HR Management & Compliance

Q&A: How Can We Safely Conduct an FLSA Compliance Audit?

By Holly Jones, JD, BLR Senior Legal Editor

Question: In preparation for the new regulations coming on December 1, we’d like to conduct a comprehensive Fair Labor Standards Act (FLSA) audit of all of our positions. We expect that some positions will be reclassified based on salary threshold, but we may also have some positions that need to be reclassified based on job duties—even though the job duties tests have not changed. We are concerned that reinterpreting exemptions based on job duties could result in misclassification liability going back 2 or 3 years. How can we minimize the potential for liability of back pay claims?

Answer: This excellent question was a hot topic of discussion during a recent BLR® FLSA Master Class led by employment attorney and FLSA expert Kara Shea.

During her presentation, Ms. Shea recommended using the upcoming deadline and FLSA changes as a catalyst to do just what this and many other employers are doing—to audit and, as necessary, reclassify positions. These realignments may be based on the upcoming salary changes or simply on a current, thorough review of the duties employees are actually performing and the amount/percentage of time spent performing those duties.

One benefit of reviewing and auditing all positions—not just those affected by the new salary minimums—is that employees are less likely to feel singled out or targeted if they understand that all positions (not just those making under the salary minimum) are being evaluated.

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