The premise behind the FLSA’s establishment of a minimum hourly wage requirement was to ensure that workers would earn enough money to at least meet their minimal economic needs. The minimum wage rate established when the FLSA became law was 25 cents per hour. As of the date this lesson was written, the minimum wage stood at $7.25 (effective July 24, 2009) per hour, following numerous incremental increases over the years by Congressional amendments to the statute.
While at first blush it might seem that legally required minimum wages are relatively straightforward and not subject to very many gray areas, this is not always the case. First, not all employees of all employers are covered, or at least fully covered, by the minimum wage requirements. Some employee groups are completely exempted from coverage by terms of the FLSA itself, such as agricultural workers and domestic companions. The FLSA provides that other groups, such as student workers and certain kinds of apprentices and trainees, may be paid a “sub-minimum” wage below the minimum wage amount.
A second problem area raised by the minimum wage requirement may occur when lowly compensated employees are required to bear certain expenses related to their employment. An example of this might be where an employer pays an employee the present minimum wage of $7.25 per hour but also requires employees to buy uniforms, at their own expense, that must be worn at the workplace. In such situations, if required employee work expenses cause wages to dip below the minimum wage, the employer could be found liable for violation of the FLSA.
One area of minimum wage problems, and resulting court litigation, involves payment of employees for time when they are “on call.”
While in “on call” status, an employee is not actually working at his or her regular job duties but is subject to being called to work by his employer on very short notice. An example might be a fire fighter or a police officer who is off work but may be required by his employer to immediately report to work if there is a fire or a police emergency situation. Obviously, being “on call” is at least an inconvenience to an employee who is otherwise off duty, and in some cases may be a major impediment to the employee’s ability to use “free time” for his own desired purposes. The question is, what obligations, if any, does an employer have to compensate an employee for being “on call?”
The test that the courts have applied under the FLSA to determine how to compensate on-call time is a pragmatic one: Is the on-call time spent predominantly for the benefit of the employee or for the benefit of the employer? If the employee can spend her time pretty much as she wishes, without a likelihood of numerous or significant interruptions by being called, the employer does not have to compensate the employee for her on-call hours. If, on the other hand, the employee is severely limited in how she can use her on-call time, the employee is considered to be “engaged to be waiting” by the employer, and must be paid at least the minimum wage for each on-call hour.