Do I Have to Pay My Employees for That? Common and Not-So Common Workplace Scenarios

HR. Payroll. Benefits.

Do I Have to Pay My Employees for That?Common and Not-So Common

Workplace Scenarios

Today’s Presenters

Richard Allaway, MBA

Richard is General Manager and

VP of ADP’s Specialty Products

Group. His tenure at ADP spans

11 years across several business

units and functions.

Renee is a certified HR Specialist

with over 10 years of HR

experience in the small business

arena.

Renee Maher, SPHR

This information is the property of ADP, LLC (ADP). It may not be distributed,

reproduced, modified, sold or used without the written permission of ADP.

The information is provided “as is” without any expressed or implied warranty, is

based on generally accepted HR practices and is advisory in nature.

This content provides a high level overview and practical information concerning

the subject matter covered and is provided with the understanding that neither the

publisher nor the writers are rendering legal advice or other professional services.

Employers are encouraged to consult with their in-house legal counsel or with an

experienced employment law attorney for legal advice regarding specific facts

concerning the organization’s compliance with applicable legislation.

Welcome to the Webcast

© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 3

Logistics and Resources


Fair Labor Standards Act (FLSA) Overview

Exempt vs. Non-exempt Classifications

Independent Contractor vs. Employee

Workplace Scenarios

Timekeeping Best Practices

Agenda

5 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.

Fair Labor Standards

Act (FLSA) Overview

PART ONE


What is the Fair Labor Standards Act (FLSA)?


Governs minimum wage, overtime

and other wage and hour issues

State minimum wage rates: http://www.dol.gov/whd/minwage/america.htm

http://www.dol.gov/whd/minwage/america.htm

Nearly every business is covered by the FLSA.


Businesses that gross $500,000 or more

Hospitals, schools, and public agencies

Employees engaged in interstate commerce

In 2013, the DOL collected more than $130 million in back

overtime wages and $38 million in minimum wage violations


Source: www.dol.gov/whd/statistics

http://www.dol.gov/whd/statistics

Worker Classifications

PART TWO


Non-exempt Employees:

• Paid for all hours worked

• Paid overtime

• Typically paid on hourly basis

Exempt Employees:

• Paid a set salary each week

• Not entitled to overtime

• Must meet specific criteria

Exempt vs. Non-exempt Employees


12

Classifying Exempt Employees

Administrative

Exemption

Executive Exemption Professional Exemption

• “Learned Professional”

• “Creative Professional”

© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.

13

Classifying Exempt Employees (Cont’d)

Computer Employee

Exemption

Outside Sales Exemption Highly Compensated

Employees


Proposed regulations expected in 2015: revisions to “White

Collar” exemptions and increases in salary thresholds.


Self-employed individuals who

offer their services to the general

public under terms specified in a

contract

What is an Independent Contractor?

15

Factors to consider:

Employer control

Relationship permanency

Type of work performed


“”

See IRS website for more

information on Common Law test

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

Workplace Scenarios

PART THREE



Independent Contractors vs. Employees

A worker is presumed to be an

employee unless he or she

satisfies certain independent

contractor requirements.

Check your state and federal law to

apply appropriate tests.

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Scenario: Independent Contractor or Employee?

Work arrangement is indefinite

Paid a set salary each week

Reports to the office daily

Uses the company's computers

and attends meetings

Is Joe an Independent

Contractor or an Employee?



Behavioral Control

• Reports to the office daily

• Uses company computers

• Attends company meetings

Financial Control

• Paid a set salary each week

• Provided a computer and workspace

Type of Relationship

• Working for firm indefinitely

• Job is a key aspect of the business

Solution: Independent Contractor or Employee?

Time worked in excess of 40

hours in a workweek. Paid at a

rate of 1.5x the regular rate.

Certain state laws require overtime

under other circumstances.

Overtime


Nick is a non-exempt employee

Paid a weekly salary of $400

Normally works 40 hours per week

Last week, he worked 43 hours

How should Chip calculate Nick’s

overtime payment?


Scenario: Overtime for Salaried Non-Exempt

Step 1: Calculate regular rate of pay

$400.00 weekly salary ÷ 40 hours = $10.00 per hour

Step 2: Calculate overtime premium pay

$10.00 regular rate of pay x .5 x 3 overtime hours = $15.00

Step 3: Calculate total compensation for week

$400 + (3 overtime hours x $15.00 overtime pay) = $445.00


Solution: Overtime for Salaried Non-Exempt


Do you have to pay employees

for time worked outside of the

office?

How can you account for that time?

What if it wasn’t authorized?

Off-the-Clock Work


Scenario: After Hours Work

Employees are replying to work

emails after hours

Does Joan have to pay the

employees for the time spent

replying to emails?

Non-exempt employees must be paid for all time worked (both during and after their

scheduled shift)

Joan can:

• Establish a clear policy on after hours work

• Train supervisors and employees on policy


Solution: After Hours Work


Scenario: Early Clock-Ins

Company policy prohibits clocking in

early

Employee violated this policy by

clocking in a half hour early

Can Holly refuse to pay the

employee for the time before the

start of his shift?

If the employee performed work during this time, he

must be paid

Holly can:

• Establish a clear policy on timekeeping

• Train supervisors and employees on policy


Solution: Early Clock-Ins


Rounding employees’ starting and

stopping time to the nearest 5, 10,

or 15 minutes.

Both federal and state laws establish

limitations on an employer’s ability to round

an employee’s hours.

Time Rounding


Scenario: Time Rounding

One of the stylists clocked in at

7:55AM, before her 8AM shift

Is Sally allowed to round her

time to 8:00AM?


Solution: Time Rounding

Best Practice:

• Track time to the nearest minute worked

Under the FLSA:

• Employers can round to a maximum of 15 minutes

• Must account for all time worked

• Cannot consistently round in the company’s favor


Working Interviews & Training


Scenario: Working Interviews

Jaime wants to use “working

interviews” to assess candidates’

skills

Is she required to pay candidates

for time spent working?

Candidates must be paid for any pre-employment time

worked

Jaime should:

• Pay candidates at least minimum wage

• Withhold taxes

• Comply with all applicable employment laws


Solution: Working Interviews


Scenario: Training

Employees are required to participate in

sexual harassment training

The training will take place before the

restaurant opens

Does Michael have to pay employees for

time spent in training?

Since the training is mandatory, Michael must pay employees

Training time must be paid, unless:

– Attendance is voluntary and outside regular working hours; and

– It’s not directly related to the employee’s job; and

– The employee does not perform any productive work.

35

Solution: Training



What is donning and doffing?

Putting on (donning) and taking off

(doffing) protective gear, clothing, or

uniforms. Sometimes these activities are

subject to pay.

Donning and Doffing

Employees are required to wear safety

equipment when working

It takes 10 minutes to put on and take off

Must be done on the premises

Does Priya have to pay employees for

time spent putting on and taking off

equipment?

Scenario: Donning and Doffing


The work gear is required and employees must put it on and take it off at work

Priya must pay employees for this time


Solution: Donning and Doffing


Meal and Break Periods

Employees are provided two 10-

minute breaks

Some employees extend those

breaks without permission

Does Violet have to pay the

employees for the extra time?

Scenario: Rest Break



Solution: Rest Breaks

Rest breaks that last 20 minutes or less must be paid

Unauthorized extensions don’t require pay if it is made clear:

– Breaks may only last a specified duration; and

– Unauthorized extensions are prohibited; and

– Violations are subject to disciplinary action

Josh provides employees a 30-

minute lunch period

One employee was on her lunch

break when Josh asked her to help a

client

Does Josh have to pay her for the

full meal period?

Scenario: Lunch Break



Solution: Lunch Breaks

To be unpaid:

• Meal periods must be at least 30 minutes without interruption; and

• The employee must be fully relieved of all duties

A meal period issubject to pay if:

• It’s interrupted for the company’s benefit; or

• The employee is not free to use the time as they wish


The nature of an employee’s

work, or extenuating

circumstances, can make

their schedule unpredictable.

When there is no work available,

employers still may be required to

compensate employees.

Reporting In and Waiting Time

Due to the weather, Melanie

sends employees home after

they arrive for their shift

Does Melanie have to pay

employees a certain number of

hours?

Scenario: Report In, But No Work


Under federal law:

• It’s not required to pay non-exempt employees for reporting in when no work is available

• Employees who report to work and must stay until a decision is made, must be paid

Melanie should check her state or local law


Solution: Report In, But No Work

An employee’s tool breaks and he

is unable to work while waiting for

repairs

He remains on the premises while

he waits

Does Roger have to pay him for

the time he spent waiting?

Scenario: Waiting Time


Time spent waiting may be unpaid only if the employee is:

– Completely relieved from duty;

– Able to use the time for their own purposes;

– Told in advance that they can leave while they wait; and

– Told what time to report back

48

Solution: Waiting Time



Time spent traveling for

business purposes.

Under the FLSA, certain time spent

traveling may be compensable.

Travel Time

Elizabeth sends two employees who

typically work in the office to a seminar

two hours away

Does Elizabeth have to pay these

employees for the time spent

traveling?

Scenario: Travel to a Different City


Time spent traveling to and from a special one-day

assignment must be paid

Elizabeth can:

• Subtract the employee’s normal commute time

• 4 hours of travel minus 30 minutes of normal commute time = 3.5 hours


Solution: Travel to a Different City

Thomas’ employees spend several

hours during their workday traveling

from worksite to worksite

Does he have to pay the employees

for time spent traveling to each

jobsite?

Scenario: Travel Among Job Sites


Time spent traveling between job sites during the workday is considered hours worked

Thomas must pay employees when they arrive to their first

job site


Solution: Travel Among Job Sites

Abby asks an employee to take an

overnight business trip

The flight is at 9AM on a Sat.

The employee's regular work hours are

8AM to 5PM, Mon. – Fri.

Does Abby have to pay the employee for

the time spent on the flight? What if the

employee wants to drive instead?

Scenario: Overnight Travel


Pay is required for the time that cuts across the

employee's regular working hours

Abby can either count:

• Time spent driving the car (12 hours roundtrip); or

• Time spent traveling by plane (2 hours roundtrip)


Solution: Overnight Travel

Key Takeaways &

Timekeeping Guidelines

PART FOUR


Ensure workers are properly classified

Pay non-exempt employees for all hours worked

Pay exempt employees a fixed salary each week

Maintain records of all hours worked and pay calculations

Ensure you have an accurate and reliable timekeeping process

57

Key Takeaways



Thank you for attending

The information contained in this Webcast is based on generally accepted

HR practice and is advisory in nature. This content provides a high level

overview and practical information concerning the subject matter covered

and is provided with the understanding that neither the publisher nor the

writers are rendering legal advice or other professional services.

For more information contact your ADP Associate or visit

http://sbshrs.adpinfo.com/hrsolutions


Date post:	16-Jul-2015
Category:	Business
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