Landscape companies are frequently found in violation of labor laws due to a variety of pay practices and scenarios. The U.S. Department of Labor Wage and Hour Division is responsible for enforcing the Fair Labor Standards Act (FLSA) and the number of FLSA investigations is on the rise.

In fact, in 2012, according to the U.S. Department of Labor Data Enforcement website, landscape companies were the third most commonly investigated sector in Colorado, only behind child care services and full-service restaurants.

Landscape companies employ a high percentage of what the U.S. Department of Labor refers to as “vulnerable workers” and enforcement agencies have been targeting industries that employ these workers. To stay out of trouble, be aware of this critical federal and state compliance information:

General overtime: Overtime must be paid after 40 hours in a 7 day workweek regardless of the length of the pay period. State of Colorado labor law also requires overtime payment after 12 consecutive hours. Employees cannot waive their right to overtime pay. Overtime is an additional one half of an employee’s regular rate of pay (which can be different from their hourly rate – see below)

Day rate workers: Landscape workers are sometimes paid a day rate instead of an hourly rate. This method of payment is legal, but it doesn’t exempt these employees from minimum wage or overtime law. Employers must pay these employees the additional one half of their regular rate of pay for all overtime hours. They must also make sure that employees have been paid at least the minimum wage for all of their hours. Employers must keep a record of hours worked for day rate landscape workers just like they do for hourly rate employees.

Pre- and post-shift work time and travel pay: Landscape workers often load up work trucks and attend morning meets prior to clocking in for the day. That time is considered work time and must be paid. If employees participate in these duties and then travel to a job site, the travel time is considered hours worked. The same principal applies at the end of the day. If an employee travels back to the shop and unloads tools, meets with supervisors, etc. then the travel time back must be paid. If employees don’t do any principal work activities at the beginning or end of the day (prior to or after traveling) then the drive time is only required for the driver of the vehicle.

Automatic deductions for lunches: Landscape workers who often work on a tight schedule may not be taking a full 30 minute break even though the 30 minutes is being deducted. This can result in substantial overtime back wages. Make sure that employees are taking their full 30 minutes. Eating lunch while driving to the next job site does not count as a lunch break for either the drivers or the passengers.

Tool deductions have historically been a gray area, but to be on the safe side you should not require employees to provide their own tools. Any tool deductions taken from their check may not take the employee below minimum wage per hour in a given week or cut into their overtime pay.
Non-discretionary bonuses: A common overtime violation occurs when employers fail to pay overtime on non-discretionary bonuses that include attendance, safety, performance, travel, and sales bonuses. The weekly amount of those bonuses must be included in the regular rate of pay that determines the overtime amount.

Uniform deductions: Colorado labor law does not allow deductions from employees’ pay for the cost of uniforms.

Contracting with a temporary staffing agency: Make sure that temp agencies pay their employees who work for you in accordance with federal and state labor laws. The Wage and Hour Division will assert a joint employment relationship between a landscape company and its staffing agency, making both entities ultimately responsible for labor law compliance.

Misclassifying employees as contractors: Do not treat anyone as a contractor who should be classified as an employee. The Wage and Hour Division uses a 6 factor test to determine the correct classification of each person. Focus on things like nature and degree of control, investment in facilities and equipment, opportunity for profit and loss, economic dependence, and permanency of the relationship.

Misclassifying employees as salary exempt: A salaried exempt employee is someone who meets certain job duty requirements and is paid a weekly salary of at least $455 per week. Employers do not have to pay overtime to these employees. However, paying an employee a salary does not make them salaried exempt. They must also meet the specific job duty requirements set forth in the federal regulations. For example, landscape companies might classify several foremen as exempt. To meet this exemption, the primary duty of the foremen must be supervising employees, not planting. Also the foremen must participate in supervisory duties such as scheduling, assigning tasks, maintaining records, interviewing, recommending hiring and firing, etc.

Contributed by Kalen Fraser, CEO, The Labor Brain, Inc., who is a former US DOL investigator. www.laborbrain.com, 970 402-9196.