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Fair Labor Standards Act: Wage and Hour Laws

Aug. 20, 2012

Baylor, like most employers, is subject to the Fair Labor Standards Act (FLSA). The FLSA is a federal law which, among other things, sets a minimum wage, requires overtime pay for covered non-exempt employees, and imposes recordkeeping requirements.

Employee Classifications: Central to the application of FLSA rules is the concept of employee classification. Generally, there are 2 classes of employees: exempt (salaried) and non-exempt (hourly).

Non-exempt: All workers are presumed to be non-exempt and thus due both the minimum wage and overtime pay, unless a specific exemption applies. Non-Exempt workers are paid on an hourly basis, at a minimum wage rate of $7.25 per hour (effective July 24, 2009). Non-exempt workers must be paid at least 1 ½ times their regular rate of pay for any hours worked over 40 hours in a week. Under Texas Payday Law, hourly employees must be paid at least every 2 weeks.

Exempt employees are paid a salary and are not eligible for overtime pay. Exempt employees generally include executive, professional, computer professionals and certain administrative personnel, as defined in Department of Labor regulations. Exempt employees must be paid a salary of at least $455 per week, except in the case of computer professionals, who must be paid at least $27.63 per hour. Under Texas Payday Law, exempt employees may be paid once per month.

Volunteers: A true "volunteer" is not technically an employee covered by these principles, but the definition of a true volunteer is very narrow and always runs the risk of a subsequent determination in a court of law that the individual is an employee, not a volunteer, even if you and the volunteer agree at the time that the individual will be a volunteer. Except in very limited circumstances, Baylor should not accept volunteers, and if Baylor "suffers or permits work to be performed" by anyone, that person, regardless of their good intentions, must be paid at least minimum wage for the time worked. Use of volunteers also raises questions regarding liabilities for injuries, and true volunteers would not be covered by workers compensation for injuries. Any contemplated use of volunteers must be coordinated with HR and OGC.

Minimum Wage: As noted above, the federal minimum wage is currently set at $7.25 per hour, effective July 24, 2009. Texas does not have a separate minimum wage law, but any out-of-state non-exempt employees may be subject to higher minimum wage.

Recordkeeping: Non-exempt employees must keep a timecard, and the timecard must accurately reflect actual hours worked each day. Comp time is not permitted, and as a result, a timecard may not reflect 8 hours worked when the employee was at work, for example, only 7 hours on that day but worked 9 hours the next day to "make up time." It is the supervisor's duty to control the hours worked by non-exempt workers, and if the supervisor allows a non-exempt worker to continue to work an extra hour each day, that employee cannot file a time card with only 8 hours, but must reflect the actual hours worked and pay for overtime if total work time actually exceeds 40 hours. The supervisor signing the timecard may become personally liable for any underpayment if the employee can prove he/she actually worked time not reflected on the timecard.

If you have any questions about employment issues, please contact OGC at ext. 3821