IS YOUR BUSINESS STILL FLSA COMPLIANT ?
The Fair Labor Standards Act (FLSA) governs overtime pay as well as minimum wage, recordkeeping, and child labor standards for full-time and part-time workers in the private sector and in Federal, State, and Local governments. We all know what time and half is, but not all employees receive overtime pay for hours worked over forty each week. This is because there are a few exemptions to overtime: Executive, Administrative, and Professional employees.
On May 18, 2016, the Department of Labor’s final rule on overtime regulations was announced. Three of the most important changes include (1) raising the standard salary level for full-time salaried workers from $455 per week to $913 per week and $47,476 annually, (2) setting the annual compensation requirement for Highly Compensated Employees (HCE) to $134,004, and (3) establishing a process for automatically updating the salary and compensation levels every three years. These provisions primarily focus on updating the salary and compensation levels needed to maintain a few exemptions to FLSA.
The effective date for these new changes is December 1, 2016. This update has many implications for businesses across the nation and they only have six months to comply. Aside from thinking about reclassifying some employees or changing pay rates, employers must make sure they review their record keeping policies, because the stakes just got higher. The presence or absence of appropriate records can mean the difference between secure compliance and exorbitant litigation costs.
The FLSA requires employers to keep certain records for each non-exempt worker. No particular form is required for these records; however, they must include certain identifying, accurate information about the employee, the data about the hours worked, and wages earned. The basic records required include: the employee’s full name, social security number, address including zip code, birth date if younger than 19, sex, occupation, time and day of week when employee’s workweek begins, hours worked each day, total hours worked each workweek, basis on which wages are paid, regular hourly pay rate, total daily or weekly straight-time earnings, total overtime earnings for the workweek, all additions to or deductions from wages, total wages paid each pay period, and date of payment and the pay period covered by the payment. Also, FLSA requires employers to preserve payroll records, collective bargaining agreements, and sales and purchase records for at least three years. Additionally, records used for wage computations must be preserved for two years. This includes time cards, piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
If you have any questions regarding these new updates or current wage and hour regulations, consult the Department of Labor’s website or contact our office. The Department of Labor provides access to straight-forward and timely explanations to many basic questions. If you require an in-depth analysis of the applicability of the new standards to your business, obtaining legal counsel to review your policies may be beneficial in avoiding future litigation and costs.