Retail Observer

RETAILOBSERVER.COM OCTOBER 2016 80 I am just back from a very enlightening seminar covering the rules for the new Federal Labor Standards Act starting on December 1st, 2016. There is no way that we can cover it all in this article so I thought I would share some of the hot topics. It is important for you to know that I am not an expert on this topic so what I share with you today is more of a warning than advise. FLSA OVERTIME BASICS • Employers must pay OT to eligible employees for all hours worked in excess of 40 hours in a given workweek. • Employers are not obligated to pay OT for work in excess of 8 hours in a workday. • Workweeks and workdays must be regularly scheduled and maintained. WHO IS ELIGIBLE FOR OT? All employees (FT/PT) unless they qualify for a statutory exemption under the FLSA. Exceptions: (if qualified) • Executive, administrative, professional & highly compensated employees • Outside sales employees • Commissioned sales employees in retail • Computer professionals • Drivers, driver's helpers, loaders and mechanics • Farmworkers • Salesmen, part-men and mechanics in the automobile dealerships • Seasonal and recreational establishments It seems that the Department of Labor forgot about appliance industry professionals who, by the results of the "Duties Test", do not meet the new guidelines to be qualified for an exemption. Since many shops pay their salesmen and technicians based on commission, not complying with the new laws will leave those shops totally exposed for audits and hefty fines along with the attorney's fees. The new regulations take effect on December 1st, 2016. The new law increases the salary threshold for eligibility of exemption from $23,660 to $47,476 and there will be automatic updates so thresholds stay at 40% of weekly earnings for FT salaried workers. There are major consequences that come along with the new rule changes as a significant number of employees will lose exempt status. Employers must immediately begin hourly record keeping on all reclassified employees and they must vigilantly monitor new, non-exempt employees work before and after scheduled hours and during breaks. Non-exempt employees must punch in at the start of their shift, punch out at lunch, punch back in after lunch and punch out again at the end of their shift. Remember the law goes into effect on December 1, 2016 so I would recommend that you take steps now to put your company in compliance. Here are a few tips on what to do. • Identify exempt positions that will fall below the new salary threshold of $47,476 • Understand how many hours these employees are working • Determine whether the salary of these employees should be bumped up to preserve exemption • Determine the hourly rate of pay for those employees who will be reclassified as non-exempt • Consider changing job duties for positions that may lose exemption status • Transfer duties that trigger OT • Eliminate duties that trigger OT • Consider additional FT/PT staff to offset the OT – Implement and enforce adequate time-keeping mechanisms – Require prior approval before working OT Remember to review ALL positions to assess whether they are properly classified. Without the review you may be in violation of the law and the consequences and penalties will be enforced. Track all hours of non- exempt employees and try to do it electronically as it is more accurate. Prohibit working through lunch and clocking in early or out late to make up time or catch up on work and regularly check time records. The new FLSA will cause all of us business owners grief in the beginning and the cost may be substantial, however, if you do it right the first time you won't have to worry that a labor department audit will find violations. For more information go to the Department of Labor website at www.dol.gov or contact your friendly labor attorney or your HR department. S E R V I C E D E P A R T M E N T Ralph E. Wolff , MCAP, CSM—Industry Relations, PSA The Service News features alternating writers discussing topics of the service industry. RO IS YOUR COMPANY READY FOR THE NEW OVERTIM E RULES? The new Federal Labor Standards act

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