You are a growing company, in the past your salaried employees were used to working all kinds of hours, but getting paid the same amount each month. In some instances that took their average hourly pay to down below minimum wage. While that may have simply been the symptoms of a growing business for some companies, for others, who should have been compensating their employees for all of those extra hours, they got away with something that perhaps they shouldn’t have.
Recently, the Department of Labor, DOL has issued new guidelines detailing who is exempt from receiving compensation for more hours worked, and who is not:
“Four Suggestions to Enhance Your Compliance Efforts
- Review employee classifications regularly to make sure they’re compliant with FLSA. Non-exempt employees have the right to receive overtime pay when they work more than 40 hours per week, while exempt employees typically do not. Under the current overtime rules, employees can be classified as exempt if (1) they make over $23,660 annually, (2) they are paid on a salary basis, (3) their duties are executive, administrative or professional. Of course, when the proposed modifications to the FLSA overtime rules take effect, the exemption threshold would jump to $50,440 and the “duties test” may or may not change.
- Implement an automated system to track employee time, and develop strict policies to support compliance. You may want to combine strong technology and clear, consistent communication in order to help optimize your ongoing overtime compliance efforts. Sophisticated, effective time-tracking software is readily available. But be clear with employees about time-related policies. For example, tell them working off the clock is strictly prohibited and must be reported to management.
- Consider rounding your practices. The best practice is track employees’ time to the minute and pay employees accordingly. If employers decide to round time, they should keep in mind that employees often work odd amounts of time. Employers could choose to round time based on five-, 10-, or 15-minute increments, for example. If you only round time down but not up, it could be detrimental to the employee. The DOL allows rounding because they assume that it will balance out in the end, favoring neither employers nor employees. So if you use rounding, to ensure that its neutral in its application.
- Be careful about automatic time deductions for breaks and meals. The best practice is for employees to clock in and out for any break (rest or meal) that is 20 minutes or longer. If an employee works through her meal break, but you automatically deduct that time, you may find yourself subject to a claim for a missed meal period or an overtime claim. Even if the employee doesn’t tell you she’s working through lunch break, the DOL deems you liable to compensate the employee. Inform employees that they must take their rest and meal breaks timely. Ensure that employees know that if they feel they absolutely must work through a break, they must communicate that to a supervisor ahead of time.”
At Complete Employee Solutions we have time sheet software that can help track the hours your employees have worked. This will help you to manage employee work hours, and to stay in compliance with the new DOL regulations.