Not Renewing a Section 14c Certificate Could Prove Costly - Hours Work Changes
Thinking of Not Renewing Your Certificate - Think It Through
Alternate Activities Can Become Hours Worked Without a Certificate
With the political climate and the prospect of elimination of commensurate wages in the future, some organizations are considering not renewing their FLSA Section 14( c) Special Minimum Wage certificate and just paying minimum wage to all consumer workers. Some have already allowed their certificate to expire and started paying the minimum wage for all work. Those decisions have been made without an understanding of the Fair Labor Standards Act differences in the regulations.
Not renewing a Section 14( c) certificate could be a costly mistake, because of the special allowances that are only allowed with the certificate.
The federal regulations at 29 CFR Part 525 only apply to certificate holders under FLSA Section 14( c). 29 CFR Part 525.6 recognizes the special needs of consumer workers with disabilities. Those needs include extra supervision, care, support and protection. It also recognizes that fact while under the supervision and control of the employer they are provided “alternate” non-work activities including therapy, simulated work training, basic education, etc. Thus, under Part 525.6, employers need not pay such time even though the consumer workers are not completely released and free to leave in many cases. Part 525.6 requires employers holding a certificate to clearly distinguish work time from alternate non-work activities.
Without the certificate, 29 CFR Part 525.6 does not apply. CFR Part 525 does not apply to any employer that does not have a Section 14( c) certificate.
Federal regulations 29 CFR Part 785 applies to employers without a Section 14( c) certificate. In Part 785, there is no exception or exclusion for “alternate” non-work activities. Part 785 enforces the general hours worked principals that have been established by the Courts over the years and the enforcement of the WHD.
Continuous Workday Rule
A major difference is the “continuous workday rule” under Part 785. The “continuous workday rule” is the principal that hours of work include all time an employee is engaged by the employer and “under the control” of the employer, regardless of the activity. Part 785 does not recognize the needs of consumers with disabilities and the fact that they may engage in nonproductive activities. The only exceptions are bona fide meal periods of 30 minutes or more and other periods of “complete freedom” long enough for the employee to engage in personal activities where the employee is free to leave. At least one court has ruled that in addition to complete freedom, the length of a non-paid period during the workday must be at least one hour.
Under Part 525, employers with certificates have considered only “work time” or “productive” time as compensable hours of work. Part 785 includes more than “work time” as compensable. Under Part 785, once engaged by the employer, all time under the control of the employer, passive or active, productive or unproductive, awake or asleep, is hours of work. Under Part 785, waiting for the next assignment is hours of work. Under Part 785, the allowance for an unpaid meal period is only for eating a meal, a maximum of three per 24-hour period. Thus, an employer cannot have an employee going in and out of compensable paid time during the day under the “continuous work day rule” because the worker remains under the control of the employer even when no work is provided.
The article with more detail and explanation is continued in our July Knuckles Report.
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