The Fair Labor Standards Act (FLSA) and Department of Labor (DOL) regulations require employers to track all hours worked so employees can be paid for all the time they spend working. That's especially true for hourly employees.
But what about tracking hours for so-called exempt employees who aren't eligible for overtime pay for hours worked over 40 per week?
Your best bet is to track their hours, too. That's true even if they work from home, are on the road or otherwise don't show up in an office to punch a time clock.
That's because if an exempt employee challenges the exemption and sues, and if you can't produce time records, the court will look to the employee's records. Don't leave yourself defenseless. Track hours even for employees you consider exempt.
Businesses of ALL shapes and sizes are being forced to pay out big bucks for misclassifying employees and failing to pay proper overtime. Is your company vulnerable?
Recent case: Greg worked as a field service engineer for six years. His employer classified Greg and other field engineers as exempt employees.
Greg's job was to install and service three-dimensional printers. He worked independently from his home and was on duty during the week waiting for assignments. When a client requested installation or servicing, a supervisor would inform Greg, who would travel to the client's location and install or service a printer. Greg did not receive overtime if he worked more than 40 hours in any given week.
Greg sent an email to co-workers, complaining that the company expected the field engineers to work long hours without overtime pay. When the company got wind of the email, it fired Greg for violating its electronic communications policies.
Greg sued, alleging he was due overtime pay because he wasn't properly classified.
The biggest overhaul of overtime law in U.S. history is coming in just a few weeks. The changes call for a DOUBLING of the salary threshold, making white-collar workers eligible for overtime pay if their salary falls below $47,476 per year ($913 per week).
Don't get caught in the DOL's regulation changes and growing enforcement net! On Wednesday, November 16, find out if you're at risk — and what to do about it — in our newest webinar Wage & Hour Law 2016 & 2017: Employee Classification Workshop & New Overtime Rules.
Because his company didn't track his hours, he testified about what he called a typical day. He said he "typically" worked two to three hours doing preparation work, and "typically" spent three to four hours traveling to locations daily. He also claimed he "typically" spent four to five hours in the evening driving to client sites or nearby hotels, three to four hours at a client's site, three to four hours writing expense reports, and one to two hours arranging travel time. On top of that, he said he "typically" spent two to three hours each weekend on administrative work.
All told, Greg testified that he "typically" worked 62 to 70 hours a week the entire time he worked for the company.
The court said it didn't need to decide whether Greg was misclassified because it was clear that Greg didn't have any detailed records to show how many hours he had worked in any specific week. Using a "typical" week simply wasn't specific enough. The case was dismissed. (Holaway v. Stratasys, No. 14-1146, 8th Cir., 2014)
Final note: The employer lucked out in this case. The DOL now offers a smartphone app designed to help employees keep track of their time and thus be in a good position to challenge time records. The app is currently only available for iPhones, though an Android version is due out soon. It will track every minute worked and even calculate how much the overtime check should be.
The number of FLSA-related lawsuits in federal courts has spiked dramatically in the past decade. If you're like most employers, your payroll is strewn with misclassified employees — ticking time bombs that could cost you a fortune. And the Obama administration's Department of Labor is cracking down harder than ever on overtime law violations.
The upcoming spike in the salary threshold will force every company to make hard choices. How should you adjust schedules and hours to minimize the impact? Should you convert exempt into hourly workers? Raise base salaries now? Hire part-timers? Use bonuses?
On November 16, Anniken Davenport, Esq., who literally wrote the book on wage-and-hour compliance, will offer practical, step-by-step FLSA compliance advice. Learn how to master the ins and outs of this complex law. You'll discover: - How to correctly classify employees as either nonexempt (eligible for overtime) or exempt (not eligible). We will provide you with checklists to make the Exempt vs. Nonexempt decision under both the current and proposed rules.
- The details and timeline of President Obama's big overtime changes — and how your organization should respond now.
- Why allowing exempt employees to take on extra work can be dangerous.
How to restructure your incentive bonus payments to take advantage of the new 10% credit toward exempt workers' salaries.- Why the new OT rules should make you reconsider telecommuting for employees.
- Special circumstances when you must pay hourly workers for travel time, on-call hours, meal breaks and training periods.
- How to control after-hours work in the era of email, smartphones and PDAs.
- When the law allows you to dock the pay of salaried employees.
- The single most effective way to discipline employees who work unauthorized overtime.
- What to do if you've been misclassifying employees as exempt and need to fix the problem before DOL knocks on the door.
- What may soon require you to rethink using independent contractors.
Plus, this interactive webinar allows you to have your question about overtime and the FLSA answered by a true expert, attorney Anniken Davenport.
Please join us at this empowering event — so you can find (and defuse) your payroll mistakes before they trigger a lawsuit or Department of Labor investigation. Register now!
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