Tip of the Day

Be Careful Who You Declare to be Exempt from Overtime

Throughout my career I’ve been surprised by the number of people who think that they can reduce or eliminate overtime pay by paying someone on a salaried basis.  Let me be perfectly clear – paying someone a salary instead of hourly has nothing to do with whether an employee is entitled to receive overtime pay for all time worked over 40 hours in a workweek.

The Fair Labor Standards Act specifies that certain requirements must be met for a position to be considered exempt from the overtime provisions of the Act.  What makes a position exempt from overtime are certain narrowly defined requirements – supervision, the amount of time spent supervising, and the authority to hire and fire or to recommend hiring and firing.

In today’s tough economic times, disgruntled employees are more apt to file complaints with the Department of Labor’s Wage and Hour Division.  Be familiar with all wage and hour requirements to avoid the embarrassment of formal complaints, lawsuits, and the possible payment of back wages.  

You can find more information on the Department of Labor’s Wage and Hour Division website at http://www.dol.gov/whd/regs/compliance/fairpay/main.htm.