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Crime And A Half

Learn what the Fair Labor Standards Act says about wages and overtime-and avoid breaking the law.

By Steven C. Bahls

Opinions expressed by Entrepreneur contributors are their own.

Life at home was a bit disjointed for a Michigan funeraldirector and embalmer, who found he was handling 15 to 20 phonecalls every night when the funeral home's phone line was routedto his house. His employer wasn't paying him the overtime heshould have been earning-his employer wasn't paying him forthat time at all. Fed up, the funeral director quit and sued underthe Fair Labor Standards Act (FLSA). In July, the 6th U.S. CircuitCourt of Appeals ruled that handling so many phone calls was morethan typical on-call time. The funeral director was working, albeitfrom home, and should have been paid for his time and for anyovertime he accrued.

The case points out the basic principle of the FLSA, which hasgoverned wages and work hours in the United States since 1938.Covering more than 80 million full- and part-time workers in boththe public and private sectors, the FLSA encodes a deceptivelysimple concept: You have to pay employees for every hour they work.And, unless they're properly classified as exempt from theregulations, employees who work more than 40 hours per week must bepaid time and a half for their overtime. That seems easy enough,but the devil is in the details. Because of the complexities of themodern workplace, most employers, if they looked closely enough,would find that somehow or other they're violating this oftenconfusing law. Violations can lead to fines of up to $10,000 peremployee and further investigation by the U.S. Department of Labor,so you need to understand the requirements and make sure your ownmarginal cases comply with the law.

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