As an employer in the construction industry, adhering to wage and hour laws is crucial to avoid legal troubles and ensure fair treatment of your employees. These laws, governed by the Fair Labor Standards Act (FLSA), outline how you should pay wages, handle overtime, and classify workers. By being aware of these rules, you can prevent common pitfalls that lead to disputes and penalties.
Understanding the Fair Labor Standards Act (FLSA)
The FLSA establishes the guidelines for minimum wage, overtime pay, and recordkeeping in construction. If your business makes $500,000 or more annually or engages in interstate commerce, you must comply with the FLSA. This means paying at least the federal minimum wage and overtime for hours over 40 in a workweek.
Consider consulting with an employment lawyer to review your practices. They can help you create compliant policies, conduct audits, and address your company’s issues. Legal advice costs often far less than potential fines or lawsuits.
Common pitfalls and how to avoid them
Accurate time tracking
One of the biggest mistakes is failing to record all hours worked. Ensure you track time spent working before or after shifts, including travel time from the shop to work sites. Use reliable timekeeping systems to capture all work hours accurately.
Proper overtime calculation
Pay overtime for any hours worked over 40 in a workweek. Don’t use “comp time” or “bank” overtime hours. If an employee works in multiple job classifications for you, combine all hours for overtime calculations. Remember, each workweek stands alone for overtime purposes.
Employee classification
Classify your workers correctly as either employees or independent contractors. Misclassification can lead to serious legal issues. Consider factors like control over work, financial investment, and the nature of the relationship when making this determination.
Meal breaks
If you provide meal breaks, ensure employees are completely relieved of duties. If they’re not, you must pay them for that time. Short breaks (5-20 minutes) are considered compensable work time.
Compliance guidance
Keep accurate employee information records, hours worked, and wages paid to stay compliant. Establish a clear workweek (any fixed 7-day period) for overtime calculations. Be aware of special rules for federally funded projects, which may require prevailing wage rates. And seek legal advice if you have doubts about FLSA laws.