lunch9568375.jpgQ. We offer free lunches to our food service employees. Can we count the cost of these lunches as part of our employees’ compensation?

A. The short answer is yes, but as we all know, there’s no such thing as a free lunch, particularly in the world of wage and hour law. To explore the right way to do this, it’s helpful to take a look at some common mistakes that employers make. 

Suppose Jerry works at Bob’s Steak ‘N Beans as a line cook. Bob’s is located in Illinois, so the minimum wage for non-tipped employees is $8.25 per hour. Suppose Jerry works 45 hours over 5 work days in a week. For that week, he would be entitled to straight-time wages of $371.25. However, rather than paying that full amount in cash, Bob provides Jerry with a free Steak ‘N Beans Bonanza platter each day for lunch. The menu cost of the platter is $15, so Bob deducts $15 per day from Jerry’s pay, leaving him with $296.25 in straight-time pay. On Thursday, Jerry brought a salad from home, but Bob still charged him for the platter since it was available to Jerry even if he didn’t eat it. (Bob ended up serving it to a customer.) Bob didn’t just fall of the turnip truck, so he knows that he also has to pay Jerry overtime for 5 hours. So Bob takes Jerry’s total straight-time wages ($296.25), divides by 45, and divides by two to get an overtime premium rate of $3.29 per hour. Multiplied by five hours, he gets $16.46. Adding that amount to Jerry’s straight-time pay, Bob comes up with a total of $312.71. 

Can anyone spot the problems here?


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FAQs17489126.jpgRecently, two blog readers asked a question about the use of compensatory (comp) time in the private sector during a discussion about tracking exempt employees’ hours worked. One reader’s company tracked exempt employees’ hours worked, and permitted the employees to “flex” any hours worked in excess of a normal workweek, either later that week or in future weeks on an hour-for-hour basis, subject to work loads and scheduling requirements. Another reader wondered if banking “flex” time would be an illegal use of comp time by a private employer. Let’s debunk that myth: Can you offer comp time, flex time, or some other additional compensated time off to your exempt employees? Yes! This is legal and permitted by the Fair Labor Standards Act (FLSA) regulations.


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FAQs17489126.jpgAs you undoubtedly know by now, the Department of Labor’s Wage & Hour Division (WHD) finally announced its long-promised proposal to amend the Fair Labor Standards Act (FLSA) Regulations and, in particular, those governing the “white collar” exemption for executive, administrative, and professional employees. For our comprehensive discussion of the changes in the DOL’s Notice

Note: This post relates to the Department of Labor’s proposed rules issued in 2015. For a summary of the final rules issued May 18, 2016, please check out this post, and see this post for a link to the recording of our May 23, 2016 webinar.

This morning, the Department of Labor’s Wage &

FAQs17489126.jpgWe discuss the misclassification of non-exempt employees regularly here on the blog and in our presentations at conferences and webinars, but a reader of the blog wrote me before the holiday weekend to ask about the reverse situation. The reader’s company has previously determined (correctly, we’ll assume) that some of its employees meet the “computer