By the end of March, the Department of Labor is expected to release proposed rules that address the classification requirements for a professional exemption under the Fair Labor Standards Act (FLSA).
Today, unless an employee qualifies for one of few FLSA exemptions, an employee working more than a 40-hour workweek is entitled to overtime pay, which is 1.5 times an employee’s regular rate of pay, or greater in some states.
What should employers do now?
Misclassifying employees can create an administrative and financial nightmare for employers. A judgment for back pay and penalties can cost thousands, if not millions, of dollars and cause reputational damage.
Additionally, the DOL and the Obama administration have been very public in their support of tighter restrictions and enforcement on this topic. Businesses that thought they could fly under the regulatory radar might reconsider, given this renewed commitment.
There’s still time to get your house in order if your human resource practice has liberally classified employees as exempt from overtime rules. Once the proposed rules are released there are time-consuming steps that have to occur before the adoption of a final rule. There will be a period of public comment that typically lasts 30 days or more, followed by a review period. Even under accelerated conditions, it’s unlikely anything will be released before summer.
Need an independent review?
Bukaty Companies human resource professionals can help with employee classification decisions. A good starting point is to review job descriptions to determine whether duties have changed.
Employee interviews also are helpful to confirm that an employee’s view of his or her responsibilities mesh with the job description. While the latter may seem unnecessary, a DOL investigator would likely give more credence to an employee’s testimony about day-to-day activities than a written job description.
For a classification audit of some or all of your job positions, contact Shirley Lind, senior vice president of Human Resources, 913-345-0440 or slind@bukaty.com.
