Compliance Watch:

What are my rights as an hourly employee in Kentucky?

In Kentucky, an hourly employee is an individual whose compensation is largely based on the number of hours they work in a given week. Unlike salaried workers who receive a fixed pay independent of their weekly work hours, the compensation of hourly employees is directly proportional to the time they put into their jobs.

Much like other U.S. states, Kentucky’s hourly employees generally form distinct employment agreements with their employers. These agreements often necessitate the use of time tracking tools such as time cards or timesheets to accurately record the payable hours worked by hourly employees. The onus is on the employer to determine the number of hours worked by these employees on a weekly basis.

The primary distinction for hourly employees is that their income is linked to the actual hours they invest in their work. In contrast to salaried employees, who earn a predetermined salary, those on hourly wages have earnings that can vary week by week depending on their work schedule.

Below is a comparison table highlighting the key differences between hourly and salaried employees in Kentucky:

To learn more about Kentucky labor laws, you can access our informative guides on understanding your rights as a salaried employee in Kentucky and discovering how to run payroll in Kentucky.

Minimum wage signifies the lowest pay per hour an individual can receive for their work. While federal wage laws are regulated by the Fair Labor Standards Act (FLSA), each state has the authority to establish its own minimum wage, which can surpass the federal standard. Kentucky is one of the states that align with the federal minimum wage laws.

Kentucky’s state laws mirror the federal guidelines, setting the minimum hourly wage at $7.25, which aligns with the federal minimum. If the federal minimum wage increases, Kentucky’s minimum wage must also rise to match that amount. Essentially, under Kentucky’s minimum wage law, an hourly worker typically earns a minimum of $290 in a standard 40-hour workweek.

The statutory laws in Kentucky that regulate overtime stipulate that employees who have worked over 40 hours a week must be additionally compensated at a pay rate of one and a half times their regular hourly pay. Therefore, an hourly employee in Kentucky would generally earn $10.88 for each overtime hour they have worked.

While some workers are qualified to earn the federally mandated minimum hourly wage, it is crucial to emphasize that the Fair Labor Standards Act (FLSA) includes legal exemptions for certain types of employees, excluding them from both the federal minimum wage and overtime prerequisites. These exceptions encompass:

• Tipped Employees: Employees who receive tips are permitted to earn an hourly wage lower than the state’s minimum wage requirement, provided that the tips, when added to the hourly wage, align with the state’s minimum wage of $7.25.
• Full-time students: High school or college students working part-time may earn $6.16 per hour which is 85% of the federal minimum hourly wage requirement and can work up to 40 hours.
• Employees below 20 years old: Kentucky does not follow the federal subminimum wage of $4.25 within the first 90 days of employment. The subminimum wage in Kentucky is based on the federal minimum wage of $7.25.
• Agricultural employees.
• Employees working for the United States.
• Employees working in domestic service in or about a private home. 
• Employees of retail stores, service industries, hotels, motels, and restaurant operations whose average annual gross volume of sales made for business done is less than ninety-five thousand dollars ($95,000) for the five (5) preceding years exclusive of excise taxes at the retail level or if the employees are the parents, spouses, children, or other members of the employer’s immediate family.
• Employees working as babysitters in an employer’s home.
• Newspaper delivery employees.
• Employees hired as companions by a sick, convalescing, or elderly person or by the person’s immediate family, to care for that sick, convalescing, or elderly person and whose principal duties do not include housekeeping.
• Employees subject to the provisions of KY Statutes, Chapters 7, 16, 27A, 30A, and 18A provided that the secretary of the Personnel Cabinet shall have the authority to prescribe by administrative regulation those emergency employees, or others, who shall receive overtime pay rates necessary for the efficient operation of government and the protection of affected employees.
• Employees working for an establishment that is an organized nonprofit camp, religious, or nonprofit educational conference center, if it does not operate for more than seven (7) months in any calendar year.
• Employees whose function is to provide twenty-four (24) hour residential care on the employer’s premises in a parental role to children who are primarily dependent, neglected, and abused and who are in the care of private, nonprofit child-caring facilities.
• Employees whose function is to provide twenty-four (24) hour residential care in his or her own home as a family caregiver and who is approved to provide family caregiver services to an adult with a disability through a contractual relationship with a community board for mental health or individuals with an intellectual disability.

In Kentucky, employees have rights and protections under federal and state leave laws, ensuring job security while taking time off for various reasons. These laws support employees dealing with family emergencies, personal health issues, pregnancy, or caring for a new child.

Kentucky’s leave laws offer diverse options for time off, including:

• Family and Medical Leave: Eligible employees can take up to 12 weeks of unpaid, job-protected leave for family or health-related reasons, provided they meet specific conditions.
• Jury Duty Leave: Employees can respond to jury summonses without facing penalties, though this time is typically unpaid.
• Witness Leave: Employees testifying in court cannot face retaliation, although they might need to provide proof of their absence.
• Military Leave: National Guard members are entitled to unpaid leave for active duty or training.
• Emergency Responder Leave: Protection for emergency responders taking time off due to an emergency or injury sustained during their response.
• Adoption Leave: Employees adopting a child under seven are eligible for up to six weeks of leave.
• Voting Time Leave: Employees must get at least four hours off to vote and can’t be penalized unless they didn’t vote for reasons within their control.

In the state of Kentucky, employers acquire specific rights and responsibilities in relation to the adjustment of an employee’s wages. Given the complexities surrounding wage deductions and the potential risk of wrongful income withholding, specific state and federal laws have been introduced to prevent these issues and protect your earnings from unlawful deductions.

According to the statutory provisions in Kentucky, an employer is allowed to make deductions from an employee’s paycheck only if:

• They have been authorized to do so by local, state, or federal law.
• The employee has given written authorization for the deduction to cover:
  • insurance premiums.
  • hospital and medical dues.
  • other deductions not amount to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to a wage agreement or statute, or union dues.

Furthermore, employers in Kentucky are disallowed from withholding or deducting any wages from an employee’s income for; fines, cash shortages in a common money till, cash box or register used by two or more persons, breakage, losses due to acceptance of a bad check, losses due to defective or faulty workmanship, lost or stolen property, damage to property, default of customer credit, or nonpayment for goods or services received by the customer if such losses are not attributable to employee’s intentional or willful disregard of the employer’s interest

Additionally, it is important to note that the Department of Labor prohibits wage deductions that would result in an employee earning less than the federal minimum wage ($7.25 per hour) for that pay cycle.

As an hourly employee, staying informed about your employment rights and compensation benefits is crucial throughout your tenure. The list below outlines several employment advantages accessible to you in Kentucky:

• Minimum wage: Workers in Kentucky have the legal entitlement to earn the state’s current hourly minimum wage of $7.25.
• Overtime: Employers are legally required at both federal and state standards to compensate non-exempt employees at a rate of 1.5 times their regular hourly wage for any hours worked beyond 40 hours in a week.
• Unemployment Insurance: Kentucky requires employers to contribute to the state’s unemployment insurance program, which provides financial support to eligible workers who have lost their jobs through no fault of their own. These insurance benefits are designed to partially offset the loss of wages of an unemployed individual as they search for work or await to be recalled by their employer.
• Workers’ Compensation: Just like other states, Kentucky has a workers’ compensation program that provides compensation and benefits to employees who suffer work-related injuries or illnesses. This is outlined in the Kentucky Workers’ Compensation Act which obligates employees to give notice of the accident to the employer as soon as practicable. 
• Extended health insurance benefits: The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal statute that allows employees to prolong their health insurance benefits following the termination of their employment. Since federal COBRA only applies to employers with 20 or more employees, numerous states have established their own version of the law, often referred to as “mini-COBRAs.” Montana’s mini-COBRA enables employees to maintain their health insurance benefits for a duration of up to one year after the reduction of their work hours. Although, providing such benefits lie at the discretion of employers.

At the federal and state levels, several laws have been put into effect to safeguard workers from a variety of workplace inequalities, encompassing concerns pertaining to health and safety, discrimination, reporting wrongdoing, and other matters. The compilation below outlines various primary laws that legally protect your rights and welfare while you are employed.

• Kentucky Civil Rights Act (KCRA): The KCRA protects employees from discrimination, harassment, and retaliation by their employers based on protected characteristics such as race, colour, national origin, age, religion, disability, sex, and pregnancy-related conditions. This Act applies to employers with eight or more employees but is also applicable to employers with 15 or more employees for disability and pregnancy discrimination cases.
• Kentucky Pregnant Workers Fairness Act: Employers must provide reasonable accommodations to employees with medical conditions related to pregnancy, childbirth, and other health-related situations. These accommodations can include additional rest periods, extended time off, and creating safe spaces for expressing breast milk. This Act applies to employers with 15 or more employees.
• Kentucky Child Labor Laws: Kentucky has specific regulations governing the employment of minors, including restrictions on the type of work, hours worked, breaks, and other employer requirements. These laws ensure that the safety and well-being of young workers are protected during their employment.
• Kentucky Equal Pay Law: This law prohibits wage discrimination based solely on sex. Wage differences are only considered acceptable if they are based on assessing seniority or merit, but not on gender.

Severance pay, a kind of financial compensation offered by employers to departing employees, plays a fundamental role in supporting individuals during their job transition phase and in their pursuit of new job opportunities. The precise amount is usually calculated according to the employee’s tenure with the company, often corresponding to one week’s pay for each year served.

While they serve as a valuable job perk, there are no state or federal laws that mandate the provision of severance pay to employees. Instead, it is determined by mutual agreement between the employer and the employee. Therefore, the provision of severance pay lies entirely at the discretion of the employer, with the terms specified in the employment contract or collective bargaining agreement. Furthermore, the contractual terms regarding severance pay may vary from one employer to another.