Wage and Hour Which Common Errors Are You Making? November 17, - - PowerPoint PPT Presentation

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Wage and Hour Which Common Errors Are You Making? November 17, - - PowerPoint PPT Presentation

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Wage and Hour Which Common Errors Are You Making? November 17, 2016 Presented by: Douglas Duerr Learning Objectives Identify the mistakes many public employers make in wage and hour compliance Update on emerging trends Steps

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Wage and Hour Which Common Errors Are You Making?

Presented by: Douglas Duerr

November 17, 2016

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Learning Objectives

  • Identify the mistakes many public

employers make in wage and hour compliance

  • Update on emerging trends
  • Steps to take to improve wage and

hour compliance

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Mistake # 1

  • Misclassifying employees as exempt

from overtime – White collar exemptions (executive, administrative, professional, computer,

  • utside sales)
  • Front line supervisors and

administrative exemption biggest problem areas

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Correcting Mistake # 1

  • Audit all positions classified as exempt
  • Consider professional assistance as to

the “close calls”

  • Reclassify those positions that are

misclassified as soon as practicable to cutoff further accrual of liability – Use the new regulation as a basis for making the change effective December 1, 2016.

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Mistake # 2

  • Impermissible deductions from “salaried

employees”

– Unpaid disciplinary suspension (e.g., 3 days)

  • Exception for certain conduct violations
  • Failure to properly document business

expenses

  • Mid-week layoff
  • Partial-day absences
  • A class of employees could lose

exemption if subject to impermissible deduction

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Correcting Mistake # 2

  • Audit payroll practices for salaried

employees

  • Implement procedure requiring HR (or

similar) authorization for deductions or pay reductions for salaried employees

  • Implement a safe-harbor policy on

deductions

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Mistake # 3

  • Treating employees as “independent

contractors”

– Wage and hour laws apply to “contract employees,” “1099 employees,” etc. – “Employee by day, contractor at night.”

  • Liability for unpaid overtime

compensation

  • Liability for benefits, unpaid

employment taxes, etc.

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Correcting Mistake # 3

  • Audit all “independent contractors”

– Assume that payment to a SSN, as

  • pposed to EIN, is a misclassification
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Mistake # 4

  • Not paying for all hours worked

– Preliminary\postliminary activities

  • Requiring an employee to be at a specific location

– Fixed, unpaid periods (e.g., automatically assuming 1-hour lunch) – Travel – Volunteer (e.g., sits at desk during lunch, takes work home to finish it, etc.) – Unauthorized overtime – Work for an associated board, commission, etc., but on a separate payroll

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Correcting Mistake # 4

  • Require employees to record all time

worked, and discipline when there is a failure to do so

– Remember, that burden is on City not to permit work that the City does not want to pay for

  • Review preliminary and postliminary

activities to determine whether it is “work” for wage and hour purposes

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Mistake # 5

  • Not paying overtime compensation

when due (e.g., after 40 hours/week)

– Payroll calculates overtime after 80 hours

  • ver 2 weeks

– Satisfying requirements for the 7(k) partial exemption

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Correcting Mistake # 5

  • Make sure payroll system accurately

determines when overtime is due

– Do not assume that using a nationally- recognized payroll service means you are in compliance

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Mistake # 6

  • Incorrectly calculating the regular rate

for overtime compensation

– Bonuses – Shift differential – On call pay – Incentive pay – Performing jobs with different rates – Piece work

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Correcting Mistake # 6

  • Examine each item of compensation

and determine whether it should be included in the regular rate

  • Implement a process for forcing a

recalculation of the regular rate when bonuses or unusual/variable payments are paid

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Mistake # 7

  • Not handling “comp time” in a lawful

manner

– Failure to record properly – Wrong rate of accrual – Not applying required caps to accrual – Not paying out properly – Not granting time off within a reasonable period following request

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Correcting Mistake # 7

  • Make sure that there is documentation
  • f the advance agreement for comp

time

  • Centralize records of accrued comp

time

  • Make sure to cap accrued comp time,

and consider applying lower caps

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Mistake # 8

  • Employees can waive their rights under

wage and hour laws just like they can

  • ther rights
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Correcting Mistake # 8

  • If a binding waiver is desired, consult

with legal counsel.

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Questions and Answers