Fair Labor Standards Act Overview

The fair labor standards act (fsla): overview and “new” implications for non-certified public school employees

Prepared By: Marge Foreman, October 31, 2003

This article provides a summary and highlights on the Fair Labor Standards Act (FLSA). In addition, it will also cover recent changes that school systems in North Carolina are implementing to ensure that employees are educated on the provisions and requirements of the Act, as well as ensure that all employees covered by the Act are treated fairly. This article will also address briefly recent FLSA lawsuits filed against school systems in Mississippi, Alabama and South Carolina. Because of these lawsuits, school districts in North Carolina have been advised to follow all requirements of the Act very carefully.

Part 1: overview/background information on the fair labor standards act (flsa)

The Fair Labor Standards Act (FLSA) and the Federal Wage and Hour law are one in the same. The FLSA (29 U.S.C. General Statute 201 through 219) was adopted in 1938. Schools were not covered in the original Act in 1938, but added in 1966 by an act from Congress. There are four primary requirements of the Act:

I. Defines Coverage: who is a covered employee under the FLSA.
II. Determines wage and hour requirement (calculating work time, etc).
III. Record Keeping Requirements
IV. Equal Pay Requirements

I. Coverage: Who is A Covered Employee?

A. “Non-Covered” (Exempt) Employees

  1. “Non-covered or exempt employees are not subject to the requirements of the FLSA and are not entitled to minimum wage protection or overtime compensation. Exempt employees are, however, covered by equal pay and record-keeping provisions of the Fair Labor Standards Act (FLSA).
  2. Public school employees in this category include, superintendents, assistant superintendents, supervisors, directors, principals, assistant principals, teachers and other building-based certified staff.

B. “Covered” (Non-Exempt) Employees

  1. All “non-exempt employees are covered by all provisions and requirements of the FLSA.
  2. Non-exempt employees typically employed by public schools are custodians, secretaries, cafeteria workers, hall monitors, clerical support, bus drivers, school nurses (not licensed R. N.), maintenance workers, security workers, laborers, after-care employees (if primary duty is childcare), pre-school employees (if primary duty is childcare), and warehouse workers.

II. Wage and Hour Requirements

A. Compensable Time

1. Hours Worked.

  • Hours worked includes all the work an employee is required or permitted to do by the employer based on the job hired to perform, or related to the job.
  • Non-exempt employees must be paid for all hours worked.
  • The reason the employee works extra hours beyond the required time is not material. It also does not matter if the hours worked were scheduled.
  • The time traveled between job sites during normal workday is considered hours worked.
  • Lunch time (must be a minimum of 20 minutes), does not count for hours worked. Note: If an employee is given less than 20 minutes for lunch, the lunch time does count for hours worked.
  • If an employee is asked to run errands during lunch, the time counts for hours worked.
  • If an employee takes work home to complete, it counts as hours worked.
  • If an employee arrives early or stays late voluntarily to perform work duties he/she must be compensated for the extra hours if the employer “suffer or permits” the extra work.
  • Coffee breaks or rest periods are considered work hours.
  • Training time counts for hours worked if required by employer as a condition of employment, but not if the training is needed to meet certification. The only other exception is if the following four regulatory criteria is met:

1. Attendance is outside the employee’s regular work hours.
2. Attendance must be voluntary
3. Training must not be directly related to employee’s job.
4. The employee performs no production work during attendance.

B. Overtime.

  • The employer must establish a work week comprised of 7 consecutive 24-hour periods (168 hours). Work week does not have to coincide with the calendar week
  • Each work week must stand alone
  • Work week hours cannot be averaged
  • Employer is not required to pay weekly, but is required by FLSA to set or define the 7 days work week.
  • If any work week exceeds 40 hours, overtime compensation must be paid.
  • The employer and employee cannot enter into anti-overtime agreements. The employee and employer may not enter into an agreement that sets aside the employees overtime opportunity. This violates the Fair Labor Standards Act.
  • Overtime pay is due to an employee after 40 hours in the work week have been exceeded.
  • If employee works 2 different jobs, the employer may pay a separate rate for each, however, all hours (combined) worked over 40 in a work week count toward overtime.

C. Regular Pay Rate

  • Is determined by dividing the total earnings in the work week by the total hours worked in the work week.
  • The regular rate of pay must not be less than the applicable minimum wage rate ($5.25 per hour for non-exempt employees, unless under age 20, who can receive pay of $4.25 per hour).

III. Record-Keeping Requirements

A. Non-Exempt Employees

  • There is no particular order or form required by the Act
  • Main records required by the FLSA include:
  1. The employer must provide employee’s full name, social security number, etc on employees’ work time or payroll
  2. The employee’s home address, zip code, birth date (under 190, sex and occupation.
  3. Set work week (the time of day and beginning day of the work week)
  4. Total hours worked (usually time card, etc), including overtime
  5. The total daily or weekly straight time earning, excluding overtime
  6. Total additions or deductions from wages paid for each payroll period
  7. Total wages paid each pay period, including date of payment and pay period.

B. Exempt Employees

  • Employers are required to keep the same records except those pertaining to overtime
  • Records regarding posting of notices must be kept
  • Records must be kept for three years

IV. Equal Pay Requirements

This requirement applies to all employees and prohibits an employer from the use of gender as a basis for pay differential for the same or similar work, requiring equal skills, abilities and responsibilities.

Note: The Fair Labor Standards Act also has a Child Labor Division that provides protection to employees under age 16. For additional details on the Fair Labor Standards Act, go the following website: http://www.dol.gov/esa/whd/. The summary presented in this article is by no means complete on rules, guidelines, or regulations on the Fair Labor Standards Act (FLSA). Please review the website for complete details or if any additional information is needed on the FLSA.

Part 2: overview/background information on recent flsa lawsuits with implications for north carolina school districts

Waves of lawsuits since 1998 have been filed by a Mississippi-based School Litigation Group against school districts in several southeastern states, including Mississippi, Alabama, Arkansas, Louisiana, Tennessee, Missouri, Georgia and South Carolina, for violations of the Fair Labor Standards Act (FSLA). The main violations of the FLSA occurred in the following areas:

1. Record keeping. Employers failed to count all compensable time employees are required to work, such as coming in early, working late, working through lunch time, working at home, etc).
2. Failure to pay minimum wage. All work time and all wages must be paid.
3. Failure to pay overtime occurred most in the following cases:

a. When an employer failed to combine hours worked for overtime pay for an employee who worked two or more jobs (Example: a custodian who is also a bus driver). This is called dual employment.
b. When an employer failed to count all hours worked (school meetings, mandatory events, PTA meetings, etc.).
c. When an employer misapplied exempt criteria for employees (Example: If a teacher assistant is hired as the football coach, he/she is not exempt, since coaching would be still considered instructional duties like their teacher assistant job). If an exempt employee works 20 percent of his work hours in activities that are not essential parts of, or incidental to, his exempt work, he or she is entitled to overtime if the work exceeds 40 hours during the work week.

The aforementioned issues are school compliance issues. The initial FLSA lawsuits were filed against 97 of Mississippi’s 152 school districts, representing an estimated 6,000 claims by current or former employees. Due to the large influx of claims in Mississippi, most cases were settled for close to $20-$25 million dollars. Similar violations of FLSA school compliance issues and subsequent lawsuits were reported in Alabama and recently in South Carolina (Associated Press story reported on lawsuits in South Carolina on October 27, 2003, Greensboro News and Record). As a result, the State Department of Public Instructions’ Division of Personnel Services and the North Carolina School Boards Association have shared vital information and coordinated and/or conducted workshops to educate local school district personnel administrators and superintendents on how to e comply with FLSA Guidelines. It has been stressed to all school district employers to educate all employees on the FLSA, with emphasis being on the following:

  1. Overview of the FLSA
  2. The importance of filling out accurate time sheets each day, and signing them along with the supervisor. Note: Falsifying time sheets is a criminal offense in North Carolina, so be sure hours worked are accurate.
  3. Ensure that employees are treated fairly.
  4. Calculating and determining overtime pay:
  • Total hours worked in multiple jobs must be combined for the workweek and may cause overtime pay.
  • Understanding what constitutes “suffered and permitted to work,” and implications for overtime pay.
  • Make sure bus drivers know the difference between “route time” and “hours worked.”
  • Non-exempt employees cannot volunteer to work in the same or similar job for which they receive regular wages. Example: Bus driver cannot volunteer to drive a sports team to a game). Non-certified substitutes cannot volunteer to work as bus drivers.
  • Coming to work early, staying late or working at home to complete work may cause the employer to pay overtime. (Example: If a school secretary calls substitutes from home and it exceeds the 40 hour workweek, overtime must be paid). Note: If an employee comes to work outside of the scheduled work hours, signs in for work, and the total hours worked exceeds 40 (even if the employer did not know or did ask the employee to perform the work early, late or at home, overtime must be paid).
  • Meal breaks of less than 20 minutes are compensable.
  • Working through part or your entire meal break (employee must have a minimum of 20 minutes of uninterrupted meal time, or overtime hours are incurred).
  • Working after-or-before school programs may cause overtime pay.

The burden of proof is on the employer to show that employees were properly paid overtime. Accurate record keeping is also the responsibility of the employer. The two major areas of compliance violation were in the proper payment of overtime (Hours worked and dual employment issues), and the accuracy of record keeping. There is a two-year statute of limitation for overtime violations of the FLSA. However, if the employee can prove that the employer willfully violated the FLSA, the statute of limitation on overtime can go up to three years. The FLSA allows for damages to include not only the overtime back pay, but also an equal amount of pay for damages. In addition, employees may also request attorneys’ fees as part of their lawsuit.

§ The actions (as related to FLSA) being taken by school districts in North Carolina are not to penalize or punish non-exempt public school employees, but to provide education on the FLSA to both the employers and employees, so violations will not occur. Public school employers are also being asked to ensure that employees are paid properly and treated fairly. Teacher Assistant members of the North Carolina Association of Educators (NCAE) have expressed concerns regarding the defining of their work week as forty hours (School districts may or may not require that teacher assistants work 40 hours). However, by defining the workweek as 40 hours, any time worked in the work week up to 40 hours cannot be considered as overtime. Therefore, if teacher assistants are asked to attend meetings, or perform other job related work, hours up to 40 are considered straight time, not overtime. Note: If an employees’ work week is not defined as a 40 hour work week (Previously 37.5 for teacher assistants in North Carolina), then hours worked over that defined work week is subject to overtime pay. Even if salary is based on 40 hours, the work week must be defined as 40 hours. This was also the basis of many of the lawsuits filed in Mississippi, Alabama and South Carolina. Teacher assistants who were asked to attend meetings or perform other work duties over the 37.5 hours, but up to 40, overtime is required for 2.5 hours (the difference between 40 and 37.5 hours), by the FLSA .

The School Litigation Group, to date, has not gotten heavily involved in taking legal action in North Carolina; however, an attorney with the Group was on an Asheville, North Carolina, radio program discussing claim violations and lawsuits filed in other southern states. The State Department of Public Instruction and the North Carolina School Boards Association have worked hard to educate public school employers on how to properly adhere to the regulations and guidelines in the Fair Labor Standards Act. Several workshops and one video teleconference have been sponsored and/or conducted by the United States Department of Labor District Officers, State Department of Public Instruction, School Personnel Division staff, and North Carolina School Boards Association attorneys. Key information was presented not only on FLSA guidelines and regulations, but also tips on how to be in compliance with FLSA, developing an FLSA compliance checklist, sharing sample time sheets to ensure proper payment of overtime work, and other information on avoiding FLSA violations. I attended one conference and the video teleconference, and I assure you that the focus was to protect the employee, educate the employee, pay for “all” overtime based on FLSA guidelines, and to treat all employees fairly. All parties involved stressed correcting and paying for any errors previously made, and to ensuring proper compliance in the future.