State and federal law regulate wage and hour regulations. The Fair Labor Standards Act (“FLSA”) is the overarching federal legislation that regulates minimum wage, overtime, equal pay, recording keeping, and hours requirements related to child labor. All enterprises engaged in interstate commerce or the production of goods for interstate commerce (except those that have an annual gross volume under $500,000) and all hospitals, public agencies, and schools (regardless of size) are covered by the FLSA. Title 23 of the Arizona Revised Statutes sets out specific Arizona laws related to the issues covered by the FLSA. For instance, A.R.S. §§ 23-362-365 set out the minimum wage laws in Arizona.
Under the FLSA, employees are separated into two basic categories: non-exempt and exempt. Exempt refers to the employees of covered entities who are members of large categories of “white-collar” jobs who are NOT entitled to the minimum wage and overtime protections of the FLSA. There are other categories of employees who are also fully or partially exempt from the FLSA wage protections; for example, employees of seasonal amusement or recreational establishments, though not white-collar workers, are exempt. Any employee who is not in one of these exempted categories is considered a “non-exempt” employee and is entitled to minimum wage and overtime protections.
Non-exempt wage employees are typically paid an hourly wage. The FLSA, its implementing regulations, and Arizona law mandate that non-exempt hourly wage employees must be compensated for all time worked and are entitled to be paid a wage of one and a half times the regular hourly wage for each hour employed over 40 hours in a work week. 29 U.S.C. § 207(a)(1); A.R.S. § 23-392(A)(1). For employers, then, the question often becomes: what is compensable work? “Employed” includes time that an employee is “suffered or permitted to work” for the employer. 29 U.S.C. § 203(g). This definition can raise issues for employers because an employee may be suffered or permitted to work but not actually working and the employer is still required to compensate for that time. For instance, an employee is permitted to continue working after his/her shift has ended, or is permitted to begin working prior to a shift starting, that employee must be compensated for the work. See U.S. Dept. of Labor Fact Sheet #22. It is the employer’s responsibility to make and enforce rules that prohibit pre and post shift work if the employer does not want to permit employees to work during these times.’
Another issue that can arise is whether an employee’s “waiting time” or “on-call time” is compensable work. Generally, if an employee is “engaged to wait” then the employee is working and must be compensated. If the employee is “waiting to be engaged” then the employee is not working and need not be compensated. An example offered by the Department of Labor is that of a fireman who is playing checkers while waiting for an alarm—that fireman is engaged to wait for the alarm and must be compensated. Federal and state courts have set out specific legal tests to analyze whether an employee’s on-call or wait time is compensable and making the determination is highly fact specific.
Employers can face harsh penalties if they fail to pay all wages owed to an employee. For instance, in Arizona, an employer may owe the employee treble the amount of unpaid wages. A.R.S. 23-355(A). Therefore, where these is a question about whether time is compensable, an employer should consider consulting with an attorney.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Avoiding the Pitfalls of Pay, or other Education Law matters, please feel free to contact 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.