Chapter 19 - § 19.4 • WAGE AND HOUR LAWS

• Jurisdiction: Colorado

§ 19.4 • WAGE AND HOUR LAWS

§ 19.4.1—Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) sets out federal requirements for minimum wage, overtime pay, and employer recordkeeping. 29 U.S.C. §§ 201, et seq.; see generally the U.S. Department of Labor "elaws Advisors" on the FLSA website at www.dol.gov/elaws. The FLSA is administered by the Wage and Hour Division of the U.S. Department of Labor.

Practice Pointer
The FLSA does not preempt state minimum wage laws. See, e.g., Overnite Transport Co. v. Tianti, 926 F.2d 220, 222 (2d Cir. 1991). To the extent the Colorado Wage Claim Act and Wage Order 34 impose stricter requirements on employers than the FLSA, state law governs.

Coverage

The FLSA applies to businesses that are engaged in commerce and have annual gross sales of at least $500,000. There is no dollar threshold for businesses engaged in the operation of certain inpatient health-care facilities, educational institutions, and enterprises that are activities of public agencies. 29 U.S.C. §§ 203(s)(1)(B) and (C). There is no distinction in the FLSA between for-profit and nonprofit companies, so commercial activities conducted by religious or other nonprofit organizations are covered. Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290 (1985). Employers not covered by the FLSA are typically subject to similar minimum-wage and overtime pay requirements under state law. See § 19.4.3 in this chapter.

Defining Minimum Wage, Overtime, and Hours Worked

Under the FLSA, unless exempt, an employee is required to be paid at least minimum wage for all "hours worked," and one and one-half times the employee's "regular rate" for all hours worked in excess of 40 hours in a given workweek. 29 U.S.C. §§ 206 and 207. The employee need not be paid on an hourly basis so long as the pay covering the workweek equals at least minimum wage. It is the employer's duty to keep accurate records if an employee is or could be due overtime. 29 C.F.R. § 516.2; see Handler v. Thrasher, 191 F.2d 120 (10th Cir. 1955). The definition of "hours worked" includes all time that an employee is "suffered or permitted" to work. 29 C.F.R. § 785.11; see generally 29 C.F.R. pt. 785, entitled "Hours Worked." It includes, in some instances, work that is preliminary or post-liminary to the employee's principal duties. 29 C.F.R. §§ 785.9 and 785.26. It includes work performed away from the employer's premises if the employer has reason to believe the work is being performed. 29 C.F.R. § 785.12. Depending on the specific facts, it may also include meals, if the employee is not completely relieved of duties while eating, 29 C.F.R. § 785.19; on-call time, 29 C.F.R. § 785.17; time spent in training, 29 C.F.R. §§ 785.27 through .32; travel time, 29 C.F.R. §§ 785.33 through .41; time spent adjusting grievances, 29 C.F.R. § 785.42; time spent receiving medical attention, 29 C.F.R. § 785.43; time spent in public or charitable purposes, 29 C.F.R. § 785.44; and sleep time, 29 C.F.R. §§ 785.20 through .23. "Hours worked" does not include periods for which the employee is absent from work but is paid, such as holidays, sick days, and vacation. 29 U.S.C. § 207(e)(2); 29 C.F.R. §§ 778.108 and .200.

The FLSA generally requires overtime to be calculated per a workweek of seven consecutive days, meaning that an employer may not average hours over two or more weeks. 29 C.F.R. §§ 778.103 through .105. An exception to this rule is provided for health-care institutions, which may adopt a 14-day cycle with employee approval. 29 U.S.C. § 207(j).

The definition of "regular wage rate" generally includes all payments received by the employee, including, but not limited to, incentive payments, piece rates, commissions, shift differentials, bonuses, or other similar premiums. 29 U.S.C. § 207(e); 29 C.F.R. §§ 778.108, .200, .201, and .208.

Practice Pointer
Employers often want to give employees so-called "comp time" — time off at a later date to compensate for overtime hours worked. If comp time is given, it must be during the actual workweek that the overtime hours are worked, even if the employee prefers comp time over cash. Further, the employee must be "comped" one and one-half hours for every hour of overtime worked during the workweek.

"White Collar" Exemptions

The FLSA contains several sets of exemptions from the minimum wage and overtime pay requirements, referred to collectively as the "white collar" exemptions.

Practice Pointer
The "white collar" exemptions are a frequent source of disagreement that can lead to wage-and-hour audits with federal and state regulators. The regulations are narrowly and precisely interpreted, and job titles are not probative of the person's exempt status. Determining whether a particular employee is exempt requires the employer to analyze carefully both the employee's role in the organization and his or her duties and compensation.

Executive Exemption

To qualify for the executive exemption, an employee must:

• Be compensated on a salary basis at a rate not less than $455 per week;
• Have a primary duty of managing the enterprise or a customarily recognized department or subdivision thereof (the term "primary duty" means "the principal, main, major or most important duty that the employee performs." Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties, the amount of time spent performing exempt work, the employee's relative freedom from direct supervision, and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 29 C.F.R. § 541.700.);
• Customarily and regularly direct the work of at least two or more employees; and
• Have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, and promotion of employees must be given particular weight. 29 C.F.R. § 541.100.

Administrative Exemption

To qualify for the administrative employee exemption, the employee must:

• Be compensated on a salary basis at a rate not less than $455 per week;
• Have as a primary duty the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
• In performance of the primary duty, must exercise discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200. The regulations provide many examples of jobs that generally do or do not...