Pay Your People Right!!!

Feb 24, 2014

FLSA, the Fair Labor Standards Act, is the legislation impacting how you pay your people.  Reading this stuff can cure insomnia so here’s your Cliff’s notes on how to make sure you’re compliant.

Make sure your employees are classified correctly.  If you’re not familiar with how to classify your staff (hourly or salaried), please call us.  That’s just one piece of our expertise.(And no, you may not pay people on a salary to circumvent paying overtime when they should be paid hourly.)

Define your workweek.  Whether your company operates Monday-Sunday, or Wednesday-Tuesday, you need to define your workweek.  When your hourly staff works more than 40 hours in that week, they must be paid time & a half for the hours over 40.  (some industries can have a 2-week pay period but it’s not arbitrary.)  

If you get these things wrong, you may be subject to an investigation from the Department of Labor (DOL) and/or the IRS.  There is a statute of limitations on an investigation but it’s not pretty...employers who don’t pay their hourly staff appropriately may be subject to an investigation of 2 years of payroll records; 3 years if the DOL deems the employer’s actions intentional.  

Yes, this was a frantic call from a new client this week.  Don’t let it happen to you!!!


Please add a comment

Posted by Shannon on
So how do I make sure my employees are properly classified? I think some of our employees are paid a salary because they just wanted a predictable pay level....not sure our ownership knows this very well.
Posted by admin on
Great question,'re right that employees shouldn't be paid a salary just because they want to...that said, as long as the employer knows their hourly rate and pays 'salaried' staff time and a half for any hours worked over 40, you're good....

The issue is more about exempt vs. non-exempt employees, rather than salaried vs. hourly. Even people paid a salary can have an hourly rate so take their salary, divided by 2080 (the number of work hours in a year) and you have your hourly rate. Any hours over 40 in a work week must be paid at time and a half for non-exempt staff.

Does that help?
Posted by Shannon on
Yes, it's helpful but I still don't know who should be paid overtime...the whole exempt/non-exempt thing is confusing for our many people doing so many different things....I guess we better get this much do you charge?
Posted by admin on
Shannon, I need a little more info about your business, number of employees and their roles, etc. Please email me your contact info or give me a call at 208-661-2539.
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