Speak Up!

Can You Manage?

Wage Discrimination.

By Patricia G. Pollack

Employers spent millions of dollars last year making restitution for violating wage and hour laws. Are you at risk? Maybe it's time to review how you pay your employees.

Confusion over employee compensation requirements can result in costly legal fiascoes. Here are answers to some of the most common compensation questions:

  • If I pay an employee a salary, do I have to pay him or her overtime? Maybe. Executive, administrative and professional employees, including outside salespeople, are exempt from overtime pay requirements if they meet the qualifying factors set for each category by the Fair Labor Standards Act (FLSA). If your employee's duties and responsibilities don't meet the FLSA requirements, the employee is not exempt and must be paid overtime wages.
  • Do I have to pay my employees minimum wage? Not necessarily. With permission from the Department of Labor, there are several scenarios in which you may pay employees less than minimum wage. Retail, school or agricultural employers, for example, may pay full-time students 85 percent of the minimum wage; you can pay vocational education students, learners or apprentices 75 percent of the minimum wage. Employees with disabilities may be paid a subminimum wage based on their productivity and consistent with the prevailing wage in the local area. Finally, new employees younger than 20 years old may be paid an "opportunity wage" that's less than the minimum wage for the first 90 days of employment.
  • Can I "round" my employee's time card? Rounding the minutes on an employee's time card to the nearest fractional hour is a common practice that makes it easier to calculate the total hours worked. For example, seven hours and 50 minutes may be rounded down to 7.75 hours, and seven hours and 55 minutes may be rounded up to eight hours. You may round the times as long as you're consistent and round equally at both the beginning and the end of shifts. Still, rounding down must not result in the nonexempt employee working more than one uncompensated hour per week.

The FLSA regulations are available from the U.S. Department of Labor. Call (202) 219-8743 or visit the Department of Labor's Web site at http://www.dol.gov for more information.

Contact Sources

Rich Manuccia, 4489 North Ave., San Diego, CA 92116, (619) 295-6988

Medical Care Connections Inc., P.O. Box 60193, San Diego, CA 92166, mccjensen@aol.com

Roger S. Smith,rssmith@hooked.net

Pamela Traux, http://www.marketsmarter.com

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This article was originally published in the February 1998 print edition of Entrepreneur with the headline: Speak Up!.

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