Most businesses focus on taking care of their people in a number of ways, from offering competitive wages, to providing perks and benefits, to building a workplace culture where people feel supported. One way people can feel supported is knowing that they can look forward to a couple of breaks during their shift. Managing Breaks […]
Read More >Exempt Misclassification
- nettime solutions staff
Caught Between a Rock and a Hard Place
In order to survive the recent recessionary earthquake, some organizations felt they needed to use creative ways to reduce fiscal outflow. One such practice that fell afoul of government regulators looking out for the welfare of the American worker, was paying employees fixed salaries for all hours worked.
Known as misclassification, paying employees salaries instead of hourly wages helped companies sidestep the overtime requirements of the Fair Labor Standards Act (FLSA) and other labor laws.
Businesses caught using this practice have incurred significant financial costs in the form of back wages, taxes, various worker protections premiums, damages and fees.
Some employers assumed that paying a salary required not the payment of overtime, but job titles and salary alone do not determine exempt status.
Salaried exempt positions have stringent guidelines that usually revolve around the primary duties of the position, management and hiring responsibilities as well as the exercise of discretion and independent judgment.
To help employers understand the requirements of the law, the US Department of Labor has Fact Sheets on their web site that outline the criteria of positions that are exempt from the overtime requirements of the FLSA.
