Happy New Year, readers. Here’s one resolution that you can easily keep—to audit your exemptions and pay practices (before the feds make good on their resolution to do it for you).
If yours is like most organizations, you’ll get the biggest bang for your New Year’s buck with an FLSA audit. The astounding amounts of recent settlements and judgments, boosted into the stratosphere by class actions, doubled damages, and other penalties, tell the story.
And, yes, the feds have made their New Year’s plans—they are out to get you for wage and hour violations. Here, to get you started, are some of the jobs that the feds think are exempt (E) or nonexempt (NE) and their comments.
Note that these E/NE classifications are not set in stone, but they are a good starting point for your analysis. (Taken from BLR’s FLSA Wage & Hour Self-Audit Guide.)
Examiner or grader—NE. Such as an employee that grades lumber, because the employee usually performs work involving the comparison of products with established standards that are frequently catalogued.
Executive assistant—E. If working for a business owner or senior executive of a large business if the employee, without specific instructions or prescribed procedures, and has been delegated authority regarding matters of significance.
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Secretary—NE.
Human resources manager—E. Assuming this person formulates, interprets, or implements employment policies.
Personnel clerk—NE. This person “screens” applicants to obtain data regarding their minimum qualifications and fitness for employment.
Purchasing agent—E. If the job includes the authority to bind the company on significant purchases, even if the employee must consult with top management officials for certain purchase commitments.
Comparison shopper for a retail store—NE. If the employee merely reports to the buyer the prices at a competitor’s store.
Certified public accountant—E. And many other accountants who are not certified public accountants but perform similar job duties.
Accounting clerk/bookkeeper—NE. As well as other employees who normally perform a great deal of routine work.
Paralegal—NE. Because an advanced specialized academic degree is not a standard prerequisite for entry into the field.
Driver who sells—E. If the employee has a primary duty of making sales, all work performed incidental to and in conjunction with the employee’s own sales efforts, including loading, driving, or delivering products, is exempt work.
See any conflicts with your classifications?
Exempt/nonexempt classification is tricky. Unfortunately, it’s not the only tricky challenge in wage and hour. For example, how independent are the “contractors” who work for you? And how about your “volunteers”? Are they really employees? Is anyone working unpaid hours? Let’s ask the question a different way—how many FLSA violations exist at your workplace?
Bottom Line: Audit Before THEY Do
“They” in this case might be the feds, lawyers, or even bankers deciding you don’t get that needed loan because improperly classified workers represent a huge potential liability.
In fact, experts say that it’s always better to do your own audit, and fix what needs fixing, before authorities order you to do so. And most employers would agree but they then get bogged down in how to start, and in the end, they do nothing. There are, however, aids to making FLSA self-auditing relatively easy.
One that our editors strongly recommend is BLR’s FLSA Wage & Hour Self-Audit Guide. It is both effective and easy to use—and it even won a publishing award in that regard. Here’s what customers like about it:
—Plain English. Drawing on 30 years of experience in creating plain-English compliance guides, our editors have translated the FLSA’s endless legalese into understandable terms.
—Step-by-Step Checklists. The book opens with a clear narrative of what FLSA is all about. That’s followed by a series of checklists that utilize a simple question/answer pattern about employee duties to find the appropriate classification.
Get all the checklists you need to avoid exempt/nonexempt classification and overtime payment errors. They’re in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Try it for 30 days.
—Complete. Many self-audit programs focus on determining exempt/nonexempt status. BLR’s also adds checklists on your policies and procedures, and includes an examination of such practices as whether your break time and travel time are properly accounted for. Nothing falls through the cracks because the cracks are covered.
—Convenient. Our personal favorite feature: A list of common job titles marked “E” or “NE” for exempt/nonexempt status. It’s a huge work-saver.
—Up to Date. If you are using an old self-auditing program, you could be in for trouble. Substantial revisions in the FLSA went into effect in 2004. Anything written before that date is probably hopelessly—and expensively—obsolete. BLR’s FLSA Wage & Hour Self-Audit Guide includes all the changes.
You can examine the BLR FLSA Wage & Hour Self-Audit Guide for up to 30 days at no cost or obligation. Go here and we’ll be glad to arrange it.