Avoiding trouble with wage-hour law

Picture yourself in this situation: You're a grounds manager, minding your own business, busy with the work you need to get done. One day, you're unexpectedly contacted by a U.S. Department of Labor (DOL) Wage-Hour Division investigator, who says he wants to audit your pay records to determine your company's compliance with the federal Fair Labor Standards Act (FLSA).

What do you do?

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“What you don't want to do is panic, turn over boxes of records or begin offering explanations to the investigator,” says attorney Chris Robinson of Fisher & Phillips LLP in Fort Lauderdale, Fla., who specializes in wage-hour law.

“Ask how long the investigation will take, then politely put off the investigator as long as possible. This will give you time to prepare. That preparation should include getting professional advice on the scope of your liability and the authority for the investigation,” he says.

Even more important, Robinson says, is that you don't wait for an investigator to show up at your door — rather, become familiar now with how the FLSA affects your operation and what you must do to comply.

In recent years, more and more landscape contractors, turf managers and other grounds maintenance professionals have been caught off guard when contacted by DOL, Occupational Safety and Health Administration (OSHA), the U.S. Immigration and Naturalization Service (INS) or other federal government enforcers. Sometimes, these contacts have come from private attorneys, worker advocacy groups, unions or others, alleging potentially costly violations of federal employment laws governing such issues as child labor, wage-hour law, immigration, sexual harassment, discrimination or OSHA compliance.

In response to this increasing liability, Robinson and several partners from Fisher & Phillips LLP, a nationwide law firm that represents management, assisted Gempler's, Inc. (Belleville, Wis.) in producing a 134-page guide entitled Labor Law Compliance: A Working Guide for Ag/Hort Employers, which includes brief synopses of these federal laws and regulations, guidance on how to comply and checklists in English and Spanish.

In the guide, Robinson spells out some of the common ways in which grounds managers and other agricultural and horticultural employers get into trouble with federal wage-hour law. These include failing to pay employees for all “hours worked,” illegally taking deductions from pay and failing to pay piece-rate workers the equivalent of the required hourly minimum wage each pay period.

Travel time and “wait” time

The Fair Labor Standards Act requires employers to pay employees for all “hours worked.” This includes the time spent traveling from work site to work site during the workday. Whether or not you have to pay workers for the time spent traveling to and from a work site at the beginning and end of the day depends on whether the transportation is optional and on whether any “work” is being performed before, during or after that time, Labor Law Compliance notes.

“If your employees receive work-related instructions before using optional transportation (“optional” meaning completely voluntary on the part of the employees), or if they engage in such activities as loading tools onto the truck or van — or receive work-related instructions during the trip — that converts the time to ‘hours worked,’ and the FLSA requires you to pay them for their entire travel time,” Robinson says.

You may also find yourself in trouble under the FLSA for failing to pay your workers for the time spent “waiting” — such as waiting for the rain to stop before beginning work outdoors that day. Courts have found such “wait time” compensable under the FLSA if the time spent waiting is primarily for the benefit of the employer, versus the employee having the time to effectively use for his or her own purposes, Robinson says.

Deductions from pay

Managers may also get into trouble under the FLSA for deducting certain items from employees' wages that result in wages dropping below the required hourly minimum wage that pay period. Charges for employer-required transportation; required uniforms; or tools, gloves or other materials necessary for employees to perform their jobs may not be deducted from employees' pay if these deductions bring wages below the required hourly minimum wage that pay period, Labor Law Compliance notes.

Reminder: The current required federal minimum wage is $5.15 per hour. But be sure to also check your state minimum wage, because it may be higher than the federal requirement.

The FLSA does allow deductions from employees' wages for certain items, regardless of their impact on the minimum wage. These include Social Security, Medicare, garnishments, federal and state income taxes; third party deductions authorized by the employee (such as voluntary insurance premiums, union dues and church or charitable contributions); certain types of customarily provided meals, facilities and lodging, as long as they don't exceed the reasonable cost or fair market value; advances against earned wages; and the actual cost of daily transportation (but only when employees know the location of the work site, when alternate sources of transportation are available and when employees are not required to use the employer's transportation but rather use it for the employees' own convenience).

“Be sure to keep good written records, including receipts for items for which deductions are made,” Robinson says. “Also, be sure to get written, signed authorizations from employees, in a language they understand, for any deductions from wages beyond those required by law.”

Paying minimum wage

In recent years, more and more costly class-action lawsuits have been filed against agricultural and horticultural employers for the alleged failure to pay “piece-rate” workers the minimum wage as required under the FLSA.

An important point stressed in Labor Law Compliance is that you must be certain that any workers who are being paid by the piece rate are receiving at least the required federal hourly minimum wage each pay period (or your state-required minimum wage, if it is higher).

You must keep accurate records that can prove you have done this. Also, be certain you are keeping all of the specific detailed records required by the FLSA. Federally required payroll records should be kept for three years. Be sure to also check any state requirements in this area.

Barbara Mulhern is the editor of Gempler's ALERT, the newsletter of Ag/Hort safety and employment law compliance, and Labor Law Compliance: A Working Guide for Ag/Hort Employers, both published by Gemper's, Inc. (Belleville, Wis.).

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