Whether time spent being on-call is compensable is decided by a non-exhaustive list of factors. The crux of the question courts seek to answer is, was the employee able to make use of their personal time? Courts will look at these factors to determine if this time is compensable:
- Whether there is an on-premises living requirement;
- Whether there are excessive geographical restrictions on the employee’s movements;
- Whether a fixed time limit for response is unduly restrictive;
- Whether the on-call employee can easily trade on-call responsibilities;
- Whether using a pager eases restrictions on the employee’s activities; and
- Whether the employee has actually engaged in personal activities during on-call time.
Using the “tip-credit” provision employers may pay servers and other employees who commonly receive tips, $2.13 per hour. There are several rules that must be followed when using the tip-credit or else the tip-credit provision will be disallowed and the employer will owe the employee the full minimum wage for all hours worked.
- Tipped employees must make the minimum wage. If you are a tipped employee, your hourly wage when combined with your tips must amount to at least the minimum wage for all hours worked. If your hourly wage combined with your tips does not equal the minimum wage your employer must increase your hourly wage to ensure you meet the minimum wage for all hours worked.
- Tipped employees must primarily perform tip related duties. If an employee spends more than 20% of their time cleaning, or performing other non-tip generating duties then the tip credit will not apply. If the employee is performing work wholly unrelated to generating tips, such as washing dishes in the kitchen, performing maintenance, or opening/closing a store when no customers are present then the employee must be paid at least minimum wage.
- Tip Pools will invalidate the tip-credit when the pool includes non-tipped employees. Non-tipped employees can include managers, supervisors, and salad makers.
To qualify for the Executive Exemption the employee must earn a salary of at least $23,660 per year andhave job duties that encompass the following:
- The Employee’s “primary duty” must be “management” of the enterprise or of a “customarily recognized department or subdivision” of the enterprise;
- The Employee must “customarily and regularly” direct the work of two or more employees;
- The Employee must have managerial authority, such as the authority to hire, fire, or promote other employees.
- People frequently mislabeled: Assistant managers and managers are frequently told they are exempt employees and thus do not qualify for overtime. Many times, their actual jobs are so micromanaged that they do not exert the requisite independent managerial authority to qualify for the exemption. If you have been told you do not qualify for overtime because you are a manager or assistant manager but you do not have any authority to do anything, other than follow a script or strict company policy/guideline that leaves you without the ability to act independently then you may have a claim for unpaid overtime.
To qualify for the Administrative Exemption the employee must earn a salary of at least $23,660 per year andhave job duties that encompass the following:
- The employee’s “primary duty” must be performing “office or non-manual work directly related to the management or general business operations” of the employer or its customers;
- The employee’s “primary duty” must include “the exercise of discretion and independent judgment” with respect to “matters of significance”
- People frequently mislabeled: IT personnel, managers, office workers. This is the broadest and most commonly used exemption. Businesses across the nation frequently mislabel workers of all kinds as administratively exempt. If you have been told you are administratively exempt but you do not have real authority or you are not able to exercise discretion and independent judgment in how you perform your job you may have a claim for unpaid wages.
To qualify for the Professional Exemption the employee must earn a salary of at least $23,660 per year andhave job duties that encompass either of the following:
- The work the employee performs requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, or
- The work performed requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
- People frequently mislabeled: Mechanists, Welders, Chefs, IT personnel, assistants, and employees who have a “skilled trade”. If your work is routine, largely governed by predetermined policies/guideline, or does not require any specialized knowledge then you may have a claim for unpaid wages.
To qualify for the Outside Sales Exemption employees must meet two requirements.
- They have a “primary duty” of making sales, that is the employee’s main job is to obtain sales or contracts for services with customers. This Exemption does not require that the employee be paid a salary.
- They “are customarily and regularly” performing their “primary duty” away from the employer’s place of business. The employee does not have to spend all of their time outside the office but the vast majority of their work should be spent away from the office.
- People frequently mislabeled: Sales Representative who create dealer networks, promoters, and drivers required to “upsell.” If you are told you are exempt through this exemption but you work off a premade customer list, you only sell to existing customers, or you do not deal directly with the customer then you may have a claim for unpaid wages.
True Independent Contractors are not covered by the FLSA;however, it is very common for businesses to mislabel employees as independent contractors in order to avoid paying overtime and benefits to the employees. Regardless of whether you were made to sign an agreement labeling you as an independent contractor, you are an employee unless you are truly “economically independent from the employer.”
True Economic Independence – Courts determine whether a worker is an independent contractor or an employee. Courts generally use the “Economic Reality” test to determine if a person is truly in business for themselves or if they are a mislabeled employee who is owed overtime. The Economic Reality test looks at the entire relationship between the employer and employee, no one factor is determinative. The following are examples of what a court will look at when deciding whether a worker is properly labeled, this list is not exhaustive.
- The degree of control exercised by the employer;
- The extent of the relative investments by the employee and employer;
- The degree to which the employee’s opportunity for profit and loss is determined by the employer;
- The skill and initiative required in performing the job; and
- The permanency of the relationship.