When navigating all the intricate and ever-changing employment laws, it can be easy to let the seemingly simple issues go to the wayside. That’s just one reason why it is especially important to make sure that your employment policies and practices on the more stable issues are airtight. As we enter the chaos of the holiday season, here are some reminders on wage and hour compliance to help you ensure a strong foundation for dealing with whatever else the new year brings your way.
Proper Classification
Before jumping into the specifics of wage and hour issues, it is important to consider whether you are dealing with exempt or non-exempt employees. Misclassifying employees can expose employers to legal risk and may result in violation of employees’ rights.
Exempt employees are typically employees with executive, administrative, or professional roles whose salary meets a specified threshold. In contrast, non-exempt employees are typically hourly workers who do not have administrative, executive, or professional duties and who earn below the salary threshold. It is important to note that not all salaried employees are automatically exempt; employers should carefully analyze whether each employee is classified correctly to ensure compliance with applicable laws.
“Hours Worked” and Overtime
The federal Fair Labor Standards Act (FLSA) requires that all non-exempt employees be paid for all “hours worked.” This phrase is deceivingly simple and encompasses a lot more than one might think. It includes not only all time spent actively working, but also any time that an employee is “suffered or permitted” to work. Accordingly, any time that an employer has directed their employees to be working or has knowledge that the employee is working on their behalf, counts as “hours worked” for purposes of FLSA compliance.
Tracking an employee’s hours worked each week is important not only to ensure that they are properly compensated, but also for the purpose of calculating overtime payments that might be owed. Non-exempt employees are entitled to payment at a rate one-and-a-half times higher than their regular rate of pay for all hours worked in excess of 40 each workweek.
Time to and From Work
In considering what constitutes “hours worked,” employers may have questions about when the workday is considered to begin. Most often, non-exempt employees are not entitled to payment for their normal commute to or from work. Accordingly, employees’ right to pay begins when their workday begins, not when they leave their residence. Employees who travel for work, however, should be paid for travel in between their work sites. As always, there are exceptions to this general rule.
Meal & Rest Breaks
In Oregon, whether a non-exempt employee is entitled to meal and rest breaks depends on how many hours they are working. Non-exempt employees are entitled to one paid rest breaks for every four-hour period worked and one 30-minute unpaid meal break for the same. Importantly, rest breaks must be paid, while meal breaks need not be.
Absent exceptional circumstances, employees should not be permitted to skip breaks or to use break time to start their day late or end it early. Rather, eligible employees must their breaks near the middle of each work period. Employers may also require their employees to clock out for unpaid meal breaks and to record their rest breaks to ensure proof of compliance with applicable laws.
Training Time
Employees must be paid for time spent attending lectures, meetings, training programs, and things of the like in most instances. However, there are exceptions. If the training program is outside of the employee’s normal working hours, is voluntarily undertaken, is not related to their job, and the employee does not perform any work while they attend it, then the employee does not need to be paid for that time.
Recordkeeping
As with all employment matters, it is essential to keep records of all employees’ time worked and their pay for each period. This is especially true for non-exempt, hourly employees, whose potential claims for penalty wages can be extremely costly for employers. Having a record that accurately identifies all hours worked by such employees, records that all breaks owed were taken, and reflects that employees were paid for all time worked can help decrease risk of costly litigation in the future. As the statute of limitations for wage claims in Oregon is six years, it is best practice to hold on to your records for at least that long.
Takeaways
Before the new year starts, it’s a good idea to ensure that your business has a solid foundation for compliance with wage and hour issues. By ensuring that employees are classified properly, paid for all hours worked and applicable overtime, and given proper meal and rest breaks, you can ensure that your business is in a good position to implement more nuanced changes in employment law that may arise in the new year.
Lex Shvartsmann is an attorney at Barran Liebman LLP. She represents and advises employers regarding a full range of employment matters. Contact her at 503-276-2111 or lshvartsmann@barran.com.
