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Labor law deep dive: Wage and Hour Division

The Wage and Hour Division is part of the Department of Labor and was formed to promote compliance with federal labor laws. The division’s primary focus is the Fair Labor Standards Act, but it oversees many other legal standards as well.

Let’s take a deeper dive into the Wage and Hour division, specifically the Fair Labor Standards Act, the Immigration and Nationality Act (pertaining to H-2A visa workers), and Executive Order 11246.

The Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act establishes and enforces the federal minimum wage, overtime pay, record-keeping requirements, and youth employment standards in both the private and government sectors.

The FLSA does not limit the number of hours or days an employee may be required to work, if he or she is at least 16 years old and is properly compensated for overtime.

The FLSA also regulates wage deductions. It states that it is illegal to make deductions from wages for merchandise or cash shortages, employer-required uniforms, or tools of the trade if the total sum of the deductions drops the employee’s wages or overtime pay below the required minimums.

What the FLSA doesn’t require

The FLSA does not require vacation, holiday, severance, or sick pay, premium pay for weekends or holidays, or pay raises or fringe benefits (unless the minimum wage rises). Also, the Fair Labor Standards Act does not limit the number of hours in a day or days in a week an employee may be required to work, including overtime, as long as the employee is at least 16 years old. These benefits are by agreement between the employer and employee.

Tipped employees need not be paid more than $2.13 an hour in direct wages, as long as those in their occupation typically receive over $30 per month in tips. The employer must inform employees in advance that the position is tipped and show that employee tips (which they are entitled to keep) plus the direct wage add up to the federal minimum wage. Also, their direct wages plus tips must bring each employee up to the required minimum wage or the employer must pay the difference.

  • If TIPS + $2.13 = $7.25/hour → No additional wages required
  • If TIPS + $2.13 ≠ $7.25/hour → Employer must make up the difference

Overtime

As we said, FLSA also covers overtime rules, which stipulate—among other things—that hourly employees who work more than 40 hours must be paid at least time and a half for the time worked after forty hours. There are several other overtime-specific stipulations that may or may not be relevant to your payroll, and can be hairy (and carry stiff penalties if violated).

The Immigration and Nationality Act – H-2A Visas

H-2A visa workers are lawfully-admitted temporary, non-immigrant workers qualified and available to perform the labor involved in temporary or seasonal services. This category applies to agricultural workers as well as U.S. employees retained by an employer of H-2A workers in any work included in an ETA (Employment and Training Administration)-approved job order.

  • Non-immigrant means the worker will return to the country of origin upon completion of the contract.
  • Temporary means there is a set beginning and end date to the worker’s term of service.

To be allowed to recruit U.S. H-2A visa workers, you must demonstrate the need for a specific number of H-2A workers after contacting former U.S. employees and coordinating recruitment activities through the State Workforce Agency. If you have laid off U.S. workers within the 60 days prior to need, they have the right of first refusal for re-employment. All wage and hour requirements apply as they would for U.S. employees.

Note: an H-2A visa is not the same as a “green card”.

Executive Order 11246 – Federal Construction Contract

Executive Order 11246 was signed in 1965, and has since been amended. It prohibits federal contractors, federally-assisted construction contractors, and subcontractors who do more than $10,000 annually in government business from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. These employers are also required to take affirmative action to ensure equal opportunity is provided in all aspects of employment.

Note the order regulates federal contractors and subcontractors only. However, much of American business offers the same protections under the EEOC.

The Federal Labor Standards Act, the Immigration and Nationality Act as it pertains to H-2A visas, and Executive Order 11246 all fall under the purview of the Wage and Hour Division of the Department of Labor. These are but three regulations under the control of the division.

For more information and details about these or other laws, consult the Department of Labor Wage and Hour Division website.