Yesterday’s Advisor answered some quirky questions on overtime. Here are several more, plus an introduction to a wage and hour audit system that will help you spot problems before the feds do.
Do we have to pay employees who clock in early?
Is it legal for us to refuse to pay hourly employees straight time or overtime when they clock in early but don’t begin work until the normal starting time?
Employers do not have to pay employees for that time prior to the beginning of the workday if the employees have arrived at work early and have to wait until work starts. (Your company should have a specific policy on when the workday starts.)
Do we have to count profit-sharing bonuses for overtime calculation?
We pay hourly employees a profit-sharing check on a monthly basis if we meet or exceed our budget. Does the profit-sharing have to be taken into consideration in calculating overtime for hourly employees?
In this case, yes, because nondiscretionary bonuses must be included in the regular rate of pay for the purposes of overtime.
Nondiscretionary bonuses are when an employer contracts, promises, or agrees to pay the bonus to employees. These include attendance bonuses, production bonuses, bonuses to encourage employees’ quality or accuracy of work, bonuses to keep working for the employer, or bonuses that are announced to employees as an inducement to work harder.
Discretionary bonuses, on the other hand, do not have to be included when calculating overtime. Discretionary bonuses are bonuses in which the payment itself, and the amount of the payment, are at the discretion of the employer and are not made pursuant to an agreement, contract, etc., that would raise the employee’s expectation of the bonus.
Avoid classification and wage and hour violations with BLR’s easy-to-use FLSA Wage & Hour Self-Audit Guide. Try it for 30 days … on us.
Do we have to use time clocks?
Do we have to use time clocks to track our nonexempt employees’ hours worked?
The Department of Labor (DOL) allows employers to use any timekeeping method they choose. For example, you may use a time clock, have a timekeeper keep track, or tell your workers to write their own times on the records. Any timekeeping plan is acceptable, as long as it is complete and accurate.
How’s your wage and hour compliance? Any “quirky questions” about your pay practices? Are you sure your “independent contractors” are independent? Are all your “exempt employees” actually exempt? To ask the question another way, how many Fair Labor Standards Act (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 loan because improperly classified workers represent a huge potential liability.
Experts say that it’s always better to do your own audit, and fix what needs fixing, before authorities do their audit. Most employers agree, but they 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.
What our editors strongly recommend is BLR’s FLSA Wage & Hour Self-Audit Guide. It is both effective and easy to use and even won an 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 begins with a clear narrative of what the FLSA is all about. That’s followed by a series of checklists that utilize a simple question-and-answer pattern about employee duties to find the appropriate classification.
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. Find out more.
—Complete. Many self-audit programs focus on determining exempt/nonexempt status. BLR’s also adds checklists on your policies and procedures, and includes questioning 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 hopelessly—and expensively—obsolete. BLR’s FLSA Wage & Hour Self-Audit Guide includes all of the changes.
You can examine BLR’s 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.