Wage & Hours
Q: What are the employers obligations to provide notice to employees of their rate of pay?
A: At the time of hire, employers must notify employees in writing of their rate of pay and the day and place of payment. This notice is traditionally delivered to employees by way of an offer letter. In addition, and what surprises most employers, is that employers must also request and obtain their employees signatures on this written notification of wages, and employers must keep a copy of the signed written notification of wages on file. Further, employers must also notify employees in writing during the course of employment of any changes to wages or day of pay prior to such changes taking effect, and the employer must obtain the employees signature on this subsequent notification as well.
Employers are further required to notify employees in writing, or through a posted notice maintained in a place accessible to employees: (a) of employment practices and policies with regard to vacation pay, sick leave and other fringe benefits; (b) of deductions made from the employees payroll check, for each period such deductions are made; and (c) of information regarding the deductions allowed from wage payments under state law. Policies regarding vacation and sick leave should inform employees whether or not the employer will cash out unused time at year end or at the end of employment, and if so, under what terms. Again, if any changes are made to vacation pay, sick leave and other fringe benefits during the course of employment (all of which are considered wages under New Hampshire law), employers must request and obtain their employees signatures on the written notification of the change, and must keep a copy of the signed form on file.
Q: I understand there are some exemptions from overtime requirements for certain employees in my dealership. How does it work?
A: The federal Fair Labor Standards Act (FLSA) requires that most employees be paid at least the federal minimum wage for all hours worked and overtime pay at the rate of one and one-half the regular rate of pay for all hours worked in excess of 40 hours in a workweek. Where these requirements apply, the employee is considered a non-exempt employee; where the requirements do not, the employee is considered an exemptemployee. The United States Department Labor refers to this as the employee classificationprocess. Dealerships should classify all employees as either exempt or nonexempt in accordance with the FLSA.
To ensure proper classification, dealerships should begin with the assumption that their employees are non-exempt (entitled to MW and OT), and then review the potential exemptions to determine whether they apply. Some employees are exempt from both minimum wage and overtime, and some employees are only exempt from overtime. In the world of dealerships, the most common exemptions fall into one of three categories. First, an employee may be properly classified as exempt if he/she serves in one of the white collar positions. See here for more information on the white collar exemptions. Second, an employee may be properly classified as exempt from overtime (but not minimum wage) if he/she serves as a salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements. This does not apply to motorcycle dealer members. For this exemption to apply, the salesman, partsman, or mechanic must be primarily engaged (i.e., spend over 50 percent of their time) in selling or servicing automobiles, trucks, or farm implements. The dealership must be primarily engaged in the business of selling automobiles, trucks, or farm implements to ultimate purchasers (i.e., over half of the dealership's annual dollar sales volume or business done must involve automobiles, trucks, or farm implements). The salesman, mechanic, and partsman must be employed in a department which is functionally operated as part of a dealership. Employees engaged in driving trucks and delivering parts do not qualify for the partsmen exemption. Mechanics do not include employees primarily performing such non-mechanical work as washing, cleaning, painting, polishing, tire changing, installing seat covers, dispatching, lubricating, and rustproofing. They do include employees who spend over half their time doing exempt mechanical work (e.g., replacing mufflers and tail pipes, replacing brake shoes, doing tune-ups). Body shop painters are not mechanics unless they spend over half their time doing mechanical body work (e.g., replacing body and trim parts in the preparation of vehicles for painting). Third, an employee paid commissions by retail establishments may be classified as exempt from the FLSA overtime requirements. There are three conditions that must be met for an employee to fit under the 7(i) exemption: (1) the employee must be employed by a retail or service establishment, and (2) the employee's regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked, and (3) more than half the employee's total earnings in a representative period must consist of commissions. Please note that employers must keep accurate records of all hours worked by employees who are classified as exempt from the overtime exemption only.
Q: What if I pay my sales person on commissions only and he/she does not earn any commission in a given week, does this create a problem under the FLSA?
A: Most likely, yes, unless this sales person can be classified as exempt under one of the white collar exemptions (see above), which is rare in dealerships. Generally, this sales person must be paid minimum wage for all hours worked. In New Hampshire, a frequent solution to address this situation is to create a draw against commission pay plan. This pay plan must comply with NH RSA 275:42.
Q: Is an employee handbook really a necessity in my business?
A: Absolutely. If you do not have the details and conditions of employment specifically listed in an employee handbook that is signed off by all employees, you open yourself up to many, many employment law problems. Furthermore, some laws require employers to provide written notice to employees and a handbook is a good place to achieve compliance with this obligation.
Q: If an employee's hours of paid time off (vacation, sick, holidays), plus the hours actually worked, total more than 40 hours in a week, is that employee eligible for overtime even though he/she actually worked fewer than 40 hours?
A: No, according to the NH Department of Labor. Under New Hampshire law, each given week must be based on actual time worked. Time off, even though paid, does not apply toward the accumulation of overtime. But, it is a best practice to clarify these terms in an employee handbook.
Q: If a salesperson quits or is fired, does the dealership have to pay commissions on vehicles the salesperson sold before he/she left if the vehicles have not been delivered yet?
A: It depends. Under New Hampshire law, a salesperson is entitled to commissions on sales made, whether or not payment is received, unless the employer can prove that there is a written agreement or a practice that clearly demonstrates that commissions are not owed until payment is received.
Q: How long must a person be employed in order to qualify for leave under the Family Medical Leave Act?
A: To qualify for FMLA leave, an employee must have worked for the employer for a total of twelve months (which need not be consecutive) and must have performed at least 1,250 hours of work for the employer in the twelve consecutive months preceding the date on which the leave will begin. The employee must also work for an employer covered by the FMLA (generally, employers with 50 or more employees); must work at a worksite where 50 or more employees are employed by the employer within 75 miles; and must request leave for a reason that qualifies under the FMLA.
Q: What type of notice is an employee required to provide prior to taking leave under FMLA?
A: The employee does not have to specifically request leave under the FMLA or reference the FMLA: It is enough for an employee to tell the employer that he/she will be out of work for a reason qualifying under the FMLA, such as for the birth of a child, for the employee's own serious health condition, or to provide care for the employee's spouse, parent, or child with a serious health condition. It is the employer's responsibility to ask the employee for more information if it is needed in order to determine whether the leave will qualify under the FMLA. With regard to timing, if the need for leave is foreseeable, such as for scheduled surgery, the employee should provide the employer with at least 30 days' advance notice of the leave. If the need for leave is not foreseeable or it is not practicable for the employee to provide 30 days' notice, then the employee must provide notice as soon as practicable. The practicable time frame will depend on the circumstances but is generally considered to be within one or two working days of the day on which the employee learned of the need for leave.
Q: If an employee exhausts his/her 12 weeks of FMLA may an employer terminate at that point?
A: It depends. If an employee was out for his/her own serious health condition, then it is very likely that the Americans with Disabilities Act (ADA) applies. In that situation, the employer must consider its obligations under the ADA and may be required to provide additional leave (which may be unpaid) to the employee.
Q: A female employee is unable to perform her job due to a disability resulting from her pregnancy. She needs far more than 12 weeks off. May we terminate her?
A: No. New Hampshires maternity leave law, RSA 354-A:7, VI, applies to employers with six (6) or more employees. The maternity leave law requires covered employers to provide female employees with unpaid leave for the period of temporary physical disability resulting from pregnancy, childbirth, or related medical conditions. Unlike the FMLA, the law requires that leave for the period of temporary physical disability be provided to female employees without regard for how long the employee has worked for the employer or for how many hours the employee has worked. As leave is only required for the period of physical incapacity, the leave begins when an employee becomes physically disabled and ends when the employee is physically able to return to work.
Q: Which Laws Govern Youth Employment?
A: The Fair Labor Standards Act (FLSA), which is the federal law, and the New Hampshire Youth Employment Law.
Q: Who Is a Youth?
A: Any individual under the age of 18.
Q: When Does the Law Prohibit the Employment of a Youth?
A: In general, any youth under the age of 14 may not work in New Hampshire (there are exceptions for casual work and newspaper delivery). Additionally, most youths may not perform hazardous work, such as, but not limited to, commercial driving, excavation, manufacturing explosives, and operating many types of power-driven equipment.
Q: What are Permissible Work/Hours?
A: For Youths Aged 14 and 15:
- Youths who are 14 and 15 years of age may work in various non-manufacturing, non-mining, and non-hazardous jobs.
- They are permitted to work 3 hours on a school day and a total of 18 hours during the school week.
- On non-school days, they may work 8 hours per day. During the summer vacation, they may work six (6) days per week, but not to exceed 40 hours per week.
- Lastly, they may only work between 7:00 a.m. and 7:00 p.m., except from June 1 through Labor Day, when they are permitted to work until 9:00 p.m.
For Youths Aged 16 and 17:
- They are not permitted to work more than 6 consecutive days during the school calendar week, which is Sunday through Saturday.
- They may not work more than 30 hours per week during the school calendar week.
- They may not work more than 10 hours a day at manual or mechanical labor in any manufacturing establishment or more than 10 hours a day at manual or mechanical labor in any other employment that is not exempt by statute.
- From June 1 through Labor Day (vacation weeks), these minors may not work more than 6 consecutive days or 48 hours in any one week.
- They may not work more than 8 hours in 24 hours or more than 48 hours during the week if performing night work.
For Youths Aged 16 and 17 and Not Enrolled in School:
- They may not work more than 10 hours a day or 48 hours a week at manual or mechanical labor in any manufacturing establishment.
- They may not work more than 10 hours a day or 54 hours a week at manual or mechanical labor in any other employment that is not exempt by statute.
- They may not work more than 8 hours in 24 hours or more than 48 hours during the week if performing night work.
Exception: In general, the minimum age requirements do not apply to minors employed by their parent or by a person acting as their guardian.
Q: Are Youth Employment Certificates Required?
A: New Hampshire requires most youths under the age of 16 to acquire a New Hampshire Youth Employment Certificate from the school district within 3 business days of the first day of employment. a New Hampshire Youth Employment Certificate For 16- and 17-year-olds, the employer must obtain a signed written document from the youths parent or legal guardian permitting the youths employment. Employers are required to keep these respective written documents on file.
Q: Are Employers required to post anything in the workplace relating to youth employment?
A: NH employers are required to post in a conspicuous place in every room where youths are employed a printed notice stating the hours of work, the time allowed for dinner or other meals, and the maximum number of hours any youth is permitted to work in any one day.
Q: Are there any other considerations with youth employment?
A: Teenagers and young adults often have limited work experience and may not understand what is appropriate or normal behavior in the workplace. As such, young workers may be more susceptible or vulnerable to sexual harassment and discrimination in the workplace and may not understand how to report such conduct. Employers should consider taking special care to train young employees on company policies and reporting procedures for discrimination and harassment upon hire. By encouraging young employees to come forward and report any problems as they arise, employers will have the opportunity to take appropriate action before the situation grows worse.
Employers must be mindful that the state and federal laws can differ, so when consulting with agencies about youth employment laws, it is important to inquire on both the state and federal levels and to follow the more stringent requirement. As with many other laws, there are many exceptions to the federal and state youth employment laws, and you should seek legal advice if you have any questions or concerns about youth employment.
Margaret O'Brien is an attorney at Devine, Millimet, a Silver-level association partner located at 111 Amherst Street in Manchester. She can be reached at 603-695-8631 or by e-mail.