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HR Update: Full story

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Steven Cesare, Ph.D. | July 27, 2011

The Fair Labor Standards Act (FLSA) is one of those laws that most landscapers have never heard about by name, but are constantly aware of, due to its widespread effect on them. This law addresses numerous compensation issues that affect all employers, especially landscapers, including:  overtime, travel time, training time, and hourly versus salary status.  
It is critical for landscapers to know what is and what is not legally required (e.g., vacations, holiday pay, discharge notice) by the FLSA, and how it corresponds to respective state laws. To that end, this article provides basic information outlining the penalties associated with FLSA violations, summarizes common FLSA violations and presents industry-wide best-in-class practices to help ensure legal compliance.  

PENALTIES
When federal investigators encounter FLSA violations, they often recommend changes in employment practices to bring the employer into compliance, and require payment of back wages for up to three years due to employees, an equal amount in liquidated damages and attorneys’ fees.  Beyond those penalties, willful violators may be prosecuted criminally and fined up to $10,000.  A second conviction can result in imprisonment. Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to civil money penalties of up to $1,100 per violation.

COMMON VIOLATIONS
Aside from state-specific wage and hour laws that often parallel or extend federal guidelines, here is a list of FLSA violations that landscapers routinely commit.

Not paying for unapproved overtime: When an employee works any type of overtime, approved or unapproved, the employee must be paid the correct overtime rate. If the employee worked unapproved overtime, the employee may be disciplined if an appropriate policy is in place.
Allowing employees to waive their overtime pay rate: Employees can never surrender their legal right to be paid time and a half for all overtime worked.  
Salaried employees are automatically exempt from overtime: Just because an employee is paid a salary instead of an hourly rate, does not mean he/she is exempt from overtime. Each employee must qualify for one of the specific FLSA exemptions: executive, administrative, professional, computer-employee and outside sales.
Automatic deductions for meal periods: Assuming non-exempt employees take a 30-minute meal period is highly problematic and can be costly. Rather than making this assumption, require each non-exempt employee to specify the time the meal period began and ended each day; never let a non-exempt employee perform any work while on a meal period.
Working off the clock: Whether it be a laborer staying after work to unload a truck, a spray technician putting on personal protective equipment before beginning a work shift or a secretary dropping off the mail on her way home from work, all work performed must be paid at the appropriate rate.  
Not paying for after hours training or meetings: Training classes and meetings are not compensable if all four criteria are met:  (a) occur outside of an employee's normal work schedule, (b) are truly voluntary (no pressure to attend or retaliation for not attending), (c) not directly related to the employee's current job, and (d) the employee does no other work during the training or meeting.
Not defining the workweek and workday: Each company must formally define the beginning and end of the standard workweek and workday, thereby ensuring overtime can be accurately measured.
Incorrect regular rate of pay: Overtime is based on each employee’s regular rate of pay. While seemingly straightforward in most cases, it requires mathematical calculation if a non-exempt employee is paid a non-discretionary bonus (e.g., safety, attendance, job quality) or shift differential.
Travel time: This is a growing area of concern and must be addressed clearly by each employer.  Any work performed during an employee’s commute to/from work must be compensated. Specific policies regarding time spent in the yard before and after work, as well as travel from/to the yard at the beginning and end of each day must be clearly established.  
Workplace closures: When a place of business is unexpectedly closed for various reasons (e.g., snow, flooding, hurricane), employees must be paid or not paid in accordance with the FLSA. These specific regulations affect non-exempt employees as well as exempt employees, and must be carefully understood, clearly communicated and properly administered.

BEST-IN-CLASS PRACTICES
These best-in-class practices can help landscapers minimize exposure to FLSA violations, and thereby improve employee morale while reducing financial penalties associated with improper compensation procedures.

•    Employee handbook: Clearly identify all relevant FLSA guidelines, related company policies, and legally-compliant compensation practices in their employee handbook.  
•    Time sheet attestations: Have three attestations listed on each individual time sheet: (a) accurate number of hours worked during this pay period, (b) took the required meal period each day during this pay period and (c) was not injured at work during this pay period.  
•    Classification analysis: Conduct rigorous and well-documented FLSA exemption analyses (e.g., salary test and duties test) on all positions claimed to be exempt.  
•    Record keeping: Maintain the 14 types of payroll records required by the Department of Labor for each non-exempt employee and retain all payroll records for three years, and records on which wage computations (e.g., time sheets, wage rate table, wage deductions) are based for two years.

SUMMARY
While landscapers may have a basic understanding of some compensation guidelines, it is in their best interest to become highly familiar with the FLSA as well as their respective state wage and hour laws.  This fundamental knowledge can save landscapers a lot of time, worry, and legal costs associated with FLSA non-compliance.


By-line at the conclusion of the article
Steven Cesare, Ph.D., is an Industrial Psychologist with the Harvest Group, a nation-wide consulting firm committed to helping landscape companies reach their potential.  If you have any questions on this article, or any other human resources issue, please contact Steve at (760) 685-3800 or at Steve@harvestlandscapeconsulting.com.

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