On December 1, 2016, new regulation goes into effect that will change how employers determine “White Collar” employees that are exempt from overtime, potentially making an additional 4.6 million employees eligible for overtime pay. In this 5 part mini-series, The Noble Law Firm helps employers navigate the new rule changes and offers executives strategies for remaining in compliance.
What are some strategies to avoid liability in general?
- Do not allow employees to “waive” overtime
Overtime may not be waived by agreement between the employer and employees. Likewise, an agreement that only 8 hours a day or only 40 hours a week will be counted as working time is also a violation of the FLSA.
- Do not have a “no payment policy” if employees fail to provide advance notice of OT
An employer cannot avoid its overtime pay obligations even if it has a stated policy that overtime must be authorized in advance. An employer can take disciplinary actions against an employee who violates the notice requirement but it still must pay the worker for the overtime work performed.
- Do not allow compensatory time in lieu of overtime to non-exempt employees
Although this is a popular management concept perhaps carried over from the public sector, there is no support for it under the FLSA. If a non-exempt employee works 60 hours in a work week, she is entitled to 20 hours of overtime pay and an employer cannot ask her to relinquish that pay for the “benefit” of 20 hours less of work the following week.
- Take industry standards with a grain of salt
The DOL and courts are not persuaded by the argument that this is the way “everyone else is doing it.” Employers need to accurately assess their FLSA obligations based upon the provisions of the law not common wisdom among industry groups.
- Err on the side of caution
Broadly speaking, the FLSA default is that most employees are entitled to overtime. If there is doubt, the most prudent course of action is to classify the employee as non-exempt. A wiser course would be to have an employment attorney review your classifications.
Laura Noble is Managing Partner of The Noble Law Firm. Based in Chapel Hill, NC, The Noble Law Firm provides forward-thinking and trusted counsel for employers and employees faced with complex legal employment issues.