(Webinar by Rick Dacri, November 12, 2016)
I 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.
(This post was written by Rick Dacri, March 15, 2014)
President Obama directed the U.S. Department of Labor to update the Fair Labor Standards Act (FLSA) to require employers to pay more of their salaried employees overtime. As you may know, under FLSA, employers must pay non-exempt employees (hourly) overtime pay at a rate of one and a half their regular rate of pay for hours worked in excess of 40. Exempt workers (usually salaried) are “exempt” from the overtime pay requirements as long as the individuals are employed in a bona fide executive, administrative, professional, or outside sales force capacity. To qualify for this exemption, the employee must be paid at least $455 per week or $23,660 per year and meet certain other requirements under the FLSA.
The President wants to significantly raise this pay threshold, making many exempt workers non-exempt and requiring employers to now pay them overtime.
While it is estimated that it will take the Department of Labor at least a year to finalize any changes, it is a good idea to begin reviewing all your exempt positions now. Positions should be “tested” to ensure they meet the current means test (paid at least $455 per week) and qualify under the duties test. This latter test is complicated, but that should not deter you. The penalties for misclassifications are significant.
If you need some assistance in testing your exempt positions, give me a call at 207-967-0837 or email me at firstname.lastname@example.org.
Posted by Rick Dacri, August 5, 2013
This question came in from one of my HR HelpLine clients.
Question: I have a salaried exempt employee who has lost time due to illness. Are deductions from pay allowed for absences due to sickness or disability?
Advice: Yes. Under the federal Fair Labor Standards Act (FLSA) employers may deduct from pay for full-day absences due to sickness or disability, but only “in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.” The same rule applies “if salary replacement benefits are provided under a state disability insurance law or under a state workers’ compensation law.” If there is no such plan or practice, employers cannot deduct for sickness absences. No pay is required for any workweek in which the employee performs no work. Employers also may deduct for full-day sick or disability-related absences for employees who are not yet eligible for the salary replacement plan or practice or who have exhausted their available leave.
If you would like to learn more about Dacri’s HR HelpLine service, where you can get all your workforce questions answered, click HR HelpLine.
Other posts you may want to read:
- Interns: Employers Obligation T0 Pay
- Off the Clock: Must I Pay?
- Employee Classifications: When Must you Pay Overtime?
Wal-Mart has agreed to pay $4.8 million in back pay and damages after the U.S. Department of Labor (DOL) found that the company failed to pay overtime to more than 4500 workers. Labor claimed Wal-Mart improperly classified security guards and some eye care managers as exempt and therefore did not have to pay them overtime. The Department of Labor disagreed and stated that these workers were nonexempt under the Fair Labor Standards Act (FLSA) and should have been paid overtime for all hours worked in excess of 40.
You may be thinking that you’re not Wal-Mart and therefore have nothing to be concerned about. Unfortunately, you’d be wrong. Misclassification of workers is a very common mistake made by employers and the DOL has been clamping down on these, handing out heavy damages.
So what’s the difference between exempt and nonexempt and is this the same thing as classify a worker either hourly and salaried? The federal Fair Labor Standards Act (FLSA) identifies three categories of employees: Hourly, Salaried Nonexempt, and Exempt. Hourly employees receive an hourly wage for all hours worked and time-and-one-half for all hours worked in excess of 40 per week. Salaried Nonexempt employees are paid a weekly salary for a set number of hours, but also receive time-and-one-half for all hours worked in excess of 40 per week. Exempt employees are paid a salary of at least $455 per week or $23,660 per year and must meet one of five FLSA testing guidelines. The tests are categorized for workers who are administrative, professional, executive, computer-related, or outside salespersons as stated by the FLSA. If the position meets the respective requirements as an exempt employee, then they are not entitled to overtime, regardless of hours worked. If they do not meet the guideline, then they are nonexempt and must be paid overtime for all hours worked in excess of 40. The law also contains a “highly compensated employee” exemption and rules for deductions of pay to exempt employees for absences.
The tests are very complex.
So unless an employee meets these strict testing requirements, the position should be classified as nonexempt and the employee should be paid overtime for all hours worked over 40.
If you have any questions on how to properly classify your workers, give me a call.
Dacri & Associates, LLC