While we title this section of our web site "Overtime/
Contractors", there
are many wage and hour issues of interest to employers, including which employees are properly exempt, overtime payments, maximum hours, vacation, sick pay, proper deductions from paychecks (including FMLA deductions), independent contractors, and the use of long-term temporary employees. We also cover
some of these fundamental topics in our classes, so managers
have working knowledge of the law and the ability to partner
with in-house experts as issues arise.
Read below for a general overview of this issue, or click here to see FAQs.
One of the big growth areas in employment law in the past few
years is enforcement of laws on overtime payments. In fiscal
2003, the Department of Labor's Wage and Hour Division
collected more than $212 million in back pay, including overtime,
the most in 11 years!
The Fair Labor Standards Act (FLSA) covers overtime pay and
the minimum wage. Our web site has information on some of the
most frequently asked about topics including:
- exemptions
- hours employees can be required to work
- rights regarding lunch, vacations, breaks and holidays
- rights regarding sick pay and PTO
- hourly employees
- paying employees when they leave or are terminated
- proper pay
and time keeping procedures
In addition to the above topics, there is increasing interest
in the role of independent contractors and temps as employers
struggle to maintain competitive and flexible in challenging
economic times. If not handled properly, these alternative
work arrangements can lead to huge liability.
While totally legal, the use of contractors is not appropriate
if they are being overly controlled by the employer and/or can’t
meet other indicia of being truly self-employed. If “contractors” are
really employees entitled to overtime, the employer is liable
for back wages and fines, and the responsible manager could be
sentenced to up to 6 months in jail. In addition, the employer
is liable for the social security, federal and state taxes that
were never deducted from pay. Misclassified contractors won’t
have an I-9 immigration form on file with the employer, leading
to a $100 - $1,000 fine per violation. And they won't be properly
counted in determining coverage under the Worker Adjustment and
Retraining Notification Act (“WARN”) which can lead
up to 60 days’ back pay and fines of up to $500 per day.
In addition, independent contractors may become eligible for
all types of other health and benefit plans (including stock
options!), which could result in millions of dollars.
Similarly, under a legal doctrine of co-employment, temps can
be transformed into “employees” and therefore entitled
to health and other benefits.
Click here for Overtime/Contractors FAQs.
