Benefits March 30, 2004

CCH Issues FLSA Checklist

March 30, 2004 (PLANSPONSOR.com) - The U.S. Department of Labor (DoL) is expected to hand down a comprehensive overhaul to the Fair Labor Standards Act (FLSA) and plan sponsors need to be aware of the potential impact on their workforce.

Reported by

Eric Hazard

To assist employer in how the FLSA changes will affect employers, CCH offers 10 tips companies can follow to better handle the situation:

Identify employees who earn less than $25,000 since some employees will be newly nonexempt under the revised salary floor and evaluatewhether your payroll costs will be best controlled by simply raisingtheir salaries to retain their exempt status or carefully budgeting your overtime needs.
Conduct job analyses to determine which employees perform administrative, professional, and executive duties.
Revise job descriptions to make sure the descriptions trulyreflect the work performed and skills required.
Make sure the company’s HRIS system is updated toreflect accurately employees’ revised exempt/nonexemptclassifications, and that overtime is paid accordingly.
Under the revised FLSA standards, employers now have the option ofdocking exempt workers a full day’s pay for certain seriousdisciplinary infractions without jeopardizing their exempt status. If this option is to be implemented, ensure your disciplinarypolicies reflect the change.
Develop a communications strategy in conjunction with the corporate communications department on the best way to alert employees of the change.
Even though some of your employees will benewly exempt from overtime, the company still must comply with the terms of any bargaining agreement in place. If your union contract provides for overtime pay for bargaining unit members,failure to compensate for overtime hours would be a breach,regardless of what the rules say about the employees’ exempt status.
Employers may not have to pay certain employees for overtime after the regulations change, but there are other strong business reasons not toimpose excessive overtime demands upon your workforce such as burnout, poormorale and turnover.
Be aware that some employees may view “nonexempt” status as a demotion . Companies need to work with the managerial staff to convey that, exemption status aside; these employees remain as valuable and integral to your organization as they have always been.
Remember that regardlessof how correctly you classify employees under the new rules,employees still have two years to sue –three years if violations werewillful –if they were misclassified under the old rules.