Wage and hour violations are at an all-time high with no end in sight. Wage and hour cases are costly and time-consuming, and can be devastating to an organization. Penalties for non-compliance can be quite high, and you can be on the hook for back-pay for up to two years (possibly three years for willful violations). Now more than ever, it’s critical for organizations to take thorough, proactive measures to ensure compliance with wage and hour laws at the federal, state and even local levels.
What can you do to ensure you are in compliance?
Start by asking the following questions―if you can’t answer “yes” for certain, you have some work to do:
- Are independent contractors classified properly?
- Are your employees classified properly as either exempt or non-exempt, using specific Department of Labor criteria?
- Are you paying overtime to non-exempt employees who work more than 40 hours in a work week? Have you properly defined your work week?
- Do you investigate laws pertaining to lunches and breaks in each state in which you have employees to ensure that you are in compliance?
- Do you pay non-exempt employees for travel time if the travel is outside of normal home to office travel?
- When work is performed “off the clock” (including remote access, checking email on smartphones or answer after hours calls), are you paying?
- Do you pay overtime to all employees even if the employee did not get prior authorization?
- Do you maintain time sheets/records of hours worked for all employees that clearly support how employees are paid?
No one is safe from a Department of Labor audit. Organizations of all sizes and within all industries are subject to scrutiny from the Department of Labor. This includes smaller organizations, which often lack a dedicated HR professional to establish solid wage and hour policies. And while smaller organizations often don’t have the resources to understand they are in violation, this does not serve as an excuse for non-compliance.
How can you protect your organization?
- Review current pay practices to ensure compliance with federal, state and local wage and hour laws.
- Keep detailed and accurate time records for all non-exempt employees.
- Ensure all job descriptions are up to date and review current position classifications to ensure exempt and non-exempt employees are classified properly.
- Train managers to understand wage and hour laws to prevent violations.
- Consider using an outside resource to review wage and hour practices and provide recommendations; Sikich’s HR Subscription provides consulting support to address compliance concerns.
