Follow DOL Guidance When Reducing Salaries During the Pandemic

The Basic Rules

Under the federal Fair Labor Standards Act (FLSA), an employer can generally reduce exempt employees’ regular salary for COVID-19-related reasons. However, the reduction cannot be made after the fact or based on the employer’s day-to-day or week-to-week needs, according to the DOL.

“In other words, exempt employees must be paid their predetermined salary for any workweek in which the employee provided any services,” said Lisa Reimbold, an attorney with Clark Hill in Los Angeles “As such, any pay reduction for an exempt employee can only apply to future workweeks.”

The FLSA requires most businesses to pay employees 1 1/2 times their regular hourly rate for hours worked in excess of 40 in a workweek, unless employees fall under an exemption. The most common exemptions are administrative, executive and professional, which are collectively called white-collar exemptions.

To read more, click here.

popdevteamFollow DOL Guidance When Reducing Salaries During the Pandemic
Read More

COVID-19 Employer Resources and Compliance Toolkit

During these uncertain times, Miami Payroll Center is keeping up to date on all legislative and tax related responses to the COVID-19 crisis as they relate to small businesses and their employees. As additional information becomes available from related government agencies such as the Department of Labor and the IRS, this page will be updated accordingly.

On Wednesday, March 18th, the President signed the Families First Coronavirus Response Act to take effect on April 1, 2020 and will sunset on December 31, 2020. The Act provides for mandated paid emergency sick leave and paid family and medical leave for many workers. To offset wages paid under the program, employers will receive a tax credit. There are still several uncertainties, such as the timing of the credits to offset the payments required by employers. Many of the details for implementation are still unknown until individual government agencies, e.g. DOL, IRS, release their own guidance between now and April 1, 2020. As additional details are released for implementation, we will update the information on this page.

If you have specific questions as to how these changes may affect your business, please contact us at 305-273-4066.

Useful Links

COVID-19 Miami Payroll Center Published Resources

IRS Updates

The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus. This page will be updated as new information is available.

popdevteamCOVID-19 Employer Resources and Compliance Toolkit
Read More

Hiring an Intern: What you need to know

The role of the intern is not what it used to be. Internships these days require more than making a Starbucks run or picking up the boss’ dry cleaning.

Establishing an internship program is a great way for your company to build a pipeline of talent. However, things are not what they used to be. There are several considerations when creating your internship program.

Under the Fair Labor Standards Act (FLSA), most interns are considered employees subject to the FLSA’s minimum wage and overtime requirements. However, if an intern is not an employee within the meaning of the FLSA, then the FLSA’s minimum wage and overtime requirements do not apply. The Department of Labor uses a Six-Factor Test for Unpaid Interns.

The DOL’s Six-Factor Test for Unpaid Interns

Under the DOL’s test, an employment relationship does not exist under the FLSA if all the following factors are met:

  1. The internship must be like training that would be given in an educational environment;
  2. The internship must be for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer derives no immediate advantage from the intern, and on occasion, its operations may be impeded;
  5. The intern is not necessarily entitled to a job at the end of the internship; and
  6. The employer and intern understand that the intern is not entitled to wages for the time spent in the internship.

If you’re considering an internship program, consult with legal counsel to ensure compliance with all applicable laws and regulations.

When in doubt, it’s best to classify interns as employees and pay them as required under applicable federal, state, and local law. These days, it pays to be cautious.

If you’re a Miami Payroll Center client, we can provide guidance and best practices with respect to internships. Contact our HR Team at (305) 273-4066.

popdevteamHiring an Intern: What you need to know
Read More

USDOL: Coming Soon to a Restaurant Near You

In the month since we’ve written about Florida’s Tipped Minimum Wage, the US Department of Labor (USDOL) reported that three separate Restaurant owners were required to pay a combined $1.3 Million in back wages and damages due to workplace practices that were in violation of the Fair Labor Standards Act (FLSA). The scary part of these stories is not in the amounts awarded, but the idea that these practices are so commonplace that we don’t even realize we’re breaking the law.

labor-lawOne of the larger awards, more than a half a million dollars, was the result of owners who required servers to contribute a portion of their total tips back to the employer, who then distributed the money to cooks and dishwashers who were not tipped employees. Consequently, the employer paid servers less than the federal minimum wage of $7.25 as required. Additionally, the restaurant failed to pay required overtime wages to employees when they worked more than 40 hours in a week, and did not keep accurate records of all hours worked.[1]

Another large penalty, also over the half million mark, was to a restaurant owner who also fell victim to the practices mentioned above but, among other things, required servers and bartenders to pay for breakages, customer walkouts and ordering errors out of their tips, which reduced their pay to below the federal minimum wage. Employees were also required to work without pay at charity events.[2]  The charity events idea is always a great discussion, because we can argue that the employees volunteered. That argument would not likely stand a chance, however, as the FLSA hardly ever permits employees to volunteer unpaid time to the employer!

The USDOL’s Wage and Hour Division reports that these issues are found across the nation. In addition to the violations mentioned above, the Division adds that it is common for them to find employers who are requiring employees to work exclusively for tips with no regard to minimum wage standards, taking illegal deductions from wages for credit card transaction fees and paying straight time for hours over 40.[3]

For the past month, Florida Restaurant Owners have been mostly lucky – none of the cases above were in our home state! However, earlier this month the Division announced that it will expand outreach, education and enforcement in the industry to more cities and states. While you never know when and if they might visit you, don’t wait to get things in order. Review your pay practices now to ensure you’re in compliance with FLSA. If you’re still unsure, contact your payroll professional today.





popdevteamUSDOL: Coming Soon to a Restaurant Near You
Read More