Wage and Hour Regulations

The Fair Labor Standards Act (FLSA) was originally written in 1938. This law was enacted following the industrial revolution and was intended to prevent employers from taking advantage of their employees. The FLSA is enforced by the United States Department of Labor.

As long as they comply with the minimum standards set by the FLSA, individual states may impose additional Wage and Hour Regulations. As it affects the day-to-day operation of businesses, Louisiana has no additional Wage and Hour requirements.

Until recently, the FLSA has not been revised since originally written. Substantial changes were made recently that are reflected in the section on overtime.

Minimum Wage

As of the writing of this document, the Federal minimum wage is $5.15 per hour. Tipped employees in restaurants may be paid at the minimum of $2.13 per hour so long as the employees tips are sufficient to make up to $5.15 per hour.

Lower "Opportunity" wages for teenagers under the age of 20 may be paid at the rate of $4.25 per hour. This wage can only be paid for 90 calendar days or until the employee turns 20, whichever comes first. While there are other categories of sub-minimum wage, those categories are not available to all employers and all jobs.

Louisiana has no minimum wage requirement above $5.15 per hour. However, the Louisiana Department of Labor enforces the Federal minimum wage and is the regulatory agency that investigates complaints from employees.

Overtime

When an employee works more than 40 hours per week for an employer, the employee must be paid at the rate of 1 ½ times their regular hourly rate of pay according to the FLSA. In some cases, the amount of overtime pay is governed by a union contract or agreement and may exceed this Federal minimum.

For private nongovernmental employers, overtime must be calculated within a designated workweek. This means that private employers must determine what 7 day, 24 hour period constitutes their workweek. A workweek consists of 168 hours and the exact days and times may be determined by employers.

Some common examples of a designated workweek are:

1. 12:01 AM Sunday through Midnight, Saturday

2. 12:01 Monday through Midnight, Sunday

This means that if employees work more than 40 hours within the designated workweek, hours over 40 must be paid at 1 ½ their regular hourly rate of pay.

If an employee with workweek 1. starts a shift at Midnight Saturday after working 40 hours during the prior 7 days, that shift can be paid at a straight time rate unless that shift causes more than 40 hours to be worked the following week.

Currently, private employers may not calculate overtime across a payroll period. It must be calculated on the workweek described above. They also cannot do compensatory time or "comp time". The only form of compensatory time available to private employers is by reducing the hours worked to 40 or less within the designated workweek.

Overtime Exemptions

One of the most commonly violated provisions of the FLSA are those related to classifying an employee as exempt from overtime. This is the most frequent complaint filed with and investigated by the DOL.

The regulations related to overtime exemptions, among others were created to protect the innocent employee from being taken advantage of by the unscrupulous employer. That is why employers need to be careful about properly paying overtime.

First, it is important to understand that there are only two classifications of employees concerning overtime. They are: Nonexempt and Exempt.

Nonexempt employees may be paid on an hourly or salaried basis, depending upon the job. Nonexempt employees who work the same number of hours per week may be paid on a salaried basis. However, placing someone on a salary does not mean they are exempt from overtime.

Nonexempt employees whose schedule varies from week to week may be paid on an hourly basis. That simply means that the employer pays them for the exact number of hours they work each week.

The FLSA has a number of exemptions from overtime. Most of them do not apply to all employers. The most common exemptions are briefly described in the following section. These descriptions represent a brief summary and do not contain all language contained in the FLSA.

Executive

This exemption applies to employees with supervisory responsibilities. Currently, the FLSA requires that in order to be eligible for this exemption, the employee must supervise 2 or more employees and have the authority to hire and fire employees, or make recommendations that are relied upon to hire and fire employees. This exemption requires regularly exercising a high degree of independent judgment.

Administrative

This exemption applies to employees who have broad discretion in performing their jobs and who perform office or non-manual work which is directly related to the management policies or general business operations of their employer or their employer\\\\'s customers, or perform such functions in the administration of an educational establishment. While working independently without much supervision may be a factor for this exemption, more important is that they perform with only broad general direction and execute their responsibilities by interpreting and applying policies and procedures.

Professional

A professional exemption applies to employees performing in positions that require advanced learning and education, work in an artistic field which is original and creative, work as a teacher, or work as a computer system analyst, programmer, software engineer, or similarly skilled worker in the computer software field. Professional employees must regularly exercise discretion and judgment and perform work, which is intellectual and varied in character, the accomplishment of which cannot be standardized as to time.

Generally, the Department of Labor looks for graduate degrees as job requirements to be eligible for this exemption.

Outside Sales

Employers with sales employees may be able to exempt them from overtime under the Outside Sales exemption. This exemption applies to employees, whose responsibilities involve working outside the office, developing and contacting sales leads and networking for referrals.

To meet the standards for an outside sales exemption, employees must engage in making sales or obtaining orders away from their employer\\\\'s place of business and not devote more than 20% of the hours worked to work other than the making of sales. An outside sales exemption does not apply to retail sales staff.

Minimum Annual Salary for Exemption

Previously, there has been a minimum wage of $200 per week or $10,400 annually as a short-form test to determine if an employee is eligible to be exempt. However, this rate was established in 1938 and does not equal the current minimum wage.

Revised regulations have changed the minimum salary to $23,660 per year. This means that any employee earning less than this amount may not be exempt from overtime, regardless of their responsibilities or duties.

Payroll Deductions

Employers may not make any deductions, other than mandatory deductions, from employee paychecks without their authorization. Many employers wish to deduct the cost of lost cell phones, pagers, computers or other items from employee paychecks. Employers wishing to do so may have the employee sign such an authorization upon issuing company owned equipment. See the forms section of this guide for a sample form.