Sunrise, Fla. -- On April 20, the U.S. Department of Labor launched a nationwide anxiety attack for HR professionals and business owners when it issued the new FairPay Rules under the Fair Labor Standards Act (FLSA).
"The new regulations take effect August 23, so you need to start preparing fast," says Ashley Kaplan, an employment-law attorney with Sunrise-based G.Neil Corp.
"The Labor Department estimated a few months ago that more than half of all U.S. companies had incorrectly classified employees under the FLSA, and that was before the new rules," says Kaplan. "And, in many cases, all it takes is one employee phone call to the DOL with an overtime complaint to start an investigation of a company's entire classification process."
The FairPay Rules take effect nationally on August 23rd. They will affect the overtime eligibility of millions of Americans, regardless of the color of their collars, because the old definitions of ‘exempt’ and ‘non-exempt’ status are gone with the wind.
"This means that employers across America will now have to evaluate each employee's actual job duties and wages under the regulations' new criteria to determine who can be paid a salary and who must punch timecards, to ensure overtime compliance under FLSA.”
Noncompliance Can Be Costly
"One fact remains clear," says Kaplan. "Employers who do not thoroughly assess their procedures to ensure that their employees are classified properly under these new FLSA rules will run some serious and potentially expensive risks, including DOL audits and even class-action lawsuits. DOL wage-and-hour settlements have reached an all-time high with record increases in back pay settlements and jury damage awards. Employers simply can't afford not to start protecting themselves."