Wage and Hour Law Basics

Wage and hour laws establish and regulate wage standards on the federal and state levels which include but are not limited to overtime, minimum wage and methods of wage payment. These laws highlight common overtime problems and have recently been the basis of increased overtime lawsuits.

Major Points Covering Federal and State Wage and Hour Laws

  • The Fair Labor Standards Act (FLSA) sets the majority of wage and hour laws at the federal level.
  • FLSA Overtime Act sets minimum wage guidelines, overtime rate of pay, child labor restrictions and record keeping in both the private sector and in federal, state, and local governments.
  • Federal (FLSA) overtime pay is 1.5 times the regular rate-of-pay for hours worked over a 40 hour workweek for covered, non-exempt employees.
  • State overtime laws differ. For example, California and Washington have daily overtime calculations, in addition to the weekly FLSA requirement.
  • It is a violation of the Fair Labor Act to be forced to work off-the-clock without pay.
  • FLSA states that covered non-exempt workers are entitled to a minimum wage of not less than $7.25/ hour effective July 24, 2009.
  • Not all States have a minimum wage of $7.25/ hour.
  • Not everyone is covered by the minimum wage requirement.
  • FLSA wage and hour laws allow for “punch in and out rounding”.
Wage and Hour Laws Case Study

Olan Mills pays $3 Million in Labor Settlement

In September of 2010, Olan Mills Inc. paid out $3 million in a labor settlement which involved 18 current and former employees in four states as compensation for claims that the portrait studio chain violated the FLSA wage and hour laws.

The 18 plaintiffs alleged Olan Mills violated the Fair Labor Standards Act by being forced to work off-the-clock. Other federal and state wage and hour law claims by the plaintiffs included:

  • having to attend various meetings without being compensated for their time,
  • not receiving overtime wages for overtime worked,
  • not getting time for meal and breaks during long shifts,
  • having wages illegally withheld, and,
  • not being reimbursed for out-of-pocket expenditures on items necessary for their work.

Olan Mills denied all allegations, but reached an agreement with the plaintiffs to settle the claims out of court to avoid the risk and expense of litigation.

Punch In / Out Rounding Legalities

Q: Is there a law in Michigan, that allows the employer to put into policy and procedures that you may only punch in 6 minutes prior to your shift and only allows you 6 minutes after your shift–violation of this will result in discipline?

The FLSA (federal wage and hour law) does allow “rounding” of an employee’s starting and stopping times, and the Department of Labor has approved the practice of recording employee starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth (6 minutes) or quarter of an hour (15 minutes).

The FLSA and Michigan state labor law requires an employer to pay employees for all hours actually worked – even if you did not properly punch in/out on the time clock. Note that some of this time (even if worked in violation of policy) may potentially be overtime, depending on whether you work over 40 hours per week. Your employer can, however, discipline you (write you up, etc) for failing to properly follow policy regarding clock in/out, but may not use this as a reason to not pay you for time that you actually worked, including time and a half for any overtime.

If you have a situation at work that you believe has violated your rights under the wage and hour laws detailed above, please submit our free & confidential Case Evaluation Form and one of our overtime lawyers will be happy to consult with you about your claim.