Wage and hour lawsuits outpace all other types of employment litigation, and federal and state labor departments continue vigorous enforcement in this area. Under the Fair Labor Standards Act (“FLSA”), employees are categorized as either exempt or non-exempt. Exempt employees are paid a salary for all hours worked and do not receive overtime pay. Exempt employees must meet certain criteria under the FLSA to qualify as exempt based on the primary duties of the employee's job and they must be paid on a salary basis. Non-exempt employees are generally paid on an hourly basis. They must be paid for all hours worked in a workweek and receive overtime pay if they work over forty hours in a workweek. So, in order to calculate the amount of money a non-exempt employee should receive, an employer must determine the number of hours of work or “compensable time.” Compensable time or working time is defined as any time the employer permits or allows an employee to perform the activity. This includes all time worked while at the office, work performed at home, and even work that is performed before the regular workday begins.
It is critical for employers to ensure that their non-exempt employees are properly compensated for all hours worked, including all overtime hours worked. The top ten list below highlights some of the common pitfalls for employers, and addresses areas of confusion under the FLSA’s complex rules on compensable time for non-exempt employees.
1. Waiting Time
If a non-exempt employee is not performing work during a regular workday, but is waiting for an assignment, such time must be considered compensable time because the employee is not free to leave. For example, an administrative assistant who is reading a romance novel while waiting for an assignment must still be compensated for that time since the employee is being required to wait. If, on the other hand, the employee is told that he or she can leave and come back in two hours, that time is not compensable waiting time because the employee is free to use the time for his or her own purposes...
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