Tag Archives: FLSA

Drugs, Talent, and the Law: Confusion Reigns in 2017

(A post by Rick Dacri, January 5, 2017)

img_3347Some days it feels like you just can’t win. Our 4 year old (puppy?) golden retriever, Bailey, woke us up with his usual pre-5 AM whimper, reminding us that his stomach and other urges needed to be met. Our cat, Maggie, also decided to join the choir. It was raining, so we passed on the walk and let Bailey out into his pen. Mistake! You see, rain makes mud, which means Bailey’s earlier $60 spa treatment was now for naught. Spending your early, pre-coffee morning, cleaning up a muddy dog, and house, was not in the plan. Finally, semi-cleaned, it was time to sit and enjoy a nice cup of coffee—that is until Bailey decided to join me on my lap and the coffee was now airborne. And the day had not yet even begun.

Many employers are feeling the same way. Finding and keeping talent, post election uncertainties, opioids in the workplace are all flying at you, preventing you from running your business. And it isn’t likely to get any easier.

Here are just 4 huge issues you will be facing in 2017.

  1. Opioids epidemic: Drugs on the streets means drugs in the workplace. More employees are coming to work addicted. And many are using hard drugs. Yesterday’s street junkies are today’s nurses and executives. While this may shock you, our society is openly welcoming the legalization of medical marijuana and now recreational marijuana. Society’s drug problem is only going to get worse and now it is your problem to solve.
  2. Losing good people: Poaching is now an acceptable sport. Good people are leaving and heading to your competition. And it is just not the rank and file. Managers and executives are going just as fast. Why? 3%-4% merit just doesn’t it cut it anymore. Limited opportunities, I’m out of here; bad boss, well, you can “take this job and shove it.” When all employers are scrambling for help, employees look for greener pastures. Loyalty is dead.
  3. Hiring is impossible: Finding good talent is becoming harder and harder. And with experienced workers retiring out, shortages are growing. The numbers are just not working. It is going to get bad…very bad.
  4. Employment law chaos: You heard it (by me and others), the Fair Labor Standards Act updates are going to radically change how you need to pay your people, so get your systems updated before the implementation date. Ready? Never mind, it’s now on hold and may be permanently delayed. What? How in the world do you get that Jeanie back in the bottle? Finally figured out Obamacare? Hold! The new Congress and Administration are going to scrap it and start all over again—at least that’s what they claim. Your state has legalized medical marijuana or maybe even recreational use of marijuana. How do you handle that? Wait, the feds still say its illegal. Your state has just passed an increase in minimum wage, but you’re a multi-state employer and each state has a different rate…and the feds have a totally different one. Yikes! What can you do? Best bet, become an employment attorney, as you’ll have plenty of work. In the mean time, you’ll need to do some juggling to figure these out.

It is going to be a challenging 2017 and frankly, I could have addressed several other issues. While it seems to be going from bad to worse, as an employer, you need to address these issues and find solutions…and fast.

Let’s take a deep breath first. I’ve got to give Bailey a bath, but I need another coffee first. Maybe you should join me.

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New White Collar Federal Regulations Blocked

(Post by Rick Dacri, November 28, 2016)

Time to take a deep breadth.no-sign

By now you know that a federal judge in Texas has put on hold the implementation of the changes to the Fair Labor Standards Act. The law, with a scheduled December 1 effective date, would have increased the salary level to qualify for overtime, virtually doubling the existing rate to $913 per week.

The overtime rate (“means test”) needed adjusting, but the Department of Labor’s proposal was excessive, so a hold is a good thing, albeit a bit last-minute. If Labor had asked me (they didn’t) I would have suggested a modest adjustment, along with a closer look at modifying the “duties test,” which many employers do not fully understand. It was the biggest area of misunderstanding from employers who called into my HR HelpLine.

Now that the law is on hold, what should employers do? Unfortunately, since the enforcement was enjoined at the last minute, most employers have either put the changes in place or at least announced the changes. And, Labor is likely to appeal the ruling, so an implementation of the law may still happen. So, here is what I suggest:

  1. If in the course of your review you found positions that did not meet the duties test, implement those changes.
  2. If you have not put in place compensation changes based on the new means test (raised salaries to meet the threshold and/or reclassified positions), you may want to put these on hold until we get clarity on Labor’s next move. Keep in mind, if you announced the changes, you will need to address the employee’s potential expectations.
  3. If you implemented salary changes and reclassified employees, it would be hard to pull these back. Besides it being an employee relations nightmare to do so and because you could still be in violation of some state laws, if the law is finally implemented, it could requires restoring them again.
  4. Communicate your plans to your employees. They may not know that the law is on hold and clearly do not know your plans. Be open and frank.

Employers have been put into a box with these actions. Consider what I have suggested above and put together your new plan. You may also want to seek professional legal guidance before you take any action.

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Filed under Department of Labor, FLSA, Management

Final Overtime Rules for Private & Public Sector Employers

 

Unknown(Post by Rick Dacri, June 1, 2016)

The Department of Labor’s (U.S. DOL) changes to overtime eligibility have been approved and are scheduled for a December 1, 2016 implementation. The waiting is over and all employers need to immediately prepare. No one will be able to avoid this.

I have outlined below a summary of the changes that apply to both private and public sector employees. Remember, this is a summary and does not constitute a complete review of all the changes to the rules nor should it be considered legal advice.

The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:

  1. Sets the salary threshold under which employees would be nonexempt—required to receive overtime pay (regular hourly rate x 1.5 for all hours worked beyond 40 hours per week) at $913 per week or $47,476 annually for a full-year worker, more than doubling the salary threshold from the current level of $23,660.
  2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test, to $134,004; and
  3. Establishes a mechanism for automatically updating the salary and compensation levels every three years.
  4. Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

Earning above the $47,476 annual ($913 per week) salary level do not automatically classify an employee as exempt from mandatory overtime pay, as the duties test still comes into play.

This is a significant change to the law and all employers should review their plans now, before the December 1, 2016 implementation. Don’t wait, as changes will be complex and contain plenty of pitfalls.

To avoid problems with existing exempt workers currently being paid less than the new threshold, your options include:

  1. Reclassify affected workers as nonexempt, or
  2. Increase the employees’ salaries to at least $47,476, or
  3. Reduce the hours of these workers, or
  4. Pay a lower hourly rate so that, when multiplied by time-and-one half, weekly compensation remains unchanged

As I have noted in previous posts, none of these steps are ideal and are likely to result in employee relation issues and increased payroll costs. To make matters worse, the DOL has stepped up enforcement, expecting to dole of the law out fines, attorney fees and back pay for violations.

Rules for State and Local Governments:

The FLSA contains several provisions unique to state and local governments, including compensatory time off, under certain provisions.

  • Comp Time: State or local government agencies may arrange for their employees to earn comp time instead of cash payment for overtime hours.
  • Fire and police small-agency exemption: The FLSA also provides an exemption from overtime protection for fire protection or law enforcement employees, if they are employed by an agency that employs fewer than five fire protection or law enforcement employees, respectively.
  • Work periods rather than workweeks for fire protection or law enforcement employees: Employees engaged in fire protections or law enforcement may be paid overtime on a “work week period” basis, rather than the usual 40-hour work week of the FLSA.

Not Affected by Changes:

Many employees won’t be affected by the final rule:

  1. Hourly workers: The new threshold will have no impact on the pay of workers paid hourly.
  2. Workers with regular workweeks of 40 or fewer hours: To the extent that many salaried white-collar staff have jobs where they work no more than 40 hours, the changes to the overtime rules will have no effect on their pay.
  3. Law enforcement and fire protection employees who regularly work hours that conform to the longer work periods permitted for such employees, the changes will also not impact their pay.
  4. Workers who fail the duties test: Salaried workers who do not primarily perform executive, administrative, or professional duties are not eligible for the white-collar overtime exemption and therefore are not affected by the final rule.
  5. Highly compensated workers: White collar workers who fail the standard duties test but are “highly compensated”—earn more than $134,004 in a year—are almost all ineligible for overtime under the highly compensated employee exemption, which has a minimal duties test.
  6. Police and fire employees in small agencies: Fire protection or law enforcement employees in public agencies with fewer than five fire protection or law enforcement employees respectively will continue to be exempt from overtime.
  7. Elected officials, their policymaking appointees, and their personal staff and legal advisors who are not subject to civil service laws
  8. Public employees who have a comp time arrangement

To avoid problems and lawsuits:

  • Audit your compensation program and pay practices for compliance
  • Review the classification of all exempt workers, particularly those being paid under $47,476
  • Put in place a safe harbor policy, which states that if an employee feels he/she has been incorrectly paid, to bring it to your attention for review.

Develop a plan now to implement before the December 1 deadline. If you have questions, contact the Dacri HR HelpLine.

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Filed under Compliance, Uncategorized

Exempt? Nonexempt? What’s it mean?

I am regularly asked the difference between exempt and nonexempt and whether that means the same as classifying someone as salaried or hourly. In this 3 minute video, I explain how to properly pay and classify your workers. I will explain when someone should be classified exempt, nonexempt, salaried or hourly and how to conduct the Fair Pay Test required under the Fair Labor Standards Act (FLSA).

 

Other posts that might interest you:

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Filed under Compensation, Compliance, Uncategorized

2016 Compensation Trends (Webinar)

 

(Webinar by Rick Dacri, November 12, 2016)

payI recently lead a webinar focusing on compensation trends, what we can expect to see for pay raises in 2016, the expected doubling of the minimum salary for exempt employees in 2016, and how to eliminate some costly wage & hour violations.

If you would like to hear or part of this 57 minute webinar, click Dacri Compensation Webinar.

Let me know what you think in the comment section below and let me know what percentage increase for pay raises your company expects to give in 2016.

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Filed under Compensation, Compliance, Uncategorized

Pay Increases & Trends for 2016

pay(Post by Rick Dacri, November 2, 2015)

Pay increases for 2016 are expected to remain at 3%, the same as 2015 and up from 2014’s 2.5%. Exceptional performers are likely to enjoy increases in the 4.5% range.

Regionally, wages should be higher in the Northeast. Critical, hard to find and retain positions, such as electric and software engineers, line workers, nurses and IT will demand and get more.

Employers continue to find it difficult to recognize and motivate workers with merit budgets of only 3%. It is nearly impossible to differentiate between good and average performers with so little money. As a result, more are turning to annual short term incentive plans. These plans can quickly put cash in worthy employee’s pockets and not impact base wages. Employers are also putting more dollars into benefits, particularly into supplemental retirement plans for “older” workers.

In addition to compensation, companies are relying upon non-monetary rewards including career development, education and more exciting and challenging work assignments.

If you would like to explore options for your company, call me at 207-229-5954 or rick@dacri.com.

Other posts you may like:

  1. Compensation Trends & Pitfalls (Webinar)
  2. Overtime Eligibility to Double: Prepare for Changes
  3. FLSA: Record Keeping Requirements

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Filed under Compensation, Compliance

Compensation Trends & Pitfalls What You Must Know and Do (Webinar)

images-2Proposed changes in the Department of Labor overtime rules will force you to make significant changes to your pay and benefit structure; a changing economic market is driving wages upward; and an increasing number of wage and hour lawsuits has all put compensation at center stage.

In this one-hour webinar, scheduled for November 12th at 2PM, Rick Dacri will show where wages are going in 2016; how to prepare for the 2016 proposed changes to the overtime rules; and how to avoid the most common wage and hour violations.

This webinar is designed for all executives, managers, supervisors and HR professionals—anyone who supervises staff.

In this 60-minute webinar, you will learn:

  • What the expected pay increases will be in 2016
  • What will be the important 2016 compensation trends you should know
  • How to remain competitive when new hires are driving pay upward
  • Strategies to address the proposed doubling of the overtime minimum
  • A definitive way to differentiate between a salary and hourly position
  • Understanding if you must pay someone who does work on his or her time
  • Knowing when you can deduct pay from a salaried worker
  • Methods to correct mistakes in employee’s pay
  • Pay requirements when employees work through lunch, at home, or before the start of a shift
  • Avoiding mistakes in paying Independent Contractors
  • Whether you can prevent employees from discussing their pay

These are just some of the things we will cover in this packed webinar. In addition, by attending, you will also receive a copy of the PowerPoint slides and 3 white papers (Understanding Exempt Status under the FLSA; FLSA Fair Pay Questionnaire; and Improper Deductions of salaried workers).

The entire program is just $125 (my clients will receive a complimentary pass). To enroll, simply email (rick@dacri.com) or call me (207-229-5954). It’s that easy. I’ll take your information and you can send me a check.

Got questions? Give me a call and I’ll give you an answer.

Sound good. Then sign up now…and tell your colleagues too!

You may want to read:

Compensation Trends and Pitfalls: What You Must Know and Do

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Filed under Compensation