After years of working her way up from the bottom, Lily finally earned the promotion she’d been dreaming of.
If she’d known how close her new job would come to ruining her life and destroying her business, she never would have taken it.
Lily thought the new responsibilities and power that came with her promotion would make her job more enjoyable. Instead, they made her want to run off to a tropical island and never look back. How could the Fair Labor Standards Act – and her unfamiliarity with it – create such a disaster?
When my friend Lily invited me to lunch one afternoon, I expected a celebration over her recent promotion at Fiske Electronics. But she was anything but happy when I met her. “Everything started out great,” Lily sighed. “I finally had the job I’d spent so much of my time working toward. I spent years working for Fiske – filling orders, helping customers, answering phones. Every time I got a little more responsibility or one more person to manage, I knew I was one step closer to my goal. And a few months ago, it happened – I was finally in charge. And it was just as great as I’d hoped. For about five seconds.”
“So what went wrong?” I asked.
“What didn’t go wrong? I don’t think I’m going to be in charge much longer. Not after the mess I’ve made.”
“It can’t be that bad.”
“Trust me, it can,” Lily said. “Thanks to me, we’re probably going to be sued.”
“By a customer?”
“No,” she replied sadly. “By the employees.”
“I dove into my new job head-first,” Lily continued. “I thought I knew everything I needed to know. Boy, was I wrong. I knew I would have a ton of new responsibilities, but I never expected the ones I got. And the employees knew more about them than I did!”
“What do you mean?”
“First of all, I thought paying everyone would be really easy. The salaried employees got salaries and everyone else was paid by the hour. But no, it’s so much more complicated than that. Some people can get overtime pay but some people can’t. Some people have to get overtime even if they’re not recording their hours correctly. Some people have to be paid even when they’re not working. It doesn’t make any sense!”
Then there are all the things I’d never had to think about before. Like the fact that we sometimes hire independent contractors to help us with store promotions. I was paying them completely wrong. It turns out some of them are contractors and some aren’t – but I have no idea how to figure out the difference.
“No one explained all the rules to you?” I asked.
“It went right over my head,” she said. “There are so many rules, it’s impossible to keep them all straight. I can’t figure out who’s exempt from overtime pay and who isn’t. Or when a break is really a break. Or why I have to pay someone overtime when I didn’t authorize those hours.
“Take my coworker Jay. He’s a manager and he receives a salary. Last week there was a power outage and we had to close for a day. Jay was supposed to work that day, and even though he didn’t come in, I have to pay him!
“And one of my salespeople, Katie, is upset because I didn’t pay her while she was on break. I told her it’s because she wasn’t working. But she says since she still had to answer the phone, she was working. That means I have to pay her.
“And Will, another manager, stayed late the other night to help with a last-minute order. He thinks he should get overtime, even though he was supposed to be off the clock. The next day, he came in on time but there was nothing for him to do for two hours. He wants to be paid for that, too!
“If that all weren’t enough, Beth, my best troubleshooter, is talking about quitting. She’s upset because I wouldn’t pay her for the time it took her to go to a training session last week. Why should I pay her when she’s in her car, not working? Plus, she wants comp time instead of overtime for some extra hours she worked recently, but she doesn’t want to take the comp time until next month. How am I supposed to keep track of things like that?
“Now everyone’s going through old time sheets and paychecks to make sure I’ve paid them all correctly. And the people who didn’t get the money they think they should get are threatening to sue! I think my boss is ready to show me the door. He told me to figure out how to fix everything, but I have no idea how.
“I just don’t get all of these rules. Why should I have to pay people who aren’t working? Do I really have to pay all that overtime? Even when I didn’t authorize someone to work those extra hours?” Lily pushed her food away. “Maybe I should just let them fire me. I don’t know what I’m doing anyway. I’ll just run off to Tahiti and pretend this never happened.”
“I think I know how I can help you,” I told her, pulling a copy of the FLSA Compliance Guide out of my briefcase. “Don’t lose hope just yet.”
The FLSA Compliance Guide has saved many confused and frustrated workers from expensive, unnecessary lawsuits. It can do the same for you. What you don’t know about FLSA regulations could land you in the middle of a costly, time-consuming lawsuit or audit. The Guide can help you stay on top of those regulations and protect your business.
You’ll better understand:
Lily was close to losing it all. But with the Guide, suddenly things were looking up.
Table of Contents
That night I got a call from Lily. She was a completely different person from the somber, hopeless mess I’d had lunch with. “This is amazing!” she exclaimed. “This is going to save my job!
“All those exempt/non-exempt rules make complete sense now. And I have all these examples of situations where an employee should get overtime pay and when I don’t have to pay it. I’d better make sure all of my employees are classified correctly – the last thing I need is to find out an exempt worker is really non-exempt and wants his overtime pay.
“I was shocked that Wal-Mart had to pay millions in damages and back pay to about 125,000 people who worked ‘off the clock.’ They were working through breaks and weren’t getting paid for it. If the Wal-Mart executives had just read this FLSA Compliance Guide, they would have saved themselves a lot of time and a lot of money.”
“So did the Guide answer all your questions?” I asked.
“It answered questions I didn’t even know I should ask!" Lily replied. "I had no idea there were so many things I should be doing. It turns out Katie was right – since she was still working while she was on break, I do have to pay her. But Will can’t receive overtime since he has a salary. That’s going to save us some money right there.
“And I do have to pay Jay even though he didn’t come to work the day we were closed. He was ‘ready, willing and able’ to work. The same goes for Will that morning he was at work but there was nothing for him to do. Beth wasn’t happy since I helped instate a rule that comp time has to be taken in the same pay period it’s earned, but now that I’ve discovered she does deserve pay for the time she spent traveling to that training session, she’s happy again.
“I can’t believe my employees knew so much more about these regulations than I did! But now I know the steps I need to take to ensure we’re compliant with all the rules.”
Thanks to the FLSA Compliance Guide, Lily’s confidence returned. She went back to work with all the tools she needed to keep her job – and her business – safe. She made sure the employees who deserved overtime received it. She made sure Will understood why he couldn’t get overtime on top of his salary. She paid people who were still working while on break, she made sure everyone was correctly classified as exempt or non-exempt and she paid overtime she hadn’t authorized.
Lily also used the FLSA Compliance Guide to head off problems before they could turn disastrous. She discovered that one of her delivery men wasn’t making minimum wage with his cash wages plus tips, and she was able to ensure that he was receiving the money he deserved. She also learned how to compensate employees who wanted payment for time spent traveling or in training courses.
“Thanks so much for this Guide,” she told me a few weeks later, having ensured that her job wasn’t in danger any longer. “Things could have gotten even worse than I thought. If one of my employees had filed a complaint, we could have had our wage-and-hour practices audited, and all sorts of violations might have come up. With the Guide, I was able to fix them before they ever became problems. Now my boss can’t stop telling me how proud he is that I got everything under control on my own. And to think I was afraid he was going to fire me!”
The FLSA Compliance Guide saved Lily’s job when she thought there was no hope. She didn’t understand anything about FLSA regulations, but after reading the Guide, she felt confident that she could fix all her mistakes. Now the Guide can help you solve your problems – even before they appear.
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