Tag Archives: Fair Labor Standards Act

Texas Employer’s Legal Guide to COVID-19 Issues

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Note: Some of these laws are changing rapidly as the federal government responds to the crisis. For example, paid sick leave and paid family leave are required of small employers beginning April 1, 2020. That’s why some of the information below has been deleted. Be sure to call an employment lawyer for the latest information and advice.

As COVID-19 dominates the headlines, Texas employers still have businesses to run and employees to supervise. The novel coronavirus, which causes the disease “COVID-19”, is creating all kinds of questions for these businesses, and most of those are best answered by medical and governmental resources.

But there are also employment law issues arising that a Texas employer may wrestle with. I wouldn’t even think about giving medical advice, but 32 years of practicing law has given me some insight that you may find helpful about the legal issues you are facing with your employees.

While there are some companies that can and should practice social isolation and allow employees to work from home, many businesses require employees to show up to perform work—think grocery stores, pharmacies, restaurants, retail, medical offices, hospitals, construction, feedlots, landscapers, agriculture, trucking companies, banks, childcare facilities, etc.

In those businesses, employers must walk the tightrope between compassion for those who are sick and the reality of needing your employees to be present in the workplace. There may also be tension between wanting to pay your employees even while they are absent and a possible huge decrease in your revenue during this time.

So there are no easy answers, but here are the laws you need to consider and discuss with your human resources professionals and your employment attorney BEFORE you take any action involving your employees:

Continue reading Texas Employer’s Legal Guide to COVID-19 Issues →

Docking A Salaried Employee’s Pay is Tricky

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Paying an exempt employee on salary means that employee receives the same amount of money each week regardless whether the employee works 35 hours or 45 hours. There are benefits for both you and the employee because you don’t have to calculate overtime and the employee doesn’t have to religiously track work hours.

Interestingly, employers ask me all the time about docking that weekly salary of an exempt employee. For some reason, if a salaried worker misses a half-day for a child’s school field trip or a distant relative’s funeral, suddenly employers want to dock the employee’s salary, possibly because the reason for missing work seems trivial. But that’s legally not how salaries work within the context of the federal Fair Labor Standards Act (“FLSA”).

The FLSA requires that a salaried, exempt employee be paid a “fixed” weekly salary of at least $684 that cannot be docked regardless of the quantity or quality of work. One way to think about it is to tell yourself that a salaried, exempt employee earns her whole salary for the week by Monday morning at 8:05 a.m.

So if your marketing director is paid $1000 per week, she has to be paid $1000 even for the weeks when she goes home on two separate workdays after lunch because she is sick or when she recklessly spends $20,000 of the company’s funds on an unsuccessful marketing campaign. You cannot deduct from her pay just because she did not work the quantity of hours you expected or perform her job with the quality that you expected.

There are legal deductions you have to take from a salary when required by law (for example, income tax withholding, payroll taxes, child support) and legal deductions you can make for items that are authorized in writing by the employee (for example, health insurance premiums, retirement contributions, salary advance repayments).

But the FLSA is extremely strict when it comes to the employer deducting from an exempt employee’s salary for missed days or poor work.

Here are the absences and acts for which a Texas employer cannot dock a salaried, exempt employee:

Continue reading Docking A Salaried Employee’s Pay is Tricky →

Employer End of the Year Tasks: W-4 and Salary Minimum

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Employers must address two important employment law issues before the end of 2019:

  1. Changing the exempt status of employees making a salary of less than $35,568 per year, and
  2. Adoption of the new W-4 form.

I’ve previously explained the new salary minimum for exempt (salaried) employees. In summary, for you to legally pay an employee on salary, that employee must perform exempt duties (such as running a division of the company, performing professional work such as a CPA, or performing non-profitable office duties requiring independent discretion and judgment, such as human resources, benefits coordinator, safety director, marketing director, and others, but not secretarial or bookkeeping) and make at least the new salary minimum per week of $684.00.

If an employee of yours does not meet both of these criteria (exempt duties + salary minimum), you must pay that employee by the hour and pay overtime if the employee works more than 40 hours in any one workweek. In other words, you must change the employee to a non-exempt status under the Fair Labor Standards Act and make that person an hourly employee.

There are a few exceptions to this new salary minimum rule: teachers, doctors, lawyers and outside salespersons are not subject to the salary minimum test. There are also some very  industry-specific, narrow exceptions for taxi drivers, truck drivers, fisherman and some other strange exemptions from overtime that don’t have salary minimums. But the vast majority of workers paid on salary are affected by the requirements of the exemptions.

If you are having any difficulty deciding whether to change an employee to hourly or determining if their duties meet the tests for executive, administrative or professional jobs, please call your employment lawyer immediately to get you into compliance for the January 1, 2020 effective date on the salary minimum rule.

The other big change you as an employer should be aware of is the new W-4 form that the government released on December 5, 2019. It is supposed to be easier to use for your employees.

Here are the things you need to know about this new W-4 as you start the new year:

  • You must use this new W-4 form for any employee you hire beginning on January 1, 2020 and thereafter.
  • Any employee who wants to adjust his/her withholding on January 1, 2020 or after must use the new W-4 to make that adjustment.
  • Current employees do not have to fill out a new W-4 if they don’t want to make any changes, but should consider filling out a new one if they faced an unexpected penalty of bill last year or will have a change in 2020 such as marital status, a new baby or a change in income.
  • Employees filling out the new W-4 must complete steps 1 and 5 on the new form, but may complete steps 2, 3, and/or 4 if applicable. So if you have a new employee fill out the W-4 after New Year’s Day, just check that steps 1 and 5 are complete.
  • Because it is an unfamiliar form and because it encourages people to use the IRS’s new online Tax Withholding Estimator, you should allow employees to take the new W-4 form home so they can have some time to understand and complete it.

Paying Employees on Salary Soon to Get Expensive

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In July 2016, in all likelihood you as an employer will have to start paying your employees more than $50,000 per year if you want to pay them on salary.  If an employee makes less than $50,440 per year, by this summer that employee will need to be paid on an hourly basis and receive overtime whenever the employee works more than 40 hours in any one workweek.

The new regulations proposed by the Department of Labor last summer to increase the required salary basis under the Fair Labor Standards Act are expected to be finalized in July 2016, according to a statement made by the Solicitor of Labor to the New York State Bar Association.

Currently, an exempt “white-collar” employee who can legally be paid on salary only has to make $23,660 per year ($455 per week) and meet the specific duties of a professional, an administrator, a computer professional or an executive. This summer that number is widely expected to increase to $50,440 ($970 per week) and will be tied to an inflation formula that will raise that threshold number annually.

Once the final rule is released in the summer of 2016, employers could have as few as Continue reading Paying Employees on Salary Soon to Get Expensive →

Texas Employers Need Snow Day Policy

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Texas employers should have a policy to give employees advance warning of what to expect on a snow day, particularly in the Texas Panhandle, where we often have a couple of inclement weather days per year.

The easiest way to determine whether to keep your facility open or not is to follow your local school district’s decisions and let your staff find out through the media. That relieves you of having to communicate the decision to every employee. It is also helpful to your employees to be able to stay home with school-aged children who have no other place to go that day.

Texas and federal law do not specifically dictate when an employer must be open or closed during inclement weather, but they do dictate how compensation must be determined during those times.

Hourly employees do not have to be paid when they perform no work. Exempt employees, however, have to be paid their normal salaries when your facility is closed for weather reasons. On days when the company is open, but a salaried employee chooses not to travel because of road conditions near their house and therefore performs no work all day long, the exempt employee can be docked for that day or be required to use available paid time off.

The other pitfall with inclement weather days occurs when employees work at home on a snow day. If you give your employees the ability to remotely access their computers, if you allow them to take work home, or if you expect them to check emails and return phone calls on a snow day, you will need to pay them for those work hours (non-exempt employees) or that whole day (exempt employees).

I suggest that every employer adopt some kind of inclement weather policy similar to this one: Continue reading Texas Employers Need Snow Day Policy →