I have received quite a few questions regarding the Fair Labor Standards Act (FLSA) and how it impacts use of flexible scheduling. As a result, I thought that I would address a few of the questions here. There are also many myths about the FLSA so let’s get some cleared up.
If you are dealing with a large pool of non-exempt employees, you may be limited in the variety of flexible work options that you can provide. You do need to be concerned with overtime and can not average the hours over the course of a two week pay period as you would with an exempt employee. In other words, you can not have someone work 35 hours one week and 45 the next without paying overtime.
There are, however, several different options that can work. For instance, you can offer 4 10 hour days each week. If you are dealing with a critically short applicant pool, you may want to consider 3 12 hour days for 36 hours of work but pay for 40 hours. Or, pay only the hours worked and provide full time benefits at the 36 hours per week work schedule.
In some instances, organizations qualify for the option of using an 8 or 80 schedule for calculating overtime. In the case of an 8 or 80 schedule, the organization must pay overtime for any hours worked over 8 in one day or 80 in a two week pay period. Hospitals, for example, qualify and can choose which calculation they will use; over 40 hours in a week or the 8 or 80 schedule. Employees must be notified of the method being used and the method of calculation must be used consistently once implemented.
If, overall, an organization is utilizing the 8 or 80 rule, utilizing a flex schedule will require special notification to employees on the flex schedule. You will want to change them to a 40 hour per week calculation schedule. Your best bet is to have them sign an agreement that states that they are aware that they will be on a 40 hour schedule rather than 8/80 in order to accept the flexible schedule. Just make sure that the agreement does not imply any sort of employment contract if you are an at will employer.
And, while we are on the subject of FLSA, I would like to cover a few of the misconceptions that I uncovered every time I taught a course on the FLSA. Without fail the time ended with supervisors and managers sitting there with the mouths open.
Myth #1: I have a policy that states, “overtime must be pre-approved. If it is not pre-approved the hours will not be paid” I don’t have to pay overtime.
Fact: You can not utilize a policy that states that overtime must be approved ahead of time in order to be paid for the overtime. If you want overtime approved ahead of time you must invoke disciplinary action if the employee does not follow the policy. In other words, you can write someone up for not asking ahead of time to work overtime, or you can address any inefficiencies or workload issues that are causing the employee to require work outside normal business hours. But once overtime is worked you MUST pay for it. Period.
Myth #2: If an employee goes to a seminar outside of work hours I do not have to pay them for their time.
Fact: In some instances you do need to pay overtime, in other instances you do not. If the training meets the following you must pay:
The employee’s supervisor requests or mandates that the employee attend.
The training will help the employee perform better in his or her current position.
If the following circumstances exist, you do not need to pay overtime:
The employee voluntarily attends the training
The training will help the employee prepare for a new position higher level position.
Myth #3: If a non-exempt employee chooses to eat their lunch at their desk and ends up answering the phone a few times as a result, they don’t need to be paid for their time.
Fact: In order to be considered an unpaid break, the employee needs to leave the work area and/or perform absolutely no work for more than 20 minutes. If you allow the person to sit there and answer phones, that is paid time regardless of whether or not they are eating their lunch or whether or not they are choosing to do so.
Myth #4: A non-exempt employee routinely works overtime but never puts it on their time sheet. This sure is nice of them.
Fact: Hopefully the company will stay on this employee’s good side. An organization is required to pay overtime. If the employee decides that they want to be paid all the overtime retroactively they can present their own records of time. This could open up the organization to a review of time and payment records for all employees. And you could be required to pay more than just the back overtime. So, beware of this situation.