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InfoSight Highlight: How Does the FLSA Affect Credit Unions?
Friday, April 14, 2017 7:00 AM

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.

Overtime pay at a rate of not less than one and one-half times their regular pay rate is required after 40 hours of work in a single workweek. The FLSA imposes recordkeeping requirements for employers and authorizes the Wage and Hour Division (WHD) of the Department of Labor to administer and enforce the majority of its provisions. The Equal Employment Opportunity Commission (EEOC) administers and enforces the FLSA's pay equity provisions.

The FLSA applies to employer-employee relationships. Those outside of an employment relationship (e.g., independent contractors) are not covered by the FLSA.

In general, the FLSA overtime provisions cover all credit union employees. However, the FLSA does include some narrowly defined exceptions for individual employees. For example, the FLSA exempts certain categories of employees from its overtime and minimum wage requirements. These so-called white-collar exemptions include any employees employed in a bona fide executive, administrative, or professional capacity. The employer carries the burden of proving the employees exempt status, and these exemptions are narrowly construed against the employer.

What should credit unions do to comply with the FLSA?
Credit unions should put policies and procedures in place to ensure compliance with the FLSA. Management must ensure that credit union employees are properly classified as either FLSA exempt or nonexempt.

Every employer of employees subject to the FLSA's minimum wage provisions must post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it. The content of the notice is prescribed by the Wage and Hour Division of the Department of Labor.

Source:  InfoSight Compliance.

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