NJLOM Conference Attendees Get a Primer on the PAID Program and Fair Labor Standards Act (FLSA)

The practical application, overview and compliance related to the Fair Labor Standards Act was the subject of a recent session hosted by the New Jersey Municipal Management Association (NJMMA) at the New Jersey League of Municipalities Annual Conference, held in late November in Atlantic City. The FLSA is a federal law which establishes minimum wage, overtime pay eligibility, record keeping, and child labor standards affecting both full-time and part-time workers in the private sector and in federal, state, and local governments.

The session began with an overview of the PAID program, presented by Shavonne Person, a Community Outreach & Planning Specialist with the United States Department of Labor. The Payroll Audit Independent Determination (PAID) program facilitates the prompt resolution of overtime and wage violations under the FLSA. The program seeks to resolve such claims without litigation, while improving employers’ compliance, and to ensure that employees receive any back wages due.

“PAID is a win for employees, employers, and taxpayers, especially when it can help resolve disputes,” said Person. “With PAID, employees get back wages faster, limiting the level of litigation expense (if at all), reducing the employer need for attorney fees, and ultimately correcting the employers’ non-compliance with the FLSA.”

Under PAID, employers are encouraged to conduct audits and, if they discover overtime or minimum wage violations, to self-report those violations. Employers may then work, in good faith, with WHD to correct their mistakes and to quickly provide back wages to the affected employees. The WHD offers a simple, yet deliberative, process (through PAID) for employers to follow to alleviate their wage discrepancies while avoiding audits and legal action. The complete PAID process, and other important program information, can be found by clicking here.

Following the primer on PAID, Charlene Rachor, a District Director for the Wage and Hour Division (WHD) of the United State Department of Labor, provided a more specific look at the FLSA. The WHD administers and enforces the FLSA with respect to private employment, state and local governments, and federal employees from specific government agencies. Other enforcement for other executive branch agencies is handled by the federal Office of Personnel Management, and by Congress for covered employees of the legislative branch. In addition, special rules apply to state and local government employment involving fire protection and law enforcement activities, volunteer services, and compensatory time off instead of cash overtime pay.

“The FLSA is intended to protect workers against certain unfair pay practices and work regulations,” said Rachor.” The Act, passed in 1938, has seen numerous changes, but it is one of the most important laws for employers to understand since it sets out a wide array of regulations for dealing with employees.”

The Act specifies at which times workers are “on the clock” and which times they are not. There are intricate rules concerning whether employees are exempt or non-exempt from its overtime regulations. The FLSA requires pay at 1.5 times the regular hourly rate for hours worked in excess of 40 during a seven-day workweek. A handy reference guide for the FLSA can be found by clicking here.

Matthew Watkins, Bloomfield Administrator and Immediate Past President of NJMMA, told the audience that having documented job descriptions for municipal employees across all departments is essential. “Employee classification is meaningless, it’s the job description that is important. Be sure they clearly delineate whether the position is exempt or non-exempt from the FLSA protections, insist employees adhere to the municipality’s time tracking procedures, and be sure to define the pay period clearly. Each of these are critically important.”

Arthur Thibault, a labor attorney with Apruzzese, McDermott, Mastro & Murphy, concluded the session with a brief discussion and overview of how police and fire professionals, as well as emergency dispatchers figure into overtime. Under the FLSA, employees of these agencies are subject to a specific set of rules that are structured quite differently than regular public employees.

Complete detail on the FLSA can be found online by clicking here.