Wednesday, October 18, 2017
 

Salary Considerations under the New DOL Standards

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Woman working on computerBy Nancy Bourque, HR Practice Leader at
United Benefit Advisors

On 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.

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