Shawn J. Wanta appeared on The Legal Journal radio program to discuss the Fair Labor Standards Act and Minnesota’s overtime laws.
Employment attorney Shawn J. Wanta appeared on The Legal Journal radio program to discuss the Fair Labor Standards Act and Minnesota’s overtime laws. The discussion covered topics such as overtime, payment of wages, classification of employees, and retaliation against employees. The host asked questions such as “when is overtime required?,” “how many hours per day or week can an employee work?,” and “how is overtime calculated?”
An audio file of the program is available at the bottom of this post.
A transcript of the show is below:
Announcer: Welcome to this week’s edition of The Legal Journal. Now, here’s your host Ross Brindle.
Ross: Good Saturday morning, 48 degrees, cloudy skies in lovely Eagan, Minnesota. You found The Legal Journal once again, Saturday at Business 1570. A reminder, you can always listen online 24/7 at Business1570.com. If you have questions throughout the show today, keep this number in mind: 651-289-4477. You can text in as well: 651-243-0391. Today on the show I am joined by Shawn Wanta. He is with Wanta Thome Jozwiak & Wanta in Minneapolis. Shawn I believe I got that right, did I?
Shawn: Close enough.
Ross: I’m very proud of myself. It only took a little bit of coaching before the show. Shawn it’s good to see you, thank you for coming in. Why don’t you give us a little bit of background on yourself and the firm, if you don’t mind, before we get in to the topic of today?
Shawn: Absolutely. I am an attorney with the law firm of Wanta Thome Jozwiak & Wanta. We are a Minneapolis based law firm. We represent employees and consumers in disputes with their employers or with other businesses.
Ross: I want to mention your website as well, it’s Baillonthome.com. If you don’t mind, can I give out the phone number as well?
Shawn: Please.
Ross: It is 612-252-3570. That is 612-252-3570. Today we’re going to be talking about a lot of different things, especially when it comes to things like wage requirements. I want to start off with that, if you don’t mind. Even a topic as simple as minimum wage, what are general requirements of wage laws, especially for maybe an employer? These are things that obviously employees find interesting as well. What are some of the general requirements of wage laws, maybe minimum wage and overtime if we can start there?
Shawn: Sure. Minimum wage and overtime, there’s two laws that protect Minnesota employees. One is a federal law called a Fair Labor Standards Act. Most people call it the FLSA for short. Minnesota has its own version of the FLSA. It’s the Minnesota Fair Labor Standards Act, the MFLSA.
Ross: Basically just dove tailing off the national?
Shawn: Yes, in Minnesota most of the laws that apply to employees are under the federal FLSA. With certain limited exceptions, the Minnesota law would apply to employees.
Ross: Let’s talk about everything, if you don’t mind, that that act does entail. I know it talks … there’s different things about whether you’re a tipped employee, maybe you’re a server or something like that, and even student learners, vocational students, talk about that if you don’t mind.
Shawn: Sure, well I’ll give you an overview. This is a very big topic.
Ross: It doesn’t seem like something we can get through in 30 seconds.
Shawn: No, but let me tell you something about the FLSA first. That’s the federal law, and it does two things. It protects employees from minimum wage violations, it tells employers, “You have to pay your employees a minimum wage of $7.25 per hour.” That wage does change from time to time through Congress and amendments. The FLSA requires an act of Congress and approval by the president.
The other thing the FLSA does is it guarantees certain employees will be paid overtime for all hours worked over 40 hours in a work week. The overtime premium pay is one and a half times the standard rate of pay.
Ross: You brought up a good topic and I don’t want to catch you too off guard before we move on, but you mentioned that things change, whether it be a president or an act of Congress. Is there places for employers and even employees to go, maybe specifically employers, is there a good place for them to go to be aware of maybe when laws are changing?
Would you have a good answer to that, is that something or maybe they would maybe consult their own individual attorney? Or is there a website where they could be up to date on when laws change? Because I imagine things like this, and you kind of mentioned it, they don’t always stay the same. They might be changing. Is there a good source of where to learn that information?
Shawn: Yes, there’s several good sources both for employees and employers. The three places I tell you to look. The US Department of Labor has a Wage and Hour Division, and the Wage and Hour Division has a website. You can find it on Google. The Minnesota Department of Labor has a similar website that’s more specific to Minnesota. You will want to check out both sites, because the Minnesota law is different than the federal law.
Ross: Let’s talk about hours worked, if you don’t mind. This might not be your general expertise per se, but how should things like hours worked be monitored from an employer’s standpoint? Is there a good way that they should be making sure that they’re monitoring each hour that employees are working?
Shawn: Employers must monitor all hours worked that their employees are working. It’s the employer’s responsibility to track the time that their employees work. Anytime that the employee is—the technical term or the term of art is: To suffer or to permit to work. It’s the obligation of the employer to track their employee’s time.
If an employee is working outside of the office, the employer still needs to track that time. They can provide a mechanism; it might be a time sheet, it might be computer application or going through a website. It is the employer’s obligation to make sure that they are paying their employees for every minute that they’re working.
Ross: This is obviously then would be a good way to—down the road if something were to happen, this is a good backup for them in case there was some type of lawsuit. It’s just a good way to keep track, correct?
Shawn: It’s a good way to keep track but it’s also the law.
Ross: It’s also the law so you better you do it, right?
Shawn: You better do it.
Ross: You better do it. I know we were talking before the show, there is something called the de minimis doctrine. Can you tell me and the listeners a little bit more about that?
Shawn: Sure, the de minimis doctrine is in recognition that it’s very difficult for an employer to track every second worked. What the de minimis doctrine does is it’s essentially a common sense sort of application of the requirement to track employees’ time. Essentially if an employee is working time under the FLSA, so anytime that they’re suffering or permitted to work and it’s infrequent or it’s an insignificant period of time beyond the scheduled working hours which as a practical matter can’t be precisely recorded for payroll purposes, that can be disregarded.
I’ll give you an example. If for example after an employee is clocking in and that employer asks the employee to go to a different job, maybe work at a different position within the same building, and the employee has to gather up all of their tools, tools of the trade or whatever it may be, and move them to the new working area. They’re on the clock doing this, and this is time that is covered in the FLSA. This is working time. You get paid for this time to move your tools from one place to another.
Then the employee shows up to the new station within the workplace and the employee gets ill during that time, maybe they injure themselves transporting their tools or they just don’t feel well. They go to the supervisor at the new station and say, “I’m sick, I need to go home,” the employee goes home.
That time that they transported their tools between clocking in and going to the new job site, that would fall under the de minimis doctrine. The employer wouldn’t be necessarily obligated as a matter of law to pay those employees for that time.
Ross: Very, very, very interesting. Again, you’re listening to The Legal Journal on Business 1570. As always, you can listen online 24/7 at Business1570.com. If you have any questions of comments you can call 651-289-4477. You can text the show as well, at 651-243-0391. I’m joined in studio today by Shawn Wanta, he is with Wanta Thome Jozwiak & Wanta in Minneapolis. You can learn more at Baillonthome.com. I’ll give out the phone number as well: 612-252-3570. That’s 612-252-3570.
Talking about a lot of interesting stuff on the program today, especially things that pertain to a lot of our listeners when it comes to business owners and small business owners. Shawn, you touched on it briefly but I’d like to talk about it a little bit more, minimum wage in Minnesota. I know oftentimes states and federal have different minimum wages, but if you don’t mind let’s talk about minimum wage in Minnesota and where it’s at and kind of some of the legalities that go with that.
Shawn: Sure. The minimum wage in Minnesota is the federal minimum. That’s $7.25 per hour. Now many states have minimum wage laws that are different than the FLSA, and Minnesota is one of them. In Minnesota there’s a distinction between a large employer and a small employer. The large employer’s minimum wage is $6.15 an hour and the small employers are $5.25 an hour, but that doesn’t matter because the federal minimum wage is $7.25 an hour.
Ross: You have to meet that in the state, is that correct?
Shawn: You have to pay $7.25 an hour at a minimum.
Ross: When is the employer subject to both? Is that when the state says, “Here’s what the wage is,” is that how that works?
Shawn: The employer’s always subject to both laws. They’re always subject to the federal law and the Minnesota law, but to the extent that there’s a conflict. For example, in the dollar amount of the minimum wage where in Minnesota it’s either $6.25 or $5.25 an hour but in the federal law it’s $7.25 an hour, the employee gets the benefit of the difference, so the law that provides the greater protection to the employee.
Keep in mind this is the minimum wage. This is the US Congress saying, “This is the minimum you must pay your employees.” Minnesota is free to have a minimum wage that’s higher than the FLSA, and there’s many states that do.
Ross: Once that’s set in the state, that’s the one you have to go with. You can’t refer it back to the federal?
Shawn: You pay the higher of the two.
Ross: You pay the higher of the two. Okay, how about this: Minimum wage for workers who receive tips in the state of Minnesota. How does that work? Because this applies to restaurant owners, maybe people who run events and they have employees who can receive tips. Let’s talk about that. What’s the minimum wage for employees who can earn tips?
Shawn: This is one of the areas where Minnesota employees are lucky. This is where our elected officials and our governors have chosen to protect employees in a way that some other states don’t. Tipped employees in Minnesota have to be paid the minimum wage $7.25 an hour, in addition to their tips.
Since we’re talking about tips, in Minnesota tips are the property of the server, the property of the person who receives the tip. They’re not property of the employer. The employer can’t take a portion of them. They can’t require employees to turn them over to somebody else, in very limited circumstances legitimate tip pooling is okay. In Minnesota the minimum wage for tipped employees is the same for everybody else, it’s $7.25 an hour.
Ross: Let’s just say you work at a restaurant, Joe’s Restaurant, I’m making that up. If there is a Joe listening who owns a restaurant, I apologize. Joe’s Restaurant, he asks to pay his servers $7.25 an hour. Let’s say at one hour this person accumulates $15 in tips. That is their $15, correct, they don’t need to turn that over to anybody?
Shawn: Unless they have another agreement. It’s perfectly okay for a waiter to share his or her tips with the bus person and in certain circumstances maybe a host or voluntarily with the bartender. Many restaurants do have this, they’re called tip pools. There’s legitimate legal ways to pool tips. But they’re always the property of the employee who provides the direct service to the customers.
Ross: How about this, younger workers maybe somebody who’s under the age of 18. I know this applies to a lot of our listeners as well, especially if you employ kids of high school age. Let’s talk about them. What type of minimum wage are they subject to, is it the same? Are there different rules and regulations for high school age kids, somebody who’s under the age of 18?
Shawn: There are. The FLSA, the Minnesota Fair Labor Standards Act, they have been admitted periodically to cover child labor. We’re not going to talk about child labor today, but if you’re going real young in high school you need to look at a whole other set of laws, which are outside the scope of this.
There are two provisions on the FLSA that apply to younger worker. One is for employees who are new employees under the age of 20. An employer who employs somebody under the age of 20 can pay that new employee $4.90 an hour for the first 90 days of their job. After that 90 days, you’ve got to bump them up to the full $7.25 an hour.
There’s a caveat here also for employers. You can’t displace an existing employee or a more experienced employee or anybody else who’s covered or not covered by the training.
Ross: Okay, so it’s a way to protect people who are currently employed as a way for the business to basically save money, correct?
Shawn: Yeah, essentially we want to protect against employers from frequently rotating through younger workers just to avoid paying the minimum wage.
Ross: Just to avoid paying the minimum wage. How about this, minimum wage exceptions that might apply to fulltime students, are there any? I know this is probably … I don’t want to say a gray area, but I imagine that there is some things to pay attention to here.
Shawn: There are. There is a full-time student program, it’s administered by the US Department of Labor. It applies to full-time students who are employed in either retail or service stores, employed in agriculture or in colleges and universities. If there’s an employer who fits one of those categories who hires full-time students, they can apply and obtain a certificate from the Department of Labor.
That certificate will allow the employer to pay the student not less than 85 percent of the minimum wage. It also limits the number of hours that the student can work. They can’t work more than eight hours in a day and no more than 20 hours in a work week when school is in session. Now when school is not in session then it’s the standard 40 hours but no overtime on that.
Ross: You’re listening to Business 1570, it’s The Legal Journal every Saturday mornings at 9:00. How about every Saturday morning at 9:00, maybe I’ll use proper English. You can listen online at Business1570.com.
I’m joined in studio today by Shawn Wanta, learn more at Baillonthome.com. Shawn, there’s a lot that I want to get to and we still have a little bit of time here in this segment. I know you kind of touched on it, but minimum wage exceptions that apply to student learners. Can you kind of recap that very quickly and kind of what those are?
Shawn: Sure. For student learners, there’s two issues. If you’re a full-time student working for a certain type of job, either employee service or working for school, the employer can apply for a certificate that would allow them to pay 85 percent of the minimum wage.
There’s also another exception we didn’t talk about before the station identification that is for high school students that are at least 16 years old. For those students, at least 16 years, in high school, who are enrolled in a vocational education program like a shop class, the employer that hires that student can obtain a certificate from, again, the US Department of Labor, that would allow that student to be paid not less than 75 percent of the minimum wage.
Essentially, it’s for an employer who would like to hire a high school student who’s in a shop class to get real-life job experience. This represents a public policy of encouraging such employers to hire young students, to give them a job experience, at a little bit of a discount on the minimum wage.
Ross: Shawn, I want to circle back to something that we started with. We were discussing federal minimum wage, what the difference was between federal and state. If you don’t mind, I think this will be a relatively easy question but I think it’s very important.
How often does the federal minimum wage increase? Is it something where maybe we see it increase on a yearly basis or is it something that might run longer than that? When basically does the federal minimum wage increase? Is there are set time for it or is it something that just kind of happens?
Shawn: No, to both. It certainly doesn’t just kind of happen and it doesn’t happen regularly. There’s not a schedule. For example, the minimum wage isn’t tied to inflation. It may be a good idea to do that, but it takes—for the federal side, it takes an act of Congress.
It’s a bill, it’s how a bill becomes a law. It goes through Congress, goes through the House, goes to the Senate, gets approval from the president and usually—and it doesn’t happen overnight, there’s always a long debate with the legislator and the question, “Will the president sign it?” Then it takes time for the Department of Labor to implement it. There’s always a period the employers can have to catch up.
Ross: You’re telling me bills just don’t happen overnight?
Shawn: No. (Laughter)
Ross: I knew that would be relatively easy question to answer. Who makes sure that workers are paid minimum wage? Who’s the watchdog on this? Who is watching this type of stuff?
Shawn: There’s a lot of people. There’s people like me.
Ross: I was going to say, are you one of them?
Shawn: I certainly am. There’s a number of employment attorneys in town and nationally who are always available to employees who think that maybe their employer isn’t paying them the minimum wage or isn’t paying them overtime. Employees should always contact attorneys. It’s a protected activity, your employer can’t retaliate against you for doing it, they can’t dock your pay, they can’t fire you, they can’t give you a worse job position. It’s absolutely your legal right to call an attorney if you think your employer isn’t following the law.
This is not just wage and hours, not just minimum, not overtime. If you think you’re being discriminated against, if you think that you’re being retaliated against, if you’re not being treated fairly because of your age, your gender, your sexual orientation, your religion, your family status, call a lawyer. That’s protected conduct. You can’t be fired for doing it.
Ross: Let’s do this if you don’t mind, let’s reset a little bit because I think that this is good information. If you don’t mind Shawn, just reset who you’re with and maybe the best way for people to get more information about the firm.
Shawn: Sure. I’m an attorney at the law firm of Wanta Thome Jozwiak & Wanta. We’re a Minneapolis based law firm right downtown in Minneapolis. We practice primarily in employment law. We represent employees who feel that they’ve been treated improperly, whether they’re fired or retaliated against by their employer.
Ross: I want to get right back into the topic, because this is very interesting stuff. This is what we never touched on and maybe I should have started with this, but I really think we need to get to this. To whom does minimum wage apply? Are there certain people that it doesn’t apply to or does minimum wage apply to everybody?
Shawn: There are people who are exempt from the minimum wage. This, again, is a very large topic. I’ll give you a couple overviews. We talked about the student learners, we talked about younger learners, but let’s look from the employer perspective. Sometimes it’s easier to say which type of businesses does this apply to first and then we can go a little deeper into what type of people at those employers.
The FLSA applies to any business, any enterprise that has an annual gross volume of at least half a million dollars. It also applies to smaller firms, smaller businesses that are engaged in interstate commerce or in the production of goods that go outside the state.
Employees who work in transportation or communications or that use the mail outside the state or telephones for interstate communications, anybody else who would be somehow affiliated with those jobs such as guards, janitors, maintenance employees. Essentially, it’s everybody. There’s a very broad interpretation of what it means for an employer to be engaged in interstate commerce.
Ross: The next one, if you don’t mind, that I want to touch on, if you have something you need to finish on this point that’s completely fine as well, but another question that comes to mind is, is the issue of exempt and non-exempt employs? When we do the show this seems to be an issue we touched on a lot.
Can you just briefly explain the difference between exempt and non-exempt employees? Because I know to a business, I think they know but oftentimes to somebody who just shows up to work every day to do their nine to five so to speak, I think a lot of them they don’t know the difference. If we can kind of talk about that briefly?
Shawn: Sure. I don’t think a lot of employers know the difference either. I get calls to my office all the time from people who aren’t classified properly, and that’s why this is a big deal to employers and employees. This is a high-risk deal too, a lot of lawsuits about whether an employee is exempt from the FLSA or non-exempt from the FLSA.
Ross: Let’s break it down then.
Shawn: Sure. Non-exempt employees are required by the act, by the law, to be paid a minimum wage and overtime of time and a half, one and a half times the regular rate of pay. Exempt employees aren’t. The distinction is, who’s exempt and who isn’t? That’s a very complex area of law. I’ll give you a couple of examples.
Ross: This is probably the sticky part to it all, correct?
Shawn: This is the sticky part. And it is grey, it’s not always black and white. There’s five, but three within the statute of broad exemptions, three types of employees who are exempt. The first are executives. These are people who are paid a salary basis as defined in the regulations as you don’t get paid per hour you get paid by the job. Your salary has to be at least $455 per week. The executive’s primary duty must be managing the enterprise or managing a department within the enterprise.
Ross: So some type of managerial role?
Shawn: Managerial role, exactly. Also for this exemption you have to regularly direct two or more other full-time employees or the equivalent of two. Finally, that employee must have the authority to hire or fire other employees, or their suggestions are given significant weight. This executive exemption is what you would generally consider as a true manager. This is somebody with the discretion to really affect the business. They don’t have to be paid overtime.
Ross: Let’s talk about the flipside then of that. How about non-exempted employees? Or excuse me, exempt employees and non-exempt. Let’s continue and just break them down evenly here.
Shawn: Sure. There’s more exemptions. There’s the administrative assistant exemption. Again you have to have that salary basis, $450 a week. This employee’s primary job duty has to be performing in office or non-manual work that’s directly related to the management of the general business. These are the administrative assistants to the executives.
Ross: You’re listening to The Legal Journal in Business 1570. Listen online at Business1570.com. I’m joined in studio today by Shawn Wanta. He is with Wanta Thome Jozwiak & Wanta in Minneapolis. Learn more at Baillonthome.com.
I love this next question because as you were helping me prepare for the show, I looked at one of these questions and I went, “Well, this seems like an easy answer.” Then I kind of looked into what you answer might be and I thought “Well, it’s not really as easy as it sounds.”
What activities are considered work? That’s kind of a general question, but I know that’s it’s probably not a general answer. Let’s talk about that, if you don’t mind.
Shawn: Yeah, I will talk about it in one sec. I wanted to finish a couple of exemptions to the FLSA. These are important ones. I don’t want to skip them by for the listeners.
Ross: Sure.
Shawn: The other types of exempt employees are the professionals; your doctors, lawyers, accountants, engineers and anything that requires science, learning, higher education. There’s also exemptions for computer employees. These are people who are actually are designing or programming computers. Then there’s the outside sales exemption.
Let’s go back and talk about that later for the outside sales, but going back to your question about what’s considered work. A lot. (laughter) That’s the short answer. Courts have held that work time under the FLSA, and again the Minnesota FLSA also, includes time spent that’s performing job related activities and they genuinely benefit the employer. Or the work that the employer has … and this is where we have to quote the law, knows or has reason to believe that the work is being performed by the employee, if an employer knows that there’s an employee that goes home and checks her email and responds to emails from home or checks her voicemails from home or takes work home and does it at home or takes work on vacation.
If the employer knows the work is being done, that counts for work. You have to pay your employees for it. If that time pushed you over 40 hours a week, you have to pay time and half. You get that premium pay, absolutely.
The third way is … If an employer knows that an employee is doing the work, they have to pay. But if the employer does not prohibit the employee from performing the work, that’s what triggers the off the clock time. You’ve got to pay for that. You have to get paid time and a half, even if it’s voluntary. You have to pay your employees for that time.
Ross: We’re coming up on a break Shawn, so if you don’t mind we’ll kind of finish on that thought. I want to talk a little bit more about the work at home issue, because I think that that—for a lot of our listeners, I think that that’s a very interesting topic. You mentioned outside sales, I think we should talk about how that’s paid as well and how that’s covered.
If you don’t mind we’ll take a break, we’ll step away, we’ll come back with Shawn Wanta. Again, very, very quickly, Baillonthome.com or 612-252-3570. That’s 612-252-3570. More of The Legal Journal on Business 1570 in just a few moments.
Good Saturday morning, 9:32 still 48 degrees here in Eagan. It’s The Legal Journal on Business 1570, online at Business1570.com. I’m joined in the studio this morning by Shawn Wanta with Wanta Thome Jozwiak & Wanta in Minneapolis. Shawn, I think I’m getting good at that. Now, you’re probably going to tell me I’m not saying it 100 percent correct, but I feel like I’m pretty close.
Shawn: You got it.
Ross: All right, how about that. Let’s circle back a little bit. Before the break we had talked about a numerous things, including if employers need to pay employees for doing certain work at home.
A few minutes before that you had mentioned a little bit about how people in sales are paid. If you don’t mind, let’s circle back to that because I know you want to talk about it and I don’t want to leave it behind, I want to talk about this.
People in outside sales who are maybe so to speak paid a fair amount on commission or all commission, how does that work? How does that, first off maybe from an employee’s standpoint, how does that need to be monitored?
Shawn: People who work in outside sales, these are people who are out making sales outside of a fixed location. They’re not in a shop; they’re not in a retail location.
Ross: On the road, travelling by car.
Shawn: They’re travelling. These are people who … Maybe they’re drug sales people. They’re selling non-tangibles, marketing and so forth. They’re exempt from the FLSA if certain conditions are met. That means that their primary job duty, it has to be making sales or obtaining orders for contracts or services for the use of facilities. They have to be selling something.
Two, the employee has to be customarily and regularly engaged away from the employer’s place of business. That means it’s not just a one time out to the sales side, it’s not just for a period of time, seasonal. This is your job, you’re regularly outside. Oftentimes these are people who don’t even have a desk in the employers.
Ross: The road warriors, so to speak. They’re out on the road, they’re travelling from state to state. This actually, in my mind, kind of dove tails with work at home. You mentioned if they don’t have an office they might be doing some work at home. Maybe it’s even after business hours, so to speak.
I know this is probably a two-part question. Work at home maybe for somebody who is in outbound sales, that’s probably a little different than somebody who goes to work from nine to five and then might go home and still be doing work at home as well. I imagine this is not a general rule or law that is kind of one-size fits all, there’s probably multiple facets to this as well.
Shawn: This is the general rule: If an employee is doing some work that benefits the employer it doesn’t matter where you do the work, you have to be paid for that work. Whether you’re selling something, you’re doing paperwork, you’re processing reports, you’re checking your email, you’re responding to voicemails, you’re planning out your day for the next day, you’re making your agendas, whatever you’re doing. If you’re doing it at home and it benefits the employer, then you’re not exempt. You have to be paid for that time. Even if that time puts you over 40 hours a week, then you’re entitled the time and half.
Ross: If you’re an hourly employee, let’s say you’re supposed to work 40 hours a week and you’ve worked—let’s just say it’s Friday, you’ve worked 40 hours but Friday night you’re at home. Maybe you’ve logged back in to your computer, you’re typing up reports for Monday, you’re getting things ready for next week. You technically should be getting paid for that?
Shawn: Yes. Let’s look some of the factors you have to consider. Look, one is that the work has to be primarily for the benefit of the employer.
Ross: You can’t just save work to bring it home and say that you were doing it because it benefits the employer?
Shawn: Well, no. Being unproductive—you have to be paid for that. You don’t have to be fast, you don’t have to be efficient, you just have to be working for the benefit of the employer. Some other things, it has to be your principal activity. You can’t make up work and do it at home. It has to be within the scope of your job duties. If your job is stocking equipment, you can’t do that at home. You can’t say, “Oh, I’m going to chart out a plan,” or something. You don’t get to do that.
It has to do within the scope of your regular job duties. Also, that time is only compensable if the employer knew or should have known that you were engaged in those activities. Checking email, for example. The employer can know or should know if you check your email at home. They have server logs. They can go and see, “When did this employee log in to their email?” If they’re doing it after hours, the employer should be monitoring that.
Ross: Okay, very fair point. Another thing that—this actually kind of dove tails I think a lot with the sales aspect that we were just talking about. Commuting and travel time, do you need to be paid for that? Does that count as part of a work day? Are there cases where an employee can say, “Look, I drive half an hour to work every day and a half an hour back home at night.” Can you make an argument if that’s part of your workday? Let’s talk about that.
Shawn: Sure. Look, the general rule of thumb is if it’s your job to be travelling you have to get paid for it. Normal travel to and from work, that’s not work time, you don’t get paid for it. Find a job closer to home. (laughter) But an employee who is travelling in the course of their job, maybe … Let’s look at a little more complicated example.
Maybe if you travel from home to work on a special one-day assignment in a different city, maybe you have to go up North or outside the state or something. An employee who’s working usually working in an office in a fixed location but for some reason has to travel from home and it’s faster don’t go to the office, go straight to the job site, you get paid for that. That’s work time.
Now, an employee could deduct the usual time it takes you to go to the office. If it takes you 10 minutes to go to the office but in this special it took you an hour to drive, it’s 50 minutes of work time, it’s not 60 minutes of work time.
You’ll hear some people say, “It’s all in a day’s work,” it’s those outside sales people. But I don’t want to use outside sales in the example, because they’re exempt. Who is not exempt? Let’s talk about workers who travel from jobsite to jobsite. Maybe they work in people’s homes or at various businesses throughout the day. If this travel is all in a day’s work and it’s your principal activity, you get paid for that. That’s counted as time worked.
Ross: This is obviously one of those issues, much like a lot of what we’re talking about, there really is no blanket approach. This is a multi level, multifaceted and it applies in many different ways.
Shawn: It is and look, we’re just going over the bird’s eye view here. There’s a whole lot of details here. If you have questions, call a lawyer. A lot of law firms are happy to talk to you. Our firm provides free consultations for your first time. If you have a question and you’re an employee, call us and we’ll talk about it.
Ross: Shawn, would you say your firm deals more with employees or employers, or is it both?
Shawn: We deal with both, but we only represent employees.
Ross: Got you. The phone number 612-252-3570. I want to make sure that we get that out there for you, 612-252-3570. Coming up in just a little bit towards the end of the program, we’re less than three weeks from the national election, I want to touch on that in just a little bit for exactly, from an employee standpoint, what you should expect of your employer or if you need to get out and vote.
Because I know a lot of people will say, “My work day is when the polls are open. How do I make sure that I have a chance to go vote?” Let’s talk about things like security screening and making sure that you work in a safe workplace environment. If you can, let’s provide, as you mentioned, a general bird’s eye view of this.
Shawn: Bird’s eye view of this is a complicated one. There’s a somewhat important court case that says if you have a job that you have go through some rigorous screening, even if it lengthens the day, you don’t get paid for it because it’s not your principal activity. If that screen becomes your principal activity, then you have to get paid for it.
Think of those people who are bringing food in and out of airport terminals. They have to go through security all day. People who are pushing people through wheelchairs through security, they get paid for that time. If it’s your principal job, you get paid for it. But if you have a job where you have go through security, the court says that’s kind of your commute time. That’s your time travelling to work, you don’t get paid for it.
Ross: Got you. There’s a lot of things … and we should try and bold point her on through. What about things like clothes changing and certain equipment requirements? Does your employer need to make time for you to do things like that at work?
Shawn: Sure, it depends. If you’re changing into specific clothing, protective clothing, hazmat suits for example or any sort of very specific clothing, or your turning on equipment, you’re setting up equipment, you generally get paid for that. But there’s a number of factors you can consider. What are you changing into or what are you donning. If you’re just putting on your regular polo to go work that maybe has your employer’s logo, that doesn’t count. But if you’re needing to put on some—you work in a clean room, you get paid for that. Those outfits can take 20, 30 minutes to put on.
Ross: How about things, Shawn, like let’s say I get to work in the morning, I generally Monday through Friday I get to work around 9:00. What I do is I get to work, fire up the computer, turn on my email, which might take a little while. Am I doing that correctly or technically am I supposed to get to work a few minutes beforehand and fire everything up, that way when 9:00 starts I’m working from second one on through? Or just turning on your computer, getting your email ready, maybe doing other equipment things like that, does that count as work time? Or am I supposed to be doing that five, ten minutes before I technically work?
Shawn: You get paid for it. That’s called equipment donning. You get paid for it.
Ross: Oh, man. I’m doing something right, you’re telling me here. (Laughs)
Shawn: It’s not your fault that the employer has a computer system that needs to be turned on. That’s benefitting them. If you don’t turn it on, you can’t do your job. You get paid for that time. Even if you start at 9:00 a.m, if your work just starts at 9:00 a.m. and your employer says—let’s say you work in call center for example. You need a computer and you need your phones and you need to punch in on that phone to be available for a call starting at 9:00 a.m.
If that means you have to get to your job 15 minutes early to log in on the computer, open your software, do whatever charts you need for that day, you get paid for that time. Even if it’s not your scheduled time, if you need to go to work early or leave work late to set up or turn your equipment, that’s work you get paid for.
Ross: Sure, so if you get to work at 9:00 and let’s say you’re in a call center, I think that’s a very good example, and 9:01 boss walks in and says, “Why aren’t you out on the phone calling somebody?” Let’s just say boss just had a bad day. You can technically say, “Well boss, I’m firing up the software, firing up the computer. If you wanted me to be calling somebody right 9:01 maybe you should tell me I got to be here at 8:45.”
Is that essentially how that would work? That might not keep you in the good graces of the boss, but technically you’re saying—the crux of the matter is essentially what you’re saying, is you get paid for all those things like the simple startup in the morning.
Shawn: You get paid for it. If your employer wants you to be clocked in at 9:00 a.m. and you need to do things first, you need to be paid for that time. Now, can an employer reprimand you for not coming early to not be ready for your job at 9:00 a.m.? Maybe they can, but they can’t not pay you for that time.
Ross: Okay, let’s talk about overtime. I promise we’ll get to those election issues of how to maybe make time to be able to go vote on Election Day coming up here in a few weeks. Overtime, this is a very sticky issue as well. There’s a lot of different things we can touch on, but let’s start with overtime laws and maybe how they apply to somebody like an independent contractor. Let’s start there and then we’ll work through some other issues.
Shawn: Sure. Overtime doesn’t apply to true independent contractors. This is a big area of law and there’s a lot of caveats and a lot of trouble areas for employers and employees alike. I can tell you, I spend a lot of time litigating whether a worker is an employee or they’re an independent contractor. They’re complicated lawsuits to take years and they can be expensive for both sides.
Look, I’ve handled multimillion-dollar settlements over whether somebody is an employee or an independent contractor. This is a big important area of law, because if you’re an independent contractor you don’t need to be paid overtime. But it’s tricky whether or not … You have to be a true independent contractor. You can’t be an employer who wants to call somebody an independent contractor just to avoid paying overtime.
Ross: This is an issue where essentially you would say do your homework and make sure from day one, from both sides and both standpoints, everybody knows whether you’re an independent contractor or not. Just make sure you know what you’re getting into so you know the legalities.
Shawn: Make sure you understand the relationship. Both people need to know what is the relationship. Resolve these issues early on. For example, there’s a whole lot of different laws that apply to whether you’re an independent contractor or an employee. Let’s talk just about the FLSA, because that’s what we’re talking about today.
There are state laws, there’s common laws but let’s look just FLSA. It’s a test called the economic realities test. If as a matter of economic reality you’re dependent on the company, you’re an employee.
You can look if—look, if you’re integral part of the business, if you’re an integral part of the principal business, you’re probably an employee. You can look at things like what’s the permanency of the relationship? Is it an ongoing relationship? Does it last for a week? Is it a one-time job or is it a series of jobs that span months or years? Or is it a daily job—you look at the permanency of that relationship.
You also can look at an independent contractor is a separate business. Is that contractor making a substantial investment in either facilities or equipment to do the job?
Ross: Let’s look at, if you don’t mind I want to touch on—can we touch on salary employees as well quickly? Can we talk about them? Let’s talk about overtime issues for salary employees. Should you be paid overtime if you’re on a salary?
Shawn: Maybe.
Ross: Maybe. Okay, that’s already a different answer than what I was expecting, so let’s talk about that.
Shawn: Yes. The answer’s a maybe, and here’s why. Unless you’re exempt, you’re required to be paid for all your hours worked and overtime for all those hours over 40. That was the exemption we talked about earlier. Those are the true managers, the true administrative assistants. The learned professionals, doctors, lawyers, engineers, the outside sales people, people who drive large semi-trucks are exempted for different reasons. Unless there’s an exemption, even you’re salary, you need to be paid overtime.
Ross: Even if you are a salary to an employer, let’s say you work 45 hours of your salary. Most employers can’t come back to you and say, “You’re salary employee, the 40 hours doesn’t apply to you.” In most cases that—speaking in generalities, in a lot of cases that wouldn’t be correct.
Shawn: It wouldn’t be correct. There’s a special doctrine called the fluctuating workweek that does apply to salaried employees. Salaried employees are those people who are paid the same rate whether they’re working 30 hours a week or 50 hours a week. You get paid the same each workweek. What the fluctuating workweek does is that it sets out how do you calculate the hourly rate of pay. For example if you’re earning $400 a week and you work 50 hours in a workweek, you divide 400 by 50 you get … I’m not great at math on the fly. It’s like $8 an hour, that’s your straight time.
Ross: That was very good, by the way.
Shawn: Thank you. Then you calculate your premium pay based on that salary divided by work hours, so it would be $12 an hour premium pay, which is different than taking your salary divided by 40. This fluctuating workweek benefits employers who hire employees in oftentimes seasonal occupations: landscaping, gardening, snow removal, for example, where you’re working a lot in the summer but not as much in the winter.
Ross: Okay, I promise I want to get to the election issues. We have just about nine minutes left in the show, so I’m going to give you a few more questions and then we’ll move on to that and close with that. Let’s talk about things like vacation time or leave time. Does vacation time or other leave time count for calculating overtime? How does that fall into place?
Shawn: It doesn’t your only time that counts towards your 40 hours in a workweek are hours worked.
Ross: It’s the time you have work.
Shawn: You actually have to be working.
Ross: Can an employer issue compensatory time in limited overtime premium pay, how about that?
Shawn: If you’re a government agency you can. Private employers generally can’t.
Ross: Most private employers generally cannot do that. How about things like holidays, how should those be paid out? Do you have to be paid time and half for holidays? I know some people say you have to but I do not believe that that is the case unless maybe otherwise agreed.
Shawn: It’s not required by the FLSA Minnesota law. You can have a separate agreement. If you have an employment handbook that says you get time and a half, it’s a contract, you have to be paid. The law doesn’t say you have to pay time and a half.
Ross: Let’s touch on some reimbursement and deductions, if you don’t mind. If you’re required to purchase tools for your job, let’s just say you work in construction, does your employer have to reimburse you for those?
Shawn: No, not as long the purchase doesn’t cause your hourly rate of pay to fall below the minimum wage.
Ross: If you are making a gigantic purchase that may be so, but if you’re just maybe purchasing a hammer and nails for lack of a better example, that’s probably not going to qualify.
Shawn: As long as your rate of pay doesn’t fall below the minimum wage, they don’t need to reimburse you. If it falls below, the employer does need to keep paying you that minimum wage.
Ross: Can an employer deduct the cost of uniforms or equipment from wages, can they do that?
Shawn: It’s the minimum wage, as long you are not falling below the minimum wage. But in Minnesota an employer can’t make any deductions unless the employee voluntarily agrees to in writing.
Ross: The key thing to keep in mind then is minimum wage, when you’re dealing with reimbursement deductions. That’s the key thing to keep in mind.
Shawn: Minimum wage is key. You can’t deduct from an employee in Minnesota without written permission. An employer can never deduct money from a paycheck for theft or loss or damage. You can agree otherwise, but there’s no law that permits them to do it.
Ross: Let’s talk about things, I know as you mentioned you’re kind of a watchdog for wages and how money is paid out. Are there penalties for an employer who doesn’t pay minimum wage or overtime?
Shawn: Absolutely.
Ross: Okay, let’s talk about those.
Shawn: There can be criminal penalties. It is a crime to violate the labor laws, but this is also monitored and they’re usually subject to a criminal penalty. It’s a possibility. If it’s intentional, if you know you’re doing it, yeah, it’s a crime. But there’s civil penalties, and they apply to almost all cases. There’s mandatory penalties where if you’re not paying minimum wage, you’re not paying overtime, you have to pay mandatory penalties back to your employee.
You pay your back wages, but then you have to pay them even above and beyond that. You also have to pay the employee’s attorney’s fees. That’s not optional. A court can’t say, “Oh, you don’t get them this time.” The law mandates that an employer their employee’s attorney’s fees and costs for filing a lawsuit against the employer. If it’s shown that they actually broke the law, they have to pay for that.
Ross: Okay, so that’s a mandated law, if they broke the law they’re paying for that?
Shawn: No discretion.
Ross: This is The Legal Journal on Business 1570. Closing moments of this show, we’re back next Saturday at 9:00 a.m. You can listen online at Business1570.com. Shawn, what should somebody do if they feel like their employer hasn’t been paying them their full wages? What’s the process, what steps should they be taking?
Shawn: Do one of three things. Talk to the employer first, just talk to him and see if you do agree, work something out. Otherwise you can call the US Department of Labor, you can call the Minnesota Department of Labor or you can call a private attorney. Firms like mine are always happy to talk to employees.
Ross: Your phone number is 612-252-3570, that’s 612-252-3570. You can learn more as well at their website, Baillonthome.com. How about this, can you file a complaint against a former employer? Say you’re now on a new job … I imagine this does happen, they take a new job, they’re there for I don’t know, six months to a year and they say, “Man, this company is taking care of me a lot better than my last one.”
They start to look at maybe in the last job all these things where they were maybe wronged. Can they go back and … Retroactively is probably not the right word, but can you go back and still file a complaint against a former employee if you’re no longer working there, or employer?
Shawn: Absolutely, it happens all the time. You have two years to go back, a minimum of two years. You can go longer, a minimum of two years to go back and sue an employer.
Ross: Shawn, how does somebody enforce … and we spent a lot of time on the FLSA, how do you enforce your FLSA right? What’s the best way for an employee to do that to make sure that your employer is following these things?
Shawn: The best way is to know the law. That’s number one. Employees should educate themselves. You can find this information on the Department of Labor website, Minnesota Department of Labor. Our website Baillonthome.com has a lot of information. If you have questions, call us. We’re happy to talk to employees who have questions about Wage and Hour or any other sort of employment issue.
Ross: Basically for anybody who is working, your recommendation is just to be informed and know the laws and just make sure you’re aware of what you’re employer’s rights are and what they have to do for you, correct?
Shawn: Absolutely. These laws are designed to protect the employees. If you stand up for yourself you can’t be reprimanded, you can’t be fired.
Ross: Baillonthome.com, 612-252-3570 that’s 612-252-3570. Shawn, we have just about three minutes left so I want to just very quickly if you can help us out, the election comes up on Tuesday, November 6th. I think the polls are open 7:00 to 7:00 in this state, I could be off on that.
Let’s say you’re an employer who … maybe you get to work at 8:30 in the morning but you work until 6:00 but you got to drive an hour to work. You’re thinking, “Boy, I got to leave before the polls open. I won’t get home until the polls close.” What does your employer have to do for you to be able to vote?
Shawn: In Minnesota we’re lucky. The employers have to allow their employees to vote. They can’t be docked pay for voting. Employers can request employees to give them notice, say, “Hey, I’m going to vote over my lunch break, so I might not be back on time.” That’s okay. Or, “I might go vote at 10:00 a.m. because it’s more convenient for me.” Or, “I may go vote at 3:00 p.m.” Even if it’s not convenient for the employer, you need to go to vote.
Ross: You can say, “Look, normally I come at 8:30 but after I drop the kids off at school I’m going to go vote, so I’ll in a little bit late.” As long as you made that note or you’ve put in that request, you’re legally covered. You can do that?
Shawn: Yes. I don’t want to emphasize you don’t need the request. It doesn’t matter. In Minnesota you have an absolute right to go vote. That’s protected conduct. You can be absent, you have a right to be absent to go to the polls. There’s no excuse for employees not voting because of their job.
Ross: Baillonthome.com, 612-252-3570. Shawn, if you don’t mind just very quickly remind people about who you are and the firm before we get out of here.
Shawn: Wanta Thome is a law firm from Minneapolis. We represent employees only who’ve been wronged by their employer for discrimination, blowing the whistle on an employer, retaliation, anything like that. If you’re an employee, you think your rights have been violated, whether it’s just a wrongful termination, if you think you’ve been wronged call us. We talk to you, that’s what we do. We represent employees to protect their rights.
Ross: It can’t hurt just to pick up the phone, give somebody like yourself a call, even if you feel like it. Just maybe get a consultation, correct? Get somebody else’s opinion.
Shawn: It’s always good to know the law.
Ross: 312-252-3570 or Baillonthome.com. Shawn, thanks for coming and we greatly appreciate your time and expertise.
Shawn: Thanks for having me.
Ross: That will do it today for The Legal Journal on Business 1570. We’re back next Saturday at 9:00 a.m. right here on Twin Cities’ business talk Business 1570. Have a great Saturday, have a great weekend.
Announcer: You’ve been listening to The Legal Journal with Ross Brindle. Join us every Saturday at 9:00 a.m. as the top attorneys from the Twin Cities share their legal expertise with you on The Legal Journal.