Wage and Hour Law
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What are the wage laws in Tennessee?
In Tennessee there are two basic wage and hour laws that affect employers and employees. The first, and by far the most far reaching, is the Fair Labor Standards Act (“FLSA”). The second is Tennessee’s Wage Regulations Act.
The FLSA has been around since 1938 and generally establishes limits on child labor, minimum wages and the right to receive overtime wages for workers. Some of its highlights include:
- Minimum Wages. Effective July 24, 2009, the federal minimum wage was $7.25 per hour. If you live in a state with a higher minimum wage law (think Arkansas has a minimum wage of $8.00 per hour effective January 1, 2016, moving up to $8.50 per hour January 1, 2017), that state’s minimum wage law will control.
- Overtime. Employers must pay their nonexempt employees 1.5 times the employee’s regular rate of pay for time worked over 40 hours in a regular work week.
- Child Labor. Various restrictions are placed on the number of hours worked and types of positions that children can work. These restrictions vary by age. For example a 14 year old can work up to 3 hours per day and 18 hours per week during the school year. However a 13 year old cannot work even under these restrictions except to deliver newspapers, babysit on a casual basis, be a child star or (my two personal favorites), gather evergreens and make evergreen wreaths or work for a business owned entirely by your parents. (So long as your parents don’t own a coal mine.) Don’t believe me? Check it out here.
In order to determine if an employee is eligible to receive overtime compensation or even minimum wage, the FLSA classifies employees as either exempt or nonexempt. Making this determination, whether as an employer or employee, is not for the faint of heart and the penalties for getting it wrong can be severe. For example, a common misconception is that because an employee is salaried, that employee is not entitled to overtime. This is simply wrong. The law looks to the actual job functions and how an employee is paid to determine if the classification is proper. If you are feeling adventurous, you can look at the website maintained by the U.S. Department of Labor and its guidance on classifications.
A second major failing of employers is miscalculating the employee's regular rate of pay. This results in miscalculating the overtime premium and shorting the employee of the rightful amount of overtime pay.
Often, when an employer misclassifies its employees or miscalculates the pay rate, it does so across a broad range of employees. The law allows employees to bring representative actions on behalf of all of the other similarly situated employees.
Damages for violation of the federal wage and hour law include your lost wages for the past 2 or 3 years, potentially doubled and attorney's fees and expenses.
The second major law is the Tennessee Wage Regulations Act. For all that the FLSA does, it does not cover some areas of wage payment at all. For example, it does not deal at all with breaks or lunch times, nor does it deal with the timing of payment or the payment final wages. For these things, you have to look to the Wage Regulation Act.
- Break or lunch time. In Tennessee, each employee must have a 30 minute unpaid break or meal period of that employee is scheduled to work more than 6 consecutive hours. However, this rule is not absolute. If the work environment or nature of the work does not permit this 30 minute period, but does provide opportunity to rest or take an appropriate break, that will meet the requirements of the law.
- Posting and timing of payment of wages. Each employer with 5 or more employees is required to maintain and post regular paydays in at least two places. These paydays can be at any schedule, but must be at least semi-monthly (twice per month) and the employee must be paid “in lawful money of the United States or by a good and valid negotiable check or draft… .”
- Payment of final wages. An employee’s final wages are due on the later of the next regular payday or 21 days following the date of separation from employment.
If you have questions about this information, please do not hesitate to contact our office.