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17 Jun 2019 
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Applicable minimum wage
You should know the applicable minimum wage for your employees according to the law. The Fair Labor Standards Act has outlined the federal minimum wage for workers. This wage is imposed for covered and non-exempt employees. However, it is important to note that most states have their own minimum wage laws as well. You should check the regulations for your business before making any wage decisions.
In general, if your employees are subject to state and federal laws, the applicable wage will be the higher rate of the two. Choosing the lower amount could expose your business to legal problems. You should also know that there are some exemptions that you must consider when looking at minimum wages. For instance, the minimum wage may be different for people on government aid, student learners, full-time students, and tipped employees.
Small business minimum wage
Small businesses are subject to minimum wages laws if their annual sales income surpasses the threshold set in the Fair Labor Standards Act. Failing to meet the requirements due to the size of your operations can result in negative consequences. However, your business will still be subjected to the same minimum wages with less than the set annual income if you operate across different states.
Interstate commerce is subject to broad interpretation in the legal industry. For instance, if your business handles goods, mail, or even phone calls across state lines, it might be considered interstate commerce. It is best to consult a lawyer before deciding to pay a minimum wage lower than the federal minimum. If you do get involved in a legal case, the court could interpret some operations as interstate work.
Compensatory time
You should handle compensatory time with caution to avoid violating federal employment and labor laws. Some business owners choose to provide compensatory time as opposed to paying wages for the overtime put in by their workers. This practice might seem ideal because employees get compensatory
Payment docking
If your employee cannot meet the desired production quota for your business, you can consider pay docking. But, there could be consequences. If they are exempt from overtime rules, you might end up using more funds through pay docking. Typically, an exempt employee is not entitled to overtime pay for extended hours. Once you deduct their payment based on the work done, they can no longer be considered exempt. You will need to pay overtime wages at that point. You should avoid improper payment docking because it could change your obligations or even result in legal issues.
Overtime for executive employees
Under normal circumstances, executive employees or individuals in managerial positions are not entitled to overtime pay. However, you should understand the meaning of executive employees under the applicable federal law. True managers should be in charge of at least two employees, manage the company or a subdivision, and have the rights to hire and fire workers. If your managerial staff does not have these rights, they cannot be exempt from overtime payment.
Wages for tipped employees
If your employees earn tips, you must ensure that their total wages match up to the federal minimum to avoid legal action. Simply speaking, the wages for tipped workers can be low if your employees earn significant tips. However, the total amount of money earned by each employee, including the basic pay and the tips, must add up to the minimum wage. If the amount is less than the legal rate, you must provide funds to make up for the difference.
Hiring a labor and employment attorney
Having someone on your side when something goes wrong can help your business stay strong. Whether you need help with a lawsuit or would like to learn more about staying compliant with federal labor laws, an experienced lawyer can help. These professionals are dedicated to keeping your business compliant and protecting your company.
Employment and labor laws can be complicated and hard to keep up with while managing a company. If your business is in need of help with labor law compliance, the Labor and Employment team at Brown & Fortunato, P.C. is ready to help. You can Contact Us by email or call us at (833) 228-6300 to learn more about our Practice Areas.