Employer-Employee Issues to Watch

July 14, 2014

By Henry Bogdan, Director of Advocacy and Public Policy, Maryland Nonprofits

Employee “wage and benefit” issues generated intense activity in this year’s legislative session. An increase in the state minimum wage successfully passed. Proposed requirements for “paid time off” for use such as sick leave failed, but are sure to return.

But this summer, managers should remember some basic issues in Maryland, and Federal wage and hour laws, that often trip up both nonprofit and for-profit employers. These are questions such as “what counts as work,” “who is an employee,” and “who is entitled to overtime.”

The Maryland Department of Labor, Licensing and Regulation has a useful section on its website devoted to these and other questions: The Maryland Guide to Wage Payment and Employment Standards.  

Examples include:
Numerous nonprofits operate residential facilities with overnight staffing – “What is Work?” includes: “Work may only involve fulfilling the requirements or following the directions of the employer — even where an employer instructs a worker to report to the jobsite at 7 AM and do nothing until called on. Work may even mean sleep time if a worker must remain on the premises for anytime less than 24 hours. Where free to leave without the possibility of consequence, the worker is on his or her own time, even if instructed to remain ‘on call’ with a beeper, and may not be entitled to compensation. Once called back to work, however, compensation becomes due.”

Nonprofits often engage limited time help or services, such as trainers, consultants, etc. -“Employee or Independent Contractor” points out:  “a signed agreement declaring that a worker is an independent contractor is not, by itself, enough to establish the fact. The ‘economic reality’ of the work relationship determines the worker’s status. Thus, if two individuals in fact stand in the relation of employer and employee to each other, it is irrelevant that the worker has agreed to be called an independent contractor. The measurement, method, or designation of compensation is also of lesser importance, if the relationship of employer and employee in fact exists.” That section includes case studies as examples.

The “Overtime” section points out that even though employers often have non-hourly salaries for office staff, including clerical employees, those employees may still be eligible for overtime pay. 
“Hourly and ‘hourly-type’ employees (who do not fit the definitions of Executive, Administrative or Professional), even though they may receive a salary, generally are entitled to overtime. Some examples of ‘hourly-type’ employees include office clerical workers, landscape laborers, fast-food employees, health care workers not meeting the regulatory definition of ‘professional’ (including most categories of nurses in non-state facilities), dishwashers, construction and factory workers, day care workers, maintenance workers, etc. Where such employees receive a salary, as mentioned above, employers must mathematically compute the average hourly wage rate by dividing hours into salary in order to determine the amount of overtime compensation to be paid at the rate of time and one-half.”

(The legal definitions of “Executive,” Administrative” and “Professional” may not be what you think! For example: “An Administrative employee is one who is compensated on a salary basis at a rate of not less than $455 per week (excluding board, lodging or other facilities), and whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer, and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.”)

Join Maryland Nonprofits’ 2014 Annual Conference “Connecting for Impact!” November 5th at the Universities of Shady Grove in Rockville, MD.

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