Wage Payment & Work Hour

Fast Facts on Wage Payments and Work Hours

Minimum Wages and Overtime

The Fair Labor Standards Act (FLSA) affects most private and public employment. The FLSA requires employers to pay covered non-exempt employees at least the federal minimum wage and overtime pay for all hours worked over 40 in a work week.

Covered employees must be paid for all hours worked in a workweek. In general, compensable hours worked include all time an employee is on duty or at a prescribed place of work and any time an employee is suffered or permitted to work. This would generally include work performed at home, travel time, waiting time, training, and probationary periods. Some important points:

  1. Federal Minimum Wage is $7.25 per hour effective July 24, 2009.
  2. Tipped employees may be paid $2.13 per hour; if an employee’s tips combined with cash wage does not equal the applicable minimum wage, the employer must make up the difference.
  3. Overtime after 40 hours in a week = 1 ½ times an employee’s regular rate of pay.
Salary versus Hourly

The terms exempt and non-exempt employees are frequently used in defining employment, but they are more than mere labels. Only certain employees are truly exempt from FLSA protections regarding overtime work. Those include employees who have the ability to hire and fire other employees, who have the ability to direct their own work activities, and who primarily perform managerial or supervisory work or highly-technical work. Highly-compensated employees, such as those earning over $100,000.00, may also be classified as exempt employees. Other employees who have set hours may be paid on what seems to be a salary basis, but are not exempt from the requirement they be paid overtime for the work they perform beyond the standard 40-hour week.

Independent Contractor versus Employee

Independent contractors are not entitled to the same wage and employment rights as employees, so it is important to know whether a worker is an independent contractor or an employee in terms of what rights he or she may have in the workplace. It is not simply up to the employer or general contractor to determine the worker’s status as an employee or independent contractor, and some employers routinely misclassify their workers.

Independent Contractors generally control their own work hours, job duties and pay. They normally provide their own equipment and are able to hire assistants.

Employees tend to work set hours, have job tasks assigned by a supervisor, are paid by the hours they work rather than the job performed, and have continual employment with the same employer.

If you feel you have been classified improperly, get your classification corrected for tax payment, social security contribution, workers’ compensation, and a host of other critical purposes.

Wage Payments: Withheld Wages, Deductions, and Wage Disputes

The Iowa Wage Payment Collection Law provides workers are to be provided their full wages each regular payday. The wages must be personally delivered or automatically deposited, unless the worker prefers another method of payment (such as U.S. Mail). Deductions from wages are to be limited to those required by law (taxes, social security, garnishments, etc.) and those that an employee chooses (retirement accounts, health insurance, etc.). An employer cannot withhold wages for damage to property or refuse to pay wages for unsatisfactory performance if a worker has worked the hours for which wages are due.

If a worker seeks to file a claim for unpaid wages, the worker may file with the Department of Labor or retain a private attorney. Damages recoverable include the withheld wages and additional liquidated damages of up to the full amount of wrongfully withheld wages. The employer will also be required to pay a reasonable attorney’s fee, court cost, and civil penalty. It is also unlawful to terminate an employee for filing a wage claim.

OSHA and Workplace Safety

Workers are to be able to work in clean, safe working conditions. Employers are required to observe state and federal laws and regulations on equipment operation, use of protective gear, and other items concerning working conditions. The Department of Labor receives anonymous tips concerning OSHA violations and conducts worksite inspections to enforce worker safety regulations. Outside of OSHA enforcement, if a worker has been injured due to safety violations, there may be lawsuits that can be filed to recover damages for the injured worker. Personal injury claims for gross negligence on the part of the employer, product liability lawsuits for faulty equipment, and workers’ compensation claims are all potential avenues for recovery.

Migrant and Seasonal Workers

The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) requires farm labor contractors, agricultural employers, and agricultural associations who “employ” workers to:

  1. Pay workers the wages owed when due.
  2. Comply with federal and state safety and health standards if they provide housing for migrant workers.
  3. Ensure vehicles they use to transport workers are properly insured, operated by licensed drivers, and meet federal and state safety standards.
  4. Provide written disclosure of the terms and conditions of employment.