On April 20, the U.S. Department of Labor launched a nationwide anxiety attack for HR professionals and business owners when it issued the new FairPay Rules under the Fair Labor Standards Act (FLSA). The new regulations take effect in mid-August, so you need to start preparing fast," says Ashley Kaplan, an employment-law attorney with Sunrise-based G.Neil Corp.
SUNRISE, FL (PRWEB) May 19, 2004 -– On April 20, the U.S. Department of Labor launched a nationwide anxiety attack for HR professionals and business owners when it issued the new FairPay Rules under the Fair Labor Standards Act (FLSA).
What previously had seemed a simple decision to classify an employee either exempt" or non-exempt" from the federal overtime-pay regulations was instantly changed to a bewildering jungle of new terminology, new calculations, and new risks of DOL audits and fines.
The new regulations take effect in mid-August, so you need to start preparing fast," says Ashley Kaplan, an employment-law attorney with Sunrise-based G.Neil Corp.
The Labor Department estimated a few months ago that more than half of all U.S. companies had incorrectly classified employees under the FLSA, and that was before the new rules," Kaplan said. And all it takes is one employee phone call to the DOL with an overtime complaint to start an investigation of a companys entire classification process. So, it is absolutely critical that employers begin examining their procedures now, before they face a DOL audit or a costly lawsuit."
The FairPay Rules take effect nationally 120 days from their publication in the Federal Register, which is August 23. They will affect the overtime eligibility of millions of Americans, regardless of the color of their collars, because the old definitions of exempt" and non-exempt" status are gone with the wind.
The new rules clarify what job responsibilities an employee must perform to be exempt from overtime requirements," Kaplan said. This means that employers across America will have to evaluate each employees actual job duties and wages under the regulations new criteria to determine who can be paid a salary and who must punch timecards, to ensure overtime compliance under FLSA."
Some Examples of the New Rules
Under current rules, exempt (salaried) employees are required to exercise discretion and independent judgment." This requirement was retained in the FairPay Rules; however, the discretion and judgment now must be exercised on matters of significance," Kaplan noted. In other noteworthy changes:
•The long and short tests for classifying people exempt or non-exempt was eliminated. Now it is irrelevant if an employee spends 20 percent or a majority of his or her time on non-exempt duties.
•Currently, employees who earn at least $8,060 annually can be classified as exempt if they perform certain duties or have certain responsibilities. Under FairPay, this becomes $23,660 a year ($455 a week), and people making less than that are automatically eligible for overtime.
•FairPay retains the long-standing FLSA truism that an employees title doesnt determine his or her exempt status, but it mandates that an employees specific job duties and salary must meet specified criteria or an overtime exemption cannot be granted.
•Significant alterations have been made in the factors that determine the executive, administrative, professional, computer employee, and outside sales exemptions.
•A new exemption for highly compensated employees" was created, and new rules were adopted to cover police, fire fighters, paramedics and other first responders."
Noncompliance Can Be Costly
One fact remains clear," Kaplan warned. Employers who do not thoroughly assess their procedures to ensure that their employees are classified accurately under these new FLSA rules will run some serious and potentially expensive risks, including DOL audits and even class-action lawsuits.
DOL wage-and-hour settlements have reached an all-time high," she added, with record increases in back pay settlements and jury damage awards. Employers simply cant afford not to start protecting themselves."
G.Neil has specialized in labor law compliance for more than 15 years and offers numerous products to help business owners and managers comply with the new FLSA FairPay Rules. These include the companys new FLSA Compliance Kit and attorney-developed ComplyWare® FLSA Software.
The company also has retained veteran attorney Christopher D. Robinson, Esq., an FLSA expert with the national law firm of Fisher & Phillips, to conduct an online interactive seminar on June 2 to explain the new rules and answer participants questions. For details on the seminar or more information about the FLSA compliance products, call toll-free 1-800-999-9111 or visit www.gneil.com.
Based in suburban Fort Lauderdale, Fla., privately held G.Neil Corp. develops and markets more than 7,000 tools to manage and motivate people" to over 1 million customers worldwide. It specializes in products that help employers manage everyday workplace issues, products that include HR forms and software, pre-employment and substance testing, workplace safety solutions, and labor law compliance posters.
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