Wage & Hour Traps
An employer pays a nondiscretionary quarterly bonus to a non-exempt employee who worked overtime during the bonus period. What must the employer do?
1) The bonus must be apportioned across the weeks in the bonus period
AND
2) The employer must recalculate overtime using the revised regular rate method.
An employee exhausts FMLA but still cannot return to work due to a medical condition.
What law may still require leave consideration?
The ADA as a reasonable accommodation.
During an investigation, the accused employee asks to see the complaint.
Is the employer required to provide it?
No. Employers may summarize allegations without disclosing the complaint and that is what is recommended as best practice.
What steps must an employer take to properly determine whether a position is exempt under the FLSA? (HINT: there are 3 steps)
The employer must apply:
The salary basis test
The salary threshold test
The appropriate duties test (e.g., executive, administrative, professional)
Under the ACA, what determines whether an employer is subject to employer mandate requirements?
Whether the employer is an Applicable Large Employer (ALE), meaning they average 50 or more full-time and full-time equivalent employees.
A non-exempt employee:
Travels out of town for a one-day assignment
Leaves home at 6:00 AM
Arrives at the work site at 9:00 AM
Returns home at 8:00 PM
Their normal commute is 30 minutes each way.
What portion of this travel time is compensable?
All travel time is compensable except the employee’s normal commute time.
So:
Morning: 6:00–9:00 → compensable, minus normal commute
Evening: Return travel → compensable, minus normal commute
An employee provides a doctor’s note stating they must avoid working with a specific coworker due to anxiety.
Is the employer required to comply?
Not necessarily. Employers generally are not required to separate employees as an accommodation unless it is reasonable and does not impose undue hardship.
True or False?
An at-will employer can terminate any employee, at any time, for any reason.
False: The statement is missing one key adjective - the reason has to be a lawful reason. Terminations for unlawful reasons are not protected under at-will.
Which test is used by the U.S. Department of Labor to determine independent contractor status?
The economic realities test.
A client wants to rescind an offer based on a background check and plans to notify the candidate immediately.
What step must occur before taking action?
The employer must issue a pre-adverse action notice, including:
A copy of the background report
A summary of rights
And provide the candidate a reasonable opportunity (typically 5 days) to respond before taking final action.
A California non-exempt employee reports they worked through their required 30-minute meal period.
What compensation actions must the employer take?
The employer must:
Pay the employee for the time worked, and
Provide one additional hour of pay at the employee’s regular rate as a meal period premium
An employer requests medical documentation to support an employee’s request for a reasonable accommodation under the ADA.
How long does the employee have to provide the requested medical certification?
There is no fixed deadline under the ADA. The employee must be given a "reasonable amount" of time to provide the documentation.
Follow up: If the delays response unreasonably, what can the employer do?
During an investigation, the accused employee has a strong performance history and is highly valued by leadership.
Should this information be considered in a credibility assessment?
No. Credibility assessments should only be based on evidence related to the allegation, not the employee’s performance history or organizational value.
An employer determines employees have been misclassified as exempt and reclassifies them as non-exempt going forward.
What key risk remains?
Potential liability for back wages (overtime) for prior periods of misclassification.
A client is hiring their first employee in a new state.
What steps should HR should advise before onboarding?
Confirm and establish state-specific compliance requirements, including:
State/local tax registrations
WC registration
State DBL or PFL programs w/ payroll/policy implications
Wage and hour laws
Required policies and notices
A salaried non-exempt employee earns $800 per week and works 50 hours in a workweek. The salary covers all hours worked, but hours vary from week to week.
Your client asks "which overtime calculation method is the most cost effective and compliant?"
A. Weighted average method
B. Piece-rate overtime method
C. Fluctuating workweek method
D. Time-and-a-half based on the employee’s hourly equivalent
C. Fluctuating workweek method: (only if all conditions are met)
An employee on FMLA fails to pay their portion of health insurance premiums.
Under what conditions may the employer lawfully terminate the employee’s benefits coverage?
1) The employee was clearly notified in advance (e.g., in the FMLA designation notice) of: amount, due dates, payment method, nonpayment consequences
2) The payment is more than 30 days late (the grace period)
3) The employer provides written notice that: Payment is overdue and coverage will be terminated if payment is not made
4) The employee is given at least 15 days from the date of the notice to make payment (cure period)
At the federal level, what core conditions must exist for conduct to meet the legal standard of unlawful harassment?
The conduct must be based on a protected characteristic, and
It must be severe or pervasive enough to create a hostile work environment or result in an adverse employment action
An employee supervises two employees but spends 90% of their time performing the same work as subordinates.
Why might the executive exemption fail?
Management may not be their primary duty.
An employer realizes they failed to reverify an employee’s expired work authorization and the document expired two months ago. The employee is still actively working.
What should the employer do?
The employer must:
Immediately reverify the employee’s work authorization using a valid document
Complete Section 3 (or a new I-9 if needed) with the current date
Not backdate the form
If the employee cannot provide valid authorization, the employer must remove them from work.
A non-exempt employee works 45 hours in a week and is paid:
$15/hour for 30 hours
$20/hour for 15 hours
Name the method you should use to calculate overtime AND give the total amount of wages owed to the employee.
Overtime must be calculated using the weighted average (regular rate):
Calculate total earnings:
(30 × $15) + (15 × $20) = $450 + $300 = $750
Divide by total hours worked (45):
Regular rate = $16.67/hour
Overtime premium = 0.5 × regular rate × OT hours:
0.5 × $16.67 × 5 = $41.68 additional OT pay
👉 $750 + $41.68 = $791.68
An employee works a regular Monday–Friday schedule and completes their full shift on Friday, 3/1, before sustaining a workplace injury. The employee is not scheduled to work again until Monday, 3/4, and will require time off continuously for several weeks.
The medical certification lists 3/1 as the date incapacity began.
For FMLA tracking purposes, when should the leave begin?
It begins on 3/4 (the next scheduled workday missed)
Since the leave is continuous, weekends will count towards the leave after it begins (but not before on the weekend following 3/1 and prior to 3/4)
An employee shares their salary with coworkers and spends company time complaining to coworkers about wages instead of raising concerns with their manager.
Can the employer issue corrective action?
Yes, but only for time misuse, not for discussing wages, which is protected activity.
An employer discovers that several exempt employees have had improper salary deductions taken for partial-day absences over the past six months.
How should the employer address this issue to preserve exempt status?
Use the FLSA safe harbor to preserve exempt status: reimburse, correct, and prevent future improper deductions.
A client discovers that due to a payroll integration failure, several employees’ 401(k) deferrals and employer matches were not withheld or contributed over multiple pay periods.
What are the required remediation steps?
The employer must:
Fund missed employee deferrals (typically 50% of missed deferrals under IRS correction principles)
Fund 100% of missed employer match
Calculate and contribute lost earnings on all missed amounts
Correct through the IRS EPCRS program (Self-Correction Program, if eligible)
Review and fix the process failure to prevent recurrence