Is the CEO owed overtime? Absolutely, says attorney Phillip Russell. Every employee must be paid overtime unless he or she falls into one of the exemption classifications. While it is hard to imagine a non-exempt CEO, Russell was making the important
point that job title alone does not determine whether an employee is exempt.
Russell is a member of the Tampa, Florida, office of national employment law firm Constangy, Brooks & Smith, LLP. He made his remarks at BLR’s Second Annual National Employment Law Update, held last week in Las Vegas, Nevada. (Next year’s Employment Law Update will be held October 21–23, 2009, in Las Vegas.)
Common Wage and Hour Misconceptions
Here are more common misconceptions Russell hears often:
“Everyone in the office is exempt and on a salary basis.” That’s just not likely, says Russell. Remember that titles don’t mean anything. If you’ve got 12 people in an office, someone is nonexempt.
“We don’t have to pay overtime because we pay salaries.” Again, this will not fly. Unless the people are exempt based on one of the exemption categories, they are owed overtime.
“Our system automatically deducts for meal breaks.” Many employers let their timekeeping systems automatically deduct for breaks or meal times. This is dangerous, says Russell. Invariably, your system will deduct time that the person is working.
“We don’t have to pay overtime as long as people only work 80 hours in a 2-week period.” No, says Russell, don’t try that one. The law requires overtime to be calculated on a weekly basis. So if that 80 hours divides 30 hours one week and 50 hours the next, you owe 10 hours of overtime for the second week.
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“Our construction estimator is exempt.” Many jobs sound as though they might qualify for the administrative exemption, but don’t. Take, for example, construction estimators, controllers, and customer service reps. If their jobs are routine, just plugging numbers into a spreadsheet or reading answers off a prepared script, they are probably nonexempt, Russell says.
However, working supervisors, such as call center managers, nursing home supervisors, and foremen, may qualify for exemption if they are part of the decision-making process, if they decide when they switch to performing nonexempt duties, and if they remain responsible for the success or failure of business operations.
“Our telecommuting sales people qualify for the ‘outside sales’ exemption.” To get the outside sales exemption, an employee needs to be on the road, Russell says. He saw an ad that read “Inside sales, $30,000 annually.” “I don’t think so,” said Russell. For inside sales, there’s no exemption; it’s probably hourly work with overtime required.
Pay close attention to wage and hour issues, says Russell. If you don’t, you’ll be calling him for help in defending against the inevitable suits and charges.
To avoid that call, there’s only one option—you’ve got to audit and find problems before they get serious. You need audit checklists, and there’s good news—BLR’s editors have written them—not just for wage and hour, but for all the challenging areas of HR.
Why Checklists?
Why are checklists so great? Because they’re completely impersonal, and they force you to jump through all the necessary hoops, one by one. They also assure consistency in how operations are conducted. And that’s vital in HR, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.
The program the editors recommend is BLR’s HR Audit Checklists.
Just as an example of how it compels thoroughness, it contains not one, but three checklists relating to recordkeeping and digital information management. One lists 34 types of data and also covers confidentiality, emergency planning, efficiency, compliance with laws, and safety. You’d likely never think of all those possible trouble areas without a checklist, but with it, just scan down the list and you instantly see where you might get tripped up.
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In fact, housed in the HR Audit Checklists binder are dozens of extensive lists organized into reproducible packets for easy distribution to line managers and supervisors. There’s a separate packet for each of the following areas:
- HR Administration (including communications, handbook content, and recordkeeping)
- Health and Safety (including OSHA responsibilities)
- Benefits and Leave (including health cost containment, COBRA, FMLA, workers’ compensation, and several areas of leave)
- Compensation (payroll and the Fair Labor Standards Act)
- Staffing and Training (incorporating Equal Employment Opportunity in recruiting and hiring, including immigration issues)
- Performance and Termination (appraisals, discipline, and termination)
HR Audit Checklists is available for a no-cost, no-risk evaluation in your office for up to 30 days. Visit here and we’ll be happy to arrange it.