What was the impact of the Fair Labor Standards Act?

Answer=In October 2019, the U.S. Department of Labor (DOL) announced changes to the Fair Labor Standards Act (FLSA) requirements for an employee to be considered exempt with regard to the application of minimum wage and overtime requirements, an issue relevant to the use by high school athletics and activities programs of non-exempt school employees as coaches, support personnel at sports events, and sponsors of a wide variety of other school activity programs.

During the past two decades, approximately 40 percent of all administrative complaints filed with the DOL’s Wage & Hour Division (WHD) have involved non-exempt school employees seeking to recover unpaid minimum wage and overtime from their districts for the hours they have invested in extracurricular athletics and activities, with such complaints often leading to federal lawsuits. When an aggrieved worker is successful with an FLSA complaint or suit, the remedy is generally three years of back-pay for the amount of minimum wage and overtime owed in arrears to the employee, with the ensuing sum doubled as a liquidated-damages “slap on the wrist” to the employer for its wrongdoing, typically resulting in a total of $10,000-plus per complainant or plaintiff, and in some cases an award of tens of thousands of dollars to the successful litigant.

Although a school district may be able to absorb the damages from an occasional, isolated FLSA case, the trend is that an award of damages to one non-exempt district employee triggers a flood of litigation by other employees – often numbering in the hundreds of cases in larger districts – and sometimes resulting in millions of dollars of liability for those school systems.

The October 2019 changes to the FLSA, which went into effect on January 1, 2020, are to the minimum salary amounts for an employee classified as having executive, administrative or professional duties (EAP) in order to qualify as exempt – the compensation requirements have been increased from $23,660 per year ($455 per week) to $35,568 per year ($684 per week). And separately, for an employee to qualify as an exempt “highly compensated individual,” the increase is from $100,000 per year to $107,432 per year. A set of greater increases ($913 per week or $47,476 annually for EAP workers and $134,004 for highly compensated workers) had been scheduled to go into effect on January 1, 2017, but were rescinded after the 2016 presidential election because of fears by the incoming administration regarding the potentially negative financial impact that those even-larger thresholds might have on all employers, including school districts.

Therefore, in addition to ensuring FLSA compliance for all school employees with regard to the hours they work performing their regular job duties, one of the additional challenges presently facing districts is the imminent necessity of reclassifying everyone who plays a role in school extracurricular activities or athletics to evaluate whether they are exempt from the FLSA or whether they are entitled to overtime for what are often extensive hours worked beyond 40-per-week as measured by the sum of the time spent on their regular job duties combined with the hours worked in assisting with scholastic sports, theatre, choir, band, orchestra, debate, forensics or clubs through service as coaches, assistant coaches, athletic trainers, activity or club sponsors, or any of the variety of support positions for school events such as ticket sellers, ticket takers, ushers, concession workers, public-address announcers, statisticians, scoreboard operators, scorebook keepers, security officers or event supervisors.

The Fair Labor Standards Act established the minimum wage, legislated a standard workweek, and outlawed oppressive child labor. President Roosevelt called it, after the Social Security Act, “the most far-reaching, far-sighted program for the benefit of workers here or in any other country

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