal courts. If you’ve been denied your legal rights, fill out our free client intake form, so our team can review your situation.

What Is the FLSA?

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The FLSA was enacted in 1938 and created the Wage and Hour Division within the U.S. Department of Labor. The law, which has been amended since 1938, established worker rights to minimum wage and overtime pay while setting rules concerning pay records, youth employment, and more. Workers who are covered by the law are entitled to be paid at least the federal minimum wage of $7.25/hour. They are also required to be paid overtime, at the rate of 1.5 times their hourly rate (or time and a half) for all hours worked over 40 during a work week.

The FLSA sets the minimum rules affecting private sector employees as well as those in federal, state, and local government. States have enacted their own laws that cover many of the same areas that fall under the jurisdiction of the FLSA, as well as additional matters not addressed in the federal law. While states can offer more generous protections to workers, they cannot deprive employees of the minimum rights secured by the FLSA. Wherever the FLSA and state laws differ, the rule that is more beneficial to employees will apply.

What Issues Are Covered By the FLSA?

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As a law that governs the labor rights of every American and migrant worker, the FLSA is fairly broad in its scope. Employees must be paid accurately and timely for all hours worked during the work week. This generally means all time that a worker is on duty or at a prescribed place of work, including work performed at home, travel time, waiting time, training, and probationary periods.

These are a few of the more specific wage and hour matters that fall under the scope of the law:

  • Minimum wage. Nonexempt workers must be paid a minimum wage of at least $7.25/hour, which is the federal rate that went into effect on July 24, 2009. Tipped workers may be paid $2.13/hour. However, if an employee’s tips combined with the hourly wage do not add up to the minimum wage, the employer must pay the difference. Many states and municipalities have enacted higher minimum wages.
  • Overtime pay. Workers must be paid 1.5 times their regular hourly rate, also known as time and a half, for all hours over 40 worked during a week. A work week is any fixed and regularly recurring period of 168 hours or seven consecutive 24-hour periods. There is no cap on the number of hours that employees 16 years or older can work during a week. Work done on weekends, holidays, or regular days of rest does not have to be paid above the regular hourly rate unless overtime is worked on those days.
  • Hours worked. To save money, many employers refuse to count all time devoted to work duties as payable hours. “Hours worked” includes all time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace. This definition addresses such issues as when waiting time and on-call time must be paid.
  • Meal breaks and rest periods. Relatively short rest periods (e.g. 20 minutes or less) must count as hours worked. Longer periods devoted to meals (usually 30 minutes or more) do not have to be paid. However, the employee must actually be relieved of work duties during this time for the employer to avoid having to pay him or her. If the employee is on call during lunch or frequently interrupted, for instance, that time counts as hours worked.
  • Recordkeeping rules. Employers have to maintain certain records concerning their employees’ pay. These records must include certain information related to the identity of each employee, the number of hours worked, and the amount of wages earned. In addition, employers must display an official poster outlining their workers’ wage and hour rights.
  • Child labor. Provisions of the FLSA also concern how many hours per week young people can work at different ages. Different rules apply to youth employed in agriculture. And as with other areas of the law, state provisions also regulate the amount of time young employees can work.

Taking Action to Protect Employees’ Rights

The Lore Law Firm works to protect employee rights by filing claims related to overtime pay and other areas that are covered by the FLSA. We also help enforce state laws that are related to these matters. Our national network of co-counsel and local counsel has successfully resolved countless claims on behalf of clients whose wage and hour rights have been violated.

Reach Out to the Lore Law Firm Today

We understand the frustration and stress you are undoubtedly feeling if your employer has refused to pay you properly for the work you’ve done. We are committed to supporting workers by fighting against illegal employment practices and winning compensation for unpaid back wages. Connect with us today by filling out our free and confidential intake review form so we can review your case.

Pay Methods Overview

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One area of wage and hour law that many employers disregard is the manner in which they pay their employees. There are basic federal rules that govern the ways your boss or company is allowed to pay you for the work you’ve done. Your employer’s failure to comply with the law could violate your rights and cheat you out of the compensation you’ve earned. Have questions about the pay methods your employer is using? It’s time to connect with The Lore Law Firm for a free and confidential case review.

Basic Obligations of All Employers

No matter the way in which your employer has chosen to compensate you, state and federal laws require that you be paid for all hours worked. Employers must pay at least the federal minimum wage, and a higher wage if set by state law. Employers must also pay non-exempt workers overtime, which is time and a half (or 1.5 times the regular pay rate) for every hour over 40 in a seven-day workweek. “Hours worked” generally includes all time spent actually performing job duties, plus time spent on call or waiting for work.

An employer must pay you promptly, either in cash (including direct deposit) or by way of a negotiable instrument, such as a check. “Promptly” generally means at the end of the current pay period. Employers cannot refuse to pay you and can only make legally permissible deductions from your pay (see below).

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Acceptable Rates of Pay

There are different frequencies or rates of payment that employers can use to compensate their employees. Some examples include:

Hourly

Many workers are paid by the hour, but they must be paid for all hours and fractions of hours worked. For instance, if you only work twenty minutes of one hour, your employer cannot round the twenty minutes down to zero and deprive you of payment. Minimum wage and overtime rules also apply (e.g. you must be paid time and a half for all hours over 40 in a given week).

Learn about overtime rules for hourly workers

Salary

Salaried workers are paid the same amount each week, regardless of how many days or hours per week they work. Even if salaried, you may still be entitled to overtime pay, which is an area that many employers get wrong. The way that you are paid does not alone determine whether you are entitled to overtime. Rather, your job duties must also be considered to determine whether you fall under overtime rules.

Learn about overtime rules for salaried employees

Day rate

A day rate worker is paid a flat rate per day, regardless of the number of hours worked. This method of pay is common in heavy industry, inspection, and oil and energy field service work. But as with salary, a worker can still be entitled to overtime pay. Whether you are so entitled will depend on your day rate, the number of days worked in a week, and the number of hours worked.

Learn about overtime rules for day rate workers

Commission

A commissioned employee is paid a percentage of sales or services without regard to hours worked. However, this method does not necessarily exempt a worker from the right to overtime. In fact, many employees lose money because their employers failed to pay the required overtime. Your entitlement to overtime can be more complicated if you are paid hourly plus commission.

Learn about overtime rules for commissioned employees

Other forms of payment

Employers are generally free to structure their employee payments as they see fit, provided they comply with state and federal laws. Some common examples include:

  • 1099 payments (independent contractor)
  • Tips
  • Flag rate
  • Piece rate
  • Payment for meals and lodging

Learn more about overtime rules for employees being paid via other methods

It is imperative that you understand your rights to a minimum wage and overtime if you are being paid by one of these alternative methods. Employers cannot evade their legal duties to comply with wage and hour laws simply by using a less common method. If you have questions, check with our team by completing our free and confidential intake form.

Cash, Direct Deposit, and Check

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Cash payments to employees are perfectly legal, but there are a few things employees should know about them. First, your employer is required by law to take out certain deductions for taxes, Social Security, and other items. This is the same rule if your employer paid you by check or direct deposit.

One issue that arises with cash payments is that employers sometimes fail to keep accurate records related to payment, which is required by law. This can be the result of an honest oversight or an attempt to evade tax laws by paying an employee “under the table.” Although the Fair Labor Standards Act (FLSA) does not require an employer to provide a worker with pay stubs, the laws in your state might. These are important records you should keep for tax and other purposes.

Direct deposit is a commonly accepted method of payment, but there are rules attached to it. Direct deposit is allowable as long as employees have the option of receiving payment by cash or check directly from the employer. As with any other wage and hour matter, the laws in your state may provide even stronger protections.

An employer can make direct deposit payments mandatory, provided the employer does one of the following:

  • Allow the employee to choose the bank to access his or her direct deposit; or
  • Choose the bank the employee must access his or her direct deposit from, but also offer the employer another payment option (e.g., cash or check)

If an employer chooses to pay by (paper) check, the funds must be available on demand. If they are not, then the employee has not been paid. This is an issue when companies have insufficient funds in their bank accounts.

Which Deductions Can My Employer Make?

Every worker knows that deductions are made from their pay, but they may not understand which ones are permitted. Some employers illegally deduct pay from their workers and thereby violate their rights.

Mandatory deductions include items like state and federal income taxes, FICA taxes, and wage garnishments. Employees can also choose to have money deducted for other items like life insurance and retirement plans. Voluntary deductions must be authorized by the employee and be for the employee’s benefit (not the employer’s).

Reach Out to The Lore Law Firm

The last thing you want to do as an employee is to not be paid fairly, fully, and on time. Even if you are not sure whether your rights have been violated, it’s worth checking with an experienced wage and hour attorney. You can have us review your case confidentially by filling out our free intake form. Reach out to us today.

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