If You Don’t Know the FLSA You Are Probably in Trouble

by Michael Haberman on February 11, 2011 · 2 comments


I made a couple of presentations at an HR Bootcamp for smaller businesses yesterday. In one of them I covered some information on the FLSA (Fair Labor Standards Act). Following my presentation an attorney also covered information on the FLSA. Speaking to him later we were both amazed at some of the questions that were asked. It provided confirmation of a statement I had heard a couple of days ago, which was “90% of employers in the US are making mistakes in some aspect of the FLSA.” Did you read that???? 90%!!! Actually I do believe that.

One area in which many companies make mistakes is in improperly docking the pay of EXEMPT employees. For the most part you CANNOT dock the pay of exempt employees, but there are seven (7) exeptions to that. Here they are: 

  1. Absence from work for one or more full days for personal reasons, other than sickness or disability
  2. Absence from work for one or more full days due to sickness or disability if deductions made under a bona fide plan, policy, or practice of providing wage replacement benefits for these types of absences
  3. To offset any amounts received as payment for jury fees, witness fees, or military pay
  4. Penalties imposed in good faith for violating safety rules of “major significance”
  5. Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of written workplace conduct rules
  6. Proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment
  7. Unpaid leave taken pursuant to the Family and Medical Leave Act

If you are improperly deducting you may in danger of getting a visit from a Wage & Hour investigator. The picture at the top of this blog is from the USDOL website. “We can help” is designed to help your employees report you. They are trying to get the word out that they are paying attention to many issues of the FLSA. In addition to improper classification and deductions they are also looking at “off the clock” work. I will post about that next week.

One thing is clear from all the activity going on is that you need to take how you handle FLSA VERY SERIOUSLY! The amounts of money that may result from lawsuits, fines and settlements is going to be big. And I would hate to be the person in charge of HR when that happens.

I am just saying…..

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