Overview: The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees for all "hours worked." Determining an employee's pay can sometimes be complicated since hours worked includes not only time actually spent working but also certain nonproductive time. Below, we address several scenarios where pay may be required.
The FLSA does not require employers to pay candidates for time spent undergoing pre-employment drug testing.
Whenever you impose special tests, requirements, or conditions that your current employees must meet, the time must be paid. This includes time they spend traveling to and from drug tests, waiting for and undergoing these tests, or meeting other requirements. Pay is required regardless of whether the tests are scheduled during the employee's normal working hours or during non-working hours.
Time spent in training generally must be paid. It can only be unpaid if all four of the following criteria are met:
· Attendance is outside of the employee's regular working hours;
· Attendance is voluntary;
· The course, lecture, or meeting is not directly related to the employee's job (meaning it's designed to help the employee handle their current job more effectively); and
· The employee does not perform any productive work while attending the training.
Several states require employers to pay for the full cost of required uniforms as well as the cost to maintain them. In these states, you should pay for the uniforms upfront or reimburse employees the full amount. Absent a state requirement, if you require the employee to pay for their uniform, the cost may not reduce their pay below the minimum wage or cut into overtime pay. This rule also applies to any special care, such as dry cleaning or ironing.
Note: Under the FLSA and many state laws, employers are generally required to obtain an employee's consent before making a deduction from pay. The agreement must specify the item(s) for which deductions will be made and how the amount of the deduction will be determined. It's a best practice to obtain the employee's authorization in writing and consult legal counsel before making this type of deduction.
It's also important to note that employers are prohibited from making deductions from exempt employees' salaries for uniforms, tools, and equipment.
Tools and Equipment
Some states require employers to pay for the full cost of required tools and equipment.* In these states, you have to pay for the tools upfront or reimburse employees. If there is no state requirement to pay for tools and equipment, then you must ensure an employee's expenses don't reduce their pay below the minimum wage or cut into overtime pay.
*Note: Some states make exceptions for certain types of tools or equipment, such as tools and equipment customarily required by the employee's trade. Check your state law for more information.
Paying for Safety Equipment:
Generally, employers must pay the full costs of personal protective equipment (PPE) required under the Occupational Safety and Health Act. For more information, see this handout.
"Donning & Doffing" Safety Equipment:
If the safety gear is required by law, the employer, or the nature of the work, then the time an employee spends putting on and taking off gear on the employer's premises must be paid. If employees have the option and ability to change at home, there's no requirement for the time to be paid, even if workers choose to change at work, according to the Department of Labor (see Wage & Hour Advisory Memo 2006-2).
Under the FLSA, rest breaks lasting 20 minutes or less must be paid. The duration of the break is generally the sole factor used when determining whether pay is required, not the reason for the break (such as for a cigarette, coffee, snack, or to make a personal phone call).
Generally, when employees take unauthorized extensions of rest breaks, the time must be paid if the rest period lasts 20 minutes or less.
On Duty Less than 24 Hours:
Under the FLSA, an employee who is required to be on duty for less than 24 hours must be paid for the entire time they are required to be at the worksite even if they're permitted to sleep when they aren't busy.
On Duty for 24 or More Hours:
Under the FLSA, sleep time may be excluded from hours worked for an employee who is required to be on duty for 24 hours or more if:
- Adequate sleeping facilities are furnished by the employer;
- The employee's time spent sleeping is usually uninterrupted; and
- There's an agreement (which should be in writing) between the employer and employee to exclude sleep time.
Interruptions during which the employee performs work tasks must always be paid as work time. If the interruptions are so frequent that the employee is unable to get reasonable periods of sleep totaling at least five hours during the scheduled sleeping period, the entire period must be counted as time spent working and paid accordingly.
If the party is required or it occurs during work hours, employees must generally be paid for the time they spend at the party.
Reporting to Work
There is no federal requirement for employers to pay non-exempt employees for a minimum number of hours if they report to work when there is no work available. However, some jurisdictions, such as California, the District of Columbia, Massachusetts, New Hampshire, New Jersey, New York, Oregon (applies to minors only), and Rhode Island have report-in pay requirements. Check your applicable state law to ensure compliance.
Note: If employees are required to report to work and must stay until a decision about closing is made, they must be paid for the time they spent waiting.
Business Travel & Expenses
Some states expressly require employers to reimburse employees for business trips and other business-related expenses. For example, California requires employers to reimburse employees for all expenses paid (or losses incurred) by the employee while performing their duties. This would include business travel (transportation, lodging, and meals). Check your state law to ensure compliance. Even if your state doesn't require reimbursement, the FLSA may require reimbursement if travel-related expenses brings a non-exempt employee's pay below minimum wage (or cuts into their overtime pay).
Under the FLSA and many state laws, employers must pay non-exempt employees for certain time spent traveling.
Action Required: Make sure you understand the rules governing when pay is due.
As always, please contact your dedicated service professional with any questions.
This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.