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Beware employee costs that bring wages below minimum

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in Compensation and Benefits,Human Resources

Beware breaking wage-and-hour laws if you employ drivers who cover expenses for the vehicles they use to make deliveries. If your hourly rate minus those expenses yields a figure lower than the minimum wage, you may be violating the Fair Labor Standards Act.

Recent case: Corey Bailey and other delivery drivers for Pizza Hut were paid an hourly wage for delivering orders to customers. They sued, claiming they were not paid enough to hit minimum wage after deducting their unreimbursed vehicle expenses.

Fortunately for the Pizza Hut franchisee, their case was dismissed on a technicality: The drivers hadn’t been able to provide any specific examples of falling below the minimum wage. (Bailey v. Border Foods, No. 09-1230, DC MN, 2009)

Final note: FLSA litigation is on the rise. Make sure your pay policies comply with the law.

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