The Fair Labor Standards Act (FLSA) is a federal law put in place in 1939 to protect the rights and well-being of American workers. While the act has changed since its inception 80 years ago, it still retains many of its original goals, such as the minimum wage, overtime pay requirements, record keeping, and child labor standards. The FLSA is an important part of the American workforce and protects the rights of most workers.

Are Employers Required to Pay Overtime?

According to the FLSA, if an employer permits or requires an employee to work overtime, that employer must pay the employee for those overtime hours. Overtime is defined as any hours worked after 40 hours in a single workweek. The FLSA also requires overtime pay be no less than the employee’s usual rate plus half.

For example, a retail worker normally makes $12 per hour. This week, they worked a total of 48 hours, meaning they have eight hours of overtime they must be compensated for. Their overtime rate would be $12 + $6, for a grand total of $18 for every hour worked over 40 hours in a week. This means the worker should receive a paycheck of $720, $576 for the first 40 hours worked, and $144 for the eight hours of overtime.

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Everyone who owns a business, no matter how small or large, must diligently maintain their paperwork. It is important to keep track of items for tax purposes and much more. Decent record keeping can help you monitor the success of your business, keep track of your expenses and assets, and prepare financial statements.

While well-kept records can ensure your business remains healthy, bad record keeping can get you into trouble. Here are four ways you can make things easier for yourself and keep your records in good order:

1. Have a Good Accounting System in Place

Keeping good tax records is much easier when you implement a quality accounting system. If you want accurate tax records, you need proper accounting, and that all starts with the way your records are completed and organized. There is a plethora of accounting software out there that can make the process simple, but it may be a good idea to have an experienced accountant on the job instead.

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Illinois recently passed a law that will soon require businesses to reimburse their employees for any business-related expenses paid for out of pocket. As of now, only seven other states (California, New Hampshire, North Dakota, South Dakota, Montana, Massachusetts and Iowa) and the District of Columbia have similar laws in place. The law is an amendment to the Illinois Wage Payment and Collection Act (IWPCA) and goes into effect January 1, 2019.

Amendment Closes Loophole in Act

Prior to this amendment, there was nothing in the IWPCA that specified expense reimbursement. Because of this, some employers would not reimburse workers since it was not covered under the act, and employees would then sue the employer for violation of contract. The employee would often end up incurring more expenses like attorneys fees, which would not be reimbursed.

Employers Must Reimburse “Necessary Expenditures”

The new law states employers are required to reimburse “necessary expenditures or losses” which the employee incurs during any business activity directly related to the work they do for the employer. The law states necessary expenditures are all reasonable expenses the employee racks up while performing the duties of his or her job. It also states employers are not responsible for losses that are the employee’s own fault, due to normal wear or theft, unless the theft occurred because of employer negligence.

Employees Must Comply With Employer Policies

Even though the new law states employers must reimburse their workers, employees must comply with any written reimbursement policies the employer has in place. The law specifically states employees are not entitled to reimbursement if there are official policies the employee did not follow. The law also says employers are not liable unless they authorized the expenditure the employee seeks reimbursement for, or if they violate their own reimbursement policy.

Contact a Schaumburg, IL Employment Law Attorney

This new law can have a significant impact on company expenditures. If you have employees who use their own vehicle, computer, cell phone or other equipment, an Illinois employment law lawyer can examine your company policies and help protect you against employee expenditure lawsuits. At the Miller Law Firm, P.C., we can determine if your existing employee reimbursement policies are sufficient, and if they are not, assist in drafting new procedures in accordance with the new law. Contact our office at 847-995-1205 to schedule a free consultation.

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It can be easy to misclassify a worker, especially when it comes to small businesses. There are a few different classifications that employees can fall under, such as employee or independent contractor, salaried or hourly and overtime exempt or non-exempt. Assigning the wrong status to a worker can bring costly consequences like liability for employment taxes, required payment of back wages, and other penalties. In order to avoid such trouble that will bring nothing but headaches, you should know exactly what constitutes certain designations and how to determine how you should classify a worker.

Independent Contractor vs. Employee

The first determination you should make is whether or not you technically have an independent contractor or an employee. The Internal Revenue Service (IRS) has developed a set of criteria to help employers make this designation. The IRS states that there are three areas where you should look to figure out if your worker is an employee or an independent contractor.

Behavior

Typically, workers are considered to be employees if the employer has the right to control and direct the work performed by the worker. Your worker may be an employee if:

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Potential hazards and health risks are everywhere, even in industries that are seemingly safe. As a small business owner, you must protect your employees from dangers and unsafe environments. If an employee is injured, there are multiple insurance options available to them recover. Many new business owners have questions about which coverages are mandated by Illinois employment law.

Health Insurance Coverage

Employers pay hefty costs to offer health insurance, but is it necessary? Deductibles and premiums are higher than workers’ compensation insurance, but health insurance does cover a wide variety of injuries and illnesses, including those that did not occur at work.

Health insurance benefits are not required but can be an added perk to your employees. If you have a small business of fewer than ten employees, discuss the options with your employees. Some people would instead choose their own insurance rather than have the “cookie cutter” plan offered by group benefits, and they may be able to find a better price than is being provided by the group policy.

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