FLSA
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FAIR LABOR STANDARDS ACT - FLSA (USA ONLY)#

The Fair Labor Standards Act (FLSA) establishes a federal minimum hourly wage that requires the payment of overtime compensation at one-and-half times an employee’s “regular rate” for all hours worked in excess of 40 per week. This ruling is generalized and must be revised for those occupations that work irregular shifts such as police and firefighters.

FLSA Rules#

Work Week
The term “Work Week” for FLSA purposes means a fixed, recurring 168-hour period, consisting of seven consecutive 24-hour periods. There are exceptions to this rule, so the FLSA period may be defined in a user defined calendar. The work week (or user defined FLSA period) is the basic time unit used to measure whether an employer’s compensation payments to workers comply with FLSA’s minimum wages and overtime pay requirements. The work week (or user defined FLSA period) is set by an employer and this need not coincide with the calendar week and may begin any day of the week.
Covered Employers and Employees
An “Employer” is defined as anyone “acting directly or indirectly in the interest of an employer in relation to an employee”. Included in this definition are individuals, corporations, partnerships, associations, or other groups or entities, such as agents or managers, who act for or are authorized to act for an employer.
All hours and earnings MUST be recorded on a FLSA period basis at a minimum. FLSA legislation requires that records be kept on a FLSA period basis and all assessment is done period-by-period. Those hourly employees that are paid other than weekly will have multiple assessments done per pay period, with each assessment based on a week or the FLSA period.
It is also possible to have an FLSA period greater in length than a pay period. In this case, not all pays will assess FLSA.
Exempt Employees
In general, exemptions are available for transportation, agriculture, and seasonal recreational establishments, as well as small public telephone companies and local newspapers. Other exemptions are also available as described in the Fair Labor Standards Act.
Regular Rate
An employee’s “regular rate” is the base rate for calculating overtime pay required by the FLSA. Under FLSA, employers must pay employees overtime compensation at a rate of at least one and one-half times their “regular rate” for each hour worked in excess of the excess limit during a given workweek/FLSA period.
An employee’s regular rate is an hourly rate calculated by totaling the employee’s workweek/ FLSA period remuneration and dividing it by the number of hours worked during the workweek/ FLSA period.
Wiki then takes the FLSA Regular Earnings Element and divides those earnings by the total of the four hours elements. The FLSA Regular Earnings Element should include ONLY those earnings paid at a regular rate; for example, do not include earnings paid at double time.

General FLSA Logic#

The FLSA legislation governs minimum wage as well as compensation for excess overtime hours. The FLSA logic described here deals with overtime only and not with minimum wage payments.

Groups#

Most FLSA definitions will be established at the group level. The following information is recorded on the Maintain Group (IDGR) form (date sensitive).

Work Rules tab#

FLSA Hours
This field shows the base hours after which the FLSA calculation will begin.
Any time worked over the indicated hours within the calendar period (or seven days if no calendar is indicated) will be paid at the FLSA Factor rate.
Four digit/ four decimal field no greater than 500
40 hours, 212 hours per period etc.
FLSA Factor
The rate at which earnings for time over the indicated base hours is to be paid.
1.5
FLSA User Calc
If a UserCalc is needed to enhance the FLSA process, it needs to be indicated here. The UserCalc will have access to the FLSA calculated values:
This information is available in addition to all other data previously available.
UserCalcs will be able to record additional hours or dollars into the last day of the FLSA period by using the existing ‘LET’ command. On return from the UserCalc, the FLSA assessment program will record these values and then reassess the entire FLSA period.
This of course may result in a different premium calculation.
To accomplish this, UPCALC actually performs the FLSA calculation twice, once before and again after the USERCALC.
FLSA Calendar
If FLSA is to be calculated over more than 7 days, a calendar must be set up in the Business Calendars (IDCL) form to indicate the cycle.
If not provided, then a seven-day FLSA calendar will be used. The default for FLSA legislation is seven days. This seven-day cycle begins on the ‘first day of week’ as provided in the work rule (IDWR) for the group.

Elements tab#

FLSA elements will be defined at the group level through use of the 'Group Elements'.
FLSA Regular Earnings(Mandatory)
This element is used to compute the employee’s normal rate of pay and should include only pay components containing regular earnings (only include overtime at straight time), bonus, etc.
FLSA Gross Earnings(Mandatory)
This element is used to compute the employee total earnings and should include all regular, overtime (‘expanded’ – 1.5, 2.0, etc.), bonus, etc.
The only difference between FLSA Regular Earnings and FLSA Gross Earnings Elements should be the ‘expanded’ overtime dollars and the FLSA Premium Pay Components.
*At least one of 0210, 0211, 0212, or 0213 must be provided.
The total of the four elements will be used in the FLSA premium calculation.
If a pay component in any of the four hours elements is entered in ‘Days’ or ‘Weeks’, then the time is converted to ‘Hours’ before updating the FLSA amounts.
The 'Hours per Day’ and ‘Hours per Week’ are retrieved from the primary assignment record for this conversion.
It is NOT advisable to use pay components entered in ‘Weeks’, since those hours would all be recorded on a single day (the effective date of the PAYDETAIL).
The time converted is only for FLSA purposes and is not touched in the pay amounts or the pay detail records.

Work Rules#

The ‘seven-day’ cycle begins on the ‘first day of week’ as provided in the work rule (defined in IDWR) for the group.
FLSA Method
This field is an optional field tied to the X_FLSA_CALC_METHOD lexicon. The user may select any of the following methods:
Actual Hours Worked(normally used)
The standard hours used for FLSA calculation of overtime/premiums will be based on the total of the elements indicated for all hours Group Element Types (see ‘Elements’ tab of IDGR).
IDGR FLSA Hours
The standard hours used for FLSA calculation of overtime/premiums will be based on the FLSA Hours field of the group (defined in IDGR).
Use Reg Hrs, etc.
The standard hours used for FLSA calculation of overtime/premiums will be based on the total of the elements indicated for all hours Group Element Types excluding ‘FLSA Overtime Hours’ (see ‘Elements’ tab of IDGR).
Do Not Calculate
If ‘Do Not Calculate’ is selected, the FLSA pay lines will not be inserted during the UPAUDT process and no FLSA will be calculated.

Business Calendar#

FLSA periods do not necessarily coincide with pay periods. FLSA periods are required to allow the Time Generation program to create earnings and time into the correct FLSA period.

To accommodate this need and to facilitate FLSA record keeping, FLSA calendars must be set up through the Business Calendars (IDCL) form.

The length (number of days) in an FLSA period can be any number, however, each FLSA period must be exactly the same length; there can be no gaps.

The beginning of the next FLSA period immediately follows the end of the prior period.

Pay Points#

FLSA will be invoked during UPCALC based on the FLSA pay point task defined in the Pay Point (IPPP) form.

This task can be placed on any of the existing ‘Pay Point Types’, but should be before legislation (tax calculations).

This task will validate FLSA set up and issue appropriate exception messages if set up is incomplete. Inadequate set up will NOT abort the pay run, but will result in exceptions for each employee in a group with inadequate set up.

Pay Components#

PC usage ‘7002-FLSA Premium’ is mandatory if FLSA is to be calculated.

This pay component must be included in the ‘Gross’ element as well as the FLSA gross element.

All calculated premiums are recorded into the pay component assigned to this usage.

When FLSA assessment is done, all earnings indicated are taken into consideration when calculating any premium to be paid. For this reason, the FLSA premium itself must be included in the gross.

If an invoked User Calc needs to adjust the premium, the User Calc simply stores an amount into the FLSA premium pay component. On return from the User Calc, FLSA assessment will be made with this money taken into consideration.

PC usage ‘7001-FLSA Premium Hours’ is optional. All calculated premium hours are recorded into the pay component assigned to this usage.

The pay component with the usage ‘7001-FLSA Premium Hours’ must NOT be included in any of the FLSA Hours elements since they are not really hours worked. This pay component will simply hold the number of hours used in the FLSA premium calculation.

FLSA Case Studies#

There are two case studies provided in the FLSA CASE STUDIES link which illustrate how FLSA is calculated.

Notes #

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