The first half of 2016 brought many changes with more to come. So it’s essential that employers understand the issues with an audit of their practices guided by subject matter experts. The biggest changes come from the United States Department of Labor (DOL) including overtime laws, classifications, and an announced renewed commitment to misclassification of employees as contractors.
Update of Overtime Regulations
Regulations have changed forcing employers to pay more overtime because the salary level for the common exemptions has now been more than doubled. Previously, employers focused only on duties tests for exemptions. These duties tests must still be met, but now, salary levels must be considered too when paying many people as exempt.
Adequately preparing for these changes takes more effort than just acknowledging that there is a new law in place. To protect yourself from potential exposure, including automatic attorneys’ fees charged against you in the event of even $.01 of liability, employers should reexamine their job descriptions, classifications and potentially consider re-classification or increase the salaries of certain employees.
Renewed Commitment to Misclassification of Independent Contractors
Last summer, the DOL published a new Administrator’s Interpretation that makes clear its intention to find and curtail continued misclassification of employees as independent contractors. Under the new revisions, most workers are employees and not independent contractors.
If an employee’s classification as a contractor is deemed improper, the employer may face exposure to unpaid wages (including potentially minimum wage violations and overtime violations), double damages, interest, penalties and attorneys’ fees. In most cases of misclassification, whether intentional or not, there are often record keeping violations which add to potential fines and damages.
– Nancy Johnson