Coverage for Current Employees | Health Insurance

No law mandates insurance coverage in every workplace. But employees can take some insurance aid and comfort from a number of state laws—and from a federal law imposing some fundamental fairness in coverage.

Caution Independent contractors need not apply. If you work as an independent contractor—a term used to describe people who are in business for themselves, such as consultants, freelancers, the self-employed, entrepreneurs, and business owners—you are covered by neither federal nor state laws that require health insurance coverage or continuation. To become insured, you must proceed on your own through the often mind-numbing process of procuring insurance—and the often bank account-draining process of paying for it. If you have questions about your work status as an independent contractor or employee, consult your local department of labor.

1. State Laws

A few states, counties, and cities now require some employers to provide health insurance coverage for some employees who work there. For example, Hawaii requires employers to provide coverage to employees earning a set amount or more per month. (Haw. Rev. Stat. § 393-11.)

In addition, some state laws require that employers who offer insurance to employees must provide certain minimum coverage. The state requirements vary considerably, but typical minimums include coverage for medical and surgical benefits, treatment of mental illness, alcoholism, and drug abuse and preventative testing such as mammograms and PAP smears. Check with your state’s health commissioner to find out whether there is any minimum mandated coverage in your area.

Some states impose additional restrictions on workplace health insurance. For example, a growing number of them make it illegal for employers to fire employees because they file a legitimate claim against their company’s health insurance.

2. The Health Insurance Portability Act

The Health Insurance Portability and Accountability Act, or HIPAA (Pub. Law 104-191), a federal law that took effect in July of 1997, makes it easier for employees to change jobs without losing insurance coverage—and to get coverage in the first place.

The law’s biggest promise is to improve the portability of health insurance coverage. But in addition, it purports to:

take aim against health care discrimination, fraud, and abuse, and

promote the use of tax-favored insurance plans.

a. Increased Portability
Group insurers now face limits when attempting to restrict enrollment because of preexisting medical conditions.

Under HIPAA, for example, pregnancy is not considered a preexisting condition—and newborns or newly adopted children cannot be excluded if they are enrolled within 30 days of birth or adoption.

The maximum amount of time a group health insurance plan, HMO, or self-insured plan may exclude someone on the basis of a preexisting condition is 12 months. This exclusion period is reduced by the amount of time an employee previously had continuous coverage through other private insurance or public insurance programs.

Insurers must offer individual coverage to a person who loses group coverage if the individual:

was continuously covered for 18 months under a group health plan

has exhausted COBRA coverage (see Section C, below), or

is ineligible for coverage through government programs such as Medicare or Medicaid.

b. Discrimination Protection
Group health plans and employers cannot deny coverage for an individual and his or her dependents based on health status, physical or mental medical condition, claims experience, genetic information, disability, or domestic violence.

The Inspector General and U.S. Attorney General are charged with establishing a program to coordinate federal, state, and local programs to control health plan fraud and abuse—and criminal penalties can now be imposed for defrauding any health benefits program.

c. Tax-favored Insurance Plans
Beefed up by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which became effective January 1, 2004, there are now a number of programs available with the aim of giving employees tax advantages to offset health care costs.

Health Savings Accounts. A Health Savings Account permits some workers to save for, and pay, health care expenses for themselves, a spouse, and dependents, free of taxes.

HSAs may be established by any individual who is covered by a qualified high-deductible health plan—those with an annual deductible of at least $1,000 for individuals or $2,000 for families. Contributions can be made into these accounts—by either individual employees or their employers—for the full amount of the annual deductible each year, to a maximum of $2,600 for individuals and $5,150 for families. They operate much the same way as the now-familiar Individal Retirements Accounts (IRAs) do for saving retirement money.

Medical Savings Accounts (MSAs) were the precursor to HSAs—and money put in them can be rolled over into an HSA.

Possible benefits of HSAs include:

You can claim a tax deduction for contributions you make, even if you do not itemize your deductions on Form 1040.

Interest or other earnings on the assets are tax-free.

Distributions may be tax-free if you pay qualified medical expenses.

Contributions remain in from year to year until you use them.

They are portable; they stay with you if you change employers or leave the work force.

Flexible Spending Arrangements. A Flexible Spending Arrangement (FSA), offered at an employer’s discretion, allows employees to be reimbursed for medical expenses. FSAs are usually funded through voluntary salary reduction agreements with your employer. No employment or federal income taxes are deducted from your contribution—and you are also free to contribute.

Possible benefits of an FSA include:

Your employer’s contributions can be excluded from your gross income.

No employment or federal income taxes are deducted from the contributions.

Withdrawals may be tax-free if you pay qualified medical expenses.

You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account.

Health Reimbursement Arrangements. A Health Reimbursement Arrangement (HRA) must be funded solely by an employer. The contribution cannot be paid through your own voluntary salary reduction agreement. Employees are reimbursed tax-free for qualified medical expenses up to a maximum dollar amount for a coverage period. An HRA may be offered with other health plans.

Possible benefits of an HRA:

You can exclude your employer’s contributions from your gross income.

Reimbursements may be tax-free if you pay qualified medical expenses.

Any unused amounts in the HRA can be carried forward for reimbursements in later years.

Note For more information on all of these tax-deferred accounts, see IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, at www.irs.gov. Or order it from the IRS by calling 800-829-3676.

No Legal Right to Coverage | Health Insurance

While many workers feel insurance coverage is an entitlement, in reality, offering health insurance to employees is purely voluntary—a matter of tradition, not law. This truth flies in the face of many firmly held beliefs about workplace benefits. But, in fact, there is no federal law that requires employers to provide or pay for health insurance coverage for all current employees, or even full-time employees. In 2004, only 61% of all working employers received health insurance coverage from their employers.

No federal legal scheme requires every employer to offer insurance coverage. However, an employer who promises to provide health insurance—in an employee manual, for example—must follow through on the promise. And benefits must be provided without discriminating against any employee or group of employees. That includes employees who are statistically more likely to incur high medical costs. For example, federal laws specifically provide that women workers and older workers must be provided with the same coverage as other workers. (See Chapter 7, Sections C and E.) One grand exception to this general rule is that many state laws now allow employers to offer health plans that offer higher premiums to smokers. (See Chapter 6, Section E.)

In recent years, some companies have discontinued or cut back on insurance coverage they offer employees, simply because of the expense. The legal rule emerging is that of evenhandedness: Employers cannot offer insurance coverage to some employees and deny it to others.

But because health insurance is a job benefit that is not regulated by law, employers are otherwise free to fashion a plan of any stripe. They may:

require employees to contribute to the cost of premiums

offer reduced reimbursement or pro rata coverage to part-time employees

limit options to one insurance plan or offer a variety of choices, or

give employees a sum of money earmarked for insurance coverage that may be applied to any chosen plan.

As anyone who has read the fine print on a health insurance policy can attest, insurers, too, place conditions on the coverage they provide. The most nettling of these limitations is on preexisting conditions. Under these provisions, if you have had a recent illness or have a chronic medical condition, you may be denied coverage, be made to wait a specific time period until your condition will be covered, or be forced to pay high premiums for specialized coverage. The greatest headway on doing away with the preexisting condition denial of coverage has been made in the federal law requiring continuing coverage for former employees. (See Section C3, below.)

Traditionally, employers that have provided health care coverage have done so through an indemnity or reimbursement plan which pays the doctor or hospital directly or reimburses the employee for medical expenses he or she has already paid.

While traditional coverage allowing employees to seek out their preferred medical provider is still widely used, a growing number of employers today provide coverage through the alternatives of a health maintenance organization (HMO) or a preferred provider organization (PPO).

An HMO is made up of hospitals and doctors who provide specified medical services to employees for a fixed monthly fee. Within the HMO service area, covered employees must use the HMO hospitals and doctors unless it’s an emergency or they receive permission to go elsewhere.

A PPO is a network of hospitals and doctors who agree to provide medical care for specified fees. Often the network is put together by an insurance company that also administers it. Employees usually can choose between using the network’s hospitals and doctors or going elsewhere.

There are two main categories of employee health insurance: coverage for current employees and coverage for former employees.

Filing a Complaint or Lawsuit (wages)

Enforcing Your Right to Be Paid Fairly
Your first step in enforcing your right to be paid fairly should be to decide whether your complaint involves a violation of a law or is simply a matter of disagreement or misunderstanding between you and your employer.

If, for example, your employer refused to pay you time and a half for five hours of overtime that you worked, then the issue would be covered by the FLSA. But if you had been working under the impression that you would get a raise every year—a matter not covered by the FLSA—and your employer will not give you one, then the issue is left for you to resolve with your employer, without the clout that a law can lend.

Once you have refined your complaint, try discussing it with your employer or former employer before filing any official action. Some companies have dispute resolution programs—usually outlined in their employee manuals—that can help you resolve a pay dispute without resorting to legal action.

Filing a Complaint or Lawsuit
If your complaint involves what you believe is a violation of the FLSA—for example, you have not been paid fairly or on time—contact your local office of the Wage and Hour Division of the U.S. Department of Labor, listed in the federal government section of the telephone directory and available on the agency’s website at www.dol.gov.

If you call, visit, or write to your local Wage and Hour Division office, workers there will take down the information you provide and transcribe it onto a complaint form. You can request one of these forms and fill it out yourself. But, since the staff members are familiar with which details are legally pertinent, they usually prefer to fill it out themselves. They will probably ask you to provide photocopies of documents relevant to your dispute, such as pay stubs.

Review the completed complaint form and attached documents to be sure they are correct and as complete as possible. If you are assigned to a staff person who seems particularly unsympathetic or unhelpful, calmly and politely ask to speak with someone else. Also, keep in mind that a huge dollop of patience is required. The process—from filing a complaint through investigation and the final outcome—typically takes from one to three years.

Once your complaint has been put together, U.S. Labor Department investigators will take over the job of gathering additional data that should either prove or disprove your complaint.

If the thought of reporting your employer to the authorities frightens you, take some comfort in knowing that Labor Department investigators must keep the identities of those who file such complaints confidential. Also, it is illegal for an employer to fire or otherwise discriminate against an employee for filing a complaint under the FLSA or for participating in a legal proceeding related to its enforcement. Many state laws also provide protection for employees who file state wage and hour complaints.

Where the federal investigators find violations of the FLSA, the action that they then take will depend upon the severity of the violations and whether or not the employer appears to have been violating the law willfully.

When the violations are severe and apparently willful, the Labor Department may ask the Justice Department to bring criminal charges against the employer. Government lawyers will handle the matter for you. If convicted, a first-time violator of the FLSA may be fined by the courts; subsequent convictions can result in both fines and imprisonment.

If the violations are not too severe, or if the Labor Department investigators feel the infractions were not willful, one of the following steps may be taken:

The Labor Department may set up and supervise a plan for your employer to pay back wages to you and anyone else injured by the violations.

The Secretary of Labor may file a lawsuit asking the court to order your employer to pay you the wages due, plus an equal amount as damages. The court may also issue an injunction or order preventing your employer from continuing the illegal behavior.

You may file your own lawsuit under the FLSA to recover the wages you’re owed, plus other damages, attorneys’ fees, and court costs. You will probably need to hire a lawyer to help with this type of lawsuit.

What Cannot Be Deducted or Withheld (Wages)

State laws generally control what may be deducted or withheld from an individual paycheck. Commonly, only a few things are off-limits for an employer to deduct:

the value of time taken for meal periods (see Section D3, above)

the cost of broken merchandise

tools and materials used on the job

required uniforms, and

cash register shortages and losses due to theft.

The History of Payroll Withholding
The Social Security Act of 1935, a part of President Franklin D. Roosevelt’s New Deal, was the first law to sink its teeth firmly into the typical paycheck. Intended only to save industrial and commercial hourly workers of the Depression era from poverty in old age, the original Social Security program required employers to withhold a mere 1% of workers’ pay.

Since then, the Social Security Act has been amended many times. The age of eligibility has been lowered from 65 to 62, and coverage has been extended to people unable to work because of physical disabilities, government employees, self-employed people, and a number of other groups not covered by the original Act. Consequently, the amount withheld from most wages to pay for Social Security programs now is more than 7%.

Public debate is again abuzz with talk of the Social Security Act, prompted by statistics of aging and survival and what it means for the changing workforce. Baby boomers will begin retiring in less than a decade, and life expectancy is rising. By 2025, the number of people age 65 and older will grow by an estimated 74%. In contrast, the number of workers supporting the system in its current incarnation would grow by 14%, which some see as a threat to deplete its coffers completely. Sharply divided politicians are urging a potpourri of reforms, offering everything from restoring solvency with minimal changes to scrapping the system entirely.

The federal income tax, the other major cause of paycheck shrinkage, was created when the 16th Amendment to the U.S. Constitution was passed in 1913. The original federal income tax rates ranged from 1% to 7% of annual income above $3,000—a lot of money back then.

To pay for World War II, however, the government raised the income tax rates so dramatically that the tax on the top income level bracket hit a record of 94% in 1944 and 1945. The minimum income subject to taxation was lowered so that most working people were for the first time subject to some income tax.

Politicians, hoping to assuage the public angst over paying a large yearly lump sum, decided to lessen the trauma by making employers withhold the income tax, little by little, from workers’ pay each week.

By the 1970s, employees had become so accustomed to having large sums of money withheld from their pay that most states and cities—as well as nongovernment groups such as health insurance companies and pension fund managers—instituted additional with-holding programs.

Today, it is common for employees to have more than a third of their pay withheld by their employers on behalf of government, with still more withheld to finance private benefit plans.

Payroll Withholding and Deductions

Since the end of the Depression of the 1930s, the right and responsibility of employers to withhold a portion of your pay has become a virtually undisputed part of American culture. The laws that created the income tax and Social Security programs, for which funds are withheld, typically authorize payroll with-holding to finance those programs.

But a growing number of additional deductions are now also authorized.

1. What Can Be Deducted or Withheld
In addition to Social Security and local, state, and federal taxes, an employer may also make several other deductions from minimum wages: costs of meals, housing and transportation, loans, debts owed the employer, child support and alimony, payroll savings plans, and insurance premiums. As in most other workplace laws, there are exceptions to these rules. There are often limitations on how much may be withheld or deducted from a paycheck.

a. Meals, Housing, and Transportation
Employers may legally deduct from an employee’s paycheck the “reasonable cost or fair value” of meals, housing, fuel, and transportation to and from work.

But to deduct any of these amounts from a paycheck, an employer must show that it customarily paid these expenses and that:

They were for the employee’s benefit.

The employee was told in advance about the deductions.

The employee voluntarily accepted the meals and other accommodations against minimum wage.

b. Loans
An employer that has loaned you money can withhold money from your pay to satisfy that loan. However, it is illegal to make any such deduction if it would reduce your pay to below the minimum wage.

c. Debts and Wage Garnishments
If you owe someone money and do not pay, that person might sue you and obtain a court judgment against you. If you do not pay the judgment, the creditor may try to collect by taking a portion of your paycheck until the judgment is paid in full. This is called a wage attachment or wage garnishment. Except in a few situations—student loans, child support, alimony, and taxes, which are all discussed below—a creditor must sue you and obtain a court judgment before he or she can garnish your wages.

A wage garnishment works simply. Once the creditor has a judgment, he or she delivers a copy of it to a sheriff or marshal, who in turn sends a copy to your employer. Your employer must immediately:

notify you of the garnishment

begin withholding a portion of your wages, and

give you information on how you can protest the garnishment.

In most states, the employer can also charge you a modest fee to cover the costs of garnishing your wages.

Protesting is straightforward. You file a paper with the court and obtain a hearing date. At the hearing, you can present evidence showing that your expenses are very high and that you need all of your paycheck to live on. The judge has the discretion to terminate the wage garnishment or let it remain.

A federal law, the Consumer Credit Protection Act (15 U.S.C. §§ 1673 and following), prohibits judgment creditors from taking more than 25% of your net earnings through a wage garnishment to satisfy a debt. A few states offer greater protection, however. In Delaware, for example, judgment creditors cannot take more than 15% of your wages.

The Consumer Credit Protection Act also prohibits your employer from firing you because your wages are garnished to satisfy a single debt. If two judgment creditors garnish your wages or one judgment creditor garnishes your wages to pay two different judgments, however, you can be fired. Again, some state laws offer employees stronger job protection. In Washington, for example, an employer cannot fire you unless your wages are garnished by three different creditors or to satisfy three different judgments within a year.

There are several types of statutes that prohibit employers from retaliating against an employee for being subject to a wage garnishment. (See the chart below.) They differ in how many garnishments an employee is allowed each year without retaliation.

Most state laws have a general provision protecting employees who have their wages garnished. Some states prohibit retaliation if the employee has one garnishment per year; some laws apply to more than one garnishment. To heap on a little legal intrigue, many state statutes simply do not specify whether the protection extends to one garnishment per year or to multiple garnishments for one debt or to something else. If you run up against this confusion, contact your state’s consumer protection agency for help.

Another type of anti-retribution for wage garnishment statute is one that applies to cases in which income is withheld to satisfy child support obligations. (See also Section F1e, below.) Employers may not fire employees merely because they are subject to this type of order, regardless of the quantity of garnishments.

Of course, none of these statutes prohibit firing for just cause. They only prohibit firing an employee solely because of the wage garnishment.

d. Student Loans
The federal Emergency Unemployment Compensation Act of 1991 extended unemployment insurance for Americans who are out of work. (20 U.S.C. § 1095a.) A rider to that bill authorizes the U.S. Department of Education or any agency trying to collect a student loan on behalf of the Department of Education to garnish up to 10% of a former student’s net pay if he or she is in default on a student loan.

The Department of Education does not have to sue you before garnishing your wages. But at least 30 days before the garnishment is set to begin, you must be notified in writing of:

the amount the Department believes you owe

how you can obtain a copy of records relating to the loan

how to enter into a voluntary repayment schedule, and

how to request a hearing on the proposed garnishment.

The law includes only one specific ground upon which you can object to the garnishment: that you returned to work within the past 12 months after having been fired or laid off.

e. Child Support, Medical Support, and Alimony
The federal Family Support Act of 1988 (102 Stat. § 2343) requires that all new or modified child support orders include an automatic wage withholding order. If child support is combined with alimony and paid as family support, the wage withholding applies to the payment. It is not required for orders of alimony only.

In an automatic wage withholding order, a court orders you to pay child support; then the court or your child’s other parent sends a copy of the order to your employer. At each pay period, your employer withholds a portion of your pay and sends it on to the parent who has custody. Currently, nearly 66% of the $21.2 billion a year in child support payments are collected through income with-holding by employers. In addition, medical support orders, which require noncustodial parents to include their children under their health insurance coverage, are established and enforced by state child support enforcement agencies, if necessary. A National Medical Support Notice, modeled on the standard income withholding form, works the same way as child support orders to facilitate making the health insurance deductions from paychecks.

In most states, where there is not an automatic wage attachment, employers must with-hold wages if you are one month delinquent in paying support. But an employer cannot discipline, fire, or refuse to hire you because your pay is subject to a child support wage withholding order. If an employer does discriminate against you, the employer can be fined by the state. (See the chart above for specific state law provisions.) Federal law also prohibits employers from firing, disciplining, or refusing to hire someone because he or she is subject to wage withholding to pay child support.

f. Back Taxes
If you owe the IRS and do not pay, the agency can grab most—but not all—of your wages. The amount that you get to keep is determined by the number of your dependents and the standard tax deduction to which you are entitled.

If the IRS wants your wages, it sends a wage levy notice to your employer, who must immediately give you a copy. On the back of the notice is an exemption claim form. You should fill out, sign, and return this simple form to the IRS office that issued it within three days after you receive it. Your employer should not pay anything to the IRS until you have your chance to file your exemption claim.

If you do not file the claim form, your employer must pay you only $116 per week and give the rest to the IRS. An employer who ignores the IRS wage levy notice and pays you anyway is liable to the IRS for whatever amounts were wrongly paid. Once the wage levy takes effect, it continues until either the taxes are paid in full or the collection period expires—ten years from when the taxes are assessed.

Most state and some municipal taxing authorities also have the power to seize a portion of your wages—and some act even more quickly than the IRS does when you owe back taxes. State laws vary, however, as to the maximum amount of wages that the state can take. In California, for example, the state taxing authority cannot take more than 25% of your net pay.

State Meal and Rest Breaks

Note: The states of Alabama, Alaska, Arizona, Arkansas, District of Columbia, Florida, Idaho, Indiana, Iowa, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, and Wyoming are not listed in this chart because they do not have laws or regulations on rest and meal breaks for adults employed in the private sector. Many states also exclude professional, administrative, and executive employees from these rules.

Other exceptions may apply. Check the statute or check with your state department of labor if you need more information.

California

Cal. Code Regs. tit. 8, §§ 11010, 11160; Cal. Lab. Code §§ 512, 1030

Applies to: Employers in most industries.

Exceptions: Motion picture, agricultural, wholesale baking, and household occupations.

Meal Break: 30 minutes, unpaid, after 5 hours, except when workday will be completed in 6 hours or less and employer and employee consent to waive meal break. Employee cannot work more than 10 hours a day without a second 30-minute break, except, if workday is no more than 12 hours, second meal break may be waived if first meal break was not waived.

On-duty paid meal period permitted when nature of work prevents relief from all duties and parties agree in writing.

Rest Break: Paid 10-minute rest period for each 4 hours worked or major fraction thereof; as practicable, in the middle of the work period. Not required for employees whose total daily work time is less than 3 1/2 hours.

Breastfeeding: Reasonable time to breastfeed infant or to express breast milk; paid if taken concurrent with other break time; otherwise, unpaid.


Colorado

Colo. Code Regs. § 1103-1

Applies to: Retail and service, food and beverage, commercial support service, and health and medical industries.

Exceptions: Employees in administrative and professional occupations.

Meal Break: 30 minutes, unpaid, after 5 hours of work. On-duty paid meal period permitted when nature of work prevents break from all duties.

Rest Break: Paid 10-minute rest period for each 4 hours or major fraction worked; if practical, in the middle of the work period.


Connecticut

Conn. Gen. Stat. Ann. §§ 31-51ii, 31-40w

Applies to: All employers, except as noted.

Exceptions: Employers who pay for rest breaks as described below, those with a written agreement providing other break rules, and those granted an exemption for reasons listed in statute.

Meal Break: 30 minutes, unpaid, after first 2 hours of work and before last 2 hours for employees who work 7 1/2 or more consecutive hours.

Rest Break: As alternative to meal break, a total of 30 minutes paid in each 7 1/2-hour work period.

Breastfeeding: Employee may use meal or rest break for breastfeeding or expressing breast milk.


Delaware

Del. Code Ann. tit. 19, § 707

Applies to: All employers, except as noted.

Exceptions: Employers with alternative written agreement and those granted exemptions specified in statute.

Meal Break: 30 minutes, unpaid, after first 2 hours and before the last 2 hours, for employees who work 7 1/2 consecutive hours or more.


Georgia

Ga. Code Ann. § 34-1-6

Applies to: All employers.

Breastfeeding: Reasonable unpaid break time to breastfeed infant or to express breast milk.


Hawaii

Haw. Rev. Stat. § 378-2

Applies to: All employers.

Breastfeeding: Allowed during any break required by law or collective bargaining agreement.


Illinois

820 Ill. Comp. Stat. § 140/3, § 260/10

Applies to: All employers.

Exceptions: Employees whose meal periods are established by collective bargaining agreement.

Employees who monitor individuals with developmental disabilities or mental illness, or both, and who are required to be on call during an entire 8-hour work period; these employees must be allowed to eat a meal while working.

Meal Break: 20 minutes, no later than 5 hours after the beginning of the shift, for employees who work 7 1/2 or more continuous hours.

Breastfeeding: Reasonable unpaid break time to breastfeed infant or express breast milk.


Kansas

Kan. Admin. Reg. 49-30-3(b)(2)(A)

Applies to: Employees not covered under FLSA.

Meal Break: Not required, but if less than 30 minutes is given, break must be paid.


Kentucky

Ky. Rev. Stat. Ann. §§ 337.355, 337.365

Applies to: All employers, except as noted.

Exceptions: Written agreement providing different meal period; employers subject to Federal Railway Labor Act.

Meal Break: Reasonable off-duty period close to the middle of the shift; can’t be required to take it before the third or after the fifth hour of work.

Rest Break: Paid 10-minute rest period for each 4-hour work period. Rest period must be in addition to regularly scheduled meal period.


Maine

Me. Rev. Stat. Ann. tit. 26, § 601

Applies to: Most employers.

Exceptions: Small businesses with fewer than 3 employees on duty who are able to take frequent breaks during the workday. Collective bargaining or other written agreement between employer and employee may provide for different breaks.

Meal or Rest Break: 30 minutes, unpaid, after 6 consecutive hours of work, except in cases of emergency.


Massachusetts

Mass. Gen. Laws ch. 149, §§ 100, 101

Applies to: All employers, except as noted.

Exceptions: Excludes iron works, glass works, paper mills, letterpresses, print works, and bleaching or dyeing works. Attorney general may exempt businesses that require continuous operation if it won’t affect worker safety. Collective bargaining agreement may also provide for different breaks.

Meal Break: 30 minutes, if work is for more than 6 hours.


Minnesota

Minn. Stat. Ann. §§ 177.253, 177.254, 181.939

Applies to: All employers.

Exceptions: Excludes certain agricultural and seasonal employees.

A collective bargaining agreement may provide for different rest and meal breaks.

Meal Break: Sufficient unpaid time for employees who work 8 consecutive hours or more.

Rest Break: Paid adequate rest period within each 4 consecutive hours of work to utilize nearest convenient restroom.

Breastfeeding: Reasonable unpaid break time to breastfeed infant or express milk.


Nebraska

Neb. Rev. Stat. § 48-212

Applies to: Assembly plant, workshop, or mechanical establishment.

Exceptions: Other written agreement between employer and employees.

Meal Break: 30 minutes off premises.


Nevada

Nev. Rev. Stat. Ann. § 608.019

Applies to: Employers of two or more employees.

Exceptions: Employees covered by collective bargaining agreement; exemptions for business necessity.

Meal Break: 30 minutes for 8 continuous hours of work.

Rest Break: Paid 10-minute rest period for each 4 hours or major fraction worked; as practicable, in middle of the work period. Not required for employees whose total daily work time is less than 3 1/2 hours.


New Hampshire

N.H. Rev. Stat. Ann. § 275:30-a

Applies to: All employers.

Meal Break: 30 minutes after 5 consecutive hours, unless the employer allows the employee to eat while working and it is feasible for the employee to do so.


New York

N.Y. Lab. Law § 162

Applies to: Factories, workshops, manufacturing facilities, mercantile (retail and wholesale) establishments.

Meal Break: Factory employees, 60 minutes between 11 a.m. and 2 p.m.; mercantile employees, 30 minutes between 11 a.m. and 2 p.m. If a shift starts before 11 a.m. and ends after 7 p.m., every employee gets an additional 20 minutes between 5 and 7 p.m. If a shift starts between 1 p.m. and 6 a.m., a factory employee gets 60 minutes, and a mercantile employee gets 45 minutes, in the middle of the shift. Labor commissioner may permit a shorter meal break; the permit must be in writing and posted conspicuously in the main entrance of the workplace.

North Dakota N.D. Admin. Code § 46-02-07-02(5)

Applies to: Applicable when two or more employees are on duty.

Exceptions: Waiver by employee, or other provision in collective bargaining agreement.

Meal Break: 30 minutes for each shift over 5 hours. Unpaid if employee is completely relieved of duties.


Oregon

Or. Admin. R. § 839-020-0050

Applies to: All employers except as noted.

Exceptions: Agricultural workers and employees covered by a collective bargaining agreement.

Meal Break: 30 minutes, unpaid if relieved of all duties; paid time to eat if employee cannot be relieved of duty; a 20-minute paid break, if employer can show that it is industry practice or custom.

Rest Break: Paid 10-minute rest period for each 4 hours or major fraction worked; if practical, in the middle of the work period.

Rest period must be in addition to usual meal break and taken separately; can’t be added to meal period or deducted from beginning or end of shift to reduce length of total work period.

Rest period is not required for certain solo adult employees serving the public, although they must be allowed to use rest room.


Rhode Island

R.I. Gen. Laws § 28-3-14, 23-13-2.1

Applies to: Factory, workshop, and mechanical or mercantile establishments.

Exceptions: Nighttime switchboard operators who can sleep during shift.

Meal Break: 20 minutes after 6 hours of work. Employees are not entitled to a break if shift lasts for 6 1/2 hours or less and ends by 1 p.m.; or if shift lasts for 7 1/2 hours or less and ends by 2 p.m., and employee has enough time to eat during work.

Breastfeeding: Reasonable unpaid break time to breastfeed infant or express breast milk.


Tennessee

Tenn. Code Ann. §§ 50-2-103(d), 50-1-305

Applies to: Employers with 5 or more employees.

Meal or Rest Break: 30 minutes unpaid for employees scheduled to work 6 consecutive hours or more unless work is such that there is ample time for breaks throughout the day.

Breastfeeding: Reasonable unpaid break time to breastfeed infant or express breast milk.


Vermont

Vt. Stat. Ann. tit. 21, § 304

Applies to: All employers.

Meal Break: Employees must be given reasonable opportunities to eat and use toilet facilities during work periods.


Washington

Wash. Admin. Code 296-126-092, 286-131-020

Applies to: All employers except as noted.

Exceptions: Newspaper vendor or carrier, domestic or casual labor around private residence, sheltered workshop. Separate provisions for agricultural labor.

Meal Break: 30-minute break, if work period is more than 5 consecutive hours, not less than 2 hours nor more than 5 hours from beginning of shift. This time is paid if employee is on duty or is required to be at a site for employer’s benefit. Employees who work 3 or more hours longer than regular workday are entitled to an additional half hour, before or during overtime.

Agricultural employees: 30 minutes if working more than 5 hours; additional 30 minutes if working 11 or more hours in a day.

Rest Break: Paid 10-minute rest break for each 4-hour work period, scheduled as near as possible to midpoint of each work period. Employee cannot be required to work more than 3 hours without a rest break.

Scheduled rest breaks not required where nature of work allows employee to take intermittent rest breaks equivalent to required standard.

Agricultural employees: 10-minute paid rest break for each 4 hours worked.


West Virginia

W.Va. Code § 21-3-10a; W.Va. Code St. R. § 42-5-2(2.6)

Applies to: All employers.

Meal Break: At least 20-minute break for each 6 consecutive hours worked, unless employees are allowed to take breaks as needed or to eat lunch while working.

Rest Break: Rest breaks of 20 minutes or less must be counted as paid work time.


Wisconsin

Wis. Admin. Code § DWD 274.02

Applies to: All employers.

Meal Break: Recommended but not required: 30 minutes close to usual meal time or near middle of shift. Shifts of more than 6 hours without a meal break should be avoided. If employee is not free to leave the workplace, meal period is considered paid time.

Current as of February 2005

Calculating Workhours

When a work pay period begins and ends is determined by a law called the Portal-to-Portal Pay Act. (29 U.S.C. § 251.) This amendment to the FLSA and several other workplace laws requires that an employee must be paid for any time spent that is controlled by and that benefits the employer.

This aspect of wage and hour law has generated a tremendous number of clashes—and cases in which the courts have attempted to sharpen the definition of payable time.

Worktime for which you must be paid includes all the time you must be on duty or at the workplace. However, the courts have ruled that on-the-job time does not include the time employees spend washing themselves or changing clothes before or after work, unless a workplace requires specialized uniforms or other garb that is impractical to don off the premises, nor does it include time spent in a regular commute to the workplace.

Employers are not allowed to circumvent the Portal-to-Portal Pay Act by simply “allowing” you to work on what is depicted as your own time. You must be paid for all the time you work—voluntary or not. This issue has come up frequently in recent years because some career counselors have been advising people that volunteering to work free for a company for a month or so is a good way to find a new job. Although working for free may be legal in situations where the job being sought is exempt from the FLSA—for example, a professional fundraising position with a nonprofit organization—it is not legal when the job involved is governed by the Act. (See Section A2, above, for details on FLSA exemptions.)

For ease of accounting, employers are allowed to round off records of worktime to the nearest five-minute mark on the clock or the nearest quarter hour. But rounding off becomes illegal if it means employees will get paid for less time than they actually worked. In practice, this means that your employer will usually round your worktime up to add a few minutes each day to the time for which you are paid.

In calculating on-the-job time, most concerns focus on how to deal with specific questionable situations, such as travel time, time spent at seminars, meal and coffee breaks, waiting periods, on-call periods, and sleeping on the job.

1. Travel Time
The time you spend commuting between your home and the place you normally work is not considered to be on-the-job time for which you must be paid. But it may be payable time if the commute is actually part of the job.

If you are a lumberjack, for example, and you have to check in at your employer’s office, pick up a chainsaw, and then drive ten miles to reach the cutting site for a particular day, your workday legally begins when you check in at the office.

Even if the commute is not part of your job, circumstances may allow you to collect for the odd trip back and forth. You can claim that you should be paid for your time in commuting only when you are required to go to and from your normal worksite at odd hours in emergency situations.

2. Lectures, Meetings, and Training Seminars
Generally, if you are a nonexempt employee and your employer requires you to attend a lecture, meeting, or training seminar, you must be paid for that time—including travel time if the meeting is away from the worksite.

The specific exception to this rule is that you need not be paid if all of the following are true:

You attend the event outside of regular working hours.

Attendance is voluntary.

The instruction session isn’t directly related to your job.

You do not perform any productive work during the instruction session.

3. Meal and Break Periods
Contrary to the laws of gastronomy, federal law does not require that you be allotted or paid for breaks to eat meals.

However, many states have laws specifically requiring that employees be allowed a half hour or so in meal and rest breaks during each workday. (See the chart below.) Your employer generally does not have to pay you for meal breaks of 30 minutes or more—as long as you are completely relieved of work duties during that time. Technically, however, if your employer either requires that you work while eating—or allows you to do so—you must be paid for time spent during meals. Also, you must be paid for break periods that are less than 20 minutes.

4. Waiting Periods
Time periods when employees are not actually working but are required to stay on the employer’s premises or at some other designated spot while waiting for a work assignment are covered as part of payable time. For example, a driver for a private ambulance service who is required to sit in the ambulance garage waiting for calls must be paid for the waiting time.

5. On-Call Periods
A growing number of employers are paying on-call premiums—or sleeper pay—to workers who agree to be available to be reached outside regular worktime and respond by phone or computer within a certain period. Some plans pay an hourly rate for the time spent on-call; some pay a flat rate.

If your employer requires you to be on call but does not require you to stay on the company’s premises, then the following two rules generally apply:

On-call time that you are allowed to control and use for your own enjoyment or benefit is not counted as payable time.

On-call time over which you have little or no control and which you cannot use for your own enjoyment or benefit is payable time.

Questions of pay for on-call hours have become stickier—and more common—as a burgeoning number of technological gadgets such as cell phones, pagers, and mobile email trumpet that they can keep their owners in touch 24/7 and as more employees opt for more flexible arrangements that allow them to work out of the office.

In cases of close calls as to whether on-call time is worktime that must be compensated, courts will often perform a balancing act, weighing:

whether the worker is constrained to stay in a particular spot while on-call

the frequency of the calls received

the length of time the employee must work when called

any specific agreement as to whether the time on-call is worktime, and

6. Sleep Time
If you are required to be on duty at your place of employment for less than 24 hours at a time, the U.S. Labor Department allows you to count as payable any time that you are allowed to sleep during your shift of duty. If you are required to be at work for more than 24 hours at a time—for example, if you work as a live-in housekeeper—you and your employer may agree to exclude up to eight hours per day from your payable time as sleep and meal periods.

However, if the conditions are such that you cannot get at least five hours of sleep during your eight-hour sleep-and-eat period, or if you end up working during that period, then those eight hours revert to being payable time.

Calculating Your Pay

To resolve most questions or disputes involving the FLSA, you must first know the regular rate of pay to which you are legally entitled.

Whether you work for hourly wages, salary, commissions, or a piece rate, the courts have ruled that your regular rate of pay typically includes your base pay plus any shift premiums, hazardous duty premiums, cost of living allowances, bonuses used to make otherwise undesirable worksites attractive, and the fair value of such things as food and lodging that your employer routinely provides as part of your pay.

Obviously, there is much room here for individual interpretation and arbitrary decisions. But the overriding concept is that everything that you logically consider to be a routine part of your hourly pay for a routine day is a part of your regular rate of pay.

The courts have often ruled that the regular rate of pay does not include contributions that an employer makes to benefit plans, paid vacations and holiday benefits, premiums paid for working on holidays or weekends, and discretionary bonuses. And some employee manuals clarify what is included in your regular rate of pay by specifying that some benefit programs are regarded by the company to be extra compensation that is not part of an employee’s regular pay.

The regular rate of pay for people who work for hourly wages is their hourly rate including the factors just mentioned.

For salaried workers, the hourly rate is their weekly pay divided by the number of hours in their standard workweek.

If you are paid a salary that covers a period longer than a week, it may be a bit trickier to compute your wage rate. Department of Labor regulations attempt to shed light on this by requiring that all salaries must be reduced to a weekly equivalent to determine the rate of pay.

If you are paid a monthly salary, for example, you can determine your weekly wage rate by multiplying your total monthly salary by 12 (the number of months in a year), then dividing that sum by 52 (the number of weeks in a year).

Rights Under the FLSA : Restrictions on Child Labor

Minors under 18 years old may not work in any jobs that are considered to be hazardous—including those involving mining, wrecking and demolition, logging, and roofing. The Secretary of Labor defines what jobs are deemed hazardous and so out-of-bounds for young workers. To find out which jobs are currently considered hazardous for the purposes of the FLSA, call the local office of the U.S. Labor Department’s Wage and Hour Division, located in the government section of your telephone book The Department of Labor’s website, at www.dol.gov, has a listing of local offices—and also has information about child labor restrictions.

To encourage youngsters to stay in school rather than becoming beholden to the dollar too soon, there are additional restrictions on when and how long workers between ages 14 and 16 may be employed in nonhazardous jobs:

They may work no more than three hours on a school day and no more than 18 hours in a school week.

They may work no more than eight hours on a nonschool day and no more than 40 hours in a nonschool week.

During the period that starts with the day after Labor Day and ends at midnight May 31, their workday may not begin earlier than 7 a.m. or end later than 7 p.m.

From June 1 through Labor Day, their workday may not begin earlier than 7 a.m., but it can end as late as 9 p.m.

Some industries have obtained special exemptions from the legal restrictions on child labor. Youths of any age may deliver newspapers, for example, or perform in television, movie, or theatrical productions.

The farming industry has been fighting the child labor restrictions as well as the rest of the FLSA ever since the law was first proposed in the 1930s, so less-strict rules apply to child farmworkers. For example, children as young as 12 may work on their parents’ farms. And workers as young as ten years old may work for up to eight weeks as hand harvest laborers as long as their employers have obtained a special waiver from the U.S. Labor Department.

Rights Under the FLSA : Compensatory Time

Most workers are familiar with compensatory or comp time—the practice of employers offering employees time off from work in place of cash payments for overtime. What comes as a shock to many is that the practice is illegal in most situations. Under the FLSA, only state or government agencies may legally allow their employees time off in place of wages. (29 U.S.C. § 207(o).)

Even then, comp time may be awarded only:

according to the terms of a collective bargaining unit agreement or

if the employer and employee agree to the arrangement before work begins.

When compensatory time is allowed, it must be awarded at the rate of one-and-a-half times the overtime hours worked—and comp time must be taken during the same pay period that the overtime hours were worked.

Many employers and employees routinely violate the rules governing the use of compensatory time in place of cash overtime wages. However, such violations are risky. Employees can find themselves unable to collect money due them if a company goes out of business or they are fired. And employers can end up owing large amounts of overtime pay to employees if they get caught by the labor department.

a. State Laws
Some states do allow private employers to give employees comp time instead of cash. But there are complex, often conflicting, laws controlling how and when it may be given. A common control, for example, is that employees must voluntarily request in writing that comp time be given instead of overtime pay—before the extra hours are worked. Check with your state’s labor department for special laws on comp time in your area. (See the appendix for contact information.)

b. Alternative Arrangements
Employees who value their time off over their money may feel frustrated with the letter of the law preventing them from taking comp time. If you are in this boat, you may have a few options for getting an arrangement that feels like comp time but is still within the letter of the law.

You may be allowed to take time off by rearranging your work schedule. This is legal if both of the following are true:

The time off is given within the same pay period as the overtime work.

You are given an hour and a half of time off for each hour of overtime worked.

One way is to subtract the time during a single workweek.

But you are not confined to an hour-for-hour trade. You can also take time-and-a-half pay in one week, then reduce your hours the next week so that your paycheck remains constant.

State Overtime Rules (US)

This chart covers private sector employment only. The overtime rules summarized are not applicable to all employers or all employees. Occupations that generally are not subject to overtime laws include health care and attendant care, emergency medical personnel, seasonal workers, agricultural labor, camp counselors, nonprofits exempt under FLSA, salespeople working on a commission, transit drivers, baby sitters, and other household workers, and many others. For more information, contact your state’s department of labor and be sure to check its website, where most states have posted their overtime rules.

Alabama

No overtime provisions.

Alaska

Alaska Stat. §§ 23.10.055 and following

Time and a half after x hours per DAY: 8

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 4 or more employees; commerce or manufacturing businesses.

Notes: Voluntary flexible work hour plan of 10-hour day, 40-hour week, with premium pay after 10 hours is permitted.

Arizona

No overtime limits for private sector employers.

Arkansas

Ark. Code Ann. §§ 11-4-211, 11-4-203

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 4 or more employees.

Employment excluded from overtime laws: Employment that is subject to the FLSA.

Notes: Employees in retail and service establishments who spend up to 40% of their time on nonexempt work must be paid at least twice the state’s minimum wage ($572 per week).

California

Cal. Lab. Code §§ 510 and following; Cal. Code Regs. tit. 8, §§ 11010 and following

Time and a half after x hours per DAY: 8; after 12 hours, double time.

Time and a half after x hours per WEEK: 40. On 7th day: Time and a half for the first 8 hours; after 8 hours, double time.

Employment excluded from overtime laws: Computer software employees who design, develop, create, analyze, test, or modify programs using independent judgment, or who are paid at least $45.84/hour.

Notes: Alternative four 10-hour day work week is permitted, if established prior to 7/1/99. 7th day premium pay not required when employee works no more than 30 hours per week or 6 hours per day.

Colorado

Colo. Rev. Stat. § 8-13-102; 7 Colo. Code Regs. § 1103-1(4)

Time and a half after x hours per DAY: 12

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employees in retail and service, commercial support service, food and beverage, health and medical industries.

Connecticut

Conn. Gen. Stat. Ann. § 31-76b; Conn. Agencies Regs. § 31-62-E1(c)

Time and a half after x hours per WEEK: 40; premium pay on weekends, holidays, or 6th or 7th consecutive day.

Notes: In restaurants and hotels, time-and-a-half pay required for the 7th consecutive day of work or for hours that exceed 48 per week.

Delaware

No overtime provisions.

District of Columbia

D.C. Code Ann. § 32-1003(c); D.C. Mun. Regs. tit. 7, § 906

Time and a half after x hours per WEEK: 40

Florida

No overtime provisions.

Georgia

No overtime provisions.

Hawaii

Haw. Rev. Stat. §§ 387-1; 387-3

Time and a half after x hours per WEEK: 40. Dairy, sugar cane, and seasonal agricultural work: 48 hours per week.

Employment excluded from overtime laws: Employees earning guaranteed compensation of $2,000 or more per month.

Idaho

No state overtime rules that differ from FLSA.

Illinois

820 Ill. Comp. Stat. §§ 105/3(d), 105/4a

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 4 or more employees.

Indiana

Ind. Code Ann. § 22-2-2-4(j)

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Employment that is subject to the FLSA, movie theaters, seasonal camps and amusement parks, FLSA-exempt nonprofits.

Notes: Collective bargaining agreements ratified by the NLRB may have different overtime provisions. Domestic service work is not excluded from overtime laws.

Iowa

No state overtime limits.

Kansas

Kan. Stat. Ann. § 44-1204

Time and a half after x hours per WEEK: 46

Employment excluded from overtime laws: Employment that is subject to the FLSA.

Kentucky

Ky. Rev. Stat. Ann. §§ 337.050, 337.285

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Retail, hotel, and restaurant businesses.

Notes: 7th day, time and a half.

Louisiana

No overtime provisions.

Maine

Me. Rev. Stat. Ann. tit. 26, § 664(3)

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Auto mechanics, parts clerks, and salespersons; hotels, motels, and restaurants; canning, freezing, packing, and shipping produce and perishable foods.

Notes: Employee cannot be required to work more than 80 hours of overtime in any 2-week period.

Maryland

Md. Code Ann., [Lab. & Empl.] § 3-420

Time and a half after x hours per WEEK: 40; 48 hours for bowling alleys and residential employees caring for the sick, aged, or mentally ill in institutions other than hospitals; 60 hours for agricultural work.

Massachusetts

Mass. Gen. Laws ch. 151, § 1A

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Agriculture, farming, fishing; hotel, motel, or restaurant; seasonal workers less than 5 months; hospital, nursing home, or rest home; public transit.

Notes: Sunday or holiday: Time and a half as overtime unless already paid that rate as part of regular compensation.

Michigan

Mich. Comp. Laws §§ 408.382 and following

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 2 or more employees.

Employment excluded from overtime laws: Employees not subject to state minimum wage laws.

Minnesota

Minn. Stat. Ann. § 177.25

Time and a half after x hours per WEEK: 48

Mississippi

No overtime provisions.

Missouri

Mo. Rev. Stat. §§ 290.500 and following

Time and a half after x hours per WEEK: 40; 52 hours for seasonal amusement or recreation businesses.

Employment excluded from overtime laws: Employment that is subject to the FLSA; retail or service business with gross annual sales or contracts of less than $500,000.

Montana

Mont. Code Ann. §§ 39-3-405 and following

Time and a half after x hours per WEEK: 40; 48 hours for students working seasonal jobs at amusement or recreational areas.

Nebraska

No overtime provisions.

Nevada

Nev. Rev. Stat. Ann. § 608.018

Time and a half after x hours per DAY: 8

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Businesses with a gross annual sales volume of less than $250,000.

Notes: Employer and employee may agree to flextime schedule of four 10-hour days.

New Hampshire

N.H. Rev. Stat. Ann. § 279:21(VIII)

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: Employees covered by the FLSA; employees in amusement, seasonal, or recreational business open 7 months or less a year.

New Jersey

N.J. Stat. Ann. §§ 34:11-56a(4) and following

Time and a half after x hours per WEEK: 40

Employment excluded from overtime laws: June to September: Summer camps, conferences, and retreats operated by nonprofit or religious groups.

New Mexico

N.M. Stat. Ann. § 50-4-22(C)

Time and a half after x hours per WEEK: 40

New York

N.Y. Lab. Law §§ 160(3), 161; N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2

Time and a half after x hours per WEEK: 40 for nonresidential workers; 44 for residential workers.

Employment excluded from overtime laws: Same exemptions as FLSA.

North Carolina

N.C. Gen. Stat. §§ 95-25.14, 95-25.4

Time and a half after x hours per WEEK: 40; 45 hours a week in seasonal amusement or recreational establishments.

Employment excluded from overtime laws: Employment that is subject to the FLSA.

North Dakota

N.D. Admin. Code § 46-02-07-02(4)

Time and a half after x hours per WEEK: 40; 50 hours per week, cab drivers.

Employment excluded from overtime laws: Computer professionals who design, develop, create, analyze, test, or modify programs using independent judgment or who are paid at least $27.63/hour.

Ohio

Ohio Rev. Code Ann. § 4111.03

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers who gross more than $150,000 a year.

Oklahoma

No state overtime provisions.

Oregon

Or. Rev. Stat. §§ 653.261, 653.265

Time and a half after x hours per WEEK: 40

Notes: Time and a half required after 10 hours a day in canneries, driers, packing plants, mills, factories, and manufacturing facilities.

Pennsylvania

43 Pa. Cons. Stat. Ann. § 333.104(c); 34 Pa. Code § 231.41

Time and a half after x hours per WEEK: 40

Rhode Island

R.I. Gen. Laws §§ 28-12-4.1 and following, 5-23-2(h)

Time and a half after x hours per WEEK: 40

Notes: Time and a half for Sunday and holiday work is required for most retail businesses (these hours are not included in calculating weekly overtime).

South Carolina

No overtime provisions.

South Dakota

No overtime provisions.

Tennessee

No overtime provisions.

Texas

No overtime provisions.

Utah

No overtime provisions.

Vermont

Vt. Stat. Ann. tit. 21, §§ 382, 384(b); Vt. Code R. 24 090 001

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 2 or more employees

Employment excluded from overtime laws: Retail and service businesses if 75% of annual sales not for resale; hotels, motels, restaurants; transportation workers exempt under FLSA.

Virginia

No overtime provisions.

Washington

Wash. Rev. Code Ann. § 49.46.130

Time and a half after x hours per WEEK: 40

West Virginia

W. Va. Code §§ 21-5c-1(e), 21-5c-3

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Employers of 6 or more employees at one location

Employment excluded from overtime laws: Employees that are subject to the FLSA.

Wisconsin

Wis. Stat. Ann. §§ 103.01, 103.03; Wis. Admin. Code DWD 274.01 and following

Time and a half after x hours per WEEK: 40

Employment overtime laws apply to: Manufacturing, mechanical, or retail businesses; beauty parlors, laundries, restaurants, hotels; telephone, express, shipping, and transportation companies.

Wyoming

No overtime provisions.

Rights Under the FLSA : Pay for Overtime

The FLSA does not limit the number of hours an employee may work in a week—unless the employee is a minor. But it does require that any covered worker who works more than 40 hours in one week must be paid at least one and one-half times his or her regular rate of pay for every hour worked in excess of 40.

There is no legal requirement under the FLSA that workers must receive overtime pay simply because they worked more than eight hours in one day (although a few states require it). Nor is there anything that requires a worker to be paid on the spot for overtime. Under the FLSA, an employer is allowed to calculate and pay overtime by the week—which can be any 168-hour period made up of seven consecutive 24-hour periods.

It is custom, not law, that determines that a workweek begins on Monday. However, the FLSA requires consistency. An employer cannot manipulate the start of the workweek to avoid paying overtime.

Also, because of the nature of the work involved, common sense—and the law—both dictate that some jobs are exempt from the overtime pay requirements of the FLSA.

The most common of these jobs include:

commissioned employees of retail or service establishments

some auto, truck, trailer, farm implement, boat, or aircraft workers

railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees

announcers, news editors, and chief engineers of small nonmetropolitan broadcasting stations

domestic service workers who live in their employer’s residence

employees of motion picture theaters, and

farmworkers.

And, finally, some employees may be partially exempt from the Act’s overtime pay requirements. The most common of this hybrid type is an employee who works in a hospital or residential care establishment who agrees to work a 14-day work period. However, these employees must be paid overtime premium pay for all hours worked over eight in a day or 80 in the 14-day work period, whichever is the greater number of overtime hours.

In addition to the FLSA overtime provisions, a number of state laws also define how and when overtime must be paid. Some states measure overtime on a daily, rather than weekly, basis. In these states, workers who put in more than eight hours a day are generally entitled to overtime, even if they work a total of 40 or fewer hours in a week. The chart that follows summarizes state overtime rules for private employers. Note that if the federal and state law conflict, your employer must obey the stricter law—that is, the law that provides the most expansive rights to you.

Some employers have tried to skirt the overtime pay requirements by labeling part of the pay received as a bonus. In fact, bonuses have a strict legal definition, being reserved only for money paid in addition to wages because of some extra effort you have made on the job, as a reward for loyal service, or as a gift.

While the term bonus has a grand ring to it, be skeptical if you receive one too often. And take the time to do some math to discover whether the bonus is an apt description for the sum you receive—or a ploy to circumvent the laws requiring overtime pay.

Rights Under the FLSA : Equal Pay for Equal Work

Men and women who do the same job, or jobs that require equal skill and responsibility, must be compensated with equal wages and benefits under a 1963 amendment to the FLSA called the Equal Pay Act. (29 U.S.C. § 206.) Be aware, however, that some payment schemes that may look discriminatory at first glance do not actually violate the Equal Pay Act. The Act allows disparate payments to men and women if they are based on:

seniority systems

merit systems

systems measuring earnings by quantity or quality of production, such as a piece goods arrangement, or

any factor other than sex—for example, salary differentials that stem from unequal starting salaries based on differences in experience levels.

Although the Equal Pay Act basically covers the same employers and employees as the rest of the FLSA, there is one important difference: The Equal Pay Act also protects against discriminatory pay arrangements for executive, administrative, and professional employees—including administrators and teachers in elementary and secondary schools.

Rights Under the FLSA : Minimum Wage

The FLSA guarantees a number of rights, primarily aimed at ensuring that workers get paid fairly for the time they work. (See Sections G and H, below, for an explanation of how to take action for FLSA violations.)

Minimum Wage

Employers must pay all covered employees not less than the minimum wage—currently set at $5.15 an hour.

Some states have established a minimum wage that is higher than the federal one—and you are entitled to the higher rate if your state allows for one. Employers not covered by the FLSA, such as small farm owners, are required to pay all workers the state minimum wage rate. (See “State Minimum Wage Laws for Regular and Tipped Employees” in Section E, below.)

The FLSA does not require any specific system of paying the minimum wage, so employers may base pay on time at work, on piece rates, or according to some other measurement. In all cases, however, an employee’s pay divided by the hours worked during the pay period must equal or exceed the minimum wage.

Many employers either become confused by the nuances and exceptions in the wage and hour law—or they bend the rules to suit their own pocketbooks. Whatever the situation, you would do well to double check your employer’s math. A few simple rules distilled from the law may help.

Hourly. Hourly employees must be paid minimum wage for all hours worked. Your employer cannot take an average—or pay you less than minimum wage for some hours worked and more for others.

Fixed rate or salary. Employees paid at a fixed rate can check their wages by dividing the amount they are paid in a pay period by the number of hours worked. The resulting average must be at least minimum wage.

Commissions and piece rates. Your total pay divided by the number of hours you worked must average at least the minimum hourly wage rate.

a. Form of Pay
Under the FLSA, the pay you receive must be in the form of cash or something that can be readily converted into cash or other legal forms of compensation, such as food and lodging. Your employer cannot, for example, pay you with a coupon or token that can be spent only at a store run by the employer. Employee discounts granted by employers do not count toward the minimum wage requirement.

b. Pay for Time Off
Neither the minimum wage section nor any other part of the FLSA requires employers to pay employees for time off, such as vacation, holidays, or sick days. Although most employers provide full-time workers some paid time off each year, the FLSA covers payment only for time on the job.

However, some state laws mandate that employees get paid time off for jury duty (see Section E2, below), for voting (see Section E3, below) and for family and medical leave. And most state laws provide that, if employers offer paid vacation days off, employees are entitled to be paid for the portion they have already earned when they quit or are fired.

c. Tips
When employees routinely receive a minimum amount in tips as part of their jobs—commonly, $20 to $30 per month as set out in state law—their employers are allowed to pay less than the minimum wage and credit the tips received against the minimum wage requirement. However, the employee’s hourly wage plus the tips the employee actually earns must add up to at least the minimum wage—or the employer has to make up the difference. (Under federal law, an employer can pay as little as $2.13 an hour, as long as the employee earns at least $30 in tips per month; some states have different rules, summarized in the chart in Section E1, below. (See Section B3b, below, for more on tips as wages.) Also, the employee must be allowed to keep all of the tips he or she receives.

d. Commissions
When people are paid commissions for sales, those commissions may take the place of wages. However, if the commissions do not equal the minimum wage, the FLSA requires the employer to make up the difference.

The Fair Labor Standards Act (Wages and Hours)

The most important and most far-reaching law guaranteeing a worker’s right to be paid fairly is the federal Fair Labor Standards Act, or FLSA. (29 U.S.C. §§ 201 and following.) The FLSA:

efines the 40-hour workweek

establishes the federal minimum wage

sets requirements for overtime, and

places restrictions on child labor.

Basically, the FLSA establishes minimums for fair pay and hours—and it is the single law most often violated by employers. An employer must also comply with other local, state, or federal workplace laws that set higher standards. So, in addition to determining whether you are being paid properly under the FLSA, you may need to check whether the other laws discussed in this chapter also apply to your situation.

The FLSA was passed in 1938 after the Depression, when many employers took advantage of the tight labor market to subject workers to horrible conditions and impossible hours. One of the most complex laws of the workplace, the FLSA has been amended many times. It is full of exceptions and exemptions—some of which seem to contradict one another. Most of the revisions and interpretations have expanded the law’s coverage by, for example:

requiring that male and female workers receive equal pay for work that requires equal skill, effort, and responsibility

including in its protections state and local hospitals and educational institutions

covering most federal employees and employees of states, political subdivisions, and interstate agencies

setting out strict standards for determining, paying, and accruing compensatory or comp time—time given off work instead of cash payments, and

establishing specific requirements for how and when employers must pay for overtime work.

1. Who Is Covered

The FLSA applies only to employers whose annual sales total $500,000 or more, or who are engaged in interstate commerce.

You might think that this would restrict the FLSA to covering only employees in large companies, but, in reality, the law covers nearly all workplaces. This is because the courts have interpreted the term interstate commerce very broadly. For example, courts have ruled that companies that regularly use the U.S. mail to send or receive letters to and from other states are engaged in interstate commerce. Even the fact that employees use company telephones or computers to place or accept interstate business calls or take orders has subjected an employer to the FLSA.

2. Who Is Exempt

A few employers, including small farms—those that use relatively little outside paid labor—are explicitly exempt from the FLSA.

In addition, some employees are exempt from FLSA requirements, such as pay for overtime and minimum wages, even though their employers are covered.

Exemption and partial exemption from the FLSA cuts both ways. For employees who are exempt, the often-surprising downside is that they are generally not entitled to wage extras such as overtime and compensatory time. The upside is that, at least theoretically, exempt employees are paid a salary that is handsome enough to compensate them for the extra duties and responsibilities they have taken on as part of their jobs. In addition, the paychecks of the exempt can be docked only for complete days of absence for vacation, personal business, illness, or partial initial or final weeks of employment.

Employers who attempt to have it both ways—for example, by denying workers overtime by claiming they’re exempt but docking them for tardiness or time away for an occasional errand—risk violating wage and hour laws.

a. Executive, Administrative, and Professional Workers
This is the most confusing and most often mistakenly applied broad category of exempt worker.

Above all, bear in mind that you are not automatically exempt from the FLSA solely because you receive a salary; the work you do must be of a certain type as well.

The Department of Labor, not renowned for issuing succinct or comprehensible regulations, attempts some additional guidance on what type of work these employees must perform to qualify as exempt.

Executive exemption. The requirements for an exempt executive worker are most rigorous. He or she must:

manage other workers as the primary job duty

direct the work of two or more full-time employees

have the authority to hire, fire, discipline, promote, and demote others or make recommendations about these decisions, and

earn a salary of at least $455 per week. Employees who own at least 20% of the business are exempt only if they are “actively engaged” in its management.

Administrative exemption. An administrative employee generally must:

primarily perform office or nonmanual work directly for company management or administration

primarily use their own discretion and judgment in work duties, and

earn a salary of at least $455 weekly.

Professional exemption. To qualify as an exempt professional, an employee must:

perform work requiring invention, imagination, originality, or talent in a recognized creative field—such as music, writing, acting, and the graphic arts, or

perform work requiring advanced knowledge—work that is predominantly intellectual, requires a prolonged course of instruction, and requires the consistent exercise of discretion and judgment, such as law; medicine; theology; accounting; actuarial computation; engineering; architecture; teaching; various types of physical, chemical, and biological sciences; and pharmacy, and

earn a salary of at least $455 per week—although doctors, lawyers, teachers, and many computer specialists need not meet this minimal earning requirement.

Highly compensated employees. Employees who perform office or nonmanual work and are paid total annual compensation of $100,000 or more—which must include at least $455 per week paid on a salary or fee basis—are exempt from the FLSA if they regularly perform at least one of the duties of an exempt executive, administrative, or professional employee as described earlier.

Common problems. The Department of Labor has tagged a number of problems that commonly come up relating to the exemption for executive, administrative, and professional workers. The top contenders include workplaces in which:

There is no formal sick leave policy, but salaried workers are docked for time missed due to illness.

Allegedly exempt workers are paid less than full salary each week.

Employees deemed exempt perform nearly exclusively routine work that has no bearing on setting management policies.

Exempt employees with scholastic degrees perform exclusively unprofessional, unrelated work.

Acquired job skills are confused with the need to use independent judgment and discretion.

Salaried employees are all labeled exempt, without regard to actual work duties or the percentage of time spent on them.

Note If you do not fit squarely within a particular definition of an exempt employee, following the nuances and semantic turns can be flummoxing. For more help, go to the Department of Labor’s website at www.dol.gov or seek guidance from the DOL’s toll-free helpline at 866-487-9243.

b. Outside Salespeople
An outside salesperson is exempt from FLSA coverage if he or she:

regularly works away from the employer’s place of business, and

makes sales or obtains orders or contracts for services or facilities.

Typically, an exempt salesperson will be paid primarily through commissions and will require little or no direct supervision in doing the job. And, under the law, outside sales do not include those made by mail, by telephone, or over the Internet.

c. Computer Specialists
This exemption applies to computer systems analysts, computer programmers, software engineers, and or other similarly skilled workers in the computer field who are compensated either on a salary or fee basis at a rate not less than $455 per week or not less than $27.63 an hour.

If you work in such circles, you may well know who you are. But the law specifically requires that an exempt computer specialist’s primary work duties must involve:

applying systems analysis techniques and procedures—including consulting with users to determine hardware, software, or system functional specifications

designing, developing, documenting, analyzing, creating, testing, or modifying computer systems or programs, including prototypes, based on and related to user or system design specifications

designing, documenting, testing, creating, or modifying computer programs related to machine operating systems, or

a combination of these duties.

d. Miscellaneous workers
Several other types of workers are exempt from the minimum wage and overtime pay provisions of the FLSA. The most common include:

employees of seasonal amusement or recreational businesses

employees of local newspapers having a circulation of less than 4,000

seamen on foreign vessels

newspaper delivery workers

workers on small farms, and

personal companions and casual babysitters. Officially, domestic workers—housekeepers, child care workers, chauffeurs, gardeners—are covered by the FLSA if they are paid at least $1,000 in wages from a single employer in a year, or if they work eight hours or more in a week for one or several employers. For example, if you are a teenager who babysits only an evening or two each month for the neighbors, you probably cannot claim coverage under the FLSA; a full-time au pair would be covered.

Considering Legal Action

Wipe the dollar signs from your eyes. While it’s true that some workers have won multimillion dollar judgments against their employers, it’s also true that such judgments are very few and very far between. There are several things to think about before you decide to launch a no-holds-barred legal challenge to your firing or wrongful workplace treatment.

Evaluate your motives. First, answer one question honestly: What do you expect to gain by a lawsuit? Are you angry, seeking some revenge? Do you hope to teach your former employer a lesson? Do you just want to make your former employer squirm? None of these provides a strong basis on which to construct a lawsuit. If an apology, a letter of recommendation, or a clearing of your work record would make you feel whole again, negotiate first for those things.

You will need good documentation. As this book stresses again and again, the success of your claim or lawsuit is likely to depend upon how well you can document the circumstances surrounding your workplace problem. If your employer claims you were fired because of incompetence, for example, make sure you can show otherwise by producing favorable written performance reviews or evidence that your employer circumvented the company’s disciplinary procedures before firing you.

Before you discuss your case with a lawyer, look closely at your documentation, and try to separate the aspects of your problem that you can prove from those you merely suspect. If you cannot produce any independent verification of your workplace problem, you will be in the untenable position of convincing a judge or jury to believe your word alone.

Taking action will require time and effort. You can save yourself some time and possibly some grief by using this book to objectively analyze your job loss or problem. If possible, do it before you begin talking with a lawyer about handling your case. Once again, the keys to most successful wrongful discharge lawsuits are good documentation and organized preparation—both of which must come from you.

Be mindful of the expense. Because many challenges to workplace problems are legal longshots, lawyers who specialize in this type of case often refuse to handle them. In fact, these days, many originally well-meaning employment lawyers have switched to where the money is: They represent employers.

So your initial search for legal help is likely to be frustrating. And, if you do find a lawyer willing to take your case, you will probably have to pay dearly. If you hire a lawyer with expertise in wrongful discharge lawsuits and your case is less than a sure win, you can expect to deposit several thousands of dollars to pay for the lawyer’s time if your lawsuit fails, plus thousands more to cover other costs.

Documenting the Problem
Most employers now embrace the workplace mantra reinforced by thousands of court cases: Document, document, document. If your good working situation has gone bad—or you have recently been fired—you, too, must heed the call: Document all that happened. You are nowhere, legally, without evidence of how and when things went wrong.

A little bit of workplace paranoia may later prove to be a healthy thing. Even if everything seems fine now, take the extra seconds to create a paper trail. Collect in one place all documents you receive on the job: initial work agreements, employee handbooks, management memos, performance reviews. To be safe, keep your file at home, away from the office.

If you have what seems to be a valid complaint, it is crucial to gather evidence to bolster your claim. From the start, beware of deadlines for filing specific types of legal claims. The deadlines may range from a few weeks to a few years but will likely signal that you have to act quickly.

Caution Watch what you grab. While it’s true that you are in the best position to gather evidence while you are still working, you must be wary of what you take in hand. Confidential information, such as evidence of the company’s finances, and other documents that the employer has clearly indicated should not be disclosed, are off limits. If you take these kinds of documents out of the workplace, that may actually become a legal ground for the company to fire you—or for a court to limit or deny your remedies for wrongful treatment you suffered while on the job.

There are several kinds of evidence you should collect as soon as possible.

Company policies. Statements of company policy, either written or verbal, which indicate arbitrary or wrongful treatment—including job descriptions, work rules, personnel pamphlets, notices, or anything else that either indicates or implies that company policy is to treat workers unfairly may be the most meaningful evidence you can amass.

Written statements by management. Statements by supervisors, personnel directors, or other managers about you are also important. Save any written statements and note when and from whom you received them. If you have not received any written reasons for a job decision you feel is discriminatory or otherwise wrongful, make a written request for a statement of the company’s reasons.

Verbal comments. In many cases, employers and their managers do not write down their reasons for making an employment decision. In such cases, you may still be able to document your claim with evidence of verbal statements by supervisors or others concerning unwritten company policy or undocumented reasons for a particular action involving your job.

Make accurate notes of what was said as soon as you can after the statement is made. Also note the time and place the statement was made, who else was present, and the conversation surrounding it. If others heard the statement, try to get them to write down their recollections, and have them sign that statement. Or have them sign your written version of the statement, indicating that it accurately reflects what they heard.

Talking It Over with Your Employer

Analyzing Your Options
If something is amiss in your workplace and you have turned to watercooler wisdom, commuter train tales, or locker room skinny, you may have come away with the same urging: Sue.

For most people, that is bad advice. The courtroom is usually the worst place to resolve workplace disputes. Most of them can be handled more efficiently and much more effectively in the workplace itself—through mediation, arbitration or, most often, by honest conversation.

If you have suffered an insult, an injury, or a wrong at work, you are probably feeling angry or hurt. If you have lost your job, you may be hurting financially, too. All of this is likely to cloud your ability to make well-reasoned decisions. So go slowly. Decide what you want to gain. If an apology from your employer would suffice, save yourself the time and expense of filing a legal action.

Do not overlook the obvious: First try talking over your workplace problem with your employer. An intelligent discussion can resolve most wrongs—or at least get your differences out on the table. Most companies want to stay within the law and avoid legal tangles. So the odds are that your problem is the result of an oversight, a misunderstanding, or a lack of legal knowledge.

Here are a few tips on how to present your concerns to your employer or former employer:

Know your rights. The more you know about your legal rights in the workplace—to be paid fairly and on time, to do your job free from discrimination and retaliation, to labor in a safe and healthy place—the more confident you will be in presenting your problem.

Specific penalties that may be imposed on employers who violate them. Your best course is probably not to sue your employer over a violation of a law requiring paid time off for jury duty or a single miscalculation of overtime pay. But knowing whether a particular transgression can be punished with a fine, a criminal conviction, or an order to rehire you is the kind of information that can make your employer take your complaint more seriously in the bargaining process.

Stick to the facts. Keeping your legal rights firmly in mind, write a brief summary of what has gone wrong and your recommendation for resolving the problem. It often helps to have someone who is more objective, such as a friend or family member, review the facts of your workplace problem with you and discuss possible approaches to resolving it.

Check the facts again. The human memory is not nearly as accurate as we like to think it is—particularly when it comes to remembering numbers and dates. Before you approach your employer with a complaint about your pay, check to be sure your math is correct. If your beef is about a discriminatory remark, be sure you can quote it verbatim. Review all of your written records to make sure you have not overlooked a past event or pivotal memo.

Do not be overly emotional. Recognize that dealing with a workplace problem can be stressful. After all, if you are like most workers, you spend about half of your waking hours on the job. But you also know friends, relatives, and acquaintances who are out of work—and who are having hard times finding new jobs. Acknowledge that these pressures of time and money can make it more difficult to deal with a workplace problem. Then vow to proceed as calmly and rationally as possible.

Do not tolerate abuse. If your job is on shaky ground, try not to jeopardize it further by losing your temper and getting fired as a result. A calm presentation of a complaint is always better than an emotional confrontation. Remember the common wisdom that it is easier to find a new job while you still have your old one. At the very least, it’s easier to blaze a new career trail if you leave no muddy tracks behind you.

Be discreet. Discussions of workplace problems are often very personal and should take place privately—not in front of coworkers. Employment problems can be divisive not only for those involved, but for an entire workplace. You don’t want to be justly accused of poisoning the workplace atmosphere or of filling it with disgruntled workers forming pro and con camps. Ask for an appointment to discuss your complaint privately with your supervisor or another appropriate manager. If you give that person a chance to resolve your problem rationally and privately, he or she will be more apt to see things your way.