As the Minnesota State Fair is here with everything “on a stick”, and the Renaissance Festival is back to jousting…it is signaling the end of summer, and beginning of a new school year – or in our case – a new FLSA year. The December 1, 2016 deadline is just three months away; similar to school, it’ll be here before you know it. What can (and should) employers being doing now to prepare? Get your house in order…you only get one take on this!
Be sure all your positions have job descriptions. This is good not only to analyze the exemption status, but also if a reasonable accommodation is requested in the future. Without such, an employee has more room to argue what the essential functions are (“I never have to lift more than 30 pounds!” Or, “I never have to work weekends!”). Also, if there are discipline issues, it is helpful to support what their job duties are (of course, it should always include something along the lines of “and any and all other duties as assigned” – and don’t forget the at-will language: “nothing in this job description changes the at-will nature of your employment”). Simply, job descriptions are essential to ensure everyone is on the same page for expectations.
Be sure your employee handbook is up to date. Some employers will detail what positions are paid overtime in their employee handbook (or policies), others will define “full time” or “exempt” and the like. You don’t want to be caught with discrepancies. For example, your handbook may define a “non-exempt” employee as an “hourly” employee. Yet, I know you know, that a non-exempt employee may be a salaried employee, and still receive overtime. I have seen handbook definitions such as this create much confusion in the past. Save yourself the headache and review/update your handbook!
Be sure your employees are properly classified. Easier said than done, right?! Well, all too true (if it were easy, nobody would read my blog and I wouldn’t have the wage and hour practice that I do!). You’ll want to pull all your job descriptions for each position (perfect time to create them if they don’t exist); the list of employees (the DOL looks at exemptions by individual – not position); their salary/hourly rate; how they are currently classified; any commissions/bonus structure; how many employees they supervise (if any); for sales folks, you’ll want the approximate percentage of tine spent on outside/inside sales; an organizational chart (handy to see supervisors of two or more); and any special qualifications (such as professional licenses, etc.) or other unique circumstances about their position. This basic information is a good start on your wage and hour audit / analysis.
As it will take much longer than you’d think to pull it altogether, I would highly suggest employers start doing this now. Also, as a great majority will likely find at least one employee could be classified differently, you’ll want time to address how to make that change prior to December 1. Finally, if you think you may have issues, it is not a bad idea to have legal counsel be a part of the audit process (including how to handle potential misclassifications). I know it is not fun to pay attorneys’ fees before an issue arises (going to the dentist is arguably more enjoyable, I suppose), but I can almost guarantee defending a wage and hour lawsuit will be exponentially more expensive, time consuming, and interrupting to your business. In any event, as noted above, employers are only going to get one take on this…the filming stops in only 3 months, so get your house in order now!