Within the workplace, the actions of supervisors are "where the rubber meets the road for following wage and hour laws." In his report, Teachout details five areas of wage and hour law that supervisors need to understand to avoid potentially costly pitfalls.

"Providing effective training to supervisors on these issues is like doing the routine maintenance on a car; it helps the organization run more smoothly and proactively and will save much more by preventing costly errors,' he writes.

So where should you focus? Take a look:

1. Minimum wage

When faced with conflicting federal, state and municipal wage payment laws, the rule of thumb is to complying with whichever provides the greater benefit to employees. For example, an employer must pay the higher of the federal minimum wage or the applicable state minimum wage.

"Deductions from an employee's wages normally may not be made if they drop the employee's pay below the minimum wage, although there are certain exceptions," Teachout writes. "Deductions that do not reduce an employee's pay below the minimum wage must be agreed upon by the employee. Supervisors should make sure that authorizations for deductions are in writing and kept according to the organization's recordkeeping policy."

It's also critical for supervisors to know what pay deductions are permitted and prohibited in the state where an employee is working to avoid possible violations.

"For example, the FLSA allows an employer to deduct the cost of a uniform from an employee's pay, but some state laws prohibit a similar deduction," he writes. "In such cases, the employer must follow the state law and not make the deduction."

2. Overtime

In addition to overtime rules spelled out in the federal Fair Labor Standards Act, which requires that nonexempt employees working more than 40 hours in a week be paid at a rate of one and one-half times the employee's regular rate of pay, supervisors must also comply with any state overtime requirements. For example, some states require overtime to be paid for hours worked over eight in a day.

"Supervisors often arrange work schedules, so it is important that they be aware of how many hours each employee is working in order to avoid scheduling an employee to work overtime unnecessarily," Teachout writes.

A supervisor should ensure that a nonexempt employee declares all hours worked, including the time in, the time out, and any time on unpaid breaks, he writes. The supervisor also has the responsibility to ensure that the time records are accurate.

"If a supervisor is aware that an employee is 'volunteering' time to do work for the employer, the supervisor must make sure that time is recorded and the employee it compensated, even if it means paying overtime," Teachout writes. Several states have "day of rest" laws, which require an employer to provide employees with a day of rest on Sundays, on their Sabbath, or when they have worked a certain number of hours or days in a row. Some states also require overtime pay for work on Sundays or holidays. 

3. Equal pay

Under the FLSA, jobs do not have to be identical for equal pay to be required, but substantially equal in terms of skill, effort and job responsibility, and performed under similar working conditions, Teachout writes. The term pay refers not just to salary but also overtime, bonuses, vacation and holiday pay, stock options, life insurance, and all other benefits and compensation of any kind paid to employees.

"Aside from potential legal claims, disparities in pay for the same or equivalent jobs can also lead to employee morale issues, affecting a department's productivity and a supervisor's ability to retain employees," he writes.

Supervisors need to make sure that all employment decisions regarding promotions, raises, bonuses and so forth are based on legitimate and nondiscriminatory factors such as skill, merit and performance rather than an employee's membership in a protected class. Employers should avoid wage differentials based on sex, race, national origin or any other protected class unless they can be justified by legitimate and nondiscriminatory reasons.

"A supervisor should not try to prevent employees from finding out how their pay compares to their co-workers' by prohibiting them from talking about their salaries with each other," Teachout writes. "This is a violation of the National Labor Relations Act."

4.  Misclassifications

Employee misclassification is a common mistake made by an employer that may result in expensive wage and hour claims, Teachout writes. An employer often misclassifies its employees as exempt from the FLSA's minimum wage and overtime requirements when he or she is actually nonexempt. Most employees who are exempt from the FLSA's minimum wage and overtime requirements are paid at least $455 a week and generally receive a set salary each week, which does not fluctuate depending on the quality or quantity of the employee's work.

"For example, an exempt employee who fails to complete an assignment may not lose pay, but may be written up for performance issues," he writes. "Or, when an exempt employee arrives late or leaves early, the employer may not deduct from the employee's pay but may deduct from the employee's paid time off bank. Remember that, while exempt employees' pay may not be docked for working a shorter day, exempt employees also do not get paid more for working a longer day."

It's critical to periodically review an employee's classification, particularly when they receive additional responsibilities, their duties change or they are promoted.

"For example, a nonexempt employee who is promoted to manage a team of two or more full-time employees may now be exempt, or an exempt manager whose three subordinates are cut to part-time status may no longer be exempt," Teachout writes.

When it comes to working with independent contractors, a supervisor must take care to not exert too much control over the contractor in a way that renders the worker an employee under the FLSA, he writes.

"Generally, this means focusing on the end result of the contractor's work, rather than the way in which the contractor gets the job done," Teachout writes. "For example, a supervisor should generally avoid requiring a contractor to work specific hours of the day; to use the employer's facilities, equipment or processes; or to refrain from working for other employers."

5. Working and non-working time

Generally, an employer must pay an employee for all hours that the employer knew or should have known the employee was working, Teachout writes. An employer is not permitted to accept the benefits of employees' work but not pay the employees, even when the work is done voluntarily or against the employer's wishes.

"It is in this area that a supervisor's role as the 'eyes and ears' of the employer can be of great benefit," he writes. "In order to ensure an employee is paid properly, a supervisor should be aware of all the hours for which each employee must be compensated."

Specifically, a supervisor should follow applicable rules for all wage and hour concerns, including rest breaks, meal breaks, waiting time and on-call time and overtime.

An employer is permitted to have a policy prohibiting off-the-clock or overtime work and requiring employees to properly record all hours worked. In fact, an employer may discipline an employee for violating such policies; however, the discipline may not involve refusing to pay the employee for his or her time.

"A supervisor must ensure he or she is not inadvertently encouraging off-the-clock work — an employee's workload and deadlines must be realistic," Teachout writes. "If an employee is worried about finishing a project on time, the supervisor should help delegate or reprioritize duties or see if the deadline can be extended."