This special report by Business Management Daily, publisher of The HR Specialist and HR Specialist: Employment Law, will help you review your overtime pay policy and double-check your FLSA exempt employees’ status.
For years, the DOL has continued to issue a somber report card on employers for violating the FLSA’s wage-and-hour rules. The top mistake for employers—and the most costly one—is wrongly labeling employees as exempt from overtime pay, according to the DOL.
For employers, the stakes are high. Employees misclassified as exempt can be eligible for two years’ worth of back wages (three if the violation was “willful”) at 1.5 times the hourly rate, plus liquidated damages equal to the unpaid wages. That means employees can collect up to three times their regular rate of pay.
How can you avoid becoming another target of an employee lawsuit or a DOL audit? The key is to regularly audit your workforce classifications and job descriptions to ensure you’re correctly classifying employees as exempt under the current overtime rules. Use this special report, Overtime Labor Law, as your blueprint to do just that.
Editor's Note: For more essential information to help your organization properly classify employees, visit Exempt vs. non-exempt: FAQs.
OVERTIME LABOR LAW: FLSA COMPLIANCE TIP #1
Determining Exempt vs. Nonexempt Status
When a new hire comes on board, you must determine whether to classify him or her as exempt or nonexempt under the FLSA.
Generally, two requirements must be met before you can classify someone as exempt:
- You pay the worker on a salary basis.
- The worker holds a position with certain duties designated by the DOL as appropriate for exempt status. These positions include executive, administrative, professional, computer and outside sales as well as some highly compensated workers.