Avoiding Backpay Penalties
Paying a salary DOES NOT mean the employee isn’t owed overtime. The Fair Labor Standards Act, which nearly all employers are required to comply with, specifies that it is the duties of the role and not the compensation that dictates who is eligible for overtime wages.
To qualify as EXEMPT from overtime, the employee in question must meet the key rules under the following:
- Executive (primary duty is managing) administrative (high level of discretion and judgement)
- Administrative (work directly related to managing business operations)
- Professional (advanced knowledge through prolonged instruction and coursework)
- Computer (under specific job titles and duties)
- Outside sales (regularly working outside of the place of business)
What happens if a current or former employee successfully complains to the Department of Labor? Pay up! Failure to pay overtime could equal two to three years of back pay for all affected employees and remitting the back payroll taxes that apply.
What if an employee works overtime without permission? Pay them, but then issue corrective action if they failed to follow company policy.
Click the link to view our recent blog: Who Needs Workers’ Compensation or check back for more on human resources, payroll, insurance and benefits.
