HR News for Cities
Are Your Employees Classified Correctly? Don’t Know? Read on …
In April 2018, the Kentucky Labor Cabinet recouped $101,424.73 in unpaid wages for Kentucky workers. Violations by employers included unpaid overtime, including overtime based on misclassification, withheld final paychecks and unpaid breaks. One of the ways employers can prevent these costly mistakes is to be certain that they are classifying their employees correctly.
The Fair Labor Standards Act (FLSA), as well as Kentucky Revise Statute (KRS) 337.275, requires cities to pay their employees at least the federal minimum wage, which is currently $7.25 an hour. Also under federal and state law, nonexempt employees are also required to be paid overtime pay for all hours worked over 40 in a workweek. The biggest FLSA mistake that cities make is classifying employees that are nonexempt as exempt from overtime. Keep in mind that it is much better to review compliance before the Department of Labor comes in to review for you.
1. What is the Fair Labor Standards Act (FLSA)?
The Fair Labor Standards Act is a federal law that was established by the U.S. Congress in 1938 and has been amended several times since then, most recently this year. The FLSA defines the federal minimum wage, employee time recordkeeping requirements, and jobs required to receive overtime compensation after 40 hours have been worked in a workweek.
2. What does the term "nonexempt" mean?
Employees classified as nonexempt are covered by the overtime provisions of the FLSA and must record each hour worked on the time record. If the employee works more than 40 hours in one workweek, the employee is paid time and one-half, whether in pay or in accrual of compensatory time. Almost all city employees will fall into this category.
3. What does the term "exempt" mean?
Employees classified as exempt are not covered by the overtime provisions of the FLSA and are paid an agreed amount for the whole job, regardless of the amount of time or effort required to complete the work. In most cases, exempt employees do not record hours of work on the time record.
4. What are the criteria that enable employees to be exempt from the FLSA overtime provisions?
To be classified as exempt, an employee must meet all of the standards in the following "tests":
- Be paid over a minimum salary as outlined in 5;
- Be paid on a salary basis as opposed to an hourly basis; and
- Perform certain duties as outlined in one of the duties tests as outlined in 7.
5. What is the salary level test?
Currently, the FLSA salary level test requires that an employee's salary must be at least $455 a week, or $23,660 annually in order to be considered exempt from the overtime provisions. An employee with a salary less than $455 a week must be nonexempt. Part-time employees may be nonexempt even though their annualized salary is well over $455 a week.
6. What does being paid a salary mean in terms of the FLSA?
Under normal circumstances, employees paid a salary are paid a predetermined amount each week regardless of quantity or quality of work or hours worked.
7. What criteria are used to determine if employees over the wage threshold are exempt from overtime?
To be exempt, an employee must qualify under one or more of the following tests:
- Executive exemption test
- Administrative exemption test
- Professional exemption test
- Computer exemption test
- Highly compensated employee exemption test
Each duties test has specific requirements that must be met for an employee to be exempt. For example, the executive exemption requires that an employee: (a) supervise two or more full-time employees, (b) have authority to hire and fire, or meaningfully recommend hiring and firing, and (c) manage a recognized department. Additional information on each of the exemption tests is available on the Department of Labor website at http://www.dol.gov/elaws/esa/flsa/overtime/menu.htm or Chapter 11 of the 2017 KLC City Officials Legal Handbook.
8. What is the definition of overtime?
Overtime, as stated above, is time worked by a nonexempt employee that exceeds the employee's normally scheduled workweek. Overtime is time worked over 40 hours in a workweek. The workweek should be defined in your personnel policies.
9. May a nonexempt employee waive his or her rights to overtime compensation?
No. All nonexempt employees are compensated for all hours actually worked at the appropriate rate of pay.
Summer is coming! Teens will be enjoying summer vacation, and some will be looking for employment during the summer months. Before hiring teens, be sure to freshen up on the requirements because the child labor laws are detailed, and the penalties are steep if you don’t follow them!
Minimum Age Standards
The Fair Labor Standards Act (FLSA) and Kentucky law establish both hours and occupational standards for minors. In most cases the state and federal laws are very similar; however, it is important to be aware of both laws since the more restrictive requirements will apply.
In Kentucky, workers under the age of 18 are considered minors for purposes of employment. Both federal and state laws limit the occupations in which minors may be employed and the number of hours they may work. For purposes of this article, an overview of the most common requirements will be provided. To review the complete federal and state law see 803 KAR 1:100, KRS Chapter 339 and 29 CFR Part 570.
Minors under the age of 18 are prohibited from working in occupations declared hazardous by the Kentucky Commissioner of Workplace Standards or the U.S. Department of Labor, including:
- Motor vehicle driver and outside helper on a motor vehicle.
- Power-driven hoisting apparatus.
- Power-driven circular saws and band saws.
- Excavating operations.
Minors under the age of 16 are prohibited from working positions that include:
- The use of a hoisting apparatus or power-driven machinery other than office machines.
- Operating or helping on motor vehicles, although they may clean vehicles.
- Mowing (KLC Insurance Services recommends they be at least 18).
- Performing public messenger duties.
- Transporting people or property, including the operation of golf carts.
- Public utilities.
- Maintenance or repair of machinery.
- Tasks requiring the use of ladders or scaffolds.
- Cooking (except at soda fountains, lunch counters, snack bars, or cafeterias).
- Loading or unloading trucks.
Minors between the age of 14 and 16 years of age may be employed in positions that include:
- Office and clerical work, including the operation of office machines.
- Errand and delivery work by foot, bicycle and public transportation.
- Cleanup work, including the use of vacuum cleaners and floor waxers, and maintenance of grounds. They may not use power-driven mowers or cutters.
- Kitchen work and other work involved in preparing and serving food and beverages, including the operation of machines and devices used in the performance of the work, such as dishwashers, toasters, milk shake blenders and coffee grinders.
- Work in connection with cars and trucks such as car cleaning, washing and polishing. They may not perform any work involving the use of pits, racks, or lifting apparatus, or the inflation of any tire mounted on a rim equipped with a removable retaining ring.
Generally, minors under the age of 14 may not work except in an employment program sponsored by the school he or she attends. However, minors between 13 and 15 years of age may carry golf bags weighing no more than 35 pounds. Caddies under the age of 14 may caddy only 18 holes in one day. Minors who are 11 and 12 years old may not carry golf bags and are restricted to caddying only with a pull cart. No minor under 16 years of age may operate power-driven golf carts or any power-driven maintenance equipment.
Children under the age of 16 are not permitted to work during school hours nor may they work:
- More than eight hours a day or 40 hours per week during the summer months defined as June 1 through Labor Day;
- After 9:00 p.m. during the summer months;
- Three hours on school days or 18 hours a week when school is in session; or
- Before 7:00 a.m. and after 7:00 p.m. when school is in session.
However, these restrictions on hours do not apply to those minors under 16 years of age who have graduated from high school or an approved vocational school equivalent to high school, are enrolled in an approved work training or career exploration program, are otherwise not required to attend school, or school authorities have made arrangements for him or her to attend school at other than the regular hours if the employment will not interfere with the minor's schooling, health, or well-being.
Children between the ages of 16 and 17 are not permitted to work:
- More than six hours per day on a school day, or eight hours per day on a non-school day during the school year. The total hours worked in a week during the school year must not exceed 30, unless he or she has gained a special exemption from both a parent and school administrator. If exempted, he or she may only work up to 40 hours per week during the school year.
- Additionally, a minor of this age may not work later than 10:30 p.m. on a school night, or 1:00 a.m. on a non-school night.
- There are no restrictions on the number of hours per day or per week a 16 or 17 year old may work during the summer months.
Meal and Rest Breaks
No minor under the age of 18 may work for more than five continuous hours without a lunch period of at least 30 minutes. Additionally, the rest period requirements for all employees will also apply to minors. Kentucky law requires a reasonable break (usually 10 minutes or more), to be provided to an employee during each four hours worked.
Notice and Other Hiring Requirements
Cities must post conspicuously, in every room where minors under the age of 18 are working, a summary of the child labor laws, a list of occupations prohibited to minors, and a statement of the hours minors are allowed to work each day. The Kentucky Office of Workplace Standards provides a downloadable version of the required poster on their website.
Minors that are hired by the city must also be treated as any other employee hired by the city. They must be paid at least the minimum wage, which is currently $7.25, and they must be paid for all hours worked. As such cities should keep records of all hours worked, as well as the time for meal breaks taken.
Cities must also complete the Form I-9 as well as Form W-4 on all newly hired minors even if they are only employed for the summer. Specific information on filling out Form I-9 for minors can be found on the United States Citizenship and Immigration Services website. Lastly, be sure to provide and review all city policies with them and any other items normally provided during the city’s new hire process.
Penalties for violation of child labor laws can be steep, including fines ranging from $100 to $1,000 per offense, plus $100 for each day the violation continues after notice. As such, knowing the law in this area before you hire is essential.
For more information on this or other personnel matters, contact Andrea Shindlebower Main, KLC personnel services specialist.
Use of Email in City Government
Emails are like any other public record in that each one, outside of an exception found in KRS 61.878, can constitute a public record subject to the Open Records Act (ORA) and the Kentucky Department of Libraries and Archives (KDLA) Record Retention Schedule. Therefore, the city must be certain to evaluate each electronic message to see if it fits into an exception. If not, city officials must follow the most recent record retention requirements set out by the KDLA.
The Attorney General clearly states that public officials should avoid the use of a personal email account to conduct city business. In 2014, the Attorney General stated that using private email accounts is a practice that raises “significant records management and retention issues.” As an alternative to using a private account, the Attorney General states that public agencies can establish “separate email accounts for employees through a free service, such as Gmail, using a common naming convention that identifies” the government (for example, email@example.com). Another alternative is “to set up a single dedicated open records account, using a free service, to which all responsive email maintained on personal accounts could be forwarded, saved, and exported in the event of an open records request.”
In whatever way the city decides to handle email retention, a written policy needs to be in place that delineates the information for all city officials and employees. At the very minimum, the policy needs to address:
- That the ORA as well as the KDLA Record Retention Schedule is applicable to the city and its agencies;
- That the policy applies to all electronic messages created, received, retained, used or disposed of related to city business or used in the name of the city; and
- User responsibility in regards to retention and disposition of electronic messages.
Deciding which electronic records must be retained is not an easy feat. Electronic records will have to be gathered and a decision made as to whether or not they are exempt based on one of the open records exemptions. More information on how that process works as well as a model policy can be found on the KDLA website.
For sample policies or more information on this or any other personnel matter, contact Andrea Shindlebower Main personnel services specialist.
Drug Testing For Public Agencies
We expect employees to come to work free of their personal issues. However, a personal struggle as all-consuming as addiction will inevitably spill into the professional realm. That is why it is crucial for employees and supervisors alike to understand how addiction manifests itself in the workplace and to have a thorough knowledge of related city personnel policies.
Personnel policies should begin by emphasizing in positive terms the need for safety in the workplace and adherence to job requirements and work quality, and go on to cite goals such as improving safety and productivity.
When writing or amending policies, cities also need to keep in mind that the laws regarding governmental drug testing policies, unlike for the private sector, place restrictions on who, what, when and how the testing can be done. Governmental employers must have a compelling justification for testing or risk violation of the employee’s Fourth Amendment rights.
Under a city policy, employees can be tested based on reasonable suspicion, post-accident and pre-employment (only after a conditional offer of employment). Random testing, unlike in the private sector, is reserved for those employees who are considered safety-sensitive. These employees have safety-sensitive responsibilities to citizens within the areas of public safety. Examples of such employees include:
- Police officers
- Emergency dispatchers
- Emergency medical personnel
- Heavy equipment operators
- Employees with commercial driver’s license (CDL)
- Mechanics that work on CDL-regulated vehicles
- Gas pipeline workers
- Personnel who drive vehicles carrying senior citizens, handicapped peopled or children
Before doing any type of testing, a written policy must be in place and a copy of the policy should be given to all employees at least 60-90 days in advance of the start of testing. This allows any employee with a drug or alcohol addiction to seek rehabilitation. And be certain that all employees sign a receipt of acknowledgement that they have received, understood and agree to abide by the policy.
Your policy must explain how, when, where and for what reason testing may occur and outline the steps that will be taken to ensure employee confidentiality. The records should be stored and locked separately from general employment records with access to these records only on a strict need-to-know basis. It should also explain the consequences of an employee’s refusal to test, interference in the testing process, or a positive test.
In addition, it is important that the policy address federally regulated employees (such as CDL) separately. One of the main differences is the requirement that federally regulated employees are randomly tested in their own separate pool. The federal regulations also require that a Medical Review Officer (MRO) review the drug tests before they are given back to the employer. Even though this is only a requirement for federally regulated employees, it is recommended that an MRO be used for all the city’s drug testing, since they are formally trained and certified.
Lastly, the policy should also set out guidelines for mandatory training for both supervisors and employees. The ability to know the ins and outs of testing can only be ascertained through sufficient training. Remember that lack of knowledge can lead to liability issues that cities cannot afford. KLC provides free training on our website for employees and supervisors that complies with the requirements for federally regulated employees as well as for cities that maintain the certified Kentucky Drug-Free Workplace status through the Kentucky Department of Labor.
A drug and alcohol policy addresses much more than drug-testing in the workplace. An effective policy is a legally compliant policy that provides employee awareness and education, supervisor training and a plan of action. Taken together, it conveys a full, comprehensive program designed specifically to meet the needs of your city and that will set expectations for current and future employees.
For questions on this or other personnel matters, contact Andrea Shindlebower Main, personnel services specialist.
2018 Form W-4 Released February 28th
The Internal Revenue Service (IRS) released an updated Withholding Calculator earlier this year and a new version of Form W-4 this week, to assist taxpayers in checking their 2018 tax withholding following passage of the new tax law in December. The changes in the new tax law include increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. Because of the changes, the IRS is encouraging taxpayers to use the tax calculator to make sure they have the correct amount of tax taken out of their paychecks. Any employees that wish to change their deductions will need to fill out the 2018 version of the Form W-4. Employers should also begin using this form for any new hires and should have begun using the new income-tax withholding tables no later than February 15 of this year.
For more information on this or any personnel-related matters contact Andrea Shindlebower, personnel services specialist.
Spring Forward … Straight time or overtime?
That can be the question when clocks are set forward one hour March 11th
The arrival of daylight saving time requires clocks to be moved forward one hour at 2:00 a.m. on Sunday, March 11. Shift workers who are on duty at that time and who normally work an eight-hour shift will actually work only seven hours.
"Some employers decide to pay the normal eight hours of pay for that shift as a matter of policy, but under the Fair Labor Standards Act, they are not required to include the additional hour of pay when calculating an employee's regular rate for overtime," noted Heidi Henson, JD, CCH workplace analyst.
For example, if someone actually works 40 hours in the week, the additional hour's pay for that daylight-saving hour would be at straight time, not overtime. Even if the employee works over 40 hours in the city’s defined workweek, that one hour would not have to be included in the overtime calculations.
For more information or sample policies on this or any other personnel related matters contact Andrea Shindlebower, personnel services specialist.