1. Fair Labor Standards Act • Minimum Wage Provision • $5.15 / hr. • Advantages - wage floor, min. standard of living • Disadvantages - limits opportunity for unskilled, and the youth; may encourage substitutes for labor. • Tipped employees - $2.13 / hr. • Overtime Provision • 1.5 X Base Wage Rate for > 40 hours/ week • Only non exempt ees’ (hourly) covered • Employer Required to file non-exempt ees’ records of work hours with Dept. of Labor Management 4030- Managing Employee Reward Systems

2. FLSA (Cont’d) • Enforcement of FLSA • Audits • Investigations • Remedies include back wages, attorney fees and court orders to stop violating FLSA • Fines and imprisonment for willful violators • Exemptions • Executives/ Managers • Administrative Employees • Professionals • Outside Sales Force • Challenge: Correct Classifications of Jobs Management 4030- Managing Employee Reward Systems

3. Problems Managing Under the FLSA • Correct Classifications of Exemption Jobs • Exs. Team leader? Telemarketers? • Bonus Calculations - Non-discretionary bonus is part of overtime pay calculation. • Ex. Shift premiums, Xmas bonus, special duty pay. • Independent Contractor or Employee? • Set own hours, own tools, own office & work site • Tracking hours of non-exempts - Time clocks? • Inflexible work hours - bias to 40 hr. work week. • 50/30 schedule --> 10 hrs. OT • Comp Time - time off instead of pay for OT? Management 4030- Managing Employee Reward Systems

4. Managing FLSA in the work place of the 1990s: Critical thinking Questions Overtime Provision: • How do you manage the overtime of people who telecommute from a home office? • There is a negative incentive to provide variable pay for non-exempt employees because the “bonus” calculation becomes very complicated for overtime. Is there a way to avoid this problem? Management 4030- Managing Employee Reward Systems

5. Equal Pay Act (1963) Definition: Equal Pay for Jobs of Substantially Equal Work • Federal law to insure that women are paid equal to men if they are doing similar work. Factors that Define Equal Work • Skill • Effort • Responsibility • Working Conditions Management 4030- Managing Employee Reward Systems

6. Equal Pay Act (Continued) There are 4 Legal Exceptions to the EPA: Men and Women’s Pay on a similar job can be Different Due to Differences in... 1. Seniority 2. Performance or Merit ( A valid Supervisor-based evaluation of performance) 3. Quantity or Quality of Output (such as a piecework or sales commission plan) 4. Factor other than Gender such as Night shift differential or hazardous duty differential. Management 4030- Managing Employee Reward Systems