Minimum Wage Considerations
Federally, all U.S. employees covered by federal minimum wage laws must be paid, at minimum, the federal minimum wage of $7.25 per hour. However, states are allowed to set their own minimum wage standards, as long as the minimum wage does not fall below the federal minimum wage. Employers who reside in states that do not currently have their own minimum wage laws must adhere to the federal standard of $7.25. While minimum wage guidelines apply to most U.S. employees, a number of exceptions exist. Examples of those who are considered ‘exempt’ from minimum wage laws include agricultural or government employees, among others. All non-exempt employees must adhere to the guidelines set forth by the Fair Labor Standards Act.
Minimum Wage Guidelines for Tipped Employees
Federally and in many states, employees who receive tips as part of their jobs are subject to different minimum wage laws than standard hourly or salaried employees. At the federal level, employers must pay workers who receive tips $2.13 an hour, provided the worker’s tipped hourly income is at least another $5.12. The tipped income and hourly wage must together meet the federal minimum wage of $7.25 per hour. Some states set their own minimum wage requirements for tipped employees, and in some states (Washington, for example), the minimum wage is the same for both employees who receive tips and those who do not. Thus, it is critical that today’s employers fully comprehend minimum wage laws in their own states to ensure they remain.
Overtime Pay Guidelines
With the exception of exempt employees, all U.S. employees who work more than 40 hours in a standard workweek must be paid at a rate of one-and-a-half times their normal rate, per the FLSA. There are, however, some exceptions and special circumstances. Firefighters, law enforcement officials and employees at hospitals and elder care facilities are among the employees who may not be held to the federal standard. Some states also set their own laws regarding overtime pay, and in situations where employees are governed by both state and federal laws, employers must adhere to whichever guideline results in more money for the employee.
When Employees Must Be Paid
Most states set their own rules regarding how frequently employers must compensate their workers. Generally, employers are required to pay employees either every other week or twice monthly, although this doesn’t hold true for all states. Some do not set pay-frequency guidelines at all, and others yet set different guidelines for different professions. It is essential that today’s employers fully comprehend applicable rules regarding pay frequency to ensure employees receive their proper and legal pay.
Break and Meal Period Considerations
Federal laws do not require U.S. employers to grant breaks or meal times to employees. However, each state may set their own laws regarding breaks and meal times, so it is important that employers accurately determine existing break laws. When employees are granted breaks, short ones that don’t exceed about 20 minutes are typically considered compensable. Breaks that exceed 30 minutes are not considered formal work hours, and therefore employers typically do not have to pay employees for them.
Paid Time Off and Sick Pay Considerations
Federal wage and hour laws do not dictate whether employers must offer their employees paid time off or sick pay. States may set their own guidelines in these areas, but generally, whether to offer these accommodations is left up to the employer.
It is important for today’s employers to note differences that exist among federal wage and hour laws and state wage and hour laws. It’s also essential that employers fully understand which apply to them to ensure they remain compliant and avoid potential litigation.
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