The guest speaker at a recent conference of the staff of the County Technical Assistance Service was Mr. Robert S. Woodward, Wage Hour Investigator for the U. S. Department of Labor, Wage & Hour Division. Some of you in the Cookeville field area may have had occasion to meet Mr. Woodward under what some would consider less pleasant circumstances; he conducts audits of county governments to determine compliance with the federal employment laws which are administered by the Wage & Hour Division, including the Fair Labor Standards Act (overtime and minimum wage) and the Family and Medical Leave Act. Mr. Woodward spent several hours with the CTAS staff advising us of some of the problems the Wage & Hour Division often encounters in dealing with county governments, and giving us some guidance on how to avoid these problems. We would like to share this information with you.
Family and Medical Leave Act
The Family and Medical Leave Act is a relatively new law which went into effect in August 1993. Approximately 30% of Mr. Woodward’s current workload is related to the FMLA. One of the first things he checks is whether the employer is giving employees the required notices of their rights under the FMLA. Employers are required to post the FMLA poster in the workplace (and this means in each department where employees work, not just in the courthouse), in places where employees will see it. The poster should be placed near the time clock, on the employee bulletin board, or in some other visible place. Each office must have a poster. There is a civil monetary penalty of $100 per poster for failure to post the FMLA poster. This is the only poster that carries a monetary penalty for failure to post it. These posters can be obtained from your local Wage and Hour Division field office (in the blue pages in your telephone book). If you do not have a poster, borrow one from another office and copy it and post it in your office. There is no excuse for incurring a monetary penalty.
In addition to the FMLA poster, employees must be given certain additional information advising them of their rights under the FMLA. The Wage & Hour Division publishes an "FMLA Fact Sheet" which complies with this requirement, and you can obtain copies of the FMLA Fact Sheet from your local Wage & Hour Division office. The FMLA Fact Sheet must be given to employees when they request FMLA leave. Periodic distribution of the FMLA Fact Sheet to all employees is also a good idea. No one has ever gotten into trouble for giving employees too much notice . . . when in doubt, distribute the notice. Also remember to document your files. Records showing that you have given the notices, when, and to whom, are very important. Without them, you will not be able to show that you are in compliance.
After the notices, the most common areas of concern under the FMLA are its interrelationship with the state laws on workers' compensation and maternity leave. Remember that the 12 workweeks of leave guaranteed to an employee under the FMLA does not start running until the employer gives notice to the employee that leave will be counted against the 12-workweek entitlement under the FMLA. Therefore, if an employee is on leave under workers' compensation and you do not want to be required to give the employee 12 workweeks of leave in addition to the time off under workers’ compensation, you must notify that employee that the leave will be considered FMLA leave. The FMLA leave does not begin to run until the notice is given. The same is true for maternity leave under state law. If you give the employee notice that the leave will be counted as FMLA leave, the leave can run concurrently. Remember that it is the employer's responsibility to designate leave as FMLA leave. Again, your records must reflect that the proper notice has been given. The Wage & Hour Division has a new form which can be used for this purpose (Form WH-381).
Fair Labor Standards Act
The minimum wage and overtime provisions of the Fair Labor Standards Act have applied to counties since 1986. Unfortunately, it seems that ten years has not been enough time to learn the rules. The same problems arise again and again. The Wage & Hour Division is losing patience, and the assessment of monetary penalties is becoming increasingly common. Some of these recurring problems are discussed below.
1. Compensatory time ("comp time") is allowed in lieu of overtime pay, but only if the rules are followed. Comp time can only be given pursuant to an agreement between the employer and the employee. This can be accomplished in one of two ways: a written policy must be in effect and the policy must be made a condition of employment before an employee is hired, or there must be a written agreement by an existing employee that the employee will receive comp time in lieu of overtime pay (this must be a voluntary agreement -- if an employee does not agree, that employee must be paid overtime). Comp time accrues at time and one half. In general, an employee may not accrue more than 240 hours of comp time. After the limit has been reached, the employee must be paid for any overtime work. Also, employees must be paid for accrued comp time when they leave.
2. What is "overtime"? Generally, it is hours worked in excess of 40 in a workweek (there are exceptions for law enforcement personnel). Before overtime can be paid, however, the employee must be paid "straight time" (the regular rate of pay) for the first 40 hours worked. This becomes a problem when a non-exempt employee is compensated on a salary basis. What does the salary cover? In many counties, the regular workweek actually consists of less than 40 hours. If an employee's regular workweek is 37½ hours, and the employee actually works 41 hours in a particular week, how should that employee be compensated for the additional time worked? The answer depends on what the salary is intended to cover. If the salary is intended to compensate the employee for all hours worked in a workweek up to and including 40, then that employee need only be paid overtime for one hour. If, on the other hand, the salary is intended to cover only the 37½ hours the employee regularly works, then the employee must be paid straight time for 2½ hours and overtime for one hour. Employees must be told what their salary covers, and it must be documented. This is very important, because you cannot pay overtime without paying straight time. Employees must be compensated for all hours up to and including 40 at their regular rate of pay, and for any hours worked in excess of 40 at one-half times the regular rate of pay. If you have informed employees that their salary covers all hours worked up to and including 40 in a workweek, and you have documentation, the Wage & Hour Division will not question your policy. Otherwise, you could have a problem.
3. What is "work time" which must be compensated? Time in the office during regular working hours is obviously work time. What about time spent outside the office? For example, attendance at county legislative body meetings is work time if the employee is required to attend. Travel time, meal time, on-call time, training programs, and other activities may or may not be compensable time, depending on the circumstances. The Wage & Hour Division has published a useful fact sheet which helps explain what constitutes compensable time under the FLSA. You can obtain Fact Sheet No. ATL 22-9312 from your local Wage & Hour Division office.
4. "Dual employment" situations (where an employee does more than one job for the county) can also cause problems. If an exempt employee spends more than 20% of the time in a workweek doing non-exempt work, the employee loses the exemption for that workweek. Also, the county is a single employer for FLSA purposes, so if a highway department employee also drives a school bus, the hours worked are combined for overtime proposes.
5. The biggest single problem is lack of documentation. You must keep records. Employers are required to keep records of all hours worked, even for those employees who never work overtime. If an employee claims to have worked overtime, the burden of proof is on the employer to show how many hours the employee has worked and that the employee has been compensated for all of that time. If the employer cannot produce any records, the employer will lose.
6. Mr. Woodward identified two departments of county government in which he has noticed particular problems. One department which seems to have recurring problems is the Sheriffs’ office. In addition to the usual overtime and recordkeeping problems, apparently no records are kept of the time deputies spend in court in most counties. School Boards have come to the forefront as well. Many of them are not keeping adequate records, either.
7. If the Wage & Hour Division finds a violation, the employer will be required to pay all back wages owed to the employees. In addition, the Wage & Hour Division can and will assess civil monetary penalties for repeated violations. Remember, the county is considered a single employer, and if a violation has been found in the past in any department of the county, a monetary penalty can be assessed for the second violation even if it is in a different department. The fine can be as high as $1,000 per worker. If a violation has been found in your county in the past, do not be found guilty a second time.
We hope this information will help you in your efforts to get in compliance and stay in compliance. We strongly recommend that you contact your local Wage & Hour Division office and obtain the information discussed above. Prevention is the best medicine. Don't wait for an audit to find out that you have a problem. The Wage & Hour Division investigators are willing to answer questions by telephone, and they do not require that you tell them what county is calling. You can ask questions and obtain guidance without fear of "telling on yourself." If you are still uncomfortable about contacting the Wage & Hour Division, contact your CTAS county government consultant.