Avoiding Wage and Hour Pitfalls By Joseph M. Hannon, Esq., Genova Burns LLC, New Jersey State League of Municipalities Labor Counsel Wage and hour litigation is the fastest growing type of employment litigation in the nation. Much of this litigation is filed under the Fair Labor Standards Act (FLSA), the federal law that governs how employees are paid. Municipalities must be mindful of their obligations under the Act as it is applicable to local public entities. The general rules under the Act is that all non-exempt employees must be paid minimum wage for all hours worked and overtime compensation for all hours worked beyond 40 in a workweek. These seemingly uncomplicated rules, however, often present a minefield for employers. Determining which employees are non-exempt, their actual “hours of work,” and the overtime compensation to which they are entitled require careful analysis and, sometimes, legal counsel. Claims under the Act are costly. In addition to the normal costs associated with defending litigation, the Act provides for double damages and attorney’s fees for a prevailing
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plaintiff. In addition, FLSA claims are often filed as “collective actions” (the FLSA’s version of a “class action”). Therefore, compliance with the Act is extremely important. Your policies and practices should be reviewed annually to ensure you are in compliance. Refusing to pay unauthorized overtime Employees are entitled to overtime for all hours worked over 40 in a workweek. Employees are to be compensated for all hours they are “suffered or permitted” to work. Hours permitted is generally understood as time the employer wants the employee to work. Hours suffered is generally understood to be the time the employer doesn’t necessarily want the employee to work, but they do so anyway. Refusing to pay for work because the employer did not ask for and/or authorize the work is a violation of the Act. Unauthorized overtime must be addressed through the disciplinary process, not refusing to pay for the unauthorized work. To avoid these types of violations, while at the same time controlling unanticipated overtime costs, policies should
SOUTH DAKOTA MUNICIPALITIES
