0818On Decem­ber 1, 2016, the Depart­ment of Labor (DOL) will imple­ment changes rais­ing the min­i­mum com­pen­sa­tion for exempt employ­ees to $47,476 annu­al­ly. While salary is just half of a two-part equa­tion that includes a duties test of essen­tial job func­tions, scruti­ny is under way to ana­lyze com­pen­sa­tion and find solu­tions to avoid con­flict with the new rule. Many employ­ers are ask­ing: Why not just have all employ­ees work 40 hours and get approval for overtime?

The statu­to­ry def­i­n­i­tion of “employ” is “to suf­fer or per­mit to work.” The phrase “suf­fer or per­mit” to work does not mean “approve.” Hence, any time a nonex­empt employ­ee works, the employ­ee must be com­pen­sat­ed. A nonex­empt employ­ee can­not vol­un­teer to work off the clock, so activ­i­ties as innocu­ous as an employ­ee arriv­ing ear­ly and just start­ing their day become prob­lem­at­ic. Com­mon advice is to issue pro­gres­sive dis­ci­pline for employ­ees who work unap­proved over­time, but writ­ing up a good employ­ee for what they rea­son­ably per­ceive to be ini­tia­tive can open a new can of worms.

Employ­ers fur­ther bear the bur­den of cap­tur­ing and record­ing all time worked. Doc­u­ment­ing com­pens­able time is com­pli­cat­ed when review­ing the vari­a­tions of what con­sti­tutes work time. The non-exhaus­tive list includes:

  • Wait­ing or on-call time when it is on the employer’s premis­es (for exam­ple, wait­ing for a shift replace­ment to arrive)
  • Work-relat­ed train­ing activ­i­ties (includ­ing trav­el time if they are off-site
  • Eat­ing meals while check­ing emails or answer­ing phones
  • Work trav­el out­side of the employee’s nor­mal commute
  • Answer­ing work emails or com­plet­ing reports after work hours
  • Atten­dance at required com­pa­ny func­tions, includ­ing vol­un­teer activ­i­ties and social events

Even with a sophis­ti­cat­ed time-keep­ing sys­tem, cap­tur­ing all hours is a chal­lenge. So what are some solu­tions? View the lat­est UBA Com­pli­ance Advi­sor, “Salary Con­sid­er­a­tions under the New DOL Stan­dards,” which reviews work­able solu­tions using salary increas­es, bonus­es or incentives—as well as impor­tant con­sid­er­a­tions when pay­ing nonex­empt staff on a salary basis.

Orig­i­nal­ly pub­lished by Unit­ed Ben­e­fit Advi­sors — Read More